Investor presentations: Governance Roadshow/UBS Conference

Chorus Limited
Level 10, 1 Willis Street
P O Box 632
Wellington
New Zealand

Email: company.secretary@chorus.co.nz






STOCK EXCHANGE ANNOUNCEMENT

9 November 2022

Investor presentations – Governance Roadshow and UBS Australasia
Conference

The attached Chorus presentations will be referenced during a governance
roadshow in Australia this week and at the UBS Australasia Conference next week.

Authorised by:

Andrew Carroll
Chief Financial Officer (acting)

ENDS

For further information:

Brett Jackson
Investor Relations Manager
Phone: +64 4 896 4039
Mobile: +64 (27) 488 7808
Email: Brett.Jackson@chorus.co.nz

Steve Pettigrew
Head of External Communications
Mobile +64 (27) 258 6257
Email: Steve.Pettigrew@chorus.co.nz

---

Governance update
10 November 2022

10 November 2022
Disclaimer
CHORUS GOVERNANCE UPDATE
This presentation:
• Is provided for general information purposes and does not constitute investment advice or an offer of or invitation to purchase Chorus
securities.
• Includes forward-looking statements. These statements are not guarantees or predictions of future performance. They involve known
and unknown risks, uncertainties and other factors, many of which are beyond Chorus’ control, and which may cause actual resultsto
differ materially from those contained in this presentation.
• Includes statements relating to past performance which should not be regarded as reliable indicators of future performance.
• Is current at the date of this presentation, unless otherwise stated. Except as required by law or the NZX Main Board and ASX listing
rules, Chorus is not under any obligation to update this presentation, whether as a result of new information, future events or otherwise.
• Should be read in conjunction with Chorus’ audited consolidated financial statements for the year to 30 June 2022 and NZX and ASX
market releases.
• Includes non-GAAP financial measures such as "EBITDA”. These measures do not have a standardised meaning prescribed by GAAP and
therefore may not be comparable to similar financial information presented by other entities. They should not be used in substitution for,
or isolation of, Chorus' audited consolidated financial statements. We monitor EBITDA as a key performance indicator and we believe it
assists investors in assessing the performance of the core operations of our business.
• Has been prepared with due care and attention. However, Chorus and its directors and employees accept no liability for any errors or
omissions.
• Contains information from third parties Chorus believes reliable. However, no representations or warranties (express or implied) are
made as to the accuracy or completeness of such information.
2

10 November 2022
CHORUS GOVERNANCE UPDATE
Introducing Mark Cross
>Chorus Chair effective 26 October 2022
▪Chorus director since 1 November 2016
▪previous chair of Audit & Risk Management Committee (ARMC)
▪20+ years international experience in corporate finance and investment
banking
>Other current governance roles:
▪Board member and investment committee chair of Accident Compensation
Corporation (ACC)
▪director of Xero (and chair of ARMC)
>Previous governance roles:
▪chair of Milford Asset Management (retired July 2022)
▪director of Genesis Energy, Z Energy, Argosy Property
3

10 November 2022
Your Board
CHORUS GOVERNANCE UPDATE
Sue Bailey
Appointed 31 Oct 2019
Miriam Dean
Appointed 27 Oct 2021
Murray Jordan
Appointed 1 Sept 2015
Kate Jorgensen
Appointed 1 July 2020
Jack Matthews
Appointed 1 July 2017
Will Irving
Appointed26 Oct 2022
4

10 November 2022
CHORUS GOVERNANCE UPDATE
5
Board tenure
0-1 year2-3 years4-5 years6+ years

10 November 2022
CHORUS GOVERNANCE UPDATE
6
Executive Team

10 November 2022
CHORUS GOVERNANCE UPDATE
7

10 November 2022
CHORUS GOVERNANCE UPDATE
Chorus is changing gear: from
build to operate
>11-year fibre build programme practically complete and copper
network withdrawal underway
>new regulatory regime in place for fibre: requires
organisational evolution in reporting and asset management
>focus on improving customer experience and delivering
benefits to all stakeholders
>updated strategy: emphasis on managing capital to deliver
predictable and growing returns to owners
>growing free cash flow enables us to explore opportunities to
grow regulated and/or non-regulated revenues where
shareholder value is maximised
8

10 November 2022
CHORUS GOVERNANCE UPDATE
End of fibre rollout = return to positive free cash flow
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
0
100
200
300
400
500
600
700
800
900
FY13FY14FY15FY16FY17FY18FY19FY20FY21FY22FY23
CapexNet senior debt/EBITDA*
*based on S&P and bank covenant methodologies
>Chorus’ Board considers that a ‘BBB’ credit rating or
equivalent credit rating is appropriate for a company
such as Chorus.
▪4.08x ND/EBITDA at 30 June
▪total net debt $2,713m at 30 June
>ratings agencies thresholds reflect new regulatory
regime and growth in free cashflow
▪S&P:5.00xND/EBITDA on a sustained basis
▪Moody’s: 5.25x ND/EBITDA on a sustained basis
>intention that in normal circumstances the ratio of net
debt to EBITDA will not materially exceed 4.75 times
>financial covenants require senior debt ratio to be
no greater than 5.50 times
Guidance
$410 -$450m
$m
Net Debt
/EBITDA
9

10 November 2022
CHORUS GOVERNANCE UPDATE
FY22 marked a return to revenue growth
0
200
400
600
800
1000
FY19FY20FY21FY22
Revenue
0
100
200
300
400
500
600
700
800
FY19FY20FY21FY22FY23
EBITDA
Guidance
$655 -$675m
>FY22 Revenue of $965m (FY21: $955m)
▪Growing consumer fibreuptake and ARPU
▪Strong greenfield demand
>Objective of modest EBITDA growth
10

10 November 2022
>FY23 and FY24dividend guidance*
▪42.5cps in FY23
▪a minimum of 47.5cps in FY24
▪dividends unimputed in short to medium term
>$54m of $150m share buyback complete
▪tax efficient capital return to shareholders
▪Board reserves option to suspend the buyback if more accretive
opportunities for shareholder value are identified
>Dividend Reinvestment Plan
▪available with no discountfor FY22 dividend: 11% uptake
Capital management
CHORUS GOVERNANCE UPDATE
0
5
10
15
20
25
30
35
40
45
50
FY22FY23FY24
cps
* subject to no material adverse changes in circumstances or outlook
Dividend guidance –August 2022
Board reviews capital management settings at each result
11

10 November 2022
CHORUS GOVERNANCE UPDATE
*Examples include fibre footprint expansion,
greenfield connections & customer retention spend
>Surplus capital is allocated based on maximising
shareholder value, with discretionary capex only pursued
where:
▪greater shareholder value is created compared to share
buybacks and/or additional dividends; and
▪regulatory incentives are appropriate (e.g. regulatory
WACC vs Chorus WACC)
>Ordinary dividend: intention to pay out 60% to 80% of
free cash flow
▪free cash flow = net cash flows from operating activities
minus sustaining capex
Capital allocation framework
12

10 November 2022
CHORUS GOVERNANCE UPDATE
CEO remuneration components
Significant portion of remuneration linked to performance and at risk
13
FY22 scenario chart (excludes LTI)
Fixed
remuneration
Pay for
performance
% STI
awarded
against
maximum
FY221,275,0001,147,50067%
FY211,250,000768,75047%
>Note: Three grants have been made under the LTI scheme
▪$319,829 in 2019 (vested)
▪$412,500 in 2020 (yet to vest)
▪$420,750 in 2021 (yet to vest)

10 November 2022
CHORUS GOVERNANCE UPDATE
Short term incentive
Performance goals reviewed annually to align with shareholder value
14
>Company and individual
performance components
▪STI bonus is at ultimate
discretion of Board
▪CEO STI set at 75% of base
remuneration
(achieved 67% in FY22)
▪Non-financial measures
include targets associated
with H&S, overall team
engagement scores and
gender balance and mix of
teams

10 November 2022
CHORUS GOVERNANCE UPDATE
Long term incentive scheme
An absolute return based scheme
15
>We use a blended total shareholder
return rate to reflect regulated WACC
▪weighted cost of equity calculation,
proportional to regulated vs non-
regulated components and based on
relative enterprise value
▪0.75% stretch is added to determine
the 3-year performance hurdle
>Re-testing can occur monthly for 12
months (with the hurdle continuing to
increase) if performance hurdle is not met
by the initial vesting date

10 November 2022
CHORUS GOVERNANCE UPDATE
Our sustainability focus
Second year producing a standalone Sustainability Report
16
>enhancing our reporting against TCFDframework
in preparation for mandatory climate reporting
for Chorus’ 2024 annual report
>continued focus on worker welfarewith
dedicated team monitoring contractor and
subcontractor field workforce
>Modern Slavery Statement: FY22 focus on
imported electronics and telco network
equipment
>ESG frameworks:
▪focus on infrastructure-oriented GRESB
framework in FY22: achieved B rating
▪received MSCI ESG rating of AA in 2021
▪CDP rating: B

10 November 2022
CHORUS GOVERNANCE UPDATE
Sustainability metrics
Employee engagement
17

10 November 2022
CHORUS GOVERNANCE UPDATE
Cybersecurity and privacy
18
>we comply with the NZ Privacy Act for all personal
information we hold and have a public privacy policy
▪privacy is managed within our wider risk
management framework
▪our systems, processes and training meet the Act’s
requirements
>our ARMC receives cybersecurity reports from our CTO
every six months, with interim updates as required
▪we conduct response testing and undertake regular
reviews, including external audits
▪we liaise with the National Cyber Security Centre on
advanced cyber threats
As a wholesale network operator we hold less
personal information than retail providers

10 November 2022
UBS CONFERENCE 2022
Shareholder composition
Chorus is a distinctive regulated listed communications infrastructure asset
19
>few listed comparators given Chorus is a
wholesale only netco
▪closest comparator is NetlinkNBN Trust in
Singapore
>admitted to Global Listed Infrastructure
Organisation Index in 2021
▪recently added to GLIO/GRESB ESG Index
>10% ownership cap as part of government
demerger requirements in 2011
Investor location
AustraliaNZUSAUKOther
Investor type
InstitutionRetailOther
Data as at August 2022

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UBS Australasia Conference
14 November 2022

14 November 2022
Disclaimer
UBS AUSTRALASIA CONFERENCE
This presentation:
• Is provided for general information purposes and does not constitute investment advice or an offer of or invitation to purchase Chorus
securities.
• Includes forward-looking statements. These statements are not guarantees or predictions of future performance. They involve known
and unknown risks, uncertainties and other factors, many of which are beyond Chorus’ control, and which may cause actual resultsto
differ materially from those contained in this presentation.
• Includes statements relating to past performance which should not be regarded as reliable indicators of future performance.
• Is current at the date of this presentation, unless otherwise stated. Except as required by law or the NZX Main Board and ASX listing
rules, Chorus is not under any obligation to update this presentation, whether as a result of new information, future events or otherwise.
• Should be read in conjunction with Chorus’ audited consolidated financial statements for the year to 30 June 2022 and NZX and ASX
market releases.
• Includes non-GAAP financial measures such as "EBITDA”. These measures do not have a standardised meaning prescribed by GAAP and
therefore may not be comparable to similar financial information presented by other entities. They should not be used in substitution for,
or isolation of, Chorus' audited consolidated financial statements. We monitor EBITDA as a key performance indicator and we believe it
assists investors in assessing the performance of the core operations of our business.
• Has been prepared with due care and attention. However, Chorus and its directors and employees accept no liability for any errors or
omissions.
• Contains information from third parties Chorus believes reliable. However, no representations or warranties (express or implied) are
made as to the accuracy or completeness of such information.
2

14 November 2022
UBS AUSTRALASIA CONFERENCE
Shareholder composition
Chorus is a distinctive regulated listed communications infrastructure asset
>few listed comparators given Chorus is a
wholesale only netco
▪closest comparator is NetlinkNBN Trust in
Singapore
>admitted to Global Listed Infrastructure
Organisation Index in 2021
▪recently added to GLIO/GRESB ESG Index
>10% ownership cap as part of government
demerger requirements in 2011
Investor location
AustraliaNZUSAUKOther
Investor type
InstitutionRetailOther
Data as atAugust 2022
3

14 November 2022
UBS AUSTRALASIA CONFERENCE
Fibre has very strong global momentum
New Zealand now among global leaders for fibre uptake and development
>Recent Network Xglobal broadband conference in Europe highlighted a
fibre boom with substantial network rollouts
▪1.2bn fibre-based households by 2027 (Omdia)
▪cable networks now upgrading to fibre (e.g. Virgin Media UK)
▪separation of retail and network units becoming more common
▪copper withdrawal programmes accelerating with leading European nations
extending fibre as far as possible
>Fibre seen as ‘future-proof’ for capacity, reliability and latency
▪new deployments leapfrogging to 10Gbps capability
▪fixed line traffic forecasted to keep growing steadily
▪expectation future applications (e.g. metaverse) will need very low latency
▪6GHz spectrum increasingly important to unlock future Wi-Fi performance
and enable fibre’s full potential for consumers
RankCountry
1Singapore
2South Korea
3China
4UAE
5Qatar
6Japan
7Thailand
8Romania
9Spain
10New Zealand
(+5 places)
OmdiaFibre Development
Index 2022
4

50%
55%
60%
65%
70%
75%
80%
85%
AucklandDunedinWellington
UFB uptake by quarter
Sep-21Dec-21Mar-22Jun-22Sep-22
Auckland fibre uptake reaches 80%
>Total UFB uptake of 71% (rounded) within completed
footprint in Q1*
▪uptake in UFB1 areas grew from 74% to 75%
▪uptake in UFB2 areas grew from 50% to 51%
▪938,000 connections (Q4 FY22: 919,000) now within
completed footprint, including business premium connections
▪1,330,000customers able to connect (Q4 FY22: 1,324,000)
▪1,042,000 premises passed** (Q4 FY22: 1,037,000) out of
1,054,000 target = UFB rollout 99% complete
(note: data includes some UFB2 areas that have been partially built, but not yet submitted
for Crown sign-off)
>26,000 fibre installations completed in Q1 (Q4 FY22: 25k)
▪customer satisfaction reduced from 7.8 to 7.7
▪WIP reduced from 14k to 13k
▪field crews reduced from ~520 to ~450 due to resourcing
challenges
* includes ~3kpartly subsidised education connections
**under the UFB contract, a multi-dwelling unit or single office block is one premises
Uptake
14 November 2022
UBS AUSTRALASIA CONFERENCE
▪Auckland, Wellington and Dunedin cover >70% of
UFB1 homes and businesses able to connect
▪91% of Chorus’ broadband connections in our
planned UFB zone are now on fibre
student
holidays
5

14 November 2022
Connection changes by Zone (indicative as at 30 Sept)
* Excludes 9k partly subsidised education connections and 12k fibre premium and data services (copper) connections
** Includes planned Chorus UFB1, 2 and 2+ coverage
6
4
7
9
7
-2
-3
-2
-2
-1
-3
-2
-2
-3
-3
-6
-8
-7
-6
-8
-1
-2
-1
-2
-1
-1
-2
-2
-2
-3
-10-50510
Q1 FY23
Q4 FY22
Q3 FY22
Q2 FY22
Q1 FY22
Q1 FY23
Q4 FY22
Q3 FY22
Q2 FY22
Q1 FY22
Q1 FY23
Q4 FY22
Q3 FY22
Q2 FY22
Q1 FY22
Broadband connections
Copper (no broadband) connections
Quarterly change (’000s) by zone*
UBS AUSTRALASIA CONFERENCE
Other fibre
company (LFC)
zone
Broadband connections32,000Disconnections continue due to Local Fibre
Company and fixed wireless provider activity,
with some slowdown due to COVID-19 effects.
Copper line (no broadband)18,000
TOTAL50,000
Non-UFB zoneBroadband connections140,000Some expansion of wireless broadband footprint
through Government backed programme. New
housing outside of UFB zone driving fibre
premises growth.
Copper line (no broadband)28,000
TOTAL168,000
Chorus UFB
zone**
Broadband connections1,018,000Continued broadband growth driven by Chorus
incentives and migration campaigns. Copper
voice disconnections reflect migration to fibre
and targeted fixed wireless activities.
Copper line (no broadband)49,000
TOTAL1,067,000
6

0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
30-Sep-2131-Dec-2131-Mar-2230-Jun-2230-Sep-22
14 November 2022
30 Sept
2021
31 Dec
2021
31 March
2022
30 June
2022
30 Sept
2022
Unbundled copper
(no broadband)
8,0006,0003,0001,0001,000
Baseband copper
(no broadband)
127,000119,000112,000102,00094,000
Copper ADSL
(includes naked)
152,000142,000133,000122,000112,000
VDSL
(includes naked)
148,000138,000128,000118,000109,000
Fibre broadband
(GPON)
883,000907,000929,000949,000969,000
Data services
(copper)
2,0002,0002,0002,0001,000
Fibre premium
(P2P)
11,00011,00010,00010,00011,000
Total connections
1,331,0001,325,0001,317,0001,304,0001,297,000
Fibre (GPON)
VDSL
Copper ADSL
Unbundled copper
Baseband copper
Fibre comprises 76% of Chorus connections
>1,190,000 broadband connections comprises:
▪969,000 fibre (GPON) connections
▪221,000 VDSL/ADSL (copper) connections
Business premium
Note: 9,000 partly subsidisededucation connections are excluded from this data
UBS AUSTRALASIA CONFERENCE
7

>300Mbps plans account for 68% of residential connections
>~1/3of residential fibre adds were 1Gbps plans in Q1
>1Gbps and Hyperfibreuptake now 24% across residential and business broadband connections
14 November 2022
UBS AUSTRALASIA CONFERENCE
Q1: Mass market fibre connections grew 20k
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
Sept 2021Dec 2021Mar 2022June 2022Sept 2022
Residential
1Gbps300Mbps200Mbps100Mbps<100MbpsVoice
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Sept 2021Dec 2021March 2022June 2022Sept 2022
Business
1Gbps500Mbps300Mbps200Mbps100Mbps<100MbpsVoice
8

14 November 2022
UBS AUSTRALASIA CONFERENCE
FibreCPI price changes implemented 1 October
Allowable CPI on anchor product fibre pricing was 6.9%
Fibre plan -consumerWholesale price -currentWholesale price from 1 Oct
2022
Change
Voice line$26.02$27.455.5%
Home starter 50/10Mbps$38$38-
50/10Mbps$44.22$47.286.9%
300/100Mbps$47.87$50.505.5%
1Gbps $56$583.6%
Hyperfibre2Gbps$75$70-6.7%
Hyperfibre4Gbps$100$85-15%
Hyperfibre8Gbps$150$110-26%
Copper pricingWholesale price before16 Dec
2021
Wholesale price –currentChange
Copper line$32.14$33.734.93%
Copper broadband$42.97$45.094.93%
9

>10k managed migration installations completed in Q1
(Q4 FY22: ~10k)
>marketing activity drove activation of installed fibre
sockets (ONTs) from ~9k to ~10k in Q1
▪45% of these activations were at offnet addresses
14 November 2022
Managed migration programme lifts connections
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Q1 FY22Q2 FY22Q3 FY22Q4 FY22Q1 FY23
Managed migration programme
InstallationsConnections
UBS AUSTRALASIA CONFERENCE
10

14 November 2022
UBS AUSTRALASIA CONFERENCE
Copper shutdown underway
Code enables shutdown with 6 months’ notice
▪Chorus provides notice to consumers and retailers
▪fibre must be available at no installation cost to consumer
▪initial focus on copper cabinets and premises with fibre installed
~17,000
initial
notices
issued
~90%
broadband
retention
lower
fault rate
on fibre:
5%
200+
cabinets
now
empty
11

Monthly average data usage on fibre 559gigabytes
>October data shows return to growth in data usage
▪559GBon fibre (Sept:554GB)
▪296GBon copper (Sept:290GB)
▪511GBaverage (Sept:504GB)
>Average peak throughput on our network at peak time
(~9pm) was consistent at 3.3Tbps
14 November 2022
290
554
504
0
100
200
300
400
500
600
CopperFibreAverage
Data
usage
(GB)
Q1: Monthly average data usage per connection
on our network*
* includes upstream traffic from June 2020 onwards
UBS AUSTRALASIA CONFERENCE
12

14 November 2022
Commerce Commission broadband testing report
▪The Commerce Commission’s Measuring Broadband New Zealand, Spring Report (October 2022) continues to highlight
the strong performance of fibre relative to other technologies.
UBS AUSTRALASIA CONFERENCE
Source: Commerce Commission
13

14 November 2022
UBS AUSTRALASIA CONFERENCE
Fibre powering Aotearoa’s
digital future
▪90%+ of fibre connections on 300Mbps and above
▪strong technology roadmap: trialled 25Gbps
▪focus on improving customer experience and
delivering benefits to all stakeholders
▪pragmatic policy settings could get fibre to at least
90% of the population
14

14 November 2022
UBS AUSTRALASIA CONFERENCE
15

14 November 2022
UBS AUSTRALASIA CONFERENCE
Sustainability
See also https://company.chorus.co.nz/sustainability
Employee engagement
16

Regulatory framework
14 November 2022
UBS AUSTRALASIA CONFERENCE

14 November 2022
UBS AUSTRALASIA CONFERENCE
Regulated Asset Base (RAB) finalised
Final RAB of $5.413 billion vs draft RAB of $5.425 billion
>RAB movement reflects lower than forecast actual spend to 31 December 2021, partly offset by increased
allocation of central office space spend to fibre (+$67m)
Core RAB
$3.997bn
Financial Loss
Asset
$1.416bn
Starting RAB
(1/1/2022)
We expect another ~$250m of shared
assets (current value) to be eligible to
enter the core RAB over time (e.g.
ducts, poles, exchange space)
What isn’t in the fibreRAB:
▪fibrein LFC areas
▪non-FFLAS fibre(e.g.
regional transport; grant
funded fibre)
▪copper assets
NOTE:
▪The effect on maximum allowable revenue (MAR) of the change in total RAB and allocations (from
draft to final) will be part of the wash-up process for the next regulatory period starting in 2025.
▪The RAB is indexed annually for actual inflation based on Statistics NZ data for the quarter to
December. The forecast changes in CPI used for revaluations in the 2022-2024 MAR were 1.8%
(2022), 2.2% (2023), 2.13% (2024).
18

14 November 2022
UBS AUSTRALASIA CONFERENCE
Maximum Allowable Revenue (MAR)
Source: Commerce Commission, price-quality path final decision, 16 Dec 2021
>MAR reflects draft starting RAB and allocations. Changes in the final RAB
will be reflected in the next regulatory period wash-up.
Pass-through costs14.214.515.5
TOTAL$690.2$747.4$789.5
>RP1 WACC of 4.72% would be ~7% if re-run at recent risk free rates
(determined by the linearly-interpolated, annualised, bid yield to maturity
on New Zealand government bonds with a term to maturity of the
regulatory period)
>The ‘benefit of Crown finance’ deduction will reduce from 2025 as Crown
finance is redeemed
>Reflects an implied 14-year asset life through regulatory process.
>Reflects asset life of 14.2 years and tilted annuity depreciation (-13% tilt
rate)
>CPI forecast assumptions were 2.71% in 2022, 2.17% in 2023, 2.04% in
2024. 2023 and 2024 will be updated for actual CPI as part of wash-up
process (see next slide). Chorus has made a submission to the
Commission on the status of the 2022 wash-up.
19

14 November 2022
UBS AUSTRALASIA CONFERENCE
MAR wash-up mechanism
Regulatory framework updates the MAR for actual costs on 7 cost items
>the wash-up for each calendar year is calculated annually in May via Information Disclosure process
>the wash-up amount (positive if under-earn MAR; or negative if over-earn) is added to MAR for the next
regulatory period
>the wash-up balance is rolled forward each year using the post-tax WACC as the time-value of money to preserve
NPV neutrality
2022 MAR
$690.2m
(set in 2021
using
forecasts)
initial RAB
Crown financing
cost allocators
pass through costs
individual capex
price path CPI
connection capex
updated
2022
MAR
actual
2022
revenue
2022
wash-up
amount
Difference vs forecast in:
20

14 November 2022
UBS AUSTRALASIA CONFERENCE
Looking ahead
Upcoming milestones and RP2 outlook
▪15 December 2022: final decision on 2023 market
incentive payments due
•draft decision approved $12.5m of $16.8m proposed spend; the
Commission noted incentive payments can promote competition,
accelerate uptake and drive cost efficiencies
▪31 May 2023: information disclosure submission and
wash-up report for 2022 submitted to Commission
▪30 June 2023: annual quality compliance statement
for 2022 submitted to Commission
▪31 August 2023: annual price compliance statement
for 2024 submitted to Commission
▪31 October 2023: Chorus RP2 submission due to
Commission
>next regulatory period (RP2) settings will be
calculated from mid-2024 and should reflect:
▪future risk-free rate (RP1 WACC used 0.51%)
▪tax building block commences from ~FY27 and
grows to ~$90m
▪~$250m (current value) of existing shared
assets that should be eligible to enter the RAB
over time
▪2025 repayment of Crown financing (regulator
only allows ~2% return on funded assets)
▪cost allocations will need to be addressed in
RP2, or reflected in policy framework for copper
Telecommunications Service Obligations
21

Financial overview
14 November 2022
UBS AUSTRALASIA CONFERENCE

14 November 2022
Significant refinancing milestone completed in Q1
Net debt/EBITDAAs at
30 June 2022
$m
Borrowings2,389
+ PV of CIP debt
securities (senior)
225
+ Net leases payable187
Sub total2,801
-Cash88
Total net debt2,713
Net debt/EBITDA*4.08x
>Q1 update
▪EMTN due in October 2023 refinanced with new 7-year EUR500m EMTN
at similar rates as the existing 2023 EMTN
▪~60% of the 2023 EMTN was tendered with stub of NZ$328m
remaining (see next slide)
▪~65% of CNU interest rate exposure was fixed as of 31 October
>ratings agency thresholds (net debt/EBITDA):
▪Moody’s5.25x
▪S&P5.0x
>the Board considers that a ‘BBB’ credit rating or equivalent is
appropriate for a company such as Chorus
▪intention that in normal circumstances the ratio of net debt to EBITDA
will not materially exceed 4.75x
▪financial covenants require senior debt ratio to be no greater than 5.5x
*Based on S&P and bank covenant methodologies
UBS AUSTRALASIA CONFERENCE
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24
>up to $1.33 billion CIP financing available
by 2023 (57:43 equity/debt)
>$1,277m drawn at 30 September 2022
>At 30 September, debt of $2,562m comprised:
▪Long term bank facilities of $350m (Undrawn)
▪NZ bonds: $400m and $500m
▪Euro Medium Term Notes $1,662m (NZ$ equivalent at hedged rates)
NZ
$M
200
500
200
328
514
820
85
90
137
174
11
21
26
0
100
200
300
400
500
600
700
800
900
CIP debt securities
available
Face value of CIP debt
securities issued
EUR EMTN
NZ Bond
Crown financing and debt profile
462462
306
47
58
U F B 1
E Q U I T Y
U F B 1 D E B TU F B 2 / 2 +
E Q U I T Y
U F B 2 / 2 +
D E B T
drawnundrawn
NZ
$M
14 November 2022
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14 November 2022
Crown financing summary
UBS AUSTRALASIA CONFERENCE
▪CIP equity securities
•unique class of security with no right to vote at
shareholder meetings, but entitle the holder to a
right to repayment preference on liquidation
•an increasing portion of the securities will attract
dividend payments from 30 June 2025 onwards
•the dividend rate is based on 180 day NZ bank bill
rate, plus 6% p.a. margin
•may be redeemed at any time by cash payment of
total issue price or the issue of Chorus shares (at a
5% discount to the 20-day VWAP for Chorus
shares)
▪CIP debt securities
•unsecured, non-interest bearing and carry no voting
rights at shareholder meetings
•Chorus is required to redeem the securities in
tranches from 30 June 2025 to 2036 by repaying
the issue price to the holder
Debt
securities
maturity
profile
30 June
2025
30 June
2030
30 June
2033
30 June
2036TOTAL
UFB1 & 2$85.3m$104.7m$166.7m$210.2m$566.9m
Equity
securities
subject to
paying
dividends
(cumulative)
30 June
2025
30 June
2030
30 June
2033
30 June
2036TOTAL
UFB1 & 2$85.3m$197.1m$377.7m$766.4m$766.4m
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14 November 2022
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FY22 marked a return to revenue growth
0
200
400
600
800
1000
FY19FY20FY21FY22
Revenue
0
100
200
300
400
500
600
700
800
FY19FY20FY21FY22FY23
EBITDA
Guidance
$655 -$675m
>FY22 Revenue of $965m (FY21: $955m)
▪Growing consumer fibreuptake and ARPU
▪Strong greenfield demand
>Objective of modest EBITDA growth
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14 November 2022
UBS AUSTRALASIA CONFERENCE
End of fibre rollout = return to positive free cash flow
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
0
100
200
300
400
500
600
700
800
900
FY13FY14FY15FY16FY17FY18FY19FY20FY21FY22FY23
CapexNet senior debt/EBITDA*
Guidance
$410 -$450m
$m
Net Debt
/EBITDA
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14 November 2022
Sustaining vs non-sustaining
capex
>$161m of FY22 capex was sustaining vs $331m non-
sustaining
>fibre sustaining capex is expected to increase over time
as the asset ages
>sustaining capex expected to be ~$200m (midpoint
within a range)
UBS AUSTRALASIA CONFERENCE
**Relates to provisioning, systems and service desk costs
Non-sustaining capexFY22 $mFY21 $m
UFB communal77147
Fibre installations166244
Greenfield growth* and product
development
5951
Footprint expansion (West Coast)*1532
Customer retention (incentives)1418
Subtotal331492
Coppercapex: sustainingFY22 $mFY21 $m
Network sustain2729
Copperconnections11
Copper layer234
Customer retention costs**711
Subtotal3845
Commoncapex: sustainingFY22 $mFY21 $m
Informationtechnology3246
Building& engineering services1914
Subtotal5160
Fibrecapex: sustainingFY22 $mFY21 $m
Layer 22931
Fibre products & systems711
Network sustain1311
Other fibre1011
Customer retention costs*1311
Subtotal7275
*majority funded by third party contributions
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14 November 2022
>FY23 and FY24dividend guidance*
▪42.5cps in FY23
▪a minimum of 47.5cps in FY24
▪dividends unimputed in short to medium term
>$54m of $150m share buyback complete
▪tax efficient capital return to shareholders
▪Board reserves option to suspend the buyback if more accretive
opportunities for shareholder value are identified
>Dividend Reinvestment Plan
▪available with no discountfor FY22 dividend: 11% uptake
Capital management
UBS AUSTRALASIA CONFERENCE
0
5
10
15
20
25
30
35
40
45
50
FY22FY23FY24
cps
* subject to no material adverse changes in circumstances or outlook
Dividend guidance –August 2022
Board reviews capital management settings at each result
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14 November 2022
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*Examples include fibre footprint expansion,
greenfield connections & customer retention spend
>Surplus capital is allocated based on maximising
shareholder value, with discretionary capex only pursued
where:
▪greater shareholder value is created compared to share
buybacks and/or additional dividends; and
▪regulatory incentives are appropriate (e.g. regulatory
WACC vs Chorus WACC)
>Ordinary dividend: intention to pay out 60% to 80% of
free cash flow
▪free cash flow = net cash flows from operating activities
minus sustaining capex
Capital allocation framework
30

▪fibre maintenance increasing as share of connections grows;
~5% fault rate on fibre
▪copper fault volumes reducing as connections reduce in UFB
zone; beginning to realise fixed cost savings
▪non-UFB zone copper spend stable ~$20m p.a.
14 November 2022
Reactive maintenance: Chorus network
Key drivers for $54m spend
0
5
10
15
20
25
30
FibreCopper - fixedCopper -
variable
Reactive spend by type
FY20FY21FY22
0
5
10
15
20
25
30
Chorus UFB Non UFB LFC UFB
Copper -reactive spend by area
Note:
▪reactive maintenance excludesspend on proactive maintenance and
customer networks (i.e. premises wiring, no fault found, cancellations)
▪‘fixed’ faults: occur in parts of the network that affect multiple customers
(e.g. cable between exchange and cabinet)
▪‘variable’ faults: only affect one customer (e.g. cable on customer property)
$m
$m
UBS AUSTRALASIA CONFERENCE
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