Spark New Zealand Limited FY24 Results
Spark New Zealand Limited
ARBN 050 611 277 Spark City, 167 Victoria Street West, Private Bag 92028, Auckland, New Zealand
MARKET RELEASE – FRIDAY 23 AUGUST 2024
Spark announces FY24 full-year results
• Reported and adjusted
1
, Revenue
2
, EBITDAI
3
, and NPAT
4
declined
• Mobile service revenue surpassed $1 billion for the first time and IT products, data centres,
and high-tech continued to grow
• Growth offset as economic conditions impacted IT services demand, competition intensified
in business mobile, and lower consumer spending impacted mobile devices and accessories
• SPK-26 Operate Programme accelerated in H2, but could not adapt the cost base to
changing demand quickly enough, with benefits to be largely realised in FY25
• On-market share buy-back concluded
5
and total FY24 dividend of 27.5 cents per share
declared, 100% imputed
Spark New Zealand (Spark) today announced its FY24 results. Spark Chair Justine Smyth said,
“It has been a challenging year for Spark and for many businesses across Aotearoa, with
recessionary economic conditions creating a tough operating environment.
“Public sector spending cuts and deferred private sector investment had a significant impact on
IT services revenues, while lower household and business spending impacted mobile devices
and accessories sales, and intensified competitive pricing pressure, particularly in business
mobile.
“We did see strong growth in many of our core markets such as mobile, where service revenue
surpassed $1 billion for the first time, as well as cloud, data centres, and high-tech.
“This was not enough to offset subdued demand in other areas, and we could not adapt our cost
base quickly enough as the market turned. As a result, EBITDAI
declined to $1,163 million,
NPAT declined to $316 million, and this had a flow through impact to lower free cash flow of
$330 million.
“While we are disappointed to not achieve our FY24 ambitions, as we look to the year ahead our
business fundamentals are strong, our underlying drivers of growth are enduring, and our
continued focus on cost reduction will improve margins and support growth.
“Our data centre strategy is a significant mid-term growth opportunity. The reinstatement of our
Dividend Reinvestment Plan
6
for the H2 FY24 dividend and a potential hybrid capital notes
issuance will help fund our growth investments in the near term and we will also explore other
equity funding options such as capital partnerships.
“The Board remains committed to maintaining financial strength and flexibility and our investment
grade credit rating, and approved a total FY24 dividend of 27.5 cents per share, 100% imputed,
for our shareholders.”
FY24 operating performance
Spark’s FY24 financial results are cycling the significant revenue and net profit declared in FY23
following the TowerCo and Spark Sport transactions. As such, both reported and adjusted year-
Spark New Zealand Limited
ARBN 050 611 277 Spark City, 167 Victoria Street West, Private Bag 92028, Auckland, New Zealand
on-year comparisons are provided – the latter of which strips out the impact of the one-off gain to
provide a like-for-like performance comparison.
In FY24 Spark delivered revenues of $3,861million, a decline of 1.2% on an adjusted basis and
14% on a reported basis. This resulted in EBITDAI of $1,163 million, a decline of 2.5% on an
adjusted basis and 32.5% on a reported basis.
Reported NPAT declined 72.2% to $316 million as a result of cycling the TowerCo and Spark
Sport transactions, lower EBITDAI, higher finance expenses and depreciation, and a one-off $26
million non-cash tax adjustment relating to recent Government policy changes
7
. Adjusted NPAT,
excluding one-off items in both years, declined 21% to $342 million.
Lower EBITDAI and higher interest, lease costs, and non-cash earnings impacted free cash flow,
which reduced 32.5% to $330 million.
Spark maintained its leading position in the mobile market by service revenue and total
connections
8
, with service revenues surpassing $1 billion for the first time – increasing 3.1% to
$1,010 million. This was driven by connection growth, price increases, and the stabilisation of
roaming revenues in the consumer market and was partially offset by declines in the business
market as price competition intensified.
Broadband revenue declined 2.1% to $613 million, as lower consumer spending increased price-
driven competition, particularly amongst non-telco competitors.
In the digital services market, total IT revenue declined 1.6% to $692 million, driven by a 14.9%
decline in IT services revenues as economic conditions impacted demand, and masking 3.5%
growth in IT products revenues, driven by continued business migration to the cloud.
Data centres revenue grew 54.2% to $37 million, with Spark’s Takanini campus expansion
completed on time and on budget and new revenue streams coming online. High-tech revenue
grew 21.5% to $79 million, with IoT revenues up 53.3% and over 2 million devices now
connected to Spark’s IoT networks.
Commenting on the results, Spark CEO Jolie Hodson said, “It has been a tough year, and while
our FY24 performance was below our ambition, our business fundamentals remain strong, and
we are focussed on returning to earnings growth in FY25.
“Our leadership in the growing mobile market will support future top-line growth as demand for
data continues to grow, customer experience remains strong, and annual price reviews enable us
to realise the value of the significant investments we make into our mobile network every year.
“The New Zealand data centre market is predicted to grow from ~90MW today to ~500MW
9
by
2030, driven by the acceleration of Generative AI and ongoing business migration to the cloud.
With Spark’s development pipeline now sitting at 118MW
10
, and three strategic Auckland
locations primed for investment, we are well positioned to capture a significant share of this
growth and maintain our competitive position in the market.
“We must also continue to adapt as our markets change. Our SPK-26 Operate Programme will
deliver further cost reductions across the business in FY25, as we leverage new efficiencies
enabled by AI and transform our Enterprise and Government division by integrating our
subsidiaries into Spark to remove duplication, simplify our product portfolio and processes, and
deliver better customer experiences more efficiently .
“It is never easy to make changes that impact our people, and we do not do so lightly. However,
to compete and better serve our customers we must make the difficult but necessary decisions to
ensure our cost base is sustainable. We will continue to provide our teams with support to
transition through any changes.
Spark New Zealand Limited
ARBN 050 611 277 Spark City, 167 Victoria Street West, Private Bag 92028, Auckland, New Zealand
“As we move through this period, we do so with solid foundations – customer satisfaction is up 7
points, employee engagement remains strong, and we have maintained top quartile sustainability
benchmarking against our peers locally and globally.
“We have also continued to make significant investments into the digital infrastructure that
underpins New Zealand’s economy, supports businesses both big and small to grow, and
unlocks new commercialisation opportunities for Spark. In FY24 we invested over $350 million
into our highly secure and resilient network and digital infrastructure, delivering a 28% increase in
mobile network capacity and underpinning growth in data centres, IoT, and high-tech.”
FY25 guidance
Spark provided the following guidance for FY25, subject to no adverse change in operating
outlook:
• EBITDAI: $1,165 - $1,220 million
• Capital expenditure: ~$460 - $480 million
• Total dividend per share: 27.5 cents per share, 75% imputed
#ENDS
Footnotes:
[1] FY24 reported revenue, EBITDAI, and NPAT adjusted for the impact of the FY23 TowerCo gain on sale and Spark
Sport provision and FY24 reported NPAT adjusted for the impact on the tax expense arising from the change in
Government policy on zero-rating of tax depreciation on buildings.
[2] Operating revenues and other gains.
[3] Earnings before finance income and expense, income tax, depreciation, amortisation, and net investment income
(EBITDAI) and capital expenditure (Capex) are non-Generally Accepted Accounting Principles (non-GAAP)
performance measures that are defined in note 2.5 of Spark’s Annual Report.
[4] Net profit after tax.
[5] On 22 August 2024, the Board resolved to withdraw the on-market share buy-back, bringing the buy-back to a
conclusion.
[6] Shares issued under the Dividend Reinvestment Plan will be issued at a 3% discount to the prevailing market price
as determined around the time of issue.
[7] Relating to recent Government policy changes to the zero-rating of tax depreciation on buildings.
[8] Market share estimates sourced from IDC as at 30 June 2024.
[9] Based on Spark’s assessment of market information available from research reports, announced developments, land
transactions, and other publicly available information.
[10] In August, Spark entered into a conditional agreement to purchase land at Takanini, which would add 48MW to the
site. This increased the total development pipeline from 70MW at the end of FY24 to 118MW at the time of
publishing.
Authorised by:
Chante Mueller
Head of Investor Relations & Insurance
For more information contact
For media queries please contact:
Althea Lovell
Corporate Relations Lead Partner
(64) 21 222 2992
althea.lovell@spark.co.nz
For investor queries please contact:
Chante Mueller
Head of Investor Relations & Insurance
(64) 27 469 3062
chante.mueller@spark.co.nz
About Spark
Spark is New Zealand's largest telecommunications and digital services company, with a
purpose to help all of New Zealand win big in a digital world. Spark provides mobile, broadband,
and digital services to millions of New Zealanders and thousands of New Zealand businesses.
www.sparknz.co.nz
---
Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Results for announcement to the market
Name of issuer Spark New Zealand Limited
Reporting Period 12 months to 30 June 2024
Previous Reporting Period 12 months to 30 June 2023
Currency NZD - New Zealand Dollar
Amount (000s) Percentage change
Revenue from continuing
operations
NZD$3,861,000 (14.0%)
Total Revenue NZD$3,861,000 (14.0%)
Net profit/(loss) from
continuing operations
NZD$316,000 (72.2%)
Total net profit/(loss) NZD$316,000 (72.2%)
Interim/Final Dividend
Amount per Quoted Equity
Security
NZD$0.14000000 (comprised only of an ordinary dividend)
Imputed amount per Quoted
Equity Security
NZD$0.05444444
Record Date 13 September 2024
Dividend Payment Date 4 October 2024
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
As at 30 June 2024: NZD$0.41 As at 30 June 2023: NZD$0.61
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Changes in Spark’s earnings before finance income and
expense, income tax, depreciation, amortisation and net
investment income (EBITDAI) are provided in the addendum.
Net tangible assets per share declined by $0.20 per share from
30 June 2023 as the prior year calculation was high due to lower
debt levels following the sale of the Connexa business. The
FY24 calculation was more aligned to the FY22 net tangible
assets per share calculation of $0.34.
Authority for this announcement
Name of person
authorised
to make this announcement
Stefan Knight, Finance Director (CFO)
Contact person for this
announcement
Chante Mueller, Head of Investor Relations
Contact phone number +64 (0) 27 469 3062
Contact email address investor-info@spark.co.nz
Date of release through MAP
23 August 2024
Audited financial statements accompany this announcement.
Addendum:
Amount (000s) Percentage
change
Reported earnings before finance income and expense,
income tax, depreciation, amortisation and net investment
income (Reported EBITDAI)
NZD$1,163,000 (32.5%)
Adjusted earnings before finance income and expense,
income tax, depreciation, amortisation and net investment
income (Adjusted EBITDAI)
NZD$1,163,000 (2.5%)
1
1
Adjustments in the FY23 adjusted earnings before finance income and expense, income tax,
depreciation, amortisation and net investment income (EBITDAI) reflected the impact of the net
gain on sale of Connexa of $583 million and the one-off provision of $54 million for Spark Sport
(nil FY24). EBITDAI and Adjusted EBITDAI are non-GAAP measures which are defined and
reconciled in note 2.5 of Spark’s financial statements.
---
Distribution Notice
Section 1: Issuer information
Name of issuer Spark New Zealand Limited
Financial product name/description Ordinary shares
NZX ticker code SPK
ISIN (If unknown, check on NZX
website)
NZ TELE0001S4
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year X Quarterly
Half Year Special
DRP applies Yes
Record date 13 September 2024 AUST, NZ & USA;
Ex-Date (one business day before the
Record Date)
12 September 2024 AUST, NZ & USA;
Payment date (and allotment date for
DRP)
4 October 2024 AUST & NZ;
14 October 2024 USA
Total monies associated with the
distribution
NZD$253,981,767
(1,814,155,480 shares @ $0.14 per share)
Source of distribution (for example,
retained earnings)
Retained earnings
Currency NZD – New Zealand Dollar
Section 2: Distribution amounts per financial product
Gross distribution NZD$0.19444444
Gross taxable amount NZD$0.19444444
Total cash distribution NZD$0.14000000
Excluded amount (applicable to listed
PIEs)
N/A
Supplementary distribution amount NZD$0.02470588
Section 3: Imputation credits and Resident Withholding Tax
Is the distribution imputed
Fully imputed
Partial imputation
No imputation
If fully or partially imputed, please
state imputation rate as % applied
28%
Imputation tax credits per financial
product
NZD$0.05444444
Resident Withholding Tax per
financial product
NZD$0.00972222
Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any)
3%
Start date and end date for
determining market price for DRP
Start date: 12 September
2024
End date: 18 September
2024
Date strike price to be announced (if
not available at this time)
18 September 2024
Specify source of financial products to
be issued under DRP programme
(new issue or to be bought on market)
New Issue
DRP strike price per financial product
Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms
16 September 2024
Section 5: Authority for this announcement
Name of person
authorised to make
this announcement
Stefan Knight, Finance Director (CFO)
Contact person for this
announcement
Chante Mueller, Head of Investor Relations
Contact phone number +64 (0) 27 469 3062
Contact email address investor-info@spark.co.nz
Date of release through MAP
23 August 2024
---
Hello tomorrow
Spark Annual Report FY24
ANAMATAKO TE PAE
WHAKAMAUA
Tahutahuna te
Kora Karakia:
the Spark Karakia
Papā te whatitiri,
hikohiko te uira
The thunder peels,
the lightning flashes
Ko te pae anamata,
whakamaua, kia ngita
Fix your attention
to the future horizon and secure it
Kei reira te kora e
pūrātoke ana
There, is a small gleaming fragment
Kua kitea te kora
e pūrātoke ana
We have found the small
gleaming fragment
Mā wai rā te kora e tutungi,
e poipoi?
Who will light and nurture
this spark?
Mā tātou te kora e tutungi,
e poipoi
It is us who will light and nurture
the spark!
Tahutahuna te kora, (hī!)
Set fire to the spark, yes!
te kora whitawhita, (hī!)
The zealous spark, yes!
te kora tangata ēi!
The spark of humanity!
For running header don't delete
Aotearoa New Zealand faces many interconnected
challenges. The economic environment is tough,
our productivity challenge is persistent, and
climate change mitigation and adaptation is more
urgent than ever before.
The good news is that the pace of technological
advancement is accelerating just as quickly as
these challenges.
Advanced digital technologies, such as generative AI, are
changing the way people connect, communicate, and do
business and have the potential to accelerate efficiency,
productivity, and sustainability by enabling people and
businesses to do things differently.
To bring these opportunities to our shores New Zealand will
need investment in the digital infrastructure that underpins
all forms of technology and connects us to the world, in
innovation to unlock and scale new use cases, and in skilled
people who can make it all a reality. And this is where Spark
comes in.
As New Zealand’s largest telecommunications and digital
services provider, our ambition is to empower the people
and businesses creating Aotearoa’s tomorrow.
During FY24 we have continued to progress our three-year
strategy, SPK-26, to achieve this goal. We are investing in
the digital infrastructure that will underpin Aotearoa’s digital
economy and create long-term, sustainable growth for our
shareholders.
We have continued to improve customer experiences by
making it easier to interact with Spark, we are backing our
business customers to leverage technology to its fullest
potential, and we are investing in the skills and
development of the people who make it all possible – our
Spark whānau.
It has been a tough year for all New Zealand businesses,
and Spark is not immune to these challenges. But we remain
optimistic about our country’s potential, the ingenuity of
New Zealanders, and the role technology will play in
enabling great people and businesses to do great things.
Ko te pae anamata whakamaua. Hello tomorrow.
Accelerating
Aotearoa through
technology
1
Spark New Zealand Annual Report FY24
Ko te pae anamata, whakamaua
FY24 highlights
FY24 highlightsFY24 highlights
$1billion+
in mobile service revenue and
#1 in mobile market share
1
118MW
2
data centre development pipeline
3
+38
consumer and small business customer
experience (iNPS)
4
up 7 points
67%
employee engagement
remains strong
1. Maintained #1 position in mobile market share by service revenue and total connections. Market share estimates
sourced from IDC as at 30 June 2024.
2. Megawatts (MW).
3. In August, Spark entered into a conditional agreement to purchase land at Takanini, which would add 48MW to the site.
This increased the total development pipeline from 70MW at the end of FY24 to 118MW at time of publishing.
4. Interaction net promoter score (iNPS), a measure of customer satisfaction.
2Hello tomorrow
FY24 highlights
FY24 highlights
103
locations, including cities and towns
across Aotearoa, now have 5G
2 million+
devices connected to our
Internet of Things (IoT) networks
across New Zealand
10 -year
renewable energy partnership with
Genesis Energy – will account for ~60%
of Spark’s annual electricity requirements
31,776
households in need connected
through our not-for-profit broadband
service Skinny Jump
3
Spark New Zealand Annual Report FY24
Ko te pae anamata, whakamaua
Ko te pae anamata, whakamaua
– hello tomorrow
About this report
5
How we create value
6
Our operations
8
Performance snapshot
10
Chair and CEO review
12
Our performance
14
Our Board and Leadership Squad
18
Creating value for our customers
24
Creating value through our network and technology
36
Creating value for our environment
46
Creating value for our communities
56
Creating value for our people
62
Remuneration report
74
Our governance and ESG management
82
Our risk management
88
Spark climate-related disclosures
90
Financial statements
Financial statements
106
Notes to the financial statements
111
Independent auditor's report
152
Other information
Corporate Governance disclosures
157
Spark’s managing risk framework roles and responsibilities
162
Sustainability appendix
163
Glossary
175
Contact details
177
Contents
Hello tomorrow4
Contents
Contents
About this report
• This is an integrated report that shares our financial, social,
environmental, and economic performance. To inform our
approach we have applied the International <IR> Framework,
which considers the creation of value over the short, medium,
and long term, thinking holistically about the resources and
relationships our organisation uses or affects and the
dependencies and trade-offs between them as value is created.
• At the heart of this approach is the <IR> value creation model
(laid out on pages 6 and 7), which details the ‘capitals’ (the
different resources and relationships that we rely on for our
business activities) we draw upon, our strategy and business
model, and the outputs and outcomes we deliver. We have
a section of the report dedicated to each of these capitals.
Our detailed financial report is covered in pages 106–155.
• The report also applies the Global Reporting Initiative (GRI)
standards, the most widely used global sustainability reporting
standard. This requires us to apply a materiality lens to identify
and report against the sustainability issues most important to
our business and our stakeholders. We have a dedicated
sustainability appendix at the back of the report that includes
our materiality matrix and GRI index, to direct readers to where
we have covered specific sustainability topics in the report and
elsewhere. See pages 163–174.
• This report includes climate risk reporting, which has been
prepared in compliance with the Aotearoa New Zealand Climate
Standards (NZ CS 1, NZ CS 2 and NZ CS 3) issued by the
External Reporting Board (XRB). See pages 90–105.
• This Annual Report is published alongside a suite of other
disclosures covering the FY24 period, including our Corporate
Governance Statement, our Modern Slavery and Human Rights
Statement, and our Greenhouse Gas Inventory Report. For the
full suite of FY24 disclosures please visit www.spark.co.nz/
online/about/our-company/governance
Justine Smyth, CNZM
Chair
Gordon MacLeod
Chair Audit and Risk
Management Committee
• This report covers the activities of Spark New Zealand Limited and
its subsidiaries for the period 1 July 2023 to 30 June 2024. It is
dated 23 August 2024 and is signed on behalf of the Board of
Spark New Zealand Limited by Justine Smyth, Chair and Gordon
MacLeod, Chair Audit and Risk Management Committee.
Key dates
Annual Meeting
01 November 2024
FY25 half-year
results announcement
21 February 2025
FY25 year-end
results announcement
20 August 2025
Hello tomorrow
Spark Annual Report 2024
ANAMATAKO TE PAE
WHAKAMAUA
Spark Greenhouse Gas
Inventory Report 2024
INVENTORY
GREENHOUSE GAS
CORPORATE
GOVERNANCE
Spark Annual Corporate
Governance Statement 2024
Ko te pae anamata, whakamaua
5
Spark New Zealand Annual Report FY24
A culture that
develops and
empowers
our people
Investment in
resilient, adaptable
infrastructure for
New Zealand’s
future
Innovation to
create value for
Spark and our
customers
Providing leading
products and
services that
connect
and enable
New Zealanders
Economic
Transformation
Digital
Equity
Sustainable
Spark
Te Korowai
Tupu
Including the elements of our Sustainability Framework on page 83
How we create value
WHAT WE RELY ON
Our customers
Social capital
Consumers and organisations
that are enabled by our products
and services
Our finances
Financial capital
Equity, debt and cash generated
through our operations
Our network
and technology
Manufactured + intellectual capital
Our mobile sites, data networks,
systems, processes and digital
services capability
Our people
Human + intellectual capital
Engaged, adaptive and
inclusive teams that are the
heart of our business
Our environment
Natural capital
Energy, materials and impacts
of our operations
Our communities
Social + human capital
Our communities around
New Zealand and the communities
across our global supply chain
OUR BUSINESS MODEL
G
O
V
E
R
N
A
N
C
E
B
U
S
I
N
E
S
S
S
T
R
A
T
E
G
Y
W
h
a
k
a
m
a
n
a
,
W
e
E
m
p
o
w
e
r
M
a
t
o
m
a
t
o
,
W
e
S
u
c
c
e
e
d
T
o
g
e
t
h
e
r
T
ū
h
o
n
o
,
W
e
C
o
n
n
e
c
t
M
ā
i
a
,
W
e
a
r
e
B
o
l
d
TO HELP
WIN BIG
OUR PURPOSE
IN A DIGIT AL WORLD
O
U
R
V
A
L
U
E
S
As part of Integrated Reporting, we use this diagram to show how we create value as a business. It starts with the forms of capital we
rely on – from traditional forms of capital, such as financial capital, to broader forms of capital, such as manufactured or human capital.
It then displays the outputs we have delivered as a result in FY24, alongside the longer-term outcomes we are trying to achieve.
Hello tomorrow6
How we create value
How we create value
OUTPUTS FY24OUTCOMES
• $350 million invested into our network and digital infrastructure in FY24
• 28% increase in mobile capacity from FY23
• 5G now live in 103 locations, including cities and towns across
New Zealand, with 5G core build under way
• 22.3MW of data centre capacity and 118MW development pipeline
• Over 2 million devices now connected to our IoT networks
• Rural Connectivity Group delivered its 500th rural cell tower
• Established a network of satellite-connected small cells throughout the country
Connected and resilient
New Zealand
Enabling a connected New Zealand and providing
infrastructure to support innovation
See page 36
• Over 2.7 million mobile connections, up 0.3% from FY23
• 687,000 broadband connections, down 12,000 from FY23
• Consumer and small business interaction score (iNPS) of +38,
up 7 points from FY23
Connected customers
Enabling our customers to realise the benefits of digital
technology and enabling their own value creation
See page 24
• $3,861 million operating revenue and other gains
(down 14.0% on a reported basis and 1.2% on an adjusted basis
1
)
• $316 million reported net profit after tax (down 72.2%) and $342 million
adjusted net profit after tax (down 21%)
2
• 27.5 cents per share dividend, up 0.5 cents per share from FY23
Capital for future investment
Enabling future investment in our business and
providing market returns to grow financial capital for
our shareholders
See page 10
High performing, engaged,
and inclusive teams
Enabling the success of our business and our people
and growing New Zealand’s human capital
See page 62
• Employee engagement score of 67%, down from 70% in FY23
• 40:40:20 gender representation at Leadership Squad and senior
leadership levels
• 78% of group-wide employees sharing ethnicity data
• New internal skilling centre, Te Awe, upskilling and reskilling Spark people
Protecting the environment
Enabling a reduced draw on natural capital in our
business and through our customers' use of technology
See page 46
• New 10-year renewable energy partnership with Genesis Energy to supply
~60% of Spark’s annual electricity needs from January 2025
• 16,874 tCO
2
e scope 1 and 2 emissions, up 26.7% from FY23
• 450 tonnes of e-waste generated and recovered, a reduction of 109 tonnes
from FY23
• 16,425 mobile phones collected for recycling and trade-in, up 1,306 from FY23
• Efficiencies enabled across other sectors through technology
• Skinny Jump benefitting 31,776 households, up from 27,341 in FY23
• 659 marae connected through the Marae Digital Connectivity Programme,
up from 622 in FY23
• Joint Audit Cooperation (JAC) membership supporting auditing of supply
chain working conditions
• Spark Foundation investment supporting improved digital equity
in communities
Connected and empowered
communities
Enabling all New Zealanders to benefit from the digital
world and improving social outcomes across our value
chain
See page 56
1. The prior year is adjusted for the impact of the net gain on sale of Connexa of $583 million within other gains.
2. FY24 net earnings is adjusted for the impact of the zero-rating of tax depreciation on buildings, which has resulted in a $26 million non-cash increase in tax expense
and corresponding reduction in the deferred tax asset. FY23 is adjusted for the impact of the net gain on sale of Connexa of $583 million, the one-off provision of
$54 million for Spark Sport, the $5 million net gain on dilution of the investment in the Connexa group, and related tax impacts of $168 million.
Ko te pae anamata, whakamaua
7
Spark New Zealand Annual Report FY24
OTN nodes
OTN network
Metro and Edge data centres
Strategic Auckland data centre campuses
Corporate offices
Earth Station satellite link
Southern Cross Cable (SX NOW)
Southern Cross Cable (SX NEXT)
Tasman Global Access Cable (TGA)
Connection from Sydney, Australia to USA
Connection to Sydney, Australia
Connection to Sydney, Australia
Connection to USA
Our operations
Spark is New Zealand’s largest
telecommunications and digital
services company. Our customers
range from individual New Zealanders
and households to small businesses,
not-for-profits, government, and large
enterprise clients. Across all our
services – mobile, broadband,
digital services, and digital
infrastructure – we have relevance
for almost every New Zealander.
Hello tomorrow8
Our operations
Our operations
1. Cat-M1 Internet of Things network.
2. Includes Spark active equipment on 1,549 third party towers, 514 RCG towers, 98 small cells,
and 15 temporary sites active at 30 June 2024.
5,291
employees
>
110k
small-medium business customers
2 ,176
mobile sites housing our active
infrastructure
2
>
22mw
data centre capacity
24
regional business hubs
98%
of New Zealanders reached
by our 4G network
>
2.7m
mobile connections
99%
of the population reached by
our Internet of Things network
1
>
680k
broadband connections
~
1,10 0
enterprise and government
customers
61
retail stores
We operate the following brands and businesses:
CommunityConsumerBusinessOther brands
Ko te pae anamata, whakamaua
9
Spark New Zealand Annual Report FY24
Performance snapshot
Reported net earnings
$316m
72.2%
Adjusted net earnings
3
$342m
21.0%
Operating revenues and other gains
$3, 861m
14.0% Reported basis
1.2%
Adjusted basis
2
EBITDAI
1
$1,16 3 m
32.5% Reported basis
2.5% Adjusted basis
2
IT revenue
$692m
1.6%
Data centre and high-tech revenue
$116 m
30.3%
Broadband revenue
$613 m
2 .1%
Mobile service revenue
$1,010m
3 .1%
10Hello tomorrow
Performance snapshot
Performance snapshot
1. Earnings before finance income and expense, income tax, depreciation,
amortisation and net investment income (EBITDAI) and capital expenditure are
non-Generally Accepted Accounting Practice (non-GAAP) measures. These
measures are defined and reconciled in note 2.5 of the financial statements.
2. There were no adjusting items impacting EBITDAI in FY24. The prior year is
adjusted for the impact of the net gain on sale of Connexa of $583 million,
within other gains, and the one-off provision of $54 million for Spark Sport
within operating expenses.
3. FY24 net earnings is adjusted for the impact of the zero-rating of tax
depreciation on buildings which has resulted in a $26 million non-cash
increase in tax expense and corresponding reduction in the deferred tax asset.
FY23 is adjusted for the impact of the net gain on sale of Connexa of $583
million, the one-off provision of $54 million for Spark Sport , the $5 million net
gain on dilution of the investment in Connexa and related tax impacts of $168
million.
4. Free cash flow is a non-GAAP measure and is calculated on page 8 of Spark's
FY24 Detailed Financials.
5. Interaction Net Promoter Score, a measure of customer engagement.
Employee engagement
67%
3pp
Free cash flow
4
$330m
32.5%
Capital expenditure
1
$518m
0.6%
Consumer and small business iNPS
5
+38
7 points
Proposed design for Spark's Auckland CBD data centre expansion.
11
Spark New Zealand Annual Report FY24
Ko te pae anamata, whakamaua
TowerCo and Spark Sport transactions, we
have provided both reported and adjusted
year-on-year comparisons – the latter of
which strips out the impact of the one-off
gain to provide a like-for-like performance
comparison.
FY24 EBITDAI of $1,163 million was down
2.5% on an adjusted basis and 32.5% on a
reported basis.
Reported NPAT declined 72.2% to $316
million as a result of cycling the TowerCo
and Spark Sport transactions, lower EBITDAI,
higher finance expenses and depreciation,
and a one-off $26 million non-cash tax
adjustment relating to recent Government
policy changes. Adjusted NPAT, excluding
this one-off item, declined 21% to $342
million.
Lower EBITDAI and higher interest, lease
costs, and non-cash earnings impacted
free cash flow, which reduced 32.5% to
$330 million.
While we are disappointed to not achieve
our FY24 performance ambitions, as we
look to the year ahead, our business
fundamentals are strong, and we continue
to see opportunities for growth.
Tēnā koutou,
It has been a challenging year for Spark
and for many businesses across Aotearoa,
with recessionary economic conditions
creating a tough operating environment.
Public sector spending cuts and deferred
private sector investment had a significant
impact on IT services revenues, while lower
consumer and business confidence
impacted sales of mobile devices and
accessories and intensified competitive
pricing pressure, particularly in business
mobile.
We did see strong growth in many of our
core markets such as mobile, where service
revenue surpassed $1 billion for the first
time, as well as cloud, data centres, and
high-tech.
This was not enough to offset subdued
demand in other areas, and we could not
adapt our cost base quickly enough as the
market turned. This resulted in the lowering
of FY24 EBITDAI guidance in May and an
overall FY24 performance below our
ambitions.
Because our FY24 financial results are
cycling the significant revenue and net
profit declared in FY23 following the
Our leadership in the growing mobile
market will support top-line growth as
demand for data continues to grow,
customer experience remains strong, and
annual price reviews enable us to realise
the value of the significant investments we
make into our network every year.
Through our SPK-26 Operate Programme
we made changes to our operating model
during FY24, to align our teams to our new
strategy and our labour costs to changing
revenue trends, with the majority of these
benefits to be realised in FY25.
This work will continue to deliver further
labour and opex cost reductions, improve
margins, and insulate Spark from the
economic environment. This includes a
material change to our Enterprise and
Government division, where we will
integrate our subsidiaries into Spark to
remove duplication, simplify our product
portfolios and processes, and deliver better
customer experiences with greater
efficiency.
It is never easy to make changes that
impact our people, and we do not do so
lightly. However, to compete in a
challenging economic environment we
must make the difficult but necessary
decisions to ensure our cost base is
sustainable. We will continue to provide
our teams with the appropriate support to
transition through these changes.
Our data centre strategy is a significant
mid-term growth opportunity. The New
Zealand data centre market is predicted to
grow from ~90MW today to ~500MW by
2030, driven by the acceleration of AI, and
in particular Generative AI, and ongoing
business migration to the cloud.
With Spark’s potential development
pipeline now sitting at 118MW, and three
strategic Auckland locations primed for
investment, we are well positioned to
capture a significant share of this growth
and maintain our competitive position in
the market.
Justine Smyth CNZM, Chair and Jolie Hodson MNZM, CEO.
Chair and CEO review
Hello tomorrow12
Chair and CEO review
Chair and CEO review
people. We launched a new internal skilling
centre, Te Awe, to upskill and reskill our
people in new and emerging technologies,
and enhanced our Mahi Tahi wellbeing
programme with a new partnership with
Clearhead, which gives our people access
to six fully funded therapy sessions
annually. Over 1,500 people have used the
service so far, and in our most recent
culture survey, 88% of our people said they
believe their wellbeing is supported by
their leaders at Spark.
Overall, our environmental, social, and
governance (ESG) practices have continued
to mature, and we maintained our position
in the Dow Jones Sustainability Australia
Index and our ranking in the top quartile of
the Worldwide Benchmarking Alliance’s
Digital Inclusion Benchmark.
Looking ahead
As we look ahead, we know that
challenging economic conditions will
persist in the near term. Our SPK-26
strategy was built for resilience and growth,
and that is the dual focus we take into FY25.
We will drive greater efficiency across our
business to reset our cost base to a more
sustainable level, while continuing to invest
in our growth engines of the future.
We are pleased to be building on strong
foundations. Our customers are getting
better experiences, our people are
engaged, and our sustainability credentials
continue to strengthen.
We would like to recognise the hard work
and commitment of our Spark whānau,
who remain committed to supporting our
customers, and offer our sincere thanks to
our shareholders for your ongoing support.
Noho ora mai
[be well]
Justine Smyth CNZM
Chair
Jolie Hodson MNZM
CEO
The reinstatement of our Dividend
Reinvestment Plan for the H2 FY24 dividend
and a potential hybrid capital notes
issuance will help fund our growth
investments in the near term, and we will
also explore other equity funding options
such as capital partnerships.
We remain committed to maintaining
financial strength and flexibility and our
investment grade credit rating, and the
Board is pleased to confirm a total FY24
dividend of 27.5 cents per share for our
shareholders, 100% imputed.
Our FY24 Market Performance
As topline growth was impacted by
economic conditions and intensified
competition, FY24 revenue of $3,861 million
declined 1.2% on an adjusted basis and
14% on a reported basis.
Mobile service revenue increased 3.1% to
$1,010 million, driven by consumer
connection growth, price increases, and
stabilised roaming revenues, and partially
offset by declines in the business market as
price competition intensified. We were
pleased to maintain our #1 position in
mobile market share by service revenue
and total connections.
Broadband revenue declined 2.1% to
$613 million, as lower consumer spending
increased price-driven competition,
particularly amongst non-telco competitors.
As we continued to invest in digitisation
and service innovation, we were pleased to
see our measure of customer satisfaction
(our interaction net promoter score)
increase by 7 points to +38.
In our digital services market, total IT
revenue declined 1.6% to $692 million. This
was driven by a 14.9% decrease in IT
services revenue as economic conditions
impacted demand and masked 3.5%
growth in IT products, which was driven by
continued strong growth in cloud as
businesses digitise.
Data centres revenue grew 54.2% to
$37 million, as our Takanini campus
expansion was completed on time and on
budget, and new revenue streams came
online. Our high-tech revenue grew 21.5%
to $79 million, with Internet of Things (IoT)
revenues up 53.3% and over 2 million
devices now connected to our IoT networks.
Our FY24 Toitū Sustainability
Performance
Every year we make significant investments
into the digital infrastructure that underpins
New Zealand’s economy, supports
businesses both big and small to grow, and
unlocks new commercialisation
opportunities for Spark. In FY24 over $350
million was invested in our highly secure
and resilient network and digital
infrastructure, delivering a 28% increase in
mobile network capacity and underpinning
growth in data centres, IoT, and high-tech.
We understand how important connectivity
is to the lives of all New Zealanders, and we
continued to expand the reach of our 5G
network, increase rural connectivity, and
support more equitable access to the
digital world. We now support 31,776
households in need across the country
through our not-for-profit broadband
service Skinny Jump.
Our scope 1 and 2 emissions increased
26.7% in FY24, largely driven by a one-off
event at an exchange, when the release of
fire suppressant was triggered by an alarm.
Unfortunately, this means we are tracking
18.6% above the pathway required to reach
our Science Based Targets initiative (SBTi)
target. Without this event we would be
tracking 5.7% above our pathway, as a
result of the higher emissions factor of the
New Zealand grid during the year.
We did, however, make strong progress on
future emissions reductions when we signed
a ten-year renewable energy Power Purchase
Agreement (PPA) with Genesis in May.
In exploring renewable energy partnership
opportunities, it was important to us to
support investment in new renewable
energy – rather than buying certificates for
existing renewables that were added to the
grid many years ago. This new partnership
supported this ambition and will see us
purchase all of the electricity generated by
Genesis’ first solar farm in Lauriston
Canterbury. The 63MW site will meet around
60% of our current annual requirements
once it becomes operational in 2025 and
will make a significant contribution towards
our scope 1 and 2 emissions reduction
target in the years ahead.
During the year we also continued to invest
in the development and wellbeing of our
Ko te pae anamata, whakamaua
13
Spark New Zealand Annual Report FY24
Our performance
1 Earnings before finance income and expense, income tax, depreciation,
amortisation, and net investment income (EBITDAI) and capital expenditure
are non-Generally Accepted Accounting Practice (non-GAAP) measures. These
measures are defined and reconciled in note 2.5 of the financial statements.
2 The prior year is adjusted for the impact of the net gain on sale of Connexa of
$583 million, within other gains, and the one-off provision of $54 million for
Spark Sport, within operating expenses. There were no adjusting items
impacting EBITDAI in FY24.
Operating revenues and other gains
• Mobile revenue increased $4 million, or 0.3%, with mobile
service revenue surpassing $1 billion for the first time, growing
$30 million, or 3.1%. This was driven by connections growth,
price increases in the consumer market, and increased roaming
and was partly offset by price pressure in the government and
enterprise sector. Non-service revenue declined $26 million,
or 5.3%, due to lower volumes of handset and accessories sales
as consumers delayed spending on new devices.
• Broadband revenue declined $13 million, or 2.1% due to a
decline in total broadband connection numbers of 12,000,
or 1.7%, as competitor activity persisted, and lower average
revenue per user (ARPU) as customers migrated off legacy plans.
• IT revenue declined $11 million, or 1.6%. Within this, cloud
revenue grew $16 million, or 7.7%, due to onboarding of new
private cloud clients and increased public cloud uptake, but
was more than offset by a $29 million, or 14.9%, decline in IT
services revenue due to price pressure on re-signing of existing
customers and a decline in project activity across the
government and enterprise sector.
• Procurement and partners revenue decreased $36 million, or
6.2%, mainly due to lower procurement volumes across the
customer base, noting this was substantially offset by associated
lower procurement costs.
• Voice revenues declined $51 million, or 22.1%, due to
connection losses and associated lower calling volumes as part
of a continued shift from fixed line to wireless calling. Legacy
voice revenues now contribute less than 5% of total revenue.
• Data centre revenue increased $13 million, or 54.2%, as
increased capacity became available following the completion
of the second data centre pod at Takanini.
• High-tech revenue increased $14 million, or 21.5%, driven by
strong IoT connections and revenue growth and continued
growth in MATTR, partly offset by a slight decline in Qrious
following the completion of a number of large customer projects.
$ MILLION
FY24
FY23
MOBILE
BROADBAND
IT REVENUE
PROCUREMENT
AND PARTNERS
VOICE
DATA CENTRES
HIGH-TECH
OTHER OPERATING REVENUE
AND OTHER GAINS
NET GAIN ON SALE OF
CONNEXA
FY23 adjusting item
1,600
1,400
1,200
1,000
800
600
400
200
0
$3, 861m
(down 14.0% reported and down 1.2% adjusted
2
)
Reported basic earnings per share
17. 3 cents
71.5%
Adjusted basic earnings per share
3
18.7 cents
19.4%
Mobile service revenue
$1,010m
3 .1%
Dividends per share
4
27.5 cents
1.9%
Reported EBITDAI
1
$1,163m
32.5%
Adjusted EBITDAI
1,2
$1,163m
2.5%
Adjusted net earnings
1,3
$342m
21.0%
Reported net earnings
$316m
72.2%
• Other operating revenue declined $36 million, or 20.9%,
primarily driven by the closure of the Spark Sport platform at the
end of FY23.
• Other gains increased $69 million to $102 million due to the sale
of mobile network equipment, gains on lease modifications and
terminations, and vendor investments into Spark’s network in
support of revenue growth opportunities.
• Excluded from the prior year adjusted result is the net gain of
$583 million from the sale of Connexa (formerly ‘TowerCo’),
which contained Spark’s passive mobile tower assets.
Hello tomorrow14
Our performance
Our performance
0
200
400
600
800
1000
1200
1400
1600
1800
2000
$ MILLION
PRODUCT
COSTS
LABOURSPARK SPORT
PROVISION
OTHER
FY24
FY23
FY23 adjusting item
Operating expenses
• Product costs decreased $53 million, or 2.9%, with declines
broadly in line with decreases in associated revenues.
This included lower procurement volumes, reduced voice
connections, and the exit of Spark Sport and were partly offset
by increases in cloud, IoT, and MATTR in line with revenue growth.
• Labour costs were stable year-on-year with growth in Entelar
Group and increased remuneration costs being offset by
targeted reductions across the business in line with operating
model changes.
• Other operating expenses increased $35 million, or 8.7%, driven
by a full year of charges under the Connexa lease arrangement,
bad debt costs, and severance costs.
• Excluded from the prior year adjusted result was a $54 million
provision resulting from the closure of the Spark Sport business.
$2,698m
(down 2.6% on a reported basis and down
0.6% on an adjusted basis
2
)
Other
• Total depreciation and amortisation increased $23 million, or
4.6%, largely driven by higher costs associated with the increased
capital spend across FY23 and FY24, combined with increased
depreciation on right-of-use assets.
• Net finance expense increased $47 million, driven by higher costs
associated with both increased interest rates and higher debt
levels, as well as increased interest on leases due to a full year
of Connexa leases and long-term infrastructure leases.
• Adjusted tax expense decreased $13 million, largely due to
decreased adjusted earnings before tax for the period.
• The $26 million non-cash tax adjustment in FY24 relates to the
introduction of Government policy changes to remove the tax
depreciation deduction on buildings, with a corresponding
reduction in the associated deferred tax asset. In FY23 the tax
income on the adjusting items includes $14 million for the Spark
Sport provision and $154 million as a result of the Connexa
transaction.
0
100
200
300
400
500
600
DEPRECIATION
AND
AMORTISATION
NET
FINANCE
EXPENSE
NET TAX
INCOME ON
ADJUSTING ITEMS
TAX
EXPENSE
$ MILLION
FY24
FY23
FY24 adjusting item
FY23 adjusting item
3 FY24 net earnings is adjusted for the impact of the zero-rating of tax
depreciation on buildings, which has resulted in a $26 million non-cash increase
in tax expense and corresponding reduction in the deferred tax asset. FY23 is
adjusted for the impact of the net gain on sale of Connexa of $583 million, the
one-off provision of $54 million for Spark Sport, the $5 million net gain on
dilution of the investment in the Connexa group, and related tax impacts of
$168 million.
4 This represents the H1 FY24 first-half dividend of 13.5 cents per share, together
with the H2 FY24 second-half ordinary dividend declared of 14.0 cents per
share. Referenced on page 138.
Ko te pae anamata, whakamaua
15
Spark New Zealand Annual Report FY24
670
690
710
730
750
770
790
810
FY23 NET CASH FLOWS FROM
OPERATING ACTIVITIES
RECEIPTS FROM CUSTOMERS
PAYMENTS FOR INTEREST ON DEBT
PAYMENTS FOR INTEREST ON LEASES
RECEIPTS FROM INTEREST
PAYMENTS FOR INTEREST ON LEASED
CUSTOMER EQUIPMENT ASSETS
PAYMENTS FOR INCOME TAX
PAYMENTS TO SUPPLIERS
AND EMPLOYEES
FY24 NET CASH FLOWS FROM
OPERATING ACTIVITIES
$ MILLION
800
(79)
(25)
(9)(1)
01
77
764
Cash flows
• Operating cash flows decreased $36 million due to higher
payments for interest on debt. Lower receipts from
customers resulting from lower revenues were substantially
offset by a similar reduction in payments to suppliers.
• Investing cash outflows of $550 million in FY24 were mainly
due to payments for the purchase of property, plant and
equipment and intangibles. While in FY23, this was an inflow
of $425 million, mainly due to the receipt of net proceeds
from the sale of the Connexa business of $893 million,
partially offset by payments for the purchase of property,
plant and equipment and intangibles of $475 million.
• Financing cash outflows were $255 million in FY24
compared with an outflow of $1,196 million in FY23.
The prior year included repayments of debt of $463 million
following the sale of Connexa. In FY24 debt levels increased
as funds were invested in capital projects in line with Spark’s
strategy and the on-market share buy-back concluded.
• Free cash flow of $330 million was $159 million lower in
FY24, driven by the decline in EBITDAI, increased cash
payments for capital expenditure included in free cash flow
1
,
and increased interest payments.
20242023
YEAR ENDED 30 JUNE$M$M
Net cash flows from operating activities764800
Net cash flows from investing activities(550)425
Net cash flows from financing activities(255)(1,196)
Net cash flows(41)29
Free cash flow
1
330489
1 Free cash flow is a non-GAAP measure and is calculated on page 8 of
Spark’s FY24 Detailed Financials.
Operating cash flows
$764m 4.5%
Hello tomorrow16
Our performance
For running header don't delete
Capital expenditure in FY24 included the following key focus
areas and projects:
• Investment to support cloud, security, and service
management revenue growth, including an uplift in software
licensing to support Spark’s private cloud.
• Fixed network and international cable capacity to meet future
requirements for Spark's fibre and transport network,
continuation of our core network expansion and resilience
programme, advancement of our exit strategy for the PSTN,
and international cable capacity purchases to meet forecasted
demand for data. This includes enablement investment for
Multi-Access Edge Compute (MAEC).
• Lifecycle investment and licensing for internal IT systems,
enhancements to support new products and deliver simple,
intuitive customer experiences, expansion of enterprise
systems capability, and investment in deep customer insights,
automation, and artificial intelligence. This includes the
development of foundational capability to support converged
technology solutions.
• Continued investment in Spark’s mobile core and radio access
network (RAN) delivering greater network capacity and
coverage. FY24 includes an uplift in Spark’s 5G investment to
accelerate our rollout of this technology and provide a full 5G
standalone capability as an enabler of future revenues from
emerging technologies.
• Completion of data centre capacity upgrades at the Takanini
and Aotea Campuses in Auckland. Commencement of next
stage of Takanini development, planned North Shore campus,
and upgrades to the Waikato data centre.
• Property investment in Spark’s corporate offices, retail stores
fitouts and refits, and sustain investment for power and
building services for Spark-owned exchanges and data centres.
Cash payments for capital expenditure items (including capitalised
interest and excluding spectrum payments) in the statement of
cash flows were $592 million compared with capital expenditure
of $518 million. The main drivers of this difference are related to
network expenditure items that were received in FY23 but not
paid for until FY24, together with payments of capex at the end of
FY24 in relation to long term network projects that have not yet
been implemented.
$518m
Capital expenditure
2
Capital expenditure to adjusted operating revenues
$
1
7
8
M
$
1
5
9
M
CLOUD
FIXED NETWORK AND
INTERNALTIONAL CABLE CAPACITY
IT SYSTEMS
MOBILE NETWORK AND
5G STANDALONE READINESS
PROPERTY
DATA CENTRES
SUNDRY
$
1
1
M
$
4
1
M
$
1
0
M
$
3
7
M
$
8
2
M
2 Capital expenditure is a non-GAAP measure and is defined in note 2.5 of
the financial statements.
3 Capital expenditure to operating revenues for FY23 is calculated on
adjusted operating revenue (excluding the gain on Connexa sale) to
enable a meaningful comparison.
13. 4%
(F Y23 13. 2%
3
)
Ko te pae anamata, whakamaua
17
Spark New Zealand Annual Report FY24
Our Board and Leadership Squad
Our Board
1. Justine Smyth CNZM
Chair
Justine joined the Board of Spark
New Zealand in December 2011 and
became Chair in 2017. She has extensive
experience in governance, mergers and
acquisitions, taxation, and the financial
performance of large corporate enterprises,
as well as small and medium enterprises
(SMEs). Her background is in finance and
business management, having been a
Partner with Deloitte and Group Finance
Director at Lion Nathan. Justine is currently
Chair of The Breast Cancer Foundation
New Zealand and Chair of Mondiale VGL
Group and is a former director of Auckland
International Airport Limited. Justine has a
Bachelor of Commerce from the University
of Auckland and is a Fellow of Chartered
Accountants of Australia and New Zealand
and a Chartered Fellow of the Institute of
Directors. In 2020 Justine was appointed
a Companion of the New Zealand
Order of Merit for services to governance
and women.
2. Alison Barrass
Non-executive Director
Alison joined the Board in September 2016.
She brings a broad range of skills, including
knowledge and expertise in the fast-moving
consumer goods (FMCG) sector and in
governance, leadership, and marketing-led
innovation. Her background includes 30
years’ experience at major international
FMCG companies, including PepsiCo,
Kimberley-Clark, Goodman Fielder, and
Griffins Foods. She is currently a director
with Rockit Global, Zespri, Suncorp NZ,
Babich Wines, and AA Insurance and is a
former director of GWA Group and former
Chair of Tom & Luke. Alison has a Bachelor
of Science from the University of
Southampton and a Business Diploma in
Marketing from the University of Auckland.
1.2.
3.4.
5.6.
7.8.
Hello tomorrow18
Our Board and Leadership Squad
Our Board and Leadership Squad
5. Jolie Hodson MNZM
Chief Executive and Executive Director
Jolie joined the Board in September 2019.
Her appointment to CEO in July 2019
followed a substantial career within Spark,
leading different areas of the operating
business over a six-year period. As CEO,
Jolie is responsible for ensuring the
company has a sound strategy and builds a
team around her that is able to deliver the
digital infrastructure, products and services,
and innovation that supports Spark’s
customers and Aotearoa to win big in a
digital world. Jolie is a strong advocate for
diversity and inclusion, digital equity, and
the role of technology in enabling
Aotearoa’s transition to a high productivity,
low-carbon economy. Jolie is a member
of the Climate Leaders Coalition Steering
Committee, including two years as the
Convenor. In 2024 Jolie was recognised
in the King’s Birthday Honours as a
Member of the New Zealand Order of
Merit for services to business, governance,
and women.
6. Lisa Nelson
Non-executive Director
Lisa joined the Spark Board in May 2024.
She is an accomplished finance and
business development executive with
25 years of global operating experience
across the financial services, software, and
technology industries. Lisa most recently
served as Managing Director of M12,
Microsoft’s venture fund, which she
co-founded. Prior to that she held various
executive roles at Microsoft spanning
business development, investor relations,
strategy, financial reporting, and
accounting. Lisa’s current governance
appointments include Destiny Tech100 Inc,
Seattle Bank, and Banqer Limited, a
New Zealand-based edtech startup, and
she is a former director of Astra Space Inc.
Lisa’s advisory roles include several
early-stage tech startups and ventures
funds, including Movac in New Zealand.
Lisa is based in Seattle, Washington,
and is a certified public accountant
licensed in the State of Washington and
a Qualified Financial Expert in accordance
with US Securities and Exchange
Commission standards.
7. Sheridan Broadbent
Non-executive Director
Sheridan joined the Spark Board in August
2022 with an executive and governance
career spanning telecommunications, ICT,
infrastructure, and energy. Her governance
experience includes her role as Independent
Director for Manawa Energy and Downer EDI
Limited. Previous governance experience
includes her roles as Chair of Kordia, Chair
of Pipeline and Civil Group, Director of
Transpower, and former member of the
Government’s Cyber Security Advisory
Committee. Sheridan holds a Bachelor of
Commerce from the University of Auckland,
is a Chartered Member of the Institute of
Directors, and is a graduate member of the
Australian Institute of Company Directors.
8. Warwick Bray
Non-executive Director
Warwick joined the Board in September 2019.
He brings over four decades of experience in
the international telecommunications,
technology, and media sectors, most recently
in senior executive roles at Telstra. During his
nine years at Telstra up until 2018, Mr Bray’s
executive roles comprised Chief Financial
Officer, Group Managing Director Product,
Executive Director Mobile and Head of
Corporate Strategy. Earlier in his career,
he was a Managing Director at JP Morgan
(London) and Dresdner Kleinwort
Wasserstein (London) in telecommunications
equity research. He also worked at McKinsey
& Company in Europe, advising
telecommunications companies on strategy,
regulation, and operational improvement,
and as a network systems engineer at Hewlett
Packard. Mr Bray has served on the GSMA
strategy committee, the boards of Hong Kong
mobile business CSL and Australian pay
TV operator Foxtel, and as Chairman of the
Australian Mobile Telecommunications
Association. He is currently a director with
Woolworths Group. He holds a Bachelor
of Science (Hons) and a Masters in
Business Administration from the University
of Melbourne.
3. David Havercroft
Non-executive Director
David joined the Board in October 2021,
bringing skills and experience from a
career in the technology industry that has
spanned more than 35 years. He held a
number of leadership roles at Spark
New Zealand from 2009-2017, including
Chief Operating Officer and Chief
Technology Officer. Prior to this he held
executive and management positions in
IBM Asia Pacific, Cable & Wireless, and BT.
David is currently a director of Westpac
New Zealand, and was formerly a director
of Kordia, Connect 8, Southern Cross Cable
Network, and Kiwi Wealth.
4. Gordon MacLeod
Non-executive Director
Gordon joined the Board in August 2022.
He is a highly credentialed business leader,
who held a range of senior executive roles
over a 15-year tenure at Ryman Healthcare
Group, including Group CEO from June
2017 to October 2021. Prior to this Gordon
was a Corporate Finance and Advisory
Partner with PwC and was also the Finance
Director of a high-tech UK listed company
based on the Cambridge Science Park in
England. Gordon is an Independent
Director of NZX-listed Delegat Group, a
trustee of Breast Cancer Foundation NZ,
and is the Advisory Chair of two private
companies. He holds a Bachelor of
Commerce from the University of
Canterbury, is a Fellow of Chartered
Accountants of Australia and New Zealand,
and a Member of the Institute of Directors.
Ko te pae anamata, whakamaua
19
Spark New Zealand Annual Report FY24
Strategic role of the Board
Spark’s Board plays a critical role in helping
to guide and test company strategy, by
engaging in an ongoing conversation with
the Leadership Squad around key strategic
decisions. These decisions are in relation to
the long-term strategic planning and
direction of the business and our ability to
create value in the medium and long term.
It also includes non-financial performance
in areas such as customer experience,
governance, and sustainability. The Board
approves and monitors SPK-26 (our
business strategy) and has oversight of
cyber security and maturity, modern
slavery, and climate change risk. For a
detailed explanation of the Board’s
oversight of climate risk and opportunities
see page 91.
As the body elected by shareholders to
protect and enhance the value of Spark’s
assets, the Board has oversight of Spark’s
financials and the annual and three-year
planning processes. Board members
engage in robust discussions with
management around the strategic direction
of the business to test and ensure
investment is going towards the things
that will deliver the best outcomes for the
company and shareholders. This flows
through to Spark’s remuneration policies,
where there is Board involvement in setting
targets and hurdles for short-term and
long-term incentives.
Company Secretary
The Company Secretary is responsible
for supporting the effectiveness of the
Board by ensuring that its policies and
procedures are followed and for
coordinating the completion and dispatch
of the Board agendas and papers.
The Company Secretary is a position
distinct from the Leadership Squad and
is accountable to the Board, via the Chair,
on all governance matters, as further
described in the Board Charter.
Board renewal and
succession
Spark’s Board has an appropriate mix of
tenure, skills, diversity, and experience.
The Board skills matrix on page 21 outlines
the qualifications, capabilities, geographic
location, tenure, and gender of each
member of the Board. Ethnicity information
is available on page 72 of this report.
There is an ongoing Board succession
programme, which is focussed on finding
new directors with relevant skills and
experience that complement the diverse
perspectives already represented around
the table. During FY24, as part of the
Board’s ongoing succession planning,
Lisa Nelson joined the Board as an
independent Non-executive Director,
effective May 2024, and Charles Sitch
resigned as an independent Non-executive
Director with effect from 3 November 2023.
We wish to thank Charles for his huge
contribution to the Board over his
twelve-year tenure. Charles played a
unique role in guiding the business from its
telco origins to the digital services provider
it is today.
Hello tomorrow20
Our Board and Leadership Squad
For running header don't delete
Justine
Smyth
Alison
Barrass
David
Havercroft
Gordon
MacLeod
Jolie
Hodson
Lisa
Nelson
Sheridan
Broadbent
Warwick
Bray
Qualifications
BCOM, FCA,
CFINSD
BSC, DIP BUS,
MARKETING
BABCOM, FCABCOM, FCABABCOMBSC. (HONS),
MBA
Capability
Strategic knowledge for scale
telco/technology businesses
Financial/commercial
Risk management/regulatory
and/or sustainability
Customer insight/retail/brand
People leadership and culture
Listed company governance
Capital markets/capital
structure
Digital/data/new markets
Geographical location
NZNZNZNZNZUSANZAustralia
Tenure (years)
12.77.92.924.90.224.9
Gender
FFMMFFFM
KEY: High capability Medium capability
Board skills matrix
To emphasise skills, the Board have specifically limited each Director to a maximum of six capabilities, including up to three high capabilities.
Definitions of categories
of capability:
Strategic knowledge for scale
telecommunications and technology
businesses: experience as a senior
executive in, or as a strategy professional
advisor to, large telecommunications and/
or technology businesses.
Financial/commercial: a strong accounting
and finance background, most likely being
a chartered accountant, having held the
position of CFO in a significant publicly
listed company, or leadership position in
a professional services/advisory firm.
Risk management/regulatory and/or
sustainability: experience in identifying
and mitigating both financial and non-
financial risks, experience influencing
public and regulatory policy decisions and
outcomes, or experience in the design and
application of sustainability frameworks.
Customer insight/retail/brand: experience
as a senior executive responsible for
driving customer experience by effectively
using insights, optimising customer
journeys, and building brands.
People leadership and culture: experience
as a CEO of a significant publicly listed
company or large private standalone
company. Leadership skills including the
ability to build organisational culture.
Listed company governance: listed
company Board experience other than
Spark. Experience with sophisticated
governance structures.
Capital markets/capital structure: strong
knowledge of debt and equity capital
markets, and experience with mergers and
acquisitions, and/or dealing with a range of
funding sources and capital structuring
models.
Digital/data/new markets: experience as
a senior executive in, or as a professional
advisor to, digital and/or data businesses,
or businesses in emerging or new markets.
Experience in the use of digital channels
and the latest innovative and digital
technologies.
Ko te pae anamata, whakamaua
21
Spark New Zealand Annual Report FY24
Our Leadership Squad
1. Greg Clark
SME and Consumer Director
As SME and Consumer Director, Greg is
responsible for leading the retail, channels,
and small-medium business teams that focus
on delivering great outcomes for our
customers. Greg joined Spark in 2013 and
led the transformation of the broader retail
network and Spark’s SME operating model,
delivering strong revenue growth and higher
levels of customer engagement, before
joining the Leadership Squad in July 2023.
Prior to this he held a number of senior roles
across the telecommunications industry in
New Zealand and Australia, including
Allphones, Nokia, and Ericsson. Greg has a
Bachelor of Commerce and Administration
from Victoria University, Wellington.
2. Heather Polglase
People and Culture Director
Heather was appointed People and Culture
Director in September 2019. She joined Spark
in 2013 and has over 20 years’ experience as
a Human Resources (HR) professional, with
a proven track record for business
transformation, talent management,
leadership development, and succession
planning across a range of industries,
including FMCG, retail, hospitality, technology,
and telecommunications. At Spark, Heather
has held various senior HR positions and
delivered a number of critical initiatives,
including being a key architect of Spark’s
leadership and development programme
to build high-performing teams and leaders.
Prior to joining Spark, Heather was a senior
HR leader for almost a decade within
Progressive Enterprises then spent two years
in Australia leading HR, Strategy & Change
Management at Dan Murphy’s. She has a
Bachelor of Business Studies Degree
(Hospitality Management) from Auckland
University of Technology.
3. John Wesley-Smith
Strategy and Regulatory Director
John Wesley-Smith joined the Leadership
Squad in August 2023 as Strategy and
Regulatory Director, responsible for leading
the development of Spark’s business strategy
and Spark’s contributions to industry,
regulatory, and public policy processes.
John joined Spark in 2005 and has led Spark’s
industry and regulatory affairs teams for the
last 14 years.
1.2.3.
4.5.6.
7.8.9.
Hello tomorrow22
Our Leadership Squad
Our Leadership Squad
He has played a pivotal role in many of
Spark’s major capital investments and
transactions and represents Spark on the
Board of the Southern Cross Cable Network.
John started his career as a solicitor at
Russell McVeagh and has a Bachelor of Laws
and a Bachelor of Commerce from Victoria
University of Wellington.
4. Leela Ashford (nee Gantman)
Corporate Relations and
Sustainability Director
Leela joined Spark as Corporate Relations and
Sustainability Director in January 2020,
bringing with her over 20 years’ experience in
corporate and agency roles in New Zealand
and Australia. Prior to joining Spark, Leela was
Head of Communications at Fletcher Building,
and before this External Relations Director at
beverages group Lion in Australia. As Spark’s
Corporate Relations and Sustainability
Director, Leela is responsible for reputation
management, internal communications,
government, industry, and community
engagement, the company’s sustainability
strategy, and the charitable activities of the
Spark Foundation. She also serves as a Trustee
on the Spark Foundation Board. Leela holds a
Bachelor of Arts in Communications from the
University of Technology Sydney.
5. Mark Beder
Customer Director – Enterprise
and Government
As Customer Director for Enterprise and
Government, Mark supports corporate,
enterprise, and government customers to
grow and become more productive and
sustainable through technology, leading the
B2B sales, technology, and service teams
across Spark. He is also responsible for
Spark's investments into emerging
technologies and growth markets, including
digital health, data centre infrastructure,
the internet of things (IoT), and converged
technology solutions. Prior to this Mark held
a range of senior technology positions within
Spark, most recently as the Chief Operating
Officer, where he was responsible for building
a highly resilient, automated, and secure
network through investments into fixed and
mobile networks, IT infrastructure, operations
centres, cyber defence, and physical
infrastructure. Prior to joining Spark, Mark
worked for Ernst & Young Consulting in
Auckland. He has a Bachelor of Commerce
from the University of Auckland.
6. Matt Bain
Data and Marketing Director
As Data and Marketing Director, Matt brings
his digital marketing and customer experience
skills to place the customer at the centre of
Spark’s strategies. Matt joined Spark in 2018,
and was previously based in Amsterdam as
European Managing Director for brand
experience agency AKQA, with responsibility
for over 500 employees across five countries.
Over a 20-year international career, Matt has
worked with some of the world’s biggest
brands, including Nike, Heineken, Mini, Rolls
Royce, Siemens, EA Sports, Audi, Phillips,
Tommy Hilfiger, and KLM amongst others.
He has extensive experience using data, and
technologies like Artificial Intelligence (AI) to
enable organisations to better understand
and predict their customers’ needs more
accurately. Matt holds a Master of Commerce
from the University of Auckland.
7. Melissa Anastasiou
General Counsel
As General Counsel, Melissa leads Spark’s
legal and compliance functions, providing
Spark with strategic legal and commercial
guidance, ensuring the business acts lawfully
and with the utmost integrity. She has also
played a pivotal role in leading out Spark’s
diversity and inclusion programme. Melissa
joined Spark in 2009 and undertook a range
of legal roles across the organisation before
being appointed as Group General Counsel
in 2012. Prior to joining Spark, Melissa spent
a number of years as a Senior Legal Counsel
for United Kingdom (UK) mobile provider
Telefonica O2. She also has extensive
experience working for leading corporate
law firms in Auckland and the UK. Melissa
has a Bachelor of Laws from Victoria University
of Wellington.
8. Renee Mateparae
Network and Operations Director
Renee joined the Leadership Squad in July
2023 as Network and Operations Director. In
this role she is responsible for Spark’s highly
resilient, automated, and secure networks,
including fixed and mobile networks,
operations centres, physical infrastructure, and
cyber defence. Renee joined Spark in 2017
and led the rollout of our 5G and Internet of
Things networks during her time as
Technology Evolution Tribe Lead. Prior to this,
Renee held a number of leadership roles
across the product and ventures areas of the
business. Prior to Spark Renee held several
senior roles at Air New Zealand, Accenture,
and Macquarie Group. In 2019 Renee was
appointed to the board of The Warehouse
Group for a two-year term as part of the
Future Directors programme. Renee has an
honours degree in Engineering, specialising
in Automation & Control Engineering, as well
as a post-graduate diploma in Business from
Massey University.
9. Stefan Knight
Chief Financial Officer
Stefan was appointed Chief Financial Officer
in December 2019. Stefan has been with
Spark since 2003 and has worked across a
range of finance and business performance
related roles. He played a key role over recent
years in important Spark initiatives, including
the Turnaround and Quantum business
improvement programmes and, more
recently, was part of the leadership group that
helped shape the organisation’s move to an
Agile way of working. Stefan is a Chartered
Accountant and began his career at Deloitte
working across both Audit and Corporate
Finance. Stefan has a Bachelor of Commerce
in Accounting and Finance from the University
of Auckland.
Ko te pae anamata, whakamaua
23
Spark New Zealand Annual Report FY24
Creating value
for our
customers
Social capital
As New Zealand’s largest telecommunications
and digital services company, we have
relevance for almost every New Zealander.
Our customers range from individual
New Zealanders and households, to small
businesses, not-for-profits, government, and
large enterprise customers, delivering mobile,
broadband, cloud, and digital services.
We are excited by the opportunities digitisation
brings and recognise our responsibility to
help Aotearoa leverage new capabilities
to become more productive and sustainable
through technology.
Connected customers
OUTCOMES
24Hello tomorrow
Creating value for our customers
Creating value for our customers
Customer experience
We have an enduring focus on improving
the experiences of Spark customers, by
making their interactions with us simple
and effective. This work is showing up in
customer feedback, with our measure of
customer satisfaction, our interaction net
promoter score (iNPS) up 7 points to +38
in FY24.
A simple, data driven organisation
A core pillar of our strategy is to create a
simple, data driven organisation, which will
underpin our ability to improve customer
experiences, drive efficiency, and support
future growth.
In October, we completed our Plan
Simplification Programme, where we
moved customers from legacy broadband
plans to newer plans that are more suited
to customer needs. As part of this, we
migrated over 73,400 customers from
legacy fibre plans to new fibre plans,
moved over 71,200 customers off our
Unplan wireless plans to more fit-for-
purpose wireless plans, and shifted over
10,900 mobile lines to current plans.
Using data and AI to improve
transparency
Integrating a data driven approach
throughout our business has allowed our
teams to more effectively identify customer
pain points and address the root causes. In
FY24, we launched our 'emerging trends'
tool – an AI-generated report that identifies
monthly changes to customer experience.
As an example, this report identified that
customers were unhappy with our care
team messaging service, particularly when
they were passed from agent to agent. In
response, the care team was able to make
changes to limit the number of messages
each agent could handle, which reversed
the negative trend.
During the year, we also integrated new
technology into Spark's wireless
broadband modems. This means we can
now accurately measure speeds that our
customers receive on our 4G and 5G
wireless broadband plans, and share this
information as an average on our website
and in our marketing materials. As a result,
our customers are better equipped with
the information they need to understand
the speeds they can expect when signing
up for a wireless broadband plan with Spark.
We also continued to optimise our right
planning programme Made For You
Review, which harnesses the power of AI to
analyse a customer’s data, messaging, and
calling usage, and then recommends the
best and most cost-effective plan for them
based on their activity. Spark's customer
care teams underwent a major training
programme in FY24 to equip them to
understand the data served up by Made
For You Review, so they can have better
conversations with customers and guide
them towards the right plan for their needs.
When utilising any of our data and AI
capabilities, we are guided by our AI
Principles, Generative AI Policy, Privacy
Values, and Privacy Policy, which ensure
we take a responsible and ethical approach
to the design and operation of AI
technologies. Our AI Principles are
published on our website, providing
transparency for all our stakeholders:
www.spark.co.nz/online/about/our-
company/governance. See page 34 for
further details on our AI Governance and
privacy values.
Up 7 points
to +38 in FY24.
CONSUMER AND SMALL BUSINESS INPS
The Made For You Review campaign.
Ko te pae anamata, whakamaua
25
Spark New Zealand Annual Report FY24
Bringing New Zealanders the best
digital-first experiences
In the last year we have continued to focus
on digital-first care experiences for our
customers, to better anticipate customer
needs, reduce wait times, and improve the
overall experience of interacting with Spark.
Our retail and virtual care agents form our
United Frontline (UFL) and support our
customers across a variety of channels
– including call centres, stores, and through
digital messaging. Enabling our team to
flow across channels ensures our customers
receive timely responses and an experience
that consistently ’feels like Spark’. This year
we saw use of our messaging tool, which is
available via the MySpark App or a
customer’s preferred messaging app,
surpass voice calling as the preferred
customer contact method for the first time.
Our UFL teams are now utilising the same
online journey as our customers, rather
than navigating more complex, separate
systems. This means Spark agents can see
exactly what our customers can see when
providing support, which is enabling faster
and more effective resolution.
As part of our digital first approach to
service, this year we introduced Outage
Assist, which has significantly improved the
service experience for customers
experiencing fixed broadband outages.
With Outage Assist, we can now proactively
notify customers of an issue on their fixed
broadband line and provide them with a
unique fault tracking link, as well as
unlimited calls, texts, and mobile data if
they have a pay monthly mobile on the
same account. This allows customers to
track the resolution of the fault without
having to call Spark and keeps them
connected with extra mobile data.
Customers can also troubleshoot and
diagnose household speed issues at any
time using the Spark Connection Check
tool within the MySpark app. Since
introducing Outage Assist, we saw a 35%
decrease in our inbound broadband call
volume when compared to the same
period in FY23.
To further enhance speed of resolution we
introduced help videos as a new section
in the MySpark app during the year.
Initially targeting high volume query types,
customers can be linked to these videos
from web, phone, and messaging
interactions before speaking with a
Spark agent.
We also introduced a multi-channel
e-commerce experience using the MySpark
app and website, which has driven a 26%
increase in website and app revenue
growth collectively.
Introducing Hello Tomorrow
In September we launched our new brand
positioning, ‘Hello Tomorrow’, which will
underpin our brand building efforts in the
years ahead. Hello Tomorrow represents
our belief that technology creates
opportunities, and when you feel you have
an opportunity today, it changes how you
see tomorrow.
We launched the new positioning with
a TV campaign, which was shot from the
point of view of a piece of technology.
This technology narrates the commercial
and shares that while it is capable of many
things, it doesn’t know what it feels like to
take a chance, like people do every day.
This brings to life our belief that
technology’s role is to enable people
to do great things.
“ This year we saw
use of our
messaging tool
surpass voice
calling as the
preferred customer
contact method
for the first time.”
Hello tomorrow26
Creating value for our customers
For running header don't delete
Spark Open Audition
In October we launched ‘Spark Open
Audition’ – a nationwide search for
Aotearoa’s next emerging musician who
would receive $10,000 worth of prizes,
including studio time at BIG FAN
recording studio to help launch their
career into the music industry. We
encouraged applicants to enter by
posting a ‘duet’ with a video of
homegrown rapper JessB on TikTok.
18-year-old Dunedin local, Niamh Crooks,
was voted by Aotearoa as the winner, with
her original song, ‘Devotion’ striking a
chord with New Zealanders. The
campaign generated over 17 million
views, with #SparkOpenAudition trending
number two on TikTok.
Spark Game Arena
We launched Spark Game Arena during
FY24 with a nationwide online
tournament, 'The Rise Cup featuring
Fortnite'. Delivered in partnership with
leading esports organiser LetsPlay.Live,
over 1,200 tournament participants
competed over three weekends for the
chance to win a share of $30,000.
Our ambition is for Spark Game Arena to
become the home of gaming at Spark
through partnerships with leading
brands, industry partners, and events.
Spark Game Arena aims to offer exciting
new gaming products and experiences,
while maintaining a commitment to safe,
inclusive, and equitable experiences,
which is underscored by partnerships
with Netsafe and Spark Foundation
partner, Digital Natives Academy.
Noise Control
In partnership with Spotify, we launched
Noise Control in August – a first of its
kind music show. Hosted by DJ duo
The Katayanagi Twins, Noise Control
presented 10 live music events in Auckland,
offering Spark customers exclusive
access to intimate performances and Q&A
sessions with top local artists. Featuring
musicians like Riiki Reid, Troy Kingi,
Muroki, and There’s a Tuesday, Noise
Control put a spotlight on emerging kiwi
talent and provided our customers with
an unforgettable experience.
Bringing New Zealanders the entertainment that moves them
Ko te pae anamata, whakamaua
27
Spark New Zealand Annual Report FY24
Empowering the
businesses creating
Aotearoa’s tomorrow
Spark is a trusted partner to New Zealand’s
business community, supporting
businesses of all sizes to harness the power
of technology to become more productive
and sustainable.
Supporting the growth of small-
medium businesses
Spark supports over 110,000 small to
medium businesses (SMEs) around
New Zealand through our network of 24
local Business Hubs. Each Business Hub is
locally owned through our licensee model,
meaning they have a deep understanding
of the needs of their local customers.
Customers are responding positively to
this ‘local like you’ model, with our SME
customer satisfaction score up +8 points
in FY24 to +48.
Our SME customers are feeling the
pressures of a tough economic
environment, with their number one
concern being escalating costs. With this
in mind, our focus is on enabling SMEs to
use technology to become more
productive – so they can do more, with less.
In FY24, we launched our ‘right-sized
solutions’ campaign, which supports our
SME customers with plans and technology
that meet their individual needs.
In FY24, we also continued our partnership
with the Government’s Digital Boost
programme, which equips small business
owners with the practical skills needed to
get their businesses online. More than
69,000 SME users have engaged with the
platform to date. Our Director of Consumer
and SME, Greg Clark, sits on the Digital
Boost Alliance’s Board of Governance.
Spark also provided the connectivity and IT
solutions for Digital Boost’s Tech Boost
service, that is helping businesses access
fit-for-purpose IT gear and tools, which
launched in June.
Spark Business Lab
Spark Business Lab educates and engages
SME businesses through events,
educational content, and hands-on digital
workshops across the country. In FY24,
Spark Business Lab delivered two events in
its Future State series, presented in
collaboration with Semi Permanent.
In November, global sustainability leaders
in food, fashion, and design travelled to
Wellington to present 'Future State 002:
The Turning Point', which focussed on how
businesses can embrace circularity in their
own supply chains. In May, an audience of
700 gathered at Spark Arena for 'Future
State 003: Ahead of the Curve’, where
leaders from organisations such as Ikea,
Accenture, and NYU Stern Business School
explored the driving forces behind their
digital transformation.
Supporting kaupapa Māori
Spark’s business customers include
a variety of Māori businesses across
the country.
In FY24, we partnered with the Media
Design School to offer students an
opportunity to respond to a real client
brief, like one they might encounter in
the industry. The students were
challenged to design a campaign to
help Spark celebrate Matariki and
encourage rangatahi to explore careers
in technology.
The selected concept was called
'Matariki Hunga Nui' and presented an
augmented reality experience that
aimed to bring people together under
the stars of Matariki. In this concept,
augmented reality offered users an
immersive experience that guided them
in learning how to use Te Waka o Rangi
– the celestial navigation tool – to locate
Ngā Whetū o Matariki.
Matariki Hunga Nui was awarded silver
in the Student & Academic Toitanga at
the Designers Institute of New Zealand
Best Design Awards.
During the year we supported our
partner Te Pūtahitanga o Te
Waipounamu, an organisation that seeks
to create social impact by investing
directly in initiatives developed by
whānau or community groups.
This involved hosting Te Pūtahitanga o
Te Waipounamu at Te Tihi Health
conference in Hamilton, taking them for
a tour of our Innovation Studio and
offering them a place on our AI for
Business Mini MBA, alongside other
Māori business partners.
Future State 003 at Spark Arena.
Hello tomorrow28
Creating value for our customers
For running header don't delete
Harnessing the power of AI
to combat disease outbreaks
in livestock
A mass disease outbreak could
have a devastating effect on
livestock, the farming community,
and New Zealand’s economy.
Concerned by this, veterinary
startup, Ingenum wanted to develop
an early warning system to detect
notifiable diseases in livestock and
enable a timely biosecurity response.
With the knowledge that tell-tale
signs of disease may be hidden
within the plethora of on-farm data
being captured every day around the
country, Ingenum, partnered with
Qrious to develop an AI solution.
The team developed Sentinel-AI – a
bespoke AI system that integrates
inputs from multiple sources,
including government agencies,
veterinary practices, on-farm
technology and abattoirs and
analyses the incoming data in real
time, while respecting the privacy of
its sources. In the process it develops
a ‘picture’ of typical patterns of
livestock health, which allows it to
detect and flag any anomalies that
may be indicative of disease.
This real-time data tracking will
enable all stakeholders, including
disease response teams, to get
ahead of the curve and make better
informed decisions to protect
Aotearoa’s biosecurity and
farming industry.
Spark Business Group
Spark Business Group continued to
support New Zealand’s largest businesses
and government ministries to harness the
power of technology for productivity and
growth, with some notable examples
outlined below.
As businesses continue to migrate their
operations to the cloud, in FY24 Spark’s
cloud business, CCL, launched CloudIQ –
a managed hybrid cloud service designed
to help businesses seamlessly manage
their diverse cloud platforms, including
on-premise, private, and public clouds.
CloudIQ leverages CCL’s local data
centres, as well as partnerships with major
global cloud providers, to provide flexible
cloud solutions designed to meet
businesses’ needs today and to prepare
them for the future.
During FY24, Spark also introduced
ServiceFlex, a modular IT service
management solution that combines smart
technology, automation, and AI to enhance
IT service delivery. ServiceFlex provides
features such as IT service desk solutions,
proactive insights, and interactive key
performance indicator (KPI) measures, and
is designed to streamline IT operations,
improve user experience, and reduce costs
through automated processes. ServiceFlex
is aimed at corporates, enterprises, and
government organisations, and was
launched with New Zealand Red Cross and
Fidelity Life as foundation customers.
In March, Spark’s data and AI business
Qrious celebrated a decade of pioneering
data and AI innovation in New Zealand.
Qrious has implemented transformative
technological solutions across a variety of
sectors. For example, Qrious is helping the
world’s largest marketer of kiwifruit, Zespri,
to unlock its data to get the highest quality
fruit possible onto consumers’ plates, and
developing an AI-powered disease
detection system with Ingenum.
The Qrious team.
Ko te pae anamata, whakamaua
29
Spark New Zealand Annual Report FY24
Accelerating Aotearoa businesses
one technology generation
forward
In February, Spark and the New Zealand
Institute of Economic Research (NZIER)
launched a new report titled ‘Accelerating
Aotearoa businesses one technology
generation forward’ – examining the state
of New Zealand's productivity challenge,
and the role advanced digital technologies
can play in solving it.
The study combined insights from global
research into small advanced economies,
economic modelling by NZIER, and Spark’s
knowledge of current and future
opportunities enabled by digital
technology. It revealed that a 20% uplift
in the use of advanced digital technologies
is predicted to increase industry output
by up to $26 billion over the next decade
and GDP by as much as 2.08% per year.
Innovation in action
To launch these findings, we brought our
business customers, industry experts, and
media together to witness innovation in
action. Across seven life-size showcases,
technology experts demonstrated the
productivity benefits to be gained through
the implementation of advanced digital
technologies.
Audiences saw how the use of AI reduces
the time it takes to assess damage on
New Zealand roads, down from 66 days to
just seven, how extended reality headsets
can save precious time for both medical
specialists and patients, and how a
converged technology solution with MPI
is combining on-board cameras with IoT,
AI, machine learning, cloud computing,
and data and analytics, to enable better
verification of catch reporting data from
commercial fishing activities.
To help boost the adoption of advanced
digital technologies among New Zealand’s
largest organisations, we committed
$15 million to an Innovation Fund for our
business and government customers, with
$12 million allocated to customers already,
and an additional $3 million will be
available for customers to apply for over
three years.
AI for Business Mini MBA
As part of the research, NZIER asked
businesses about their knowledge gaps
when it comes to advanced digital
technologies – with 44% of respondents
stating they did not have enough
information about AI to make use of it in
their businesses. This inspired Spark to
launch New Zealand's first AI for Business
Mini MBA programme.
In May, 150 business leaders from a variety
of sectors embarked on a four-week
intensive programme to build their
competitive edge with AI. The programme
was offered exclusively to Spark business
customers and presented in collaboration
with Section, a world-leading business
education platform based in North
America. The course was designed to help
participants design AI strategies fit for their
businesses. 100% of participants surveyed
said they will apply the learnings within
their business and 78% said they would
consider using Spark to help implement an
AI solution for their business.
A Spark Health showcase of the future of digital health in New Zealand.
Hello tomorrow30
Creating value for our customers
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Spark Health
Spark Health continued to provide digital
services, including software and IT services,
to Te Whatu Ora (Health New Zealand).
As a result of the macroeconomic
environment and a slow down in
Government spending, in FY24 Spark
Health refreshed its growth strategy with
a greater emphasis on the private sector,
including primary and community
healthcare providers. Here it aims to
support customers with digital
transformation and emerging technologies
such as data, cloud, and AI. As part of this
new focus on the private sector, Spark
Health added two experienced clinicians
as Digital Clinician Leads to the team –
Professor Matthew Parson, Clinical Chair
of Gerontology, and Dr Karl Cole, a
General Practitioner.
Spark Wholesale
Spark Wholesale supports New Zealand
and international service providers with
Mobile Virtual Network Operator (MVNO)
services, data transport, national backhaul,
international connectivity, cloud, internet,
IP voice, and satellite services.
In the past year, our wholesale business
continued to grow by supporting local
and global providers, including Content
Delivery Networks (CDNs) and cloud
platform partners, with their data growth
needs. This included providing global
cloud providers with higher rate, wholesale
international capacity services, including
100Gbps and 400Gbps bandwidths, on
Southern Cross and TGA submarine cable
paths out of New Zealand and strong
growth in the ‘application to person
messaging’ SMS (A2P One) service, which
supports global communication platform
providers with their messaging solutions
to New Zealanders.
Spark was recognised on the international
stage in January 2024 at the Pacific
Telecommunications Council Awards,
where we received the ‘Outstanding Carrier
Solutions Provider’ award for investments
into our national optical transport network
and its self-healing capabilities, which
provides resilient connectivity between
New Zealand’s major cities.
MATTR
MATTR operates in a new market of Trust
Technology – or what we call TrustTech
for short.
The TrustTech market is focussed on
addressing the challenges governments,
businesses, and individuals all face in the
digital world, where trust is difficult to
establish and hard to maintain. It is an
umbrella term for platform capabilities
that enable end-to-end trust lifecycle
management, for example digital identity
credentials.
During the year MATTR expanded its
operations in Australia and North America,
with business development talent in place
across both markets.
In Australia, MATTR continues to work as
the technology provider to the NSW
Government’s Digital ID and Verifiable
Credentials programme and in July
announced a new partnership with
Austroads, a member-owned collective
comprising the transport authorities of
Australia and New Zealand.
Austroads is creating a National Digital
Trust Service (DTS), which will provide
critical digital infrastructure to support
Australian jurisdictions in delivering Mobile
Drivers Licences (mDL). MATTR will be
working closely with Austroads to power
the first stage of the project, a pre-
production version of the DTS, based on
the MATTR VII platform.
A Spark Health showcase of the future of digital health in New Zealand.
Mini MBA turbo charges
AI journey for Te Pūtahitanga
o Te Wai Pounamu
Te Pūtahitanga o Te Waipounamu is a
social impact investment agency
working on behalf of eight Te
Waipounamu iwi to determine solutions
to support whānau development.
Martin Conway, Toki Kaupapa Matua
(Projects Specialist), says his employer is
motivated by the potential productivity
gains offered by AI, allowing kaimahi
(employees) more time for engagement
with whānau, supporting their
commissioned initiatives, and
communities they serve.
For his final report in the AI for Business
Mini MBA course, Martin presented an
AI use case that aims to streamline the
funding application process by an
additional 20%.
Martin says that once Te Pūtahitanga o
Te Waipounamu’s policy and
procedures protecting data sovereignty,
and outlining AI governance, are in
place, this will be a starting point for the
use of AI into other workstreams. While
AI will complement the expertise and
talent within their workforce, he is keen
to emphasise the point that whānau
voice is at the heart of all that they do,
which is something that cannot be
replaced by AI.
Ko te pae anamata, whakamaua
31
Spark New Zealand Annual Report FY24
Keeping our customers
safe online
Spark puts cyber security, customer safety,
and privacy at the forefront of everything
we do. We invest in the security of our own
networks and also support our business
customers with their security needs.
We offer customers a breadth of capability
to monitor and detect attacks across their
networks and information architecture,
reduce business security risk, and improve
their security profiles.
Cyber security
The World Economic Forum’s Global Cyber
security Outlook Report 2024 identified
a stark divide between cyber-resilient
organisations and those that are struggling.
The report predicts that emerging
technologies will exacerbate challenges
related to cyber resilience, especially for
those that are less capable.
In New Zealand, Spark is a trusted advisor
to businesses on cyber security and works
alongside cyber security agencies and
partners, to monitor and respond to threats.
Our Chief Information Security Officer
(CISO) has responsibility for Spark’s cyber
security, while the Audit and Risk
Management Committee of Spark’s Board
has governance responsibility.
We govern our security programme using
the industry’s best practice frameworks,
including ISO27001 and NIST CSF
(National Institute of Standards and
Technology Cyber Security Framework). All
Spark services and networks are built with
multiple checks in place during the ‘design’,
‘build’, and ‘operate’ phases, to ensure they
are deployed with industry leading levels
of security, and we continually assess and
measure our cyber security maturity level.
Our cyber security strategy is shaped with
the following inputs:
• Dynamic road mapping: we adopt a
dynamic three-year outlook on our
security posture in an effort to predict
and prepare for potential cyber threats
in the coming years, whilst remaining
flexible to the realities of threats as they
arise. Roadmap management allows
our team to scrutinise our cyber security
strategy on a quarterly basis,
considering evolving global cyber
security threats and any new
technologies we can implement to
enable and protect our business,
people, and customers.
• Maturity assessments: our goal is to
always be aligned with, or even
exceed, the latest industry standards to
consistently elevate our cyber security
maturity. We audit our security maturity
through internal and external audits,
with frameworks like NIST, SOC-CMM,
and a proprietary CMMI Maturity
model developed by Accenture
forming the backbone of these
assessments. In FY24 we partnered
with Google’s Mandiant to undertake
a comprehensive maturity assessment,
which will enable us to continue to
evolve and uplift our maturity even
further.
• Alignment with Spark’s business
strategy: our cyber security strategy is
carefully aligned to both our wider
business strategy and the network
evolution strategy, to ensure it can
support our business objectives.
The Cyber Defence Tribe at the 2023 New Zealand Women in Security Awards.
Spark people also play a critical role in
helping to detect and defend against
potential cyber security threats. For that
reason, all our people are required to
undertake regular cyber security training,
to equip them in identifying and helping to
mitigate potential threats.
We have a large cyber security team with
over 150 security subject matter experts
and processes that ensure appropriate
ownership, oversight, and ongoing risk
management is applied to our customers’
and Spark’s IT systems and data. Our
Incident Response Plan governs how we
respond to threats, and we have invested
heavily in our threat intelligence platform.
In August, Spark entered into a partnership
with leading global cyber security provider,
Radware, to resell its suite of security
solutions to enterprise customers. As part
of this partnership, we have also integrated
Radware’s Cloud DDoS Protection Service
into our existing IT infrastructure as an
added layer of protection against complex
DDoS attacks – where multiple ‘bots’ are
used to send massive amounts of internet
traffic to a website server, causing it to
become overloaded and unable to handle
legitimate user requests.
In November, Spark’s Cyber Defence Tribe
won the award for Best Place to Work at
the 2023 New Zealand Women in Security
Awards.
Hello tomorrow32
Creating value for our customers
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Online safety
We recognise the important role we must
play in protecting our customers from the
growing list of threats they face online –
including scams, cyber security risks, and
objectionable material.
Scams
Spark has an important role to play in
helping prevent our customers falling
victim to increasingly frequent and
sophisticated scams. Because we cannot
stop scamming from occurring, we are
focussed on blocking scams where we
can and empowering our customers to
be vigilant.
We work to limit the number of scam
calls our customers receive by monitoring
unusual calling activity and blocking
offending numbers. We also block many
messages containing known ‘bad URLs’, to
prevent customers inadvertently clicking on
the links.
To further strengthen our defence against
malicious activity, in February we integrated
the Malware Free Networks service from
the Government Communications Security
Bureau’s (GCSB’s) National Cyber Security
Centre into our network. This service helps
to reduce incidences of mobile and
broadband customers inadvertently
downloading malware onto their devices,
by blocking confirmed malicious websites
on our network.
In April, we further enhanced our customer
protections by introducing a new
automated Short Message Service (SMS)
scam firewall. The firewall, which is informed
by a global database of confirmed scam
content, significantly reduce the amount of
scam texts being received. This is by our
customers detecting URLs, phrases, and
‘calls to action’ that are known to be used in
SMS scam campaigns, and blocking them
– preventing them being received by the
customer. We have been monitoring
outgoing SMS traffic patterns from our own
network in an effort to detect scams for
many years, and while this has resulted in
a significant reduction in scam SMSs sent
from our own network, the new filter
improves our ability to detect and block this
activity coming through to our customers
from other mobile networks as well.
During FY24 we added another layer of
protection to help prevent people falling
victim to fraudulent Spark impersonations
via email, by adopting a technology
called ‘Brand Indicators for Message
Identification’ (BIMI). BIMI shows either our
trademarked logo or a blue verification tick
in the sender section of some email
platforms when the communications are
legitimate.
We also provide a number of products and
services to further protect customers from
scams. This includes a landline product
called Call Screen, a cordless home phone
that contains technology that can effectively
help customers protect themselves from
scam calls, and McAfee Security Standard
on eligible broadband plans, which helps
to protect customers from scams, viruses,
and other threats.
While these measures collectively provide
safer online experiences, we continue to
regularly remind our customers of the
evolving scam landscape and the
importance of remaining vigilant online.
Illegal child sexual abuse material
(CSAM)
Child sexual abuse material is abhorrent
and illegal and a growing issue in Aotearoa
and globally. To help protect our customers
from this content, and to help stop its
dissemination, we implement a range of
blocking measures on our network and
provide additional tools for our customers
to utilise on their own devices.
Spark has been a long-standing participant
in the Department of Internal Affairs’ (DIA)
Digital Child Exploitation Filter, which
blocks CSAM. Our Corporate Relations and
Sustainability Director is a member of the
Independent Reference Group that
maintains oversight of the filter.
During FY24 we announced an additional
agreement with DIA to block access to
websites containing CSAM on our network.
Building on this progress, in March we
announced we would become the first
New Zealand internet service provider to
become a member of the Internet Watch
Foundation (IWF) allowing us to block
CSAM contained on the Foundation’s URL
List on our network. This list includes
criminal websites that have been
individually assessed by an IWF analyst
and is updated twice daily. We also formally
endorsed WeProtect Global Alliance’s
‘11 Voluntary Principles to Counter Online
Child Sexual Exploitation and Abuse’,
which provides a framework for the digital
industry to help combat online child
exploitation.
Tools and education to protect our
customers
We educate and alert customers to
fraudulent activity through our scam alert
webpage, our social media channels, direct
customer communications, and via our
customer service teams.
We also partner with Netsafe to develop
and disseminate scam education material,
such as brochures, which are available in
store or online.
We also provide all our broadband
customers with access to Net Shield, which
helps to block harmful content and enables
safe searching. Our customers can turn the
Net Shield service on and off as regularly as
needed, by logging into their account on
the Spark website.
“ We recognise the important role we must
play in protecting our customers from the
growing list of threats they face online
– including scams, cyber security risks,
and objectionable material.”
Ko te pae anamata, whakamaua
33
Spark New Zealand Annual Report FY24
Using technology safely
and protecting customer
privacy
Using technology safely and protecting
our customers’ personal information are
responsibilities we take seriously. As we
continue to embed new technologies like
data and analytics and artificial intelligence
(AI) through our business processes,
we also continue to evolve our approach
to AI and data ethics, privacy, and
governance, to ensure we have the right
guardrails in place to protect our
customers’ information.
We are committed to keeping customers’
personal information safe and managing
it in ways that align with customer
expectations, Spark’s Artificial Intelligence
Principles, Spark’s Privacy Values, and the
law, including the Privacy Act 2020, and
the Telecommunications Information
Privacy Code 2020.
Data and AI governance
The rapid development of AI technologies
brings many benefits to New Zealand,
while also presenting increasingly complex
challenges in ensuring that both data and
data applications, are used by people and
organisations ethically, safely, and lawfully.
Spark’s use of AI is guided by our Artificial
Intelligence Principles, which focus on a
responsible and ethical approach to the
design and operation of AI technologies
within our business. Our principles are
focussed around seven key areas: human
centred; ethical design; diversity, inclusivity,
and bias; safety and reliability; privacy;
informed human decision-making; and
explicability and transparency. These
Principles are regularly reviewed and
updated as we continue on our AI journey.
During FY24 we evolved our data
governance strategy, restructuring our
governance forums to enable a more
targeted and purposeful approach.
We established an AI Executive Governance
Committee, which provides executive
oversight of Spark’s deployment of AI
across the business, including investment
choices, benefit realisation, and associated
changes to operating model design.
We also established a Data Ethics
Committee, which is more specifically
focussed on ensuring we are using data
and data applications, including AI,
ethically, legally, safely, and in line with
stakeholder expectations.
Operational matters have now been
integrated into our Information Security
Risk Management Committee, which
oversees data security and other risk
domains more broadly.
The Data Ethics Committee includes
representatives from the Leadership Squad,
together with relevant subject matter
experts and provides oversight as our
Artificial Intelligence Principles are further
embedded into our systems and processes.
Up until this year our use of AI within Spark
has been narrowly deployed against
specific use cases and controlled by a
centralised, specialist team who have
continued to ensure our use of this
technology aligns to our Artificial
Intelligence Principles. For example, we
have used AI to implement data-driven
marketing and to increase automation
within our network.
The acceleration of Generative AI opens up
new opportunities for a much broader
number of Spark people to utilise AI in their
day-to-day activities and is another pillar to
our overall AI roadmap. We are piloting
and then scaling different use cases across
the business while enhancing our
deployment approach in a carefully
structured and staged manner. As this
occurs, we will establish clear ownership
by senior leaders across the business for
change management in their areas,
supported by our subject matter experts,
and while maintaining Leadership Squad
oversight through our governance forums.
To support this, during FY24 the Data
Ethics Committee oversaw the creation
and adoption of a new Generative AI Policy.
This is an internal policy that
operationalises our Artificial Intelligence
Principles by providing specific usage
guidelines for our people who are working
with Generative AI tools within Spark. We
are now disseminating and embedding this
policy, in line with the staged rollout of
Generative AI tools across the business.
To further embed our AI principle of
privacy into our processes, we also require
all new AI work that uses personal
information in a new way to go through a
Privacy Impact Assessment, which is then
reviewed by a Privacy Ambassador (as
explained below) or Privacy Officer. The
Privacy Ambassador either approves,
declines or helps reframe requests that sit
within guidelines, or escalates the request
to the Privacy Officer and the Spark Legal
team (as required) for further investigation
and discussion. This process ensures that
any privacy aspects of proposed data and
AI work are considered prior to any
development commencing.
Hello tomorrow34
Creating value for our customers
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Our privacy programme
Spark’s Digital Trust team leads Spark’s
privacy programme, providing frameworks,
tools, and training to support Spark people
to follow our Privacy Policy and Values.
Internal processes and controls to
safeguard customer privacy:
• Risk assessments
New products and services are
assessed for any privacy risks, with
appropriate mitigations embedded
into their design and implementation.
For many of our business units, these
assessments are conducted by Spark
Privacy Ambassadors – specially trained
team members equipped with
Spark-made assessment tools and
supported by dedicated privacy
experts. New vendors are also screened
to ensure privacy will be managed
appropriately.
• Personal information access
management
Spark’s Call Investigation Centre (CIC)
manages requests for personal
information from customers and
government agencies. We report
agency request volumes in our Spark
Transparency Reports: www.spark.co.
nz/help/privacy-and-safety/how-we-
manage-privacy/spark-transparency-
report
• Responding to data breaches
Our dedicated Data Breach Reporting
Tool enables any breaches to be
reported by our people and managed
in a customer-focussed way and in
compliance with the Privacy Act 2020.
Awareness and support for our people:
• Privacy resources
Our Policy Playbook contains guides
for applying privacy considerations to
everyday activities and comprehensive
resources are provided for our people
online.
• Privacy training
All our people must complete privacy
training on joining and annually, to
ensure privacy considerations and
Privacy Act compliance remains top
of mind.
• Resolving privacy issues
Our people are encouraged to raise
any privacy issues they become aware
of via the Digital Trust team or Spark’s
internal online whistleblowing tool,
the Honesty Box.
Supporting our customers:
• The Privacy and Online Safety section
on our website contains a range of tools
and services to help customers safely
manage their privacy and security.
Privacy compliance and reporting
In FY24 our people reported 228 data
breaches for investigation, with 30 of these
meeting the Privacy Act criteria for
notification to affected individuals and the
Office of the Privacy Commissioner (OPC).
Most notifiable breaches involved
fraudsters using personal information
obtained from non-Spark sources, such as
compromised online accounts or phishing
(where fraudsters trick individuals into
sharing their personal information).
As fraudsters’ tactics continue to evolve,
we continually review and update our
internal processes and educate our
customers around best practice password
management and avoiding scams.
In FY24 Spark received 17 substantiated
privacy complaints from customers and
two substantiated complaints through the
OPC. These enabled us to identify
opportunities for targeted coaching or
appropriate enhancements to our practices
and processes.
Legal and regulatory compliance
Under our Code of Ethics all our people
are responsible for ensuring we behave
ethically and comply fully with all
applicable laws and regulations.
Spark’s Legal and Compliance Policy sets
out the specific accountabilities that our
people have for complying with the law.
Our people leaders make sure their teams
have the information and training necessary
to meet these standards, and our Legal and
Digital Trust teams support our people with
comprehensive frameworks, tools, training,
and advice.
Every employee is required to complete
online training modules on the Code of
Ethics and how to apply it, and we reinforce
this training through regular internal
communication across the business.
See: www.spark.co.nz/online/about/
our-company/governance
We continue to engage constructively
with the Commerce Commission as
appropriate, both proactively and
reactively, on a case-by-case basis to
ensure we are complying with all
applicable laws and regulations. This
includes working proactively with the
Commission on various ‘retail service
quality’ (RSQ) initiatives such as consistency
of mobile service coverage information.
There were no significant instances of
non-compliance with laws or regulations,
including in respect of marketing
communications, in FY24.
Ko te pae anamata, whakamaua
35
Spark New Zealand Annual Report FY24
Creating value
through our
network and
technology
Manufactured + intellectual capital
Our extensive networks and valuable portfolio of
digital infrastructure assets underpin Aotearoa’s
digital economy and enable the people and
businesses creating our country’s tomorrow.
Our portfolio includes:
• Active infrastructure on 2,176 mobile sites
1
• Network connectivity across ~9,400km
national fibre backhaul
2
• Partnerships with local fibre networks and
Chorus to access the ultrafast broadband
(UFB) and national copper networks
• 22.3MW data centre capacity and 118MW
potential development pipeline
3
• 35 major network sites (exchanges)
• A purpose-built Satellite Earth Station in
Warkworth
• 41% shareholding in Southern Cross Cable
Network, which owns the Southern Cross
and the Southern Cross Next international
submarine cables
• 17% shareholding in mobile towers
business Connexa
Connected and resilient
New Zealand
OUTCOMES
1. Includes Spark active equipment on 1,549 third party
towers, 514 Rural Connectivity Group (RCG) towers, 98
small cells, and 15 temporary sites as active at 30 June 2024.
2. Includes ~1,400km of Spark owned fibre, and ~8,000km
of shared fibre active at 30 June 2024.
3. In August, Spark entered into a conditional agreement to
purchase land at Takanini, which would add 48MW to the
site. This increased the total development pipeline from
70MW at the end of FY24 to 118MW at time of publishing.
36Hello tomorrow
Creating value through our network and technology
Creating value through our network and technology
Investing in digital
infrastructure and next
evolution technology
New and emerging technologies, such as
multi-access edge computing, cloud, IoT,
and generative AI, are changing the way
we work and connect.
These technologies are underpinned by a
diverse range of digital infrastructure that is
built and operated by Spark and other
industry participants. This includes fibre
backhaul, which provides the ‘backbone’
connectivity to our fixed and mobile
networks; 5G infrastructure, which delivers
enhanced network performance for our
customers; submarine cables, which carry
large amounts of data and connect
New Zealand to the world; and data centres,
which house the large amounts of data
needed for these high-tech tools to operate.
During FY24, we invested over $350 million
to deliver a highly secure, automated, and
resilient network, and in the digital
infrastructure that unlocks new
commercialisation opportunities,
supercharges the competitiveness of our
products and services, and supports
our customers to grow.
Our AI and IT Transformation
Programme
At Spark, investment in data and AI has
been a key feature of our strategy for
many years. These capabilities enable
us to serve our customers more
effectively by better anticipating their
needs and help us to deliver our
services more efficiently.
A pillar of SPK-26 is to create a simple
data driven organisation. To deliver this
ambition, we have established a
Transformation Programme that brings
together our work in AI and IT – with the
aim of deepening our use of AI, while
integrating data and IT across Spark to
create efficiencies through the right
architecture, automation, and
standardisation.
We believe that broadening and
deepening the use of AI in our business
will deliver three key things:
• Better customer and people
experiences
• A fitter and faster business
• Higher growth
We have dedicated squads who are
testing and deploying specific
generative AI use cases into different
parts of the business, to identify our
biggest areas of opportunity. As an
example, we are now using AI in our call
centres to map customers to the right
queue and help address their needs
more quickly and effectively.
As we explore further AI use cases we
are guided by our Artificial Intelligence
Principles, our Privacy Values, and our
Privacy Policy, which can be accessed on
our website: www.spark.co.nz/online/
about/our-company/governance.
See page 34 for further details on our AI
Governance and Privacy.
Ko te pae anamata, whakamaua
37
Spark New Zealand Annual Report FY24
Investing in our data centres
Accelerating growth in our data centre
business is a core focus of Spark’s strategy.
With data usage increasing exponentially,
and the proliferation of generative AI,
demand for data centre capacity is growing
rapidly. We are well positioned to capture
our share of this growth, with our
nationwide data centre network, our own
significant capacity usage, complementary
digital infrastructure, such as our fibre
networks and subsea cable assets, our
relationships with cloud hyperscalers, and
our ability to provide products and services
direct to customers.
Our existing data centre portfolio includes
22.3 MW of total capacity focussed on
Auckland (where most current data centre
demand is), as well as regional centres such
as the Waikato, Bay of Plenty, Wellington,
Christchurch, and Dunedin.
In Auckland our ambition is to establish
three large-scale data centre campuses,
including our largest site at Takanini, our
CBD site on Mayoral Drive, and a planned
development on the North Shore.
In FY24 we completed a 10MW expansion
of our Takanini campus on time and on
budget, which now has a total capacity of
12.3MW. The expansion included a highly
energy efficient cooling system, which uses
ambient air to cool the data centre.
Following the conclusion of the financial
year, in August, Spark entered into an
agreement to purchase adjacent land at
Takanini, bringing Takanini’s total potential
development pipeline to ~63MW. Design
is currently under way for a phased
expansion.
This brings our overall development
pipeline to 118MW, and when combined
with our existing capacity, means we can
grow our total data centre business to over
140MW in the future. As we invest in this
growth opportunity, we are targeting
returns of ~10-15%
1
.
Our Auckland CBD data centre is
strategically sought after due to its
customer ecosystem and location as a key
connection point for international
submarine cable systems and national
networks. We are currently expanding
capacity at this site to add an additional
1MW of capacity, and an adjacent
Spark-owned site provides the potential to
add another 15MW of capacity in the future.
During the year we also received resource
consent to build a new, large-scale data
centre on Auckland’s North Shore as part of
a 43-hectare masterplan development with
global surf park creators Aventuur. The
development will use an innovative heat
exchange system enabling excess heat
produced by the data centre to warm the
water of the nearby surfing lagoon, while an
onsite seven-hectare solar farm will supply
renewable energy back into the data centre.
FacilityStatusSite Capacity (MW)
Auckland – Takanini CampusBuilt 12
Auckland – Aotea CampusBuilt 3
Other sitesBuilt 7
Total capacity built22
Auckland – Aotea CampusUnder construction1
Total capacity under construction1
Auckland – North Shore CampusDevelopment pipeline40
Auckland – Takanini CampusDevelopment pipeline63
2
Auckland – Aotea CampusDevelopment pipeline15
Total development pipeline (as at Aug 2024) 118
2
Total potential capacity (as at Aug 2024) ~140
The North Shore site will become Spark’s
third strategic Auckland location, with
capacity for a staged build of a 40MW
campus over time.
Outside of Auckland, during the year we
also partnered with the University of
Waikato to take over the management of its
existing data centre facility on campus, with
the University becoming an anchor
customer at the site. We have further
investment planned to upgrade and grow
capacity and operate the site as a key edge
data centre for Spark and our business
customers. An edge data centre is located
closer to where the data is being used,
reducing the time it takes for data to travel
back and forth. This enables faster access
and better performance for various
applications and services.
A render of the large-scale data centre on Auckland’s North Shore.
1. Target internal rate of return over the expected investment horizon.
2. In August, Spark entered into a conditional agreement to purchase land at Takanini, which would add 48MW to the site. This increased the total development pipeline
from 70MW at the end of FY24 to 118MW at time of publishing.
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Unlocking the power of 5G
Our national 5G rollout has continued at
pace, with 5G now live in 103 locations
across Aotearoa, from large cities to smaller
regional towns. This means almost half the
population can now access 5G through
Spark’s network.
As we build our 5G network across the
country, we are also working on making it
more advanced and powerful. 5G is not just
about faster internet on your phone, it can
also improve the performance and
reliability of many services and applications,
such as video streaming, gaming, and smart
solutions. We are currently deploying a 5G
core network, which will deliver a true
end-to-end 5G experience, without any
dependency on legacy technologies –
known as 5G standalone.
5G standalone allows us to create different
service slices of the network that can be
tailored for different purposes, referred to
as network slicing. This means we can
optimise the network to suit the specific
needs of different customers and industries.
We are already testing this technology
across a range of different use cases with
customers. For example, we have recently
started a trial that brings together a 5G
Standalone private network with AI
computer vision to help keep people safe
in a manufacturing environment. Cameras
detect whether people are wearing the
appropriate safety gear, while blurring the
images for privacy. Anyone who is not
complying with the health and safety
requirements will appear red on the screen,
enabling intervention. This can enhance
accident prevention and injury reduction
across a wide range of industries.
“ Our national 5G
rollout has
continued at pace,
with 5G now live
in 103 locations.”
Ko te pae anamata, whakamaua
39
Spark New Zealand Annual Report FY24
The Internet of Things (IoT)
Spark IoT connections have continued to
grow, surpassing two million during FY24.
IoT solutions enable businesses to monitor
things in the natural and physical worlds
around them, collecting data that can then
be analysed and used to inform decision-
making. We deliver these solutions through
a range of different Spark IoT networks,
each catering to different business use
cases depending on bandwidth and
coverage requirements. Specialist IoT
devices are used to record and capture the
data customers want to monitor, and IoT
platforms with dashboard and alert features
can be used by our customers to act
immediately on the insights gathered.
In October, Spark acquired all of the
remaining shares in Adroit, a leading
Internet of Things provider that specialises
in technology solutions for real-time
environmental monitoring, with solutions
that are used across worksites, construction,
agriculture, aquaculture, councils, and
infrastructure sectors.
During the year, Spark's Innovation Studio
underwent a refresh to bring it up to speed
with the rapid pace of technological
change. The refreshed Studio showcases
the latest innovative technologies across
different customer use cases, including
asset management, critical communications,
smart environments, construction, water,
and emerging technology. Since its
opening in 2021, the Studio has seen over
400 tour groups across businesses and
industry coming through to learn more
about technologies, such as AI, computer
vision, and IoT, and to view real-life
examples from local organisations who
are using these technologies to solve
business problems.
Using IoT for continuous
monitoring of geotechnical
environments
Many areas in New Zealand are prone to
slips, resulting in delays and road
closures. This is particularly relevant with
the increase in extreme weather events in
Aotearoa. Monitoring for tilt or slope
changes can be hazardous, labour-
intensive, and time-consuming, resulting
in delayed data gathering, health and
safety risks, and a lack of accuracy.
Adroit has been working with customers
in the infrastructure sector to provide an
IoT solution using satellite-connected
Tiltmeter technology, to monitor tilt or
slope changes in various structures
or geotechnical environments.
Highly accurate rotation data allows trend
monitoring that can help detect
movement of slopes and structures, as
well as being used as early warning
systems for catastrophic structural failure.
Real-time data allows for immediate
analysis and interpretation of monitoring
results, which in turn enables quick
decision-making and timely intervention
to mitigate risks – providing early warning
of potential hazards, such as landslides,
sinkholes, or structural instability.
Tiltmeters can be instrumental in
preventing road closures and keeping
New Zealand's biggest industries moving
around the country.
The updated Innovation Studio.
A showcase demonstration of the tiltmeter
solution.
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Creating value through our network and technology
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Harnessing converged technology to make the fishing
industry more sustainable
In FY24 Spark worked with the Ministry for Primary Industries (MPI) to install cameras
on inshore commercial fishing vessels to help verify fishers’ reported catch and effort
data and to ensure the sustainability of New Zealand marine life is managed by the
fishing industry in a modern way. This technology solution is breaking new ground by
bringing together on-board cameras with IoT, AI, machine learning, cloud computing,
and data and analytics.
Spark is providing the technology, cameras, software, and transmission process that
enables the verification of fisher-reported data, to help inform fisheries management
decision-making. An important component of the system is the processing of video
footage that happens onboard the vessel. Previously, all data had to be put on a disc
and couriered, but with this automated system, when a vessel is in range of Spark’s 4G
mobile network, the footage is uploaded to the cloud, where further processing
takes place.
Using AI and machine learning, when the system detects human in-frame activities, the
cameras move into high-definition capture and the relevant encrypted footage is
stored and marked for upload. This reduces footage storage and review costs and
allows for more targeted review of the footage by MPI, while also protecting fishers’
privacy by targeting in-frame activities.
The convergence of our
high-tech capabilities
Up until now our high-tech capabilities –
such as 5G standalone, AI, and IoT – have
operated largely independently of each
other, but globally we are seeing a rapid
acceleration of technology convergence.
Converged solutions bring these different
technologies together to solve business
problems where it was not possible or
cost-effective to do so in the past.
Considering the challenges New Zealand
businesses are currently facing, we
believe technology convergence has an
important role to play in boosting
productivity and sustainability outcomes
across our economy.
During FY24 we have embarked on a
number of converged technology
customer trials, to inform our development
of key use cases that can be scaled further
in future years.
“ Technology
convergence has
an important role
to play in boosting
productivity and
sustainability
outcomes across
our economy.”
A showcase of the converged technological solution on a makeshift fishing trawler.
Ko te pae anamata, whakamaua
41
Spark New Zealand Annual Report FY24
Enhancing the resilience of
our network
Our customers rely on us to provide
networks and technology that is highly
reliable in the face of unpredictable events.
We make significant investments into
network resiliency annually, and following
increasingly severe weather events around
Aotearoa, we have been focussed on how
resilience to natural disasters can be further
enhanced.
Working collaboratively
as an industry
As an industry, we invest heavily in disaster
preparedness, with around $1.62 billion
being invested each year to maintain and
upgrade networks. During major incidents,
the sector comes together through our
industry group, the Telecommunications
Forum (TCF), which coordinates operators,
other infrastructure sectors, including
electricity and roading, as well as
government, to restore services.
Over the last year, mobile network
operators have continued working
together to identify critical sites offering
widespread coverage so they can be
prioritised for restoration.
Maintaining coverage during
power outages
One of the main reasons for
telecommunications outages is a loss of
power. Most of our mobile sites are
equipped with battery backup and the
ability to connect standalone generators
when those battery reserves are exhausted,
which provides short-term continuity of
coverage during power outages. We are
now working with our partners to extend
battery life on major, critical sites to ensure
they can withstand power outages for
longer periods of time.
We are also working on an automation
solution for our cell towers to improve the
management of power consumption
during power outages. This means that our
cell towers will be able to monitor their
own power consumption, detect when they
are unable to draw power from the grid,
and automatically prioritise connectivity for
essential communications functions, such
as calls and texts.
Establishing Aotearoa’s Public
Safety Network
We have established a joint venture with
One NZ to support the operational
capability of New Zealand’s emergency
services through the establishment of the
Public Safety Network. The Network, which
was established by Next Generation Critical
Communications Poutama Whai Tikanga
Pāpāho, is used by New Zealand's frontline
emergency responders, including Fire and
Emergency New Zealand, Police, Hato
Hone St John, and Wellington Free
Ambulance, and provides emergency
services teams with access to roaming
across both the Spark and One NZ
networks, to improve redundancy.
Deploying satellite to bolster
resilience
Satellite has an important role to play by
adding an additional layer of resilience to
traditional networks.
While using fibre to connect cell towers to
the network ensures we can support the
day-to-day activities New Zealanders
expect to be able to do on their mobile
phones, fibre cables run along the ground,
including under roads and over bridges,
both of which can become damaged
during a natural disaster. This is where
satellite backhaul plays an important role in
resilience – substituting fibre temporarily to
allow for basic connectivity, such as texts
and calls.
During the year we established a network
of satellite-connected small cells
throughout the country, which can be
deployed to provide access to a basic level
of mobile connectivity during emergencies
when fibre backhaul (which connects a cell
tower back into the network) becomes
compromised.
These satellite-connected emergency small
cells are housed in five strategic locations
in Northland, Auckland, Gisborne,
Palmerston North, and Canterbury, making
them readily available to deploy should the
Spark mobile network be impacted by a
fibre outage.
Our longer-term ambition is to enable
our strategically placed permanent cell
towers to automatically switch to satellite
backhaul if required, ensuring we can
provide connectivity when our customers
need it most.
We are also currently trialling direct
satellite-to-mobile technology with our
partner Lynk Global, before offering the
service to Spark customers at scale as more
satellites are deployed.
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Improving customer experiences
and resilience through AI and
automation
We are trialling the use of generative AI
and machine learning to detect anomalies
in the network and generate insights for
our engineers, such as ‘I have observed
multiple voice call drops in a metro site in
Auckland’. This enables our engineers to
quickly turn their attention to that site,
diagnose the issue, and respond to prevent
it becoming more widespread.
We are also running trials of generative AI
within our operations team. This will allow
us to interact and query various knowledge
bases in real time using simple prompts
such as, ‘I want to see how many users on a
cell site are impacted by this issue’ or ‘I
want to see why traffic is unusually slow on
this cell tower’. This also has the potential to
predict maintenance requirements and
automate corrective actions in future.
Working with government to
improve resilience
While we are making great progress in
preparing our network for future disruptions,
we are committed to working alongside
the industry and government to explore
further opportunities to improve resilience.
To support this, we are engaging with
officials to ensure important policy enablers
that support network resiliency are in place.
This includes the continued release of
spectrum, which enables us to keep
extending 5G coverage; ensuring
proposed Resource Management Act 1991
reforms support the rollout of
telecommunications infrastructure in a
changing built environment; ensuring
digital infrastructure is considered in
Aotearoa’s climate change planning;
enabling cross-sector collaboration on
resilience; and ongoing investment in
public and private partnerships, like the
Rural Connectivity Group.
OTN nodes
Planned OTN 2.0 nodes
OTN network
WHANGAREI
WARKWORTH
ROTORUA
TAUPO
MASTERTON
DUNEDIN
INVERCARGILL
QUEENSTOWN
TAURANGA
NAPIER
PALMERSTON
NORTH
PORIRUA
NEW PLYMOUTH
LEVIN
NELSON
TIMARU
BLENHEIM
HAMILTON
AUCKLAND
WELLINGTON
CHRISTCHURCH
A stronger backbone for our
network
Over recent years we have been investing
in the next generation of our Optical
Transport Network (OTN), which is the
fibre backbone of our network and
connects Aotearoa’s major cities to the
core of the network.
Last year, we completed building our OTN
2.0, which has multiple redundancy paths
and ‘self-healing’ capabilities. This means it
enables the light signals that carry data up
and down the country to automatically
divert to an alternative path if a fibre cut
occurs, swiftly restoring services where it is
possible to do so.
Our OTN 2.0 has seven times the data
capacity of the OTN, which is supporting
our 5G rollout and providing our fixed and
mobile networks with enough capacity to
meet ongoing growth in data consumption.
We are also building our access and
aggregation network which will provide
diverse paths between our cell towers and
our OTN 2.0, with its own self-healing
capabilities to improve resilience further.
Additionally, we have three geographically
diverse, highly resilient Spark network data
centres providing core voice and mobile
services located in Auckland, Porirua, and
Christchurch.
Ko te pae anamata, whakamaua
43
Spark New Zealand Annual Report FY24
Connecting New Zealand with
the world
During FY24, we completed the fourth
upgrade of the Tasman Global Access
Network (TGA) cable system through a
consortium with Telstra and One NZ.
This further increases capacity on the cable
to service growing demand for connectivity
between Australia and New Zealand.
Mobile network availability
Mobile network
availabilityFY23FY24
Availability of
4G network due
to site outages*
99.69%99.87%
* Calculated as the total availability time of
all sites minus outages / total availability
time of all sites.
Connecting rural Aotearoa
Improving rural connectivity remains a key
priority for Spark as we, alongside our
industry partners, work to close the
geographical digital divide. While our
networks reach 98% of New Zealanders,
there are significant challenges in providing
coverage across mountainous, foliage-
dense terrain, with highly dispersed
populations.
The Rural Connectivity Group
We are a partner in the Rural Connectivity
Group (RCG), a joint venture with One NZ
and 2degrees that enables us to share the
costs of building rural mobile infrastructure
where it would otherwise not be
commercially viable.
In June, the RCG connected its 500th rural
cell site at Anawhata, serving a coastal
community between Piha and Bethells
Beach on Auckland’s west coast. As a result
of the connectivity provided by the RCG,
33,000 previously unconnected
households across the country now have
internet connectivity, and mobile coverage
is available across thousands of kilometres
of roads and 110 tourist hotspots.
Last year, Spark, One NZ, and 2degrees
each committed an additional $24 million
in funding to the RCG between 2023 and
2025, as part of an agreement with the
Crown to expand mobile coverage further
into rural New Zealand and reduce mobile
black spots on state highways.
We have also accelerated our own
deployment of 5G in the regions, with 5G
connectivity now available in 103 towns
with a population over 1,500 – which is 66%
of our FY26 ambition.
Connecting rural marae
The Marae Digital Connectivity
Programme aims to improve digital
access in provincial and rural Aotearoa
by connecting marae to reliable internet
and providing iwi, hapū, and whānau
with access to technology, including
cloud storage, digital security networks,
and state-of-the-art hardware. Spark is
the key delivery partner working
alongside Te Puni Kōkiri and Crown
Infrastructure Partners.
One of the immediate benefits has
been enabling whānau who lived
elsewhere to stay connected to their
hapū and join hui or wānanga virtually.
The technology will also help marae to
work with their rangatahi to support
new skills development, while
supporting local communities to
innovate and create new business
opportunities – such as hosting
wānanga or conferences and
collaborating virtually.
Comprehensive training on how to use
the technology was rolled out around
the country by Te Wānanga o Aotearoa
as part of the initiative and a total of 659
marae have been connected through
the programme at the end of FY24.
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Migrating customers off
legacy technology onto
future-proof alternatives
We continue to migrate customers off
end-of-life technology and onto modern
alternatives already used by the majority of
New Zealanders across the country, such as
fibre and wireless. This includes the
retirement of the Public Switched Telephone
Network (PSTN) and our 3G network.
Retiring the Public Switched
Telephone Network (PSTN)
The Spark-operated PSTN – the traditional
way of providing landline services – was
built in the 1980s and is rapidly reaching
end-of-life. The network’s components
have not been manufactured since 2003
and the people with the skills needed to
maintain it are getting harder to find.
The majority of New Zealanders have
already made the switch to fibre or wireless
proactively. In 2017, we had over a million
customer lines on the PSTN, by the end of
FY24 only 77,000 remained. Around 3,200
customer lines, on average, migrate off this
technology every month. As customers
move off the PSTN, we are able to
decommission legacy PSTN equipment. To
date, we have decommissioned almost
65% of our PSTN switches, which has
resulted in a significant decrease in our
power usage and carbon emissions.
Over the past year, we developed and
implemented a solution for customers who
rely on the legacy PSTN system for their
voice services but have limited access to
fibre or wireless alternatives. The solution,
called MSAN (multi-service access nodes)
enables our customers to maintain their
copper line but instead of using the PSTN
switch, it connects them to our new Access
and Aggregation Network. This solution
enables us to continue decommissioning
PSTN switches while ensuring our
customers remain connected until more
advanced solutions become available in
their region.
In a separate programme to Spark’s PSTN
shut down, Chorus is gradually withdrawing
its copper network as it also reaches
end-of-life. The copper network includes
the physical lines carrying calls and data.
We have a dedicated customer service
team for customers going through either a
PSTN or copper migration and offer free
in-home visits where required.
Closing our 3G network to make
way for 5G in rural Aotearoa
In FY23 we confirmed that we will close
down our legacy 3G network towards the
end of 2025. The 3G network currently uses
limited radio spectrum that is required to
rollout 5G in rural areas, so closing it will
enable us to re-farm that spectrum for use
in our rural 5G rollout.
We recognise that this network closure may
cause concern for the few rural
communities where there is currently only
3G available, which is why we have
continued to enhance our 4G network in
these areas ahead of the closure.
At the same time, we are aware that some
of our customers are still connecting to 3G
in areas where 4G is available.
Predominantly, this is due to customers
using devices that can’t make voice calls
over 4G (mobile voice calls over 4G are
technically known as VoLTE – Voice over
LTE) and therefore still use 3G, so we have
continued working with customers to make
sure that these devices are replaced ahead
of the 3G network closure.
Ko te pae anamata, whakamaua
45
Spark New Zealand Annual Report FY24
Creating value
for our
environment
Natural capital
We rely upon natural capital through the diverse
materials drawn from around the world to
manufacture the physical assets that make up our
networks and technology, and the devices our
customers use. We also draw upon natural
resources to power our technology and our
broader business operations.
Our networks, distributed across New Zealand,
are also impacted by changes in the
environment, which has implications for the
resilience of our infrastructure and the
supporting services required to operate them.
Through the products and services we provide,
our customers are able to live and work more
sustainably and productively, enabling them to
reduce their impact on the environment and use
of natural resources.
We can reduce our draw on natural capital and
shift towards circular and renewable operating
models. And by being deliberate about our role
in enabling emissions reductions and climate
adaptation, we can ensure our customers and all
of New Zealand can realise the benefits of digital
technology in protecting natural capital and
responding to environmental challenges.
OUTCOMES
Protecting the
environment and
enabling positive
environmental outcomes
through our customers’
use of technology
46
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Creating value for our environment
Creating value for our environment
Our approach to
environmental
management
We have a focus on continuous
improvement in our environmental
management. Despite this, we saw a
significant increase in our scope 1 and 2
emissions in FY24, putting us above our
emissions reduction target pathway – our
primary environmental KPI. See page 49 for
more information on our performance.
Spark’s Environmental Policy sets out our
expectations for our people to consider
environmental impacts when making
decisions at work, including examining our
business practices, understanding their
impacts, and taking reasonable steps to
reduce our environmental footprint. This is
available at: www.spark.co.nz/online/
about/our-company/governance
To help our people understand their role in
creating a sustainable Spark, we have an
online training module for all employees
that provides information on our approach
to sustainability and our expectation that
our people consider environmental
impacts in their day-to-day activities. We
also communicate our progress to our
employees through regular sustainability
newsletters and direct engagement with
teams across the business.
Working within Spark’s agile operating
model we have an established governance
process to manage our most material
environmental topics. This includes an
Emissions Reduction Squad, led by our
Environment Manager and comprising
employees working in a variety of roles
across the Spark Group. This squad is split
into three workstreams, focussed on
mobile networks, data centres, and fleet.
Over the past year the squad worked to
build energy costs and emissions
considerations into our capital deployment
and funding decision-making processes
and templates.
We measure and report our energy use
and emissions on a quarterly basis,
alongside other broader sustainability KPIs,
to our Leadership Squad. The Leadership
Squad acts as a steering committee for
sustainability across Spark through a
standing agenda item at quarterly
meetings. We believe sustainability is
relevant to all areas of the business, so key
updates and decisions are participated in
by all members of our Leadership Squad.
The Spark Board is provided a sustainability
update on a quarterly basis, including as
part of annual integrated reporting for year-
end. In the past year these updates
covered a range of topics, including
performance against KPIs (including
tracking emissions and energy use) and
also on broader topics, such as climate risk.
Technology for
emissions reduction
We believe technology has an important
role to play in enabling emissions
reductions across our economy. The role
of digital technology in enabling
decarbonisation is broad – it provides
secure access to remote services, which
helps people to reduce commuting; it can
connect and monitor physical assets and
natural environments, which creates
insights that people and systems can then
act on; it can influence behaviour; and it
underpins the creation of low-carbon
industries and jobs. To quantify this role,
we undertook research with thinkstep-anz
during our last financial year. Through this
study we found that digital technologies
can support annual emissions reductions
of 7.2 Mt by 2030 – equivalent to 42% of
the reductions required to meet Aotearoa’s
carbon budget targets. This highlights the
opportunity for Spark to support our
business customers to respond to climate
change through our broad range of
technology solutions.
During the year we continued to advocate
for technology to be integrated into the
Government’s next Emissions Reduction
Plan, to ensure Aotearoa realises the full
potential digital technology can bring to
the climate challenge.
In partnership with NZTech, the Ministry
of Business, Innovation, and Employment,
and the Ministry for the Environment,
we supported the development of a
framework for New Zealand's first Climate
Technology Roadmap. Climate Technology
Roadmaps have been used in many
offshore markets to integrate technology
into national climate responses. The
Technology for Emissions Reduction report
is a first step towards developing such a
Roadmap for New Zealand and draws on
perspectives from hundreds of New
Zealand businesses to provide actionable
steps to integrate climate technology into
business practices.
Launching the Technology for Emissions Reduction report with Minister of Climate Change
Simon Watts and NZTech.
7. 2Mt
The annual emissions reduction digital
technologies can support by 2030.
Ko te pae anamata, whakamaua
47
Spark New Zealand Annual Report FY24
Spark New Zealand commits to reduce
absolute scope 1 and 2 GHG emissions
56% by 2030 from a FY2020 base year.
Spark New Zealand commits that 70% of
its suppliers by spend covering purchased
goods and services and capital goods, will
have SBTi-aligned targets in place by 2026.
This means Spark is committed to pursuing
this target and we are working towards it.
For clarity, this is not a guarantee that we
will meet this target.
The Science Based Targets initiative (SBTi)
is established as the global standard for
corporate emissions reduction targets.
Over 5,000 organisations have set verified
emissions reduction targets since it
launched in 2015.
All SBTi targets must have a strict absolute
reduction target for scope 1 and 2
emissions and also include a separate
scope 3 target if these emissions are
greater than 40% of the total footprint.
SBTi targets are set against sector-specific
emissions trajectories. The ICT sector
pathways were developed with the
International Telecommunications Union
(ITU) based on projected growth and
efficiency gains.
The wording of SBTi targets are set and
verified by the Science Based Targets
initiative, and follow a common format
requiring companies to ‘commit’ to the
target that has been established. For Spark
this is as follows:
Spark’s SBTi-verified science-based emissions
reduction target
Spark’s SBTi-verified
science-based emissions reduction target
Direct emissions from sources
owned or controlled by Spark
SCOPE 1SCOPE 2SCOPE 3
Indirect emissions from
purchased electricity
Indirect emissions from other sources
in Spark’s value chain
Emissions from the Spark Group fleet, as well
as natural gas and diesel generators, which are
used as alternative energy sources for Spark’s
data centres and mobile and fixed networks, and
refrigerants (air conditioning and chillers), which
are used for cooling in data centres.
Electricity purchased for corporate
office, retail, data centres, mobile
network, and fixed network.
Purchased goods and services, capital goods, fuel- and energy-related activities
(not included in scope 1 or 2), transportation and distribution, waste generated
in operations, business travel, employee commuting, upstream leased assets
(emissions from the operation of assets leased by Spark that are not included in
scope 1 or scope 2), use of sold products, downstream leased assets (customer
on-charge for data centres), franchises, and investments.
SUPPLIERS
have SBTi-aligned
targets
70
%
Spark commits to reduce absolute scope 1 and 2 GHG emissions 56% by 2030 (from a FY20 base year), and that 70% of our
suppliers by spend covering purchased goods and services and capital goods, will have science-based targets in place by 2026.
REDUCTION
from a FY20 base year
56
%
Spark’s SBTi target covers our scope 1, 2, and 3 emissions sources
Spark climate-related
disclosures
Our climate-related disclosures
include climate risk reporting, which
has been prepared in compliance
with the Aotearoa New Zealand
Climate Standards (NZ CS 1, NZ CS 2
and NZ CS 3) issued by the External
Reporting Board (XRB). See page 90.
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Performance against our
scope 1 and 2 emissions
reduction target
In the past year we saw our emissions
increase, with our scope 1 and 2 emissions
up 26.7%. This means we are tracking
18.6% above the SBTi pathway required to
reach our 56% reduction target from FY20
to FY30.
The majority of this increase was driven by
our scope 1 emissions, which rose by
73.4%. This significant rise was primarily
due to a one-time event that led to higher
fugitive emissions. Without this event we
would be tracking 5.7% above our scope 1
and 2 SBTi pathway. See ‘Fugitive
emissions’ on page 52 where we explain
the reason for this increase.
We also saw increases in our scope 2
emissions due to higher electricity usage
and the higher emissions factor of the New
Zealand grid. Our scope 2 electricity use,
which powers our networks and
infrastructure, remains our largest overall
source of emissions related to our direct
operations, at 72.3% of our total scope 1
and 2 emissions. The emissions intensity of
the electricity we use is dependent on
whether it is generated renewably or from
fossil fuels, such as coal and gas. The mix of
sources determines our emissions factor
per unit of electricity.
Over the past year our scope 2 emissions
increased 14.8%, driven by a 2.6% increase
in electricity consumption and an 11.9%
increase in the grid emissions factor. See
‘Electricity consumption’ on page 50 for
more information.
Our scope 1 emissions associated with
fleet also increased slightly, up 6.6%
compared to FY23. This was due to more
diesel consumption as a result of additional
field service vehicles added to our Entelar
Group fleet. We saw a decrease in reported
stationary diesel combustion emissions
(measured through diesel purchase
records from the year) of 82 tonne of CO
2
e,
down 20.9% compared to FY23. This
reduction was due to having no major
diesel tank top-ups this year, in contrast to
FY23 where a significant volume of diesel
was purchased to fill tanks at our new data
centre facilities.
Greenhouse Gas Inventory
Report
We publish a standalone
Greenhouse Gas Inventory Report
alongside our Annual Report.
It includes detailed reporting on our
emissions and energy use. See
www.spark.co.nz/online/about/
sustainability/environment for more
information.
Spark Greenhouse Gas
Inventory Report 2024
INVENTORY
GREENHOUSE GAS
Reduction pathway
required to meet
FY30 target
FY24FY23FY22FY21FY20
Mobile combustion -
Vehicle fleet
Fugitive emissions
Data Centre
Fixed Network
Mobile Network
Data Centre
Fixed Network
Mobile Network
Corporate/Retail
Natural gas combustion
Stationary combustion -
Diesel generators
GHG emissions (tCO
2
e)
Baseline year
0
5,000
10,000
15,000
20,000
25,000
Ko te pae anamata, whakamaua
49
Spark New Zealand Annual Report FY24
Electricity consumption
In the past year we have seen an increase in
electricity consumption across the Spark
Group, as we have continued to rollout our
5G network and invested to increase data
centre capacity. Overall electricity
consumption is up 2.6%, from 152.6 GWh
a
to 156.6 GWh.
The majority of the variance in our
emissions since setting our target against
our FY20 baseline has been in changes to
annual hydrological conditions impacting
hydroelectric generation. This saw a
significant increase in non-renewable
electricity generation on the New Zealand
grid in FY21. In FY22 and FY23 this trend
was reversed, with a cleaner electricity mix
and underlying reductions in energy use
delivering significant emissions reduction
over the previous two years.
In FY24 we saw this trend reverse again,
with a slight increase in the grid emissions
factor, which is up from 0.0696 kg/kWh
b
to
0.0779 kg/kWh, an 11.9% increase.
We expect our fixed network consumption
to continue to decrease over time, with our
data centres set to become our largest
energy users over the medium term. In
FY24, our electricity consumption
associated with data centres increased by
8.2%. Our investment in expanded
connectivity, network capacity, and data
centre capacity is important to support
innovation and enable emissions
reductions across all sectors of the
economy. However, we cannot pursue this
growth without also reducing our own
emissions against our SBTi target pathway.
Our strategy is to decouple our business
growth from emissions growth by working
in partnership with our energy partner to
utilise our electricity procurement to
support the development of new
renewable energy generation in
New Zealand. This creates additional
generation capacity to meet growing
demand and supports New Zealand’s
overarching climate goals. In May we
announced a renewable energy
partnership with Genesis Energy.
Long-term energy plan
A reliable and sustainable supply of energy
is essential to power Spark’s infrastructure
and to enable future growth. The
New Zealand energy system is facing a
number of challenges from the impacts of
climate change, the increased pressure put
on generation through electrification of
industrial processes, and the longer-term
transition to 100% renewable electricity
generation. Because of this, a focus on
efficient use of energy is important.
The largest user of electricity across the
Spark Group is our fixed networks, which
includes our exchanges and legacy copper
networks. We have a long-running
programme of network simplification,
including the decommissioning of legacy
equipment, such as the public switched
telephone network (PSTN), which has
driven year-on-year reductions in electricity
use across our business. Over the last year
our fixed network energy consumption
reduced 5.5%. We will continue to reduce
electricity consumption through a focus on
energy efficiency and removing old,
inefficient equipment.
FY24FY23FY22FY21FY20
Data centre
Fixed network
Mobile network
Corporate/Retail
Residual Supply Factor
c
GWh consumed
tCO
2
e/GWh
69.62
77.95
110.77
124.69
99.28
0
20
40
60
80
100
120
140
160
180
200
0
20
40
60
80
100
120
140
160
180
200
a. Gigawatt hours (GWh).
b. Kilowatt hour (kWh).
c. The Residual Supply Factor is the grid emission factor we use to calculate our market-based scope 2 emissions
to measure performance against our emissions target. It is the amount of CO
2
e per unit of electricity consumed.
“ Our strategy is to
decouple our
business growth
from emissions
growth by working
in partnership with
our energy partner
to utilise our
electricity
procurement to
support the
development of
new renewable
energy generation
in New Zealand. ”
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Renewable energy partnership with Genesis Energy
Through our existing energy supply
agreement, dating back to 2021,
Spark has been working with our
energy partner, Genesis Energy, on
opportunities to work together to
achieve Spark’s SBTi target. In May 2024
this culminated in the announcement
of a new renewable energy partnership
with Genesis.
Under a ten-year Power Purchase
Agreement (PPA), we will purchase all of
the electricity generated by Genesis’ first
solar farm in Lauriston Canterbury. The
63MW Lauriston solar farm is expected to
generate enough electricity to meet 60%
of our current annual requirements and
will make a significant contribution
towards our scope 1 and 2 emissions
reduction target.
The energy generated by the Lauriston
site will be zero-carbon and we will be
able to count this renewable energy
against our market-based scope 2
emissions target through the transfer of
Renewable Energy Certificates. These
certificates transfer the renewable
attributes of the energy to Spark and
enable transparent tracking and reporting.
In exploring renewable energy
partnership opportunities, it was
important to us to support investment in
new renewable energy – rather than
buying certificates for existing
renewables that were added to the grid
many years ago. It is only through the
addition of new renewable sources that
New Zealand’s grid will further
decarbonise and our country will reach its
long-term climate goals. Long-term
commercial commitments, delivered by
PPAs, support new renewable generation
to become operational faster by
providing projects with commercial
backing and increasing confidence to
invest in further developments.
Under the agreement, the remaining 40%
of our electricity needs will continue to
be sourced by Genesis from the grid as
occurs today. However, as we continue to
grow our energy use, and we look
beyond our FY30 emissions target to our
long-term transition to net-zero, we will
ultimately need to transition 100% of our
electricity consumption to new
renewable sources. The partnership with
Genesis includes a commitment to
explore additional renewable energy
opportunities, supporting Genesis to
achieve its target to have 95% renewable
generation by 2035.
Ko te pae anamata, whakamaua
51
Spark New Zealand Annual Report FY24
Fugitive emissions
In FY24 we worked closely with our
refrigerant supplier to enhance our fugitive
emissions reporting. Beginning in Q3, we
now receive monthly refrigerant recharge
data. This improvement has allowed us to
transition from a screening method to a
more accurate measurement of refrigerant
recharges, enabling year-round monitoring.
Through this improved methodology, we
identified slow refrigerant leaks as the most
common source of fugitive emissions.
During the last quarter of the year, an
alarm triggered a fire suppressant gas
flood response at one of our exchange
sites. Due to the high global warming
potential of the gas released, this incident
resulted in emissions of 1,892 tonnes CO
2
e.
This contributed to a 311% increase in our
fugitive emissions compared to FY23.
In FY25 we plan to deploy IoT sensors
across relevant assets and investigate
low-carbon refrigerant alternatives to avoid
similar events occurring in the future.
Our fleet
In FY24, Spark’s fleet was responsible for
10.5% of our reported scope 1 and 2
emissions. Our FY24 fleet emissions were
up 6.6% on the previous year, due to
increased fuel use in the fleet of our
subsidiary Entelar Group. Entelar Group
provides services to all of New Zealand,
including network and fibre build and
maintenance. This work requires an
extensive tool-of-trade fleet that is partially
made up of diesel fuelled utes and vans. To
keep pace with business demands, Entelar
added 19 diesel vehicles to its field fleet in
FY24, while also looking for opportunities
to adopt more sustainable options,
including 26 new hybrids to support
non-field operations and the ongoing
removal of petrol vehicles.
We introduced our ‘Electric First’ policy for
the Spark corporate fleet in FY22, with all
vehicles due for renewal to be replaced by
an electric vehicle (EV). Over the past year
we have made great progress in
transitioning our Spark Corporate fleet to
EV. However, we continue to face
challenges across the Spark Group,
particularly in areas where low-carbon
alternatives for tool-of-trade vehicles are
limited. We also have roles that require
long-distance travel or involve areas with
insufficient fast charging infrastructure,
proving a barrier to the uptake of EV.
For those who have range and charging
issues, we have looked to extend the leases
on hybrid vehicles. Additionally, when a
low-carbon vehicle is no longer needed in
one part of the business, we reassign it to
another driver who is operating a less
efficient vehicle, improving the overall
efficiency of our fleet. We are continually
monitoring the New Zealand market for
new electric vehicle options, focussing on
models that offer extended range and
field-service capabilities.
Spark New Zealand fleet composition
Vehicle typeSparkSpark subsidiaries
EV80 (+39)4 (+2)
PHEV13 (-8)0 (-2)
Hybrid85 (-47)76 (+24)
Combustion engine3 (N/C)201 (+1)
Total181 (-16)281 (+25)
Bracketed figures represent the change from FY23.
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Our scope 3 emissions
Scope 3 emissions refer to the emissions
that are created across a company’s value
chain. For example, the emissions created
by the manufacturing of goods and delivery
of services used to run a business, or
through the use of the products and
services customers buy from that business.
At Spark this includes a wide variety of
sources, including the production of
purchased goods, transportation, business
travel, and the way our customers use our
products.
Performance against our scope 3
supplier engagement target
The percentage of our spend with
suppliers with SBTi-aligned targets in place
has increased to around 43%, up from 33%
last year. A number of our largest suppliers
by spend are our peers in the New Zealand
telecommunications sector. One of our key
local suppliers achieved SBTi verification of
their science-based target in the past year,
a second is finalising an SBTi-verified
target, and a third has committed to set a
target in the next two years. Across our
global supply chain approximately 21% of
our spend is with suppliers that have
publicly committed to setting targets within
the next two years.
As we have strengthened our ethical
supply chain processes we have
implemented a process to survey key
suppliers on an annual basis. This provides
an opportunity to gather more data on
supplier environmental governance,
compliance, and commitments, including
emissions reduction targets and alignment
and validation against SBTi methodology.
For global suppliers our membership of
the global industry group, the Joint Audit
Cooperation (JAC) initiative, provides a
platform to engage suppliers alongside
other telecommunications companies with
similar SBTi-verified supplier engagement
targets. For more information on our
approach to engaging suppliers on
sustainability and ESG matters, refer to our
Modern Slavery and Human Rights
Statement: www.spark.co.nz/online/about/
our-company/governance
Business travel
Flights and business travel are classed as
scope 3 emissions, so are not included in
our scope 1 and 2 SBTi emissions
reduction target. However, business travel
is a significant source of emissions that can
be easily influenced by our policies and
behaviour.
Following the post-Covid travel rebound
we saw in FY23, emissions associated with
business travel have reduced by 13% in
FY24, which is 35.4% below our FY20
baseline. We saw a decrease across all
business travel activities, and most notably
a 32.1% reduction in domestic air travel
emissions.
To contain growth in business travel we
have implemented a new sign-off process
for international travel. We have also built
quarterly travel data into our sustainability
dashboard to maintain greater oversight
and determine whether any further action
is required to manage business travel.
43%
The percentage of our spend with suppliers
with SBTi-aligned targets.
Ko te pae anamata, whakamaua
53
Spark New Zealand Annual Report FY24
Reducing e-waste
Electronic waste is our most significant
waste impact. We produce a significant
volume of electronic waste across our direct
operations and indirectly through the
downstream impacts of customer
equipment at end-of-life. E-waste also
includes valuable and potentially hazardous
elements. It is therefore important for us to
focus on circularity in our e-waste
management, to enable materials to be
recycled and to reduce environmental harm
through improper disposal.
E-waste and network recycling
Spark has a long-standing programme to
manage end-of-life network equipment
and technology. Recovered equipment is
separated into different waste streams
– such as printed circuit boards, copper
cables, lead batteries, and all types of
metals. These materials are processed by
our local recycling partners and then some
components are sent overseas for
recycling, reselling, or reusing.
In FY24 we recovered a total of 450 tonnes
of e-waste, down from 559 tonnes in FY23.
Of this, 138 tonnes were network e-waste
(down 16 tonnes on FY23) and 312 tonnes
were metals, cables, and batteries (down
101 tonnes). The reduction in recovered
e-waste was the result of fewer PSTN
switches being decommissioned in FY24
compared to FY23, as well as a number of
smaller switches being removed compared
to previous years. We continue to improve
our recycling collections focussing on
education within Spark and working with
some of our larger customers to support
them to responsibly recycle their surplus
equipment.
Alongside the Spark Foundation, we also
support the Recycle A Device (RAD)
scheme through our subsidiary, Entelar
Group, to provide logistics support towards
the collection and refurbishment of used
laptops for students and others in the
community in need of a device. See page
60 for more information.
Mobile phone recycling and
trade-ins
In FY24 Spark received 16,425 mobile
devices for recycling and trade-in, up from
15,119 in FY23. This increase was due to a
rise in trade-in numbers. Trade-ins are
becoming more popular with our
customers, allowing them to unlock value
from their older devices. Most trade-in
devices we receive go on to be refurbished
and resold, extending their lifecycle and
keeping them in circulation. When we
receive devices that are unable to be
redeployed, we recover essential materials
and send them on to be reused in new
products.
Product stewardship scheme
development
Following the 2020 amendment to the
Waste Minimisation Act 2008, electrical and
electronic products have been designated
as Priority Products. This designation
mandates the implementation of product
stewardship schemes, ensuring
manufacturers, importers, and retailers take
responsibility for the entire lifecycle of
these products.
Spark is a member of the
Telecommunication Forum’s (TCF’s)
RE:MOBILE product stewardship scheme,
one of the first industry schemes voluntarily
accredited by the Ministry for the
Environment (MfE) under the provisions of
the 2008 Act. The RE:MOBILE scheme
takes unused mobile phones, and either
refurbishes and on-sells them in overseas
markets or recycles them to recover the
materials used. Profit from the scheme is
donated to the charity Sustainable
Coastlines.
The accreditation for RE:MOBILE lapsed in
April 2021 and TCF is now seeking
re-accreditation under the new provisions
in the 2020 Act. MfE continues to recognise
the scheme as TCF work through this
process. Spark is a part of the TCF Product
Stewardship working group contributing to
the review of RE:MOBILE and the re-
accreditation process.
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Our water usage
We practise water conservation across our
data centre portfolio, using it only when
necessary for maintaining humidity,
equipment upkeep, and the evaporative
cooling of outdoor chillers during hot
weather. At sites with closed-loop cooling
systems, water is recirculated, eliminating
the need for ongoing consumption.
Water is also a key consideration in the
design of our data centres. Our newest pod
at the Takanini data centre uses a free
air-cooling system, utilising the ambient
outdoor air to cool servers and equipment.
Our future data centres are being designed
to use similar air-cooled methods or closed
loop cooling systems to minimise reliance
on municipal water supply.
In FY25 we plan to introduce new
processes to measure our total water
consumption across all business
operations, including our data centres. We
will also implement IoT water metering
systems where we require further insights
into our consumption, to enable more
detailed reporting in the future.
Proposed design for Spark’s Takanini data centre expansion.
Ko te pae anamata, whakamaua
55
Spark New Zealand Annual Report FY24
Creating value
for our
communities
Social + Human Capital
We work alongside New Zealand communities to
harness the power of technology to create a
positive digital future for all. Our products and
services help our communities to stay connected
and enable the provision of community services.
Beyond the direct impacts of our products, we
want to play a bigger role in building healthy,
connected, and equitable communities.
Connected and
empowered
communities
OUTCOMES
56
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Creating value for our communities
Creating value for our communities
Championing digital
equity
At Spark our commitment to digital equity
starts with our purpose – to help all of
New Zealand win big in a digital world.
Digital equity starts with having access to
devices and a connection to the internet
but it doesn’t stop there. To close the digital
divide our communities need the skills to
use technology, trust in the digital world,
and the motivation to participate.
Spark’s investment into the
community
In FY24 we committed nearly $10 million in
free data and funding, as well as significant
internal resources, to achieve our digital
equity ambitions and contribute to our
communities.
In FY24 Spark donated nearly $2 million to
Spark Foundation, with $1.5 million
designated specifically for community
projects, and the remaining funding
operational costs.
Spark also funds the Spark Give and Spark
Volunteer programmes, which match
employee charitable donations (up to a
total pool of $250,000 per annual year) and
provides all Spark people with one day
leave a year to commit to volunteering.
Spark’s subsidised broadband service
Skinny Jump has been designed to operate
on a not-for-profit basis – with the revenue
generated covering the costs of the free
modems, community partner network,
product development, and customer care
and education. The commercial value of
the data provided to households in need
through Skinny Jump totalled over $7.7
million in FY24.
Zakir Ahmed, Waheed Ahmed and Amjad Mahmood after getting connected by Skinny
Jump and Red Cross.
New Kiwis get connected online through Skinny Jump
and New Zealand Red Cross
For many refugees who arrive in
New Zealand, getting connected to the
internet is vital for settling in a new
country, learning a new language, and
staying in touch with their families and
friends. However, they often face
barriers such as cost, language, and lack
of knowledge about local processes.
That's why Spark Foundation and Digital
Inclusion Alliance Aotearoa (DIAA) have
partnered with New Zealand Red Cross
to provide Awhi Matihiko, a digital
inclusion programme that supports
refugees to access and use the internet.
Awhi Matihiko offers Skinny Jump, a
low-cost wireless broadband service, as
well as digital skills training and support.
Zakir Ahmed, Waheed Ahmed, and
Amjad Mahmood are three refugees
from Pakistan who arrived in Masterton
in September 2023. They were assisted
by the Red Cross team to get set up with
Awhi Matihiko and connected the
modem in their home.
"When I arrived here, I was worried
about how we would contact our
families in Pakistan. Getting connected
through Skinny Jump allows us to stay in
contact with them and tell them what
our lives are like in New Zealand,"
Waheed says.
Amjad adds: "It helps us learn English,
and to prepare for the theory test for
our driver licences."
Zakir agrees: "Without internet many
things would be difficult, including
speaking to people here and to our
families. Having the internet is a plus
point for us."
Through Awhi Matihiko, Zakir, Waheed,
and Amjad are not only able to access
the internet but also to develop their
digital skills and confidence.
~
$10m
Spark's investment into digital equity in FY24.
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57
Spark New Zealand Annual Report FY24
Seniors Connect
In FY23, Spark held an event called
ALL IN, which brought our people
together to learn more about the
digital divide and to work together on
solutions. As part of the event, our
people brainstormed ways to tackle
digital equity, with close to 1,000 ideas
generated.
These ideas were filtered down to ten
concepts for Spark to explore, taking
into consideration the feasibility and
desirability of each idea. The idea that
was chosen as the first to pursue posed
the following question: “How might we
enable Spark people to use their
volunteer time to close the digital divide
for seniors in New Zealand?”
This complements the work of Skinny
Jump, which is focussed on cost as a
barrier to connectivity, and Spark
Foundation, which is focussed on
Māori and Pacific youth. And with an
ageing population here in Aotearoa,
supporting digital equity for our senior
New Zealanders is a logical area of focus
for Spark.
To explore this idea further, we
established a squad called ‘Seniors
Connect’, who kicked things off by
engaging with key community
organisations across the country, to
understand what problems seniors are
facing when it comes to using digital
technology, what services already exist
in the community, and what Spark can
do to meaningfully support seniors to
thrive in an increasingly digital world.
The Seniors Connect Squad is now
designing a service framework that will
equip our retail store teams to support
seniors effectively, while also connecting
our customers to broader digital equity
services across the community. We are
also exploring how our people can
utilise their volunteering days to support
this work.
Improving access and affordability
through Skinny Jump
Skinny Jump is Spark’s not-for-profit wireless
broadband service for people who find cost
a barrier to having an internet connection at
home. The service is entirely prepaid, so
there are no long-term contracts or credit
checks needed, and all it takes to get set up
is registering through a community partner
and plugging in the modem.
Jump is delivered by a dedicated squad of
Spark people alongside a community
partner network, which is overseen by
Digital Inclusion Alliance Aotearoa (DIAA)
and includes nearly 300 local organisations
nationwide, spanning community libraries
and community hubs amongst others.
There are now over 31,776 households
across the country who are actively using
Skinny Jump.
For wireless broadband an active
connection is defined as a customer having
used their modem in the last 30 days.
However, Skinny Jump customers are more
likely to have infrequent internet use as they
have to reprioritise their monthly spending
when budgets are tight. This is why for
Jump, we also measure customers who
have used their modem in the last 90 days,
and in FY24 this totalled more than 33,993
households.
Jump provides customers with 35GB of data
for just $5, with the first 15GB of data each
month free. Customers can purchase up to
six top-ups a month, which means Jump
customers can access 225GB of data for just
$30 a month.
In FY24 Skinny Jump continued its key
partnerships, including the ‘Ciena Jump for
Students Fund’, which gives eligible
students a free Skinny Jump connection
until the end of the school year. There are
now 1,160 students using the Ciena Jump
for Students Fund.
Skinny Jump also continued to support the
‘Awhi Matihiko: Red Cross Digital Settlement
Package’ – a collaboration with New Zealand
Red Cross, Internet NZ, and Digital Inclusion
Alliance Aotearoa that gives new refugees a
free Skinny Jump connection (for 12
months), a laptop, and digital skills training.
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Te Ao Matihiko receives
$1 million investment from
Spark Foundation
In December, Spark Foundation
announced a $1 million investment
over the next three years in Te Ao
Matihiko, the newly formed national
organisation for Māori in technology,
which launched in October.
Māori participation in the technology
sector remains low, with the latest
NZTech report ‘Digital Skills for
Tomorrow, Today’ indicating only 4.8%
of the sector identifies as Māori.
Te ao Matihiko has an ambitious vision
to change this, by becoming the
strategic backbone organisation for
Māori in technology. It will do this by
building a community of Māori in
technology and pathways into the
sector; raising visibility of Māori in the
sector; strengthening and safeguarding
Māori culture within digital spaces;
and advocating for policy and system
change.
The support provided by Spark
Foundation will allow Te Ao Matihiko to
establish its Board and governance
structures, create a longer-term 20-year
roadmap, build operational capacity,
and grow its membership base.
Spark Foundation investment
In FY24 Spark Foundation invested over
$2 million into organisations and projects that
accelerate digital equity. This includes funding
received from Spark, in addition to proceeds
from the sale of the Spark Foundation’s art
collection, which was completed in FY23.
Around 80% of project funding supports nine
multi-year partnerships, which span around
two to five years. The rest is allocated to
smaller, one-off grants.
During the year Spark Foundation
launched a partner wellbeing initiative,
Poipoia, in response to feedback from
partners about mental health challenges
their teams were experiencing.
As part of this initiative, Spark Foundation
provided partners with funding to support
wellbeing activities or resources for their
people, as well as access to the ‘Clearhead’
app through Spark’s own Mahi Tahi
wellbeing programme. Clearhead offers a
range of online tools in addition to six fully
funded therapy sessions a year, to support
mental health. Feedback from partners has
been extremely positive and Poipoia will be
continued in FY25.
Championing digital
equity through Spark
Foundation
Spark Foundation leads Spark’s work in the
community. The Foundation has a
single-minded focus on digital equity, and
its vision is that no New Zealander is left
behind in a digital world. It has focussed its
strategy on the areas it can make the
biggest difference – digital access, digital
skills and pathways, and digital wellbeing.
Spark Foundation allocates funding for
programmes through a strategic partnership
approach, working with organisations
whose objectives are aligned to improving
digital equity for Aotearoa. Most
partnerships focus on empowering and
equipping the next generation of digital
thinkers and creators, especially Māori and
youth, who are disproportionately impacted
by digital exclusion.
Last year, Spark Foundation refreshed its
strategic direction for the next three years,
recognising the significant progress
already made improving digital access
through Skinny Jump and programmes
such as Recycle A Device (RAD).
While the Foundation’s three focus areas
remain, over the coming years the focus on
building digital skills and pathways into
technology for Māori and Pasifika will be
upweighted. We believe that equitable
participation in our sector is the ultimate
expression of digital equity.
Members of the Spark Foundation team and Board met with Te Ao Matahiko representatives at Te Kuirau Marae.
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Spark New Zealand Annual Report FY24
Spark Foundation
partnerships in FY24
Digital access
Recycle A Device: Recycle A Device (RAD)
takes second-hand laptops donated by
businesses and households, teaches local
ākonga (students) to refurbish them, and
then gets them into the hands of those who
need them the most. The result is an
end-to-end process of device collection,
refurbishment, distribution, and disposal
that enhances digital equity at every level
– providing highly sought-after tools,
access, and skills to rangatahi (young
people) while also offering the added
environmental benefit of diverting e-waste
from landfill by giving these laptops a
second life. Once devices have been
refurbished, they are gifted to students
within the school community itself or to
other community organisations for
distribution to people in need.
As well as Spark Foundation funding, Spark
subsidiary Entelar Group partners with RAD
to provide logistics support. In the last year,
over 1,300 laptops were gifted to those in
need, and RAD also ran 28 one-day
workshops where over 420 rangatahi
learned the tech engineering skills needed
to repair laptops.
Porirua Access Connectivity and Education
(PACE): Following a community talanoa in
2020 organised by Spark’s Vaka Pasifika
team, a community initiative, PACE, formed
to specifically address the digital access,
connectivity, and education divide in
Porirua. In FY24, PACE ran a school-based
community Wi-Fi pilot at three schools,
which is now being rolled out to more
schools across Porirua. PACE has also
purchased devices that it is offering to
families under a cost sharing model, which
provides the option to split costs three ways
between PACE, the school, and the family.
Digital skills and pathways
Digital Natives Academy (DNA): DNA
has been a Spark Foundation partner
for nearly six years. A kaupapa Māori
organisation, DNA Charitable Trust was
established in 2014 to illuminate digital
pathways and to inspire young people
and their families to create, transform,
shape, and develop their own digital
tools. In April, 132 students came
together to design the marae of the
future for Te Ahi Orokohanga, a
Minecraft Build event. In collaboration
with Ngā Kura ā Iwi o Aotearoa, Local
Gecko Productions, and Te Papatipu
Matihiko Charitable Trust, DNA
provided a culturally safe, empowering
space for tamariki and rangatahi to
explore the digital world and hosted
and live-streamed the entire event in
Te Reo Māori.
Fibre Fale: Founded by two young Pacific
leaders, Julia Arnott-Neenee and Eteroa
Lafaele, Fibre Fale creates pathways for
Pacific people into the technology sector
through education, advocacy, and
facilitation. In FY24 Fibre Fale has focussed
on showing up in places where their
community is active, like social media. Here
they have shared educational, relatable, and
honest storytelling content. In June Nu’uali’
Eteroa Lafaete was awarded joint Hi-Tech
Young Achiever at the NZ Hi-Tech Awards.
P-Tech: A public education model designed
by educators and the technology sector to
address New Zealand’s science, technology,
engineering and mathematics (STEM) skills
gap. Participating schools collaborate with
private companies that provide students
with mentorships, worksite visits, and paid
internships. On completing the
programme, students will have both their
National Certificate of Educational
Achievement (NCEA) qualifications and a
New Zealand Diploma aligned to industry
needs. In addition, successful graduates
typically earn first-in-line consideration at
affiliated industry partners when applying
for jobs. In FY24 P-Tech recruited 120
students, bringing the total number of
students to 350 across all five year levels of
the programme.
Pūhoro STEMM Academy: A kaupapa
Māori initiative that aims to improve
representation of Māori in Science,
Technology, Engineering, Maths, and
Mātauranga. Working with schools,
Pūhoro supports iwi-affiliated rangatahi
Māori from NCEA level 1 through to
higher education, helping to guide
them into high-value careers. Spark
Foundation is a funder of the Hawke’s
Bay regional programme, which
supports eight schools.
In FY24, Spark Foundation supported
the aspirations of Pūhoro to double
down on digital technology skills by
providing further funding investment to
support the new Kaiarataki Matihiko,
digital tech lead role.
Spark Foundation partner hui 2024 at Ōrākei Marae.
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Hihiko Te Rawa Auahau: Delivered by
Toi Kai Rawa, the Bay of Plenty’s Māori
economic development agency, Hihiko
Te Rawa Auahau is focussed on
delivering customised innovation plans
to accelerate digital inclusion in the
wider Bay of Plenty region, specifically
tailored to the individual kura (schools)
and communities they are working with.
In FY24, Hihiko Te Rawa Auahau held
three Hihiko STEAM (science,
technology, engineering, arts and
maths) Innovation Days at Te Whare
Wānanga o Awanuiārangi campus in
Whakatāne. These events provided
opportunities for ākonga (students) to
interact with a range of innovators from
STEAM sectors across the region.
Take2: A programme that aims to break the
cycle of crime through technology, Take2
teaches incarcerated individuals to code,
enabling meaningful employment
opportunities once they are released.
Spark Foundation has supported Take2 for
four years, with FY24 marking the final year
of funding.
Digital wellbeing
Digital Discipline: A programme that offers
support to young people dealing with
social media addiction through education,
awareness, and strategies to balance the
online world with the real world. Digital
Discipline is currently focussed on South
and West Auckland communities with
further collaborations across the country.
Spark Foundation has funded Digital
Discipline for three years, with FY24
marking the final year of funding.
Other partnerships and funding
In addition to multi-year partnerships,
Spark Foundation also made smaller,
one-off grants to a range of digital equity
initiatives including The Light Project, Tāiki
E!, Māori Tech leaders wānanga, Aquabots,
Sticks ‘n Stones, and AI Sandbox.
SAGE Engineering club
SAGE Engineering Club is a group of five girls aged between 13-17 who qualified to
represent New Zealand at the International SeaPerch Competition (underwater
robotics) in May. The team participated in four different robotics and engineering
competitions throughout the year and placed second in the High School Division at
the New Zealand Aquabots Competition, which qualified them to represent New
Zealand internationally. SAGE Engineering Club was the only all-girls team to qualify.
SAGE Engineering Club needed $40,000 to make it to the international competition in
the USA. In line with its mission to support youth who are disproportionately impacted
by inequity to explore a future in technology, Spark Foundation contributed $5,000 to
SAGE Engineering Club’s Givealittle and rallied Spark people to donate. SAGE
Engineering Club made it to the USA and ranked 17th out of 75 high school teams in
the International SeaPerch Competition.
Connecting our people to
our communities
Spark encourages our people to give back
to the community through our Spark Give
and Spark Volunteer programmes.
Spark Give
Our payroll giving programme, Spark Give,
enables our people to donate to schools
and charities via their pay. Spark matches
donations towards our four key partners
through Spark Give dollar-for-dollar (up to
a cap of $250,000 per year).
Our people also have the option to donate to
their personal causes, and Spark continued to
match most registered charities (except
schools and religious organisations)
dollar-for-dollar (up to $500 per person per
year, up to a total of $50,000 per year).
In FY24 Spark Give donations included:
Employee Donations:$307,497
(FY23: $366,431)
Spark’s Matching: $47,622
(FY23: $59,239)
Number of employees
participating:
342
(FY23: 205)
Spark Volunteer
Spark employees can take one volunteer
day each year, for skills or mission-based
volunteering. Skill-based volunteering
means our people focus on opportunities
to use their specialised skills and talents to
assist not-for-profits. Mission-based
volunteering means volunteering with
organisations whose work aligns with digital
equity.
Some of the organisations that our people
volunteered for over the year include Pride,
Lifeline, Sustainable Coastlines, Summer of
Tech, Shadow Tech, Hatch, GirlBoss NZ,
P-Tech, Trees that Count, and Take2.
In FY24 volunteer leave days were as
follows:
Total staff eligible for
volunteering:
5,291
(FY23: 4,259)
Total employee
participation:
610 days by 633
people
(FY23: 462 days)
% of employee
participation:
12%
(FY23: 11%)
SAGE Engineering Club at the International SeaPerch Competition.
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61
Spark New Zealand Annual Report FY24
Creating value
for our people
Human + Intellectual Capital
Our success relies on our team of talented and
diverse people. A career at Spark offers
opportunities to learn, grow, and belong to a
business that encourages leading-edge learning
and development, holistic wellbeing support and
services, and the chance to be part of a high-
performing team that operates in an inclusive
agile environment, that can unlock innovation.
High performing,
engaged, and
inclusive teams
OUTCOMES
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Creating value for our people
67%
Spark people engagement in FY24.
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Spark New Zealand Annual Report FY24
Employee engagement
We measure the engagement of our
people using regular, confidential surveys
and pulse checks that provide us with a
comprehensive engagement assessment
that reflects employee motivation,
likelihood to remain with Spark, and how
likely our people are to recommend Spark
as an employer.
Feedback from these surveys is shared with
our people, with improvement actions then
co-created within teams to improve our
ways of working and culture. As a business,
this has led to a number of improvements
over the last year, such as changes to our
annual remuneration review, our Quarterly
Business Review (QBR) processes, and the
development of a new management
development programme.
Participation in our surveys has remained
strong, with 86% of our people taking part
in our final FY24 survey, which ensures we
have high quality and reliable insights to
take action on.
In this end of year survey, our people
engagement score was 67%, which is
above the New Zealand median for large
companies, but down 3% from a year ago.
While we had tracked as high as 71%
during FY24, our end of year survey was
conducted after we made a range of
changes across different teams, to align our
operating model to our new strategy, and
respond to challenging market conditions.
Understandably, these organisational
changes had an impact on how our people
were feeling in those areas of the business.
We remain focussed on our ambition to
achieve top decile engagement by FY26.
The survey also showed that 80% of our
people are proud to work for Spark and
84% feel comfortable bringing their whole
selves to work, which indicates our
inclusion initiatives continue to resonate
with our people, and we are an employer
who differentiates based on our culture
and employee engagement.
Te Awe Skills Hub team
and cohort.
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Innovation culture
A key pillar of SPK-26 is creating an
Innovation Culture that will fuel our future
growth ambitions and differentiate Spark
through top decile people engagement.
As part of this, we will continue to evolve
our ways of working, invest in strategic skill
development, attract, develop, and retain a
diverse pipeline of future talent and use
data and insights to co-create inclusive and
differentiated employee experiences.
Investing in strategic skill
development
Continuous learning and building skills and
capabilities that enable innovation is a core
focus of how we develop our people at
Spark. We want to enable personal growth
and adaptability, so our people are clear on
what our customers want and need, are
open to diverse ideas and perspectives,
can adapt at pace, and sustain high
performance.
We enable this through quality coaching,
leading-edge learning and development
programmes and with a deliberate focus
on progressing our own people through
new roles and learning experiences across
our organisation.
Spark Cloud Academy
In FY24, we teamed up with one of our
partners, AWS, to launch the Spark Cloud
Academy – to upskill our people working in
our cloud business and deepen their
knowledge and understanding of cloud
services and solutions. The cloud market is
a key focus area for Spark, and this training
offers our teams the opportunity to become
cloud experts and better support our
customers to find the best mix of different
cloud solutions that match their needs.
Establishing our new skilling
centre – Te Awe
As the pace of technological
advancement continues to accelerate,
it is critical to upskill, reskill, and
cross-skill our people to prepare for a
future of work that is ‘already here’.
Te Awe was created in response to
the surge in demand for skills in new
technologies, such as AI, data and
analytics, and cloud. It is a skills
acceleration programme within Spark
that is building the ‘hard to access’
specialist digital skills we need to
support our strategic ambitions.
‘Te Awe’ comes from the te reo Māori
word, ‘awe’ – which refers to the white
feathers of an albatross that are
traditionally used to adorn kākahu
(clothing), korowai (cloaks), and
makawe (hair). In te ao Māori, the
adornment of feathers symbolises
strength, power, and influence, and in
Pasifika cultures, feathers are also
used to adorn fine mats to enhance
value. So, the name Te Awe was
chosen as a nod to Spark’s
commitment to Te Tiriti and our
strategic ambition to increase Māori
and Pasifika participation at Spark by
5 percentage points by the end of
FY26.
During FY24 we kicked off our first
two programmes in data analytics &
visualisation and Generative AI, with
200 people progressing through this
training.
As a company with a long-standing
commitment to digital equity, we also
want to ensure that the skills shift we
are experiencing does not further
entrench existing inequities within our
sector and our society.
Our plan is to explore how we can
now work with key partners to
potentially open Te Awe up to
broader community interest, to
ensure we are intentionally growing a
more inclusive high-tech workforce
pipeline for the future.
“ For all of our leadership
programmes we aim to
meet our 40:40:20
gender commitments
in addition to ensuring
a diverse mix of people
are participating when
considering ethnicity,
business unit, role, and
stage in career.”
Spark Māori Development Lead Riki Hollings celebrating his Corporate Change Tōtara award at the Te Matihiko awards.
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65
Spark New Zealand Annual Report FY24
Leadership development
We continued to deliver our flagship Agile
Leaders Programme (ALP), which supports
our ambition to create an Innovation Culture
at Spark, underpinned by high performance
leadership skills and experiences. The
programme is a significant investment in our
key talent and runs over six months, with a
focus on building the environments for
people to thrive, innovate through design
thinking, use leadership empathy for
connection and belonging, and coach for
sustainable high performance.
In FY24, a total of 38 leaders participated
in the programme, with 67% of ALP
alumni having progressed to other roles
or expanded the scopes of their roles
within Spark.
In June we launched a new programme
called Leadership Essentials. This has been
designed to deliver consistent learning and
development that unlocks the potential
growth and movement of our leaders at the
layer below Spark’s Wider Leadership
Group. It is focussed on resetting our
standards for leadership across key
capability growth areas, in alignment with
our three-year strategy and both identifying
and further investing in the development of
top talent from this group. We are
redirecting some of our prior investment in
ALP to this important programme, to further
accelerate performance and results. Our
pilot cohort was launched in June 2024,
and we have a roadmap for delivering
further cohorts this calendar year, formed
from new and existing leaders across the
business who are committed to developing
their own and their team members’ skills
and learning. Our ambition is to ensure all
our middle-layer leaders attend the
programme over time.
For all of our leadership programmes we
aim to meet our 40:40:20 gender
commitments in addition to ensuring a
diverse mix of people are participating
when considering ethnicity, business unit,
role, and stage in career.
Compliance and mandatory
training
There is a requirement for all our
employees and contractors to complete
mandatory e-learning modules when they
commence working at Spark. These
learning modules ensure proficiency in
core foundational areas, such as health and
safety, legal, privacy, decision-making,
reporting, and security.
Completion of these modules is monitored
by people leaders and reported more
formally on a quarterly basis. We use
regular reporting to ensure there is ongoing
visibility of completion for all our people.
As part of our ISO27001 accreditation
there are additional modules required for
completion prior to gaining access to
systems and sensitive information, to
maintain high quality standards when
dealing with information, customer data,
and security. These are closely monitored
and audited to ensure compliance and the
necessary governance. We undertake
recertification every three years for ISO
27001, with the last certification issued in
July 2023. Further surveillance audits are
undertaken each year to ensure a high level
of compliance.
88%
of our people believe that their people leader
genuinely cares about their wellbeing.
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Our culture survey showed that 88% of our
people believe that their people leader
genuinely cares about their wellbeing and
78% of our people say that when they are
unwell, they take the time off they need to
recover.
Our people have also told us that anxiety is
an important issue, so we have continued
our partnership with Take a Breath – a
breathing app designed to reduce stress
and anxiety. Nearly half of our people have
used this app so far, noting it has helped
them to combat anxiety and improve their
sleep. 10% of our people have also gifted
the app to their friends and whānau.
A foundation of our Mahi Tahi programme
are our Mahi Tahi coaches, with 20
additional coaches trained in FY24,
bringing our total to 40 internally
accredited wellbeing peer coaches. Our
coaches, who are trained and supervised
by our qualified psychologists, act as
first-line support to our people when
they’re working day to day. This includes
supporting leaders, teams, or individuals to
help them with their energy, focus, or
finding ways to seek different support
options. In FY24, our Mahi Tahi coaches
completed over 215 coaching sessions
with Spark people.
In November 2023, Spark was awarded the
‘New Horizon’ award for an innovative
approach to wellbeing, at the Southern
Cross Wayfinder Awards, which celebrate
leadership in workplace wellbeing.
Health, safety, and
wellbeing
Mahi Tahi – wellbeing
Wellbeing continues to remain a clear
priority and focus at Spark, with Mahi Tahi,
Spark’s wellbeing programme, being a key
component of our ways of working and
Health, Safety, and Wellbeing system.
Mahi Tahi works in partnership with our
people to support their goals at work and
in life. The four pillars of the Mahi Tahi
framework are closely aligned with
Te Whare Tapa Wha (the four cornerstones
of Māori health):
1. Healthy work environment – providing
our people with a place to work that
looks after more than just physical safety
but also mental and social wellbeing
2. Connection, collaboration, and
community – ensuring we have
meaningful activities in place so our
people can foster strong connections
with those they work with and
care about
3. Mind health – supporting strong mental
health capacity and confidence and
fostering a growth mindset
4. Energy – building a culture where we
help our people keep their batteries
charged, so they can perform at
their best
As part of our Mahi Tahi offering, we have
an online Wellbeing Hub that includes
opportunities for our people to book
sessions with our Spark-certified Mahi Tahi
coaches, access support through our
employee assistance provider (EAP), or
book a one-on-one appointment with one
of our qualified psychologists, who we
have partnered with directly to provide
specialist care to our people in critical
need. To really integrate Mahi Tahi into our
core business practices, our People and
Culture partners work closely with our
senior leaders to incorporate wellbeing
objectives and KPIs into their quarterly
planning.
During FY24 we launched a new
partnership with Clearhead to facilitate our
EAP services and offering. Clearhead is an
app-based assistance service that gives our
people access to knowledge and tools to
support them with their mental wellbeing,
as well as the ability to book six fully funded
therapy sessions annually with trained
psychologists and counsellors. This new
partnership was a result of feedback from
our people who told us that although our
previous EAP was useful, many of our
people were experiencing long wait times
for professional help. Over 1,500 (28%) of
our people have registered to use the
service in the last year.
Entelar Group
1
team members completing an on site installation.
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Spark New Zealand Annual Report FY24
Health, Safety, and Wellbeing
System at Spark
Spark has a well-established health and
safety management system, focussed on
continuous improvement. Our Health,
Safety, and Wellbeing Strategy is built
around four pillars:
• Strategy and framework – a strong
health and safety management
framework providing a platform for
success
• Hazard and risk management
– proactive ‘owners’ approach to health
and safety and the management of
critical hazards and associated risks
• Leadership and ownership – a culture
of empowerment at every level
• Resources and supporting activity – a
commitment by the business to
ensuring the resources and capabilities
are in place to deliver the health and
safety strategy
Our system covers all of Sparks workers
(employees and contractors) and
workplaces, and aligns to the requirements
of the health and safety at work act (2015)
and other legal and regulatory
requirements. During FY24 no Spark
employee or contractor suffered serious
injury or death over the year. Our TRIFR
(Total Recordable Incident Frequency Rate)
increased to 3.5 primarily due to an
increase in the number of recordable soft
tissue injuries. No notifiable events were
reported under current New Zealand
health and safety legislation, and Spark
received no health and safety prosecutions
or notices issued by WorkSafe.
Based on the experiences of the last few
years, our planning and response activities
now incorporate lessons from the
pandemic and the impact severe weather
events had on our people and places
across New Zealand. We are always looking
for continuous improvement in our
practices based on what is happening in
society and organisational environments.
We continue to follow a risk-based
approach for our activities and work
collaboratively across the business to
ensure we have the right response and
resources in place to support emergency
preparedness.
In FY24 we continued to work with our
Wider Leadership Group to foster health
and safety employee empowerment and
participation as part of our Tribe, Unit, and
Centre of Excellence (CoE) meetings and
routine events. We continued our work with
our wholly owned subsidiaries to identify
the areas of greatest priority to support the
development, application, and monitoring
of a health and safety continuous
improvement framework.
1. Entelar Group provides services such as fibre and mobile builds, service and field delivery, integrated supply chain, IT
distribution and mobile repair, testing and service capabilities for Spark and other customers, including Connexa.
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Diversity, equity, and
inclusion
Our commitment to diversity, equity, and
inclusion is embedded into our day-to-day
activities, standards, and business practices.
It is a strategic business priority and key
enabler of our performance and culture.
Our focus on diversity, equity, and
inclusion, including our Blue Heart
kaupapa, has helped us create an
environment where our people feel
comfortable bringing their whole selves to
work, regardless of gender, ethnicity,
orientation, age, experience,
neurodivergence, or ability.
Spark’s Blue Heart kaupapa
in action
Our Blue Heart kaupapa sets the standards
of behaviour, alongside our values, to foster
a culture of connection and belonging. It is
a visible icon of our heart-led approach to
diversity and inclusion.
Blue Heart cultural celebrations and events
remain an important part of bringing our
people together and in FY24 we
celebrated key moments, such as
International Women’s Day, Lunar New
Year, Diwali, and Matariki events at our
offices throughout the country.
During FY24, we also held our very first
‘bring your Tamariki to work day’ at Spark
City in Auckland, where our people were
invited to bring their children to work to
experience a range of fun activities and
digital experiences.
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Spark New Zealand Annual Report FY24
Te Korowai Tupu
Our Māori strategy, Te Korowai Tupu
(the cloak of growth), is a pillar of our
SPK-26 strategy and applies a tangata
whenua worldview across our
strategies, actions, and values within
Kora Aotearoa, also known as Spark
New Zealand. Our kaiārahi (Māori
ambassadors) provide guidance and
support to ensure a kaupapa Māori-led
delivery of the strategy throughout the
business.
In FY24, we continued to embed both
te reo Māori and tikanga Māori into our
everyday practices to achieve a better
understanding of our indigenous
culture. This included te reo lessons
(for beginners and intermediate levels)
with either online or classroom options,
tikanga learning and development
programmes for leaders, and Te Tiriti
o Waitangi workshops. Our cultural
intelligence Māori app Tuia te Ao
provides a tool for our people to use
to kick-start their learning journey, and
includes important aspects of te reo
Māori me ōna tikanga. In the last year
over 300 of our people chose to
participate in one of the options
available.
Key partnerships continue to enable us
to deliver on our Te Korowai Tupu
aspirations, including Te Wānanga
o Aotearoa, Whāriki, Kiwa Digital,
Education Perfect, and Te Pūtahitanga
o te Waipounamu.
In June, we also celebrated Matariki
across our corporate offices, with a
range of activities, including
performances, demonstrations, and lots
of kai (food).
Vaka Pasifika
Vaka Pasifika is Spark’s Pacific Canoe – a
community of the 5% of Spark people who
identify as Pasifika, formed in 2017 with a
mission to empower, grow, and build the
capability of Pasifika peoples at Spark.
During FY24 the Vaka Pasifika group
continued to promote its strategy ‘Folauga
mo Taeao – A Journey to Tomorrow’, to the
business through engagement with senior
leaders and people leaders.
The strategy sets out three key pillars over
the next horizon to grow and support
Pasifika aspirations at Spark, including
growing the capability and leadership skills
of the Vaka Pasifika team, growing Spark’s
cultural knowledge, and enabling Spark to
become an industry champion for Pasifika.
Pride
Spark has been a long-time supporter of
the rainbow community. In FY24 we
celebrated Pride at Spark by launching a
Blue Heart Pride pin (that was designed by
one of our people) for our people to
purchase, with proceeds from the sales
donated to OutLine Aotearoa. We also held
Pride celebrations across our offices around
the country, including Drag Bingo events in
Auckland, Wellington and Christchurch.
After consultation with Spark’s Rainbow
Committee during FY24, we want to
upweight our focus on internal initiatives in
FY25, to find more ways to support our
rainbow community to feel a sense of
belonging at Spark. With that ambition in
mind, in June we launched our ‘Allyship at
Spark’ programme – inviting our people to
make a pledge to become an ally of the
LGBTQIA+ community and help us foster
a more inclusive environment at Spark.
Everyone who makes the pledge receives a
special Spark rainbow lanyard as a visual
symbol of support for our rainbow
community.
Over the last year, we have also continued
to rollout our new email signatures, which
enable our people to display their
preferred pronouns.
These initiatives, led by our Spark Pride
Committee, aim to recognise, nurture, and
enhance belonging and connection
throughout Spark for our LGBTQIA+
community.
Our diversity performance
We believe in the idea that what gets
measured matters and gets done. We take
a data and insight-led approach to
improving and delivering our diversity and
inclusion practices and ambitions. Having a
greater understanding of who we are will
allow us to create experiences and provide
support that is tailored to the diverse needs
of our people.
Improving female representation
Over the past year we have continued to
focus on improving female representation
across the Group and achieving our
ambition of 40:40:20 representation
Spark-wide, which refers to 40% men, 40%
women, and 20% of any gender (as well as
gender diverse representatives).
We have not been able to achieve this
ambition at a Group-wide level in FY24,
with female representation remaining flat at
34%. Within the core Spark business, female
representation is higher at 37%, while in our
wholly owned subsidiaries (CCL, MATTR,
Digital Island, and Entelar Group)
representation is significantly lower at 22%.
This is reflective of what is an industry-wide
challenge, particularly within some of our
subsidiaries’ sectors, and requires long
term focus and action to continue to
challenge the status quo and create
change. We continue to work actively
alongside our industry peers, external
technology institutions, and other thought
leaders to create meaningful opportunities
for a New Zealand-wide pipeline of women
in technology careers.
We remain committed to our 40:40:20
target as part of our SPK-26 strategy and
will continue to report progress on this
annually to our stakeholders and through
our membership of Champions for Change.
Our People & Culture Partners continued to
support our senior leaders across the
business by providing resources, standards
and guidelines, and data insights that help
them to hire talented candidates with
diversity in mind and track their progress
against their goals and our Spark-wide
ambitions. Each area has an action plan to
achieve its representation goals in addition
to maintaining recruitment standards such
as 40:40:20 shortlists.
Within our Leadership Squad and Wider
Leadership Group (senior roles outside
Board and Leadership Squad), we
maintained 40:40:20 representation, which
is fundamental to reaching our broader
diversity ambitions.
Our Board is 63% female and 37% male,
with five female directors (including our
CEO) and three male directors. One new
female Director joined our Board in May,
and one male Director retired at the Annual
General Meeting in November.
For FY24, our Leadership Squad was 55%
female and 45% male. At the end of FY24
one female leader resigned from our
Leadership Squad, taking the female-to-
male ratio to a 50% female and 50% male
split for FY25.
Reducing our gender pay gap
Our ambition is to reduce our median
gender pay gap by 10 percentage points
from FY21 to 18% by the end of FY25. Our
median gender pay gap for FY24 is
unchanged from FY23 at 22%, but we did
see improvement in our mean (average)
gender pay gap from 13% to 12%.
Achieving our pay gap ambitions is closely
linked to our approach to improving
female representation and progression in
specialist skilled areas and roles, as
outlined above.
Our Diversity and Inclusion Policy sets out
our framework in this area:
www.spark.co.nz/online/about/our-
company/governance
Gender pay ratio
CategoryNumber of employees
in category
Pay ratio:
mean
1
Pay ratio:
median
2
Leadership: Spark’s wider
leadership group, including the
Leadership Squad
FY24: 83 (46 Male, 37
Female)
FY23: 77 (44 Male, 33
Female)
FY24: -1%
FY23: -4%
FY24: 19%
FY23: 9%
Technology: employees who work
in technology-focussed areas of
the business
FY24: 2,728 (2081 Male,
647 Female)
FY23: 2,717 (2101 Male,
604 Female)
FY24: 12%
FY23: 12%
FY24: 20%
FY23: 23%
Customer Channels: people
primarily employed within our
contact centres and retail
operations
FY24: 820 (418 Male, 402
Female)
FY23: 892 (446 Male, 441
Female)
FY24: 0%
FY23: 1%
FY24: 0%
FY23: 0%
Rest of Spark: including corporate,
product, marketing, and customer
units
FY24: 1,582 (890 Male,
692 Female)
FY23: 1,746 (987 Male,
751 Female)
FY24: 16%
FY23: 17%
FY24: 17%
FY23: 23%
Total5,291FY24: 12%
FY23: 13%
FY24: 22%
FY23: 22%
1. Pay Ratio = (mean male salary – mean female salary)/mean male salary
2. Pay Ratio = (median male salary – median female salary)/median male salary
Calculated using hourly On Target Earnings or Total Base Remuneration plus Short-Term Incentive Target values
as at 30 June 2024. Our previous reports presented negative pay gap values where median or mean earnings
for women were less than those for men – we have aligned with other reporting practices so that a negative
gap means women earn more.
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Gender
1
Age
Number of
people
Female %Male %Female #Male #Other/
gender not
disclosed
6
Under 30
years old
30 – 50
years old
Over 50
years old
Directors863%37%FY24: 5FY24: 30%14%86%
0+13%-13%FY23: 4FY23: 4no change+14%-14%
Leadership
Squad
2
11
3
55%45%FY24: 6FY24: 50%55%45%
+2-1%+1%FY23: 5FY23: 4no change-1%+1%
Other
leadership
roles
4
7243%57%FY24: 31FY24: 412%58 %40%
+4+2%-2%FY23: 28FY23: 40+1% -11%+11%
Permanent
starters
84439%59%FY24: 330FY24: 49733%56%11%
-430-2%no changeFY23: 518FY23: 749-2%+4%-1%
Permanent
leavers
97538%60%FY24: 369FY24: 58328%53%18%
-169no changeno changeFY23: 434FY23: 687-2%-3%+5%
Total
5
5,29834%66%FY24: 1,778
FY23: 1,832
FY24: 3,435
FY23: 3,582
FY24: 16
FY23: 10
17%57%26%
-1410%0%-2%+1%+2%
1. For the purposes of NZX Listing Rule 3.8.1(c) no directors or members of the Leadership Squad self-identify as gender diverse.
2. Includes the CEO who is also included as a Director in the line above.
3. The Leadership Squad was 10 people as at 1 July 2024 with Tessa Tierney leaving Spark on 30 June 2024. The Leadership Squad is considered ‘senior managers’ for
the purposes of the Financial Markets Conduct Act 2013 and ’senior executives’ for the purposes of the ASX Corporate Governance Council’s Principles and
Recommendations.
4. Substantive roles that report directly to members of the Leadership Squad.
5. Includes non-executive directors. Spark’s employee headcount, including our CEO, is reported as 5,291.
6. Gender diverse totals only reported in total figures. There are an additional 61 people have not provided/prefer not to disclose their gender.
Employee types TotalAuckland Wellington ChristchurchOther region
Contract typeFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleOther / Gender
not disclosed
Total
Permanent
full time
1,5343,2808281,759231613263482212426704,884
Permanent
part time
22713662492418642177486369
Temporary
full time
1417411243052233
Temporary
part time
322100100105
Casual (non-
guaranteed hours)
7300116200020
Total1,7853,4388961,820258636337505294477785,311
Based on headcount. Casual contracts include any individuals on a non-guaranteed hours basis that were active as at 30 June 2024 and had received remuneration
for hours worked in FY24.
Demographics of our workforce
Including permanent and fixed-term employees of Spark and its directors, as of 30 June 2024.
Ko te pae anamata, whakamaua
71
Spark New Zealand Annual Report FY24
Improving ethnic representation
across Spark
Diversity does not start and end with
gender and we have increased our focus
on ethnic diversity over the last few years.
We achieved our ambition to capture the
ethnicity data of 80% of our core Spark
employees last year from a baseline of
19%. This year we focussed on capturing
this data for our wider group, including
Entelar, CCL, and MATTR. We were pleased
to achieve a Group-wide figure of 78% by
the end of FY24, with only Digital Island
now excluded from this data set.
As at 30 June 2024, the available data on
our people shows that 46% come from
New Zealand European or European ethnic
backgrounds; 36% report a diverse range
of Asian ethnicities, with the largest groups
being Indian (15% overall), Southeast Asian
(8%), and Chinese (7%); 4% of our people
are Māori; and 5% report Pacific ethnicities,
most commonly Samoan (2%). A higher
proportion of people from New Zealand
European or European ethnicities are in
leadership roles at Spark (including the
Leadership Squad and Wider Leadership
Group) at 79%, down slightly from 84%
in FY23.
In FY24 we have continued our focus on
attracting, retaining, and progressing a
diverse range of people across our
organisation, as well as sustaining an
inclusive culture. As part of SPK-26 we have
an ambition to lift Māori and Pasifika
representation by a combined 5
percentage points by FY26. In FY24 we
have held flat, with Māori and Pasifika
representing 9% of our workforce. This
remains a continued focus in the years
ahead, and through our new internal
skilling centre, Te Awe, and existing
partnerships we plan to engage a diverse
pipeline of future talent to be upskilled and
reskilled for roles within Spark or the
technology sector more broadly.
0102030405060708090100
Rest of Spark
Wider
Leadership
Group
Leadership
Squad
Board
Total
NZ European/
European
Asian
Pacific peoples
Middle East,
Latin America
and Africa
Māori
Other
Percentages based on permanent and fixed-term employees at Spark; employees as of 30 June 2024 who had provided ethnicity data (n=4015). NZ European/European
includes all European ethnicities (e.g. British, German) and Australian European. Excludes employees in Digital Island. Spark collects information on main and other
ethnicity where an individual identifies with more than one ethnicity. Consistent with the Champions for Change methodology, where an individual reports more than one
ethnicity these are represented equally (e.g. two ethnicities represented as 0.5 each).
84%
The percentage of Spark people sharing
their ethnicity data with us.
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Creating value for our people
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Parental leave
Spark provides a parental leave policy for
eligible employees, regardless of gender,
sexuality, age or whether the employee is
giving birth or adopting a child.
As part of our parental offering,
Whakapuāwai, Spark tops-up the
Government’s parental leave contributions
so that primary carers receive 100% of their
normal salary for 26 weeks, with continued
employer KiwiSaver contributions of 3%
during their parental leave period.
Secondary carers also receive four weeks’
paid leave (increased from two), so they can
be present to support their partner and
whānau during those pivotal first few weeks
of their baby’s life.
The package also includes a phased
return to work policy for primary carers,
who can work 80% of their regular hours
on 100% salary for the first three months
of their return.
Eligibility for Parental Leave is in
accordance with government legislation.
In FY24 we had 139 employees take
parental leave, with 88% of parents due
to return to work in FY24 coming back and
62% of returners in FY23 remaining with
us for 12 months or more, up from 56%
in FY23.
FY23 parental leave numbersFemaleMale
1
Employees who took parental leave1363
Employees who returned to work after taking parental leave751
Employees who returned to work after taking parental leave who remain
employed 12 months after their return to work
381
Return to work rate
2
88%100%
Retention rate
3
62%100%
1. Males who took fewer than 30 days paternity leave have been excluded
2. Return to work rate = total number of employees who returned to work after parental leave, divided by the
total number of employees due to return to work after taking parental leave
3. Retention rate = total number of employees retained 12 months after returning to work following a period
of parental leave, divided by the total number of employees returning from parental leave in the prior
reporting period.
“ Spark provides a
parental leave
policy for eligible
employees,
regardless of
gender, sexuality,
age or whether
the employee is
giving birth or
adopting a child.”
Ko te pae anamata, whakamaua
73
Spark New Zealand Annual Report FY24
Alison Barrass
Chair of the HRCC
Hello tomorrow74
Remuneration report
Remuneration report
A note from Alison Barrass, Chair of the HRCC
Tēnā koutou,
As the Chair of the Human Resources and Compensation Committee (HRCC), I am pleased to
present Spark’s Remuneration Report for FY24.
This year we have consolidated relevant annual report information into a single remuneration
report, which outlines our commitment to transparent and equitable remuneration practices
that align with our strategic objectives and foster a high-performance culture.
Throughout the year, the HRCC has reviewed and refined our remuneration framework and
practices to ensure they remain competitive and fair, supporting the attraction, retention,
and motivation of our talented workforce. Our approach is underpinned by robust
governance and benchmarking against industry standards, ensuring that our policies
reflect both market conditions and the long-term interests of our shareholders.
At Spark, we seek to remunerate our people with competitive salaries, so we can recruit
and retain the best talent. In keeping with our focus on customer experience, we incorporate
customer satisfaction measures alongside EBITDAI and key strategic initiatives into our
short- term incentive (STI) measures each year.
Key highlights of our remuneration activities this year include:
• A focus on fair pay: as part of our FY24 Salary Review we ensured that we delivered
higher than inflation adjustments to our lowest paid employees taking into consideration
benchmarks such as the voluntary Living Wage standard, and that individuals earning less
than $100,000 were a focus at this time, due to inflationary pressures in the market.
• A rejuvenated Spark Share approach: we endorsed a new partnership with Sharesies
which delivered our largest employee Share Scheme participation since inception, with
1,200 participants and nearly 1,000,000 shares issued.
• Inclusion of ESG measures in incentives: we included environmental and diversity goals
in our long-term incentive (LTI) for the second year running in FY24, and will see these
continue in the FY25 LTI grant. I am proud that Spark is one of the first companies in
New Zealand to link its LTI to its sustainability ambitions.
Looking ahead, the HRCC will continue to evaluate and enhance our remuneration
practices, ensuring they remain fit for purpose in a dynamic and challenging business and
talent environment. We are committed to maintaining a remuneration framework that not
only rewards individual and collective success but also upholds our values and drives
sustainable growth.
I would like to extend my gratitude to all our employees for their dedication and
contributions over the past year. Together, we will continue to build a thriving and inclusive
workplace where everyone can achieve their best.
Thank you for your continued support.
Ngā mihi nui,
Alison Barrass
Remuneration report
Spark remunerates our people with salaries
in line with the market, alongside
consideration of performance, scope, skills,
and experience, to recruit and retain the
best talent.
We have an annual salary review process
for all eligible permanent employees.
For most employees this is based on our
Contribution Model, which considers
employee development in their ‘craft’, as
well as the application of people skills,
customer focus, and commercial acumen.
The aim is to ensure progression is
transparent, with a five-step career ladder
from beginner to expert and clearly
defined competencies to progress against.
Salary ranges for steps are benchmarked
against the New Zealand market.
In February 2024, the Board approved a
salary review allocation for FY25 (salaries
from 1 July 2024), which was based on
our Contribution Models with additional
allocations, including higher increases for
our lowest paid employees, taking into
consideration factors such as inflation and
the (voluntary) Living Wage benchmark.
As part of this process, we also reviewed
some salary ranges to ensure that they
were competitive against the market.
Fixed remuneration
All Spark employee packages include a
fixed remuneration component that is set
based on contribution, experience, and
market relativities. Fixed remuneration
consists of base salary. KiwiSaver sits
outside fixed remuneration and as such,
employees with KiwiSaver receive employer
contributions on top of base salary and
cash incentives. A number of Spark-funded
benefits, including medical and life
insurances, are also available to eligible
employees on top of fixed remuneration.
Short-term incentive schemes
Spark operates a small number of short-term incentive schemes, from monthly and quarterly
commission and sales incentive plans to annual cash-based short-term incentives. Some
employees in specific sales positions may have a component of their remuneration subject to
individual or divisional sales performance targets, such that their total remuneration potential
is directly linked to the acquisition and retention of profitable business for Spark.
For senior leaders, including the Leadership Squad, a component of their remuneration
package is at risk in the form of a discretionary annual cash-based Short-Term Incentive (STI).
Spark’s STI scheme rewards senior leaders for the achievement of annual performance
objectives, with payments awarded from a fixed cash pool that is set based on overall Spark
performance against financial and/or non-financial annual performance objectives. The actual
payment to individuals is at the sole discretion of Spark and takes into account contributing
factors such as performance and the performance of individual parts of the business.
Eligibility to participate in the STI scheme on an annual basis is at the discretion of the
company and is targeted at individuals in senior roles who play a significant role in driving
the overall performance of Spark.
The STI scheme rules contain a clawback provision that allows Spark to clawback any
payments made under the STI scheme, for a period of 12 months following the payment.
FY24 short-term incentive scheme outcomes
For FY24, substantively all STI participants shared the same Spark Group targets comprising
of EBITDAI, customer experience measures, as well as additional measures based on our
three-year strategy. The on-target percentages are provided in the table below. Where the
result of a performance metric falls below a specified threshold, there is no payment for that
proportion of the STI. Where results exceed the target, the payment can scale to up to twice
the target percentage with a maximum overall payment of 200%.
The FY24 Group performance outcome, as approved by the Board, is summarised in the
table below.
Performance metric%TargetOutcomeResult
Group EBITDAI50%$1,245m0%Did not meet threshold
Customer experience – iNPS
and digital journey
completion rate (JCR)
25%+37 (iNPS)
55% (JCR)
28%Exceeded target (iNPS)
Achieved threshold (JCR)
High tech revenue (MATTR,
Qrious, IoT, Spark Health)
25%$196m0%Did not meet threshold
Total payment100%0%No payment through STI
scheme as EBITDAI
threshold was not met
As the EBITDAI threshold was not met for FY24, no payments were approved for Spark STI
this year.
Ko te pae anamata, whakamaua
75
Spark New Zealand Annual Report FY24
Leadership and Board remuneration
Remuneration at Spark
Long-term incentive schemes
Spark believes that some senior leaders should have part of their remuneration linked to the
long-term performance of the Company, so for the Leadership Squad and a select group of
senior leaders, a long-term incentive forms part of their remuneration package. Spark’s
long-term incentive targets focus on total shareholder return as well as environment and social
governance targets. In FY24, Spark operated one main scheme: the Spark New Zealand Long
Term Incentive Scheme.
FY21 long-term incentive outcome
The FY21 long-term grant, issued in 2020, did not vest in FY24 (2023) as the absolute Total
Shareholder Return hurdle was not achieved.
Grant
year
SecuritiesPerformance
period
Performance measureVesting outcome
FY21OptionsSeptember 2020
– September 2023
Absolute Total
Shareholder Return (TSR),
hurdle – Spark’s annual
cost of equity + 1%
compounding
100% - 3 year TSR
result was 20.35%
compared with a
31.60% target
FY24 long-term incentive scheme performance measures
For FY24 members of the Leadership Squad (including the CEO) and selected senior leaders
were granted options under the Spark Long-Term Incentive Scheme (LTI). Under the scheme,
participants were granted options at the start of the three-year vesting period. The number of
options granted equalled the gross LTI value divided by the volume weighted average price
of Spark New Zealand shares for the 20 days prior to the grant date. Subject to satisfaction of
each performance hurdle and continued employment, at vesting the portion of options
associated with each achieved target convert to Spark shares based on a zero exercise price.
Where a target is not met the associated portion of options simply lapse.
Vesting of the FY24 LTI grant (September 2023) is contingent on participants’ continued
employment with Spark through to September 2026 with vesting depending on meeting or
exceeding set performance measures. 75% of the allocated shares will vest based on aTSR
exceeding cost of equity +1.5% (compounding annually) over the vesting period and 25% will
vest based on performance against environmental and diversity targets. aTSR is a measure
of share price appreciation and dividends paid over the three-year period of the grant.
MeasureTargetWeighting
Absolute Total
Shareholder Return
Cost of equity + 1.5% compounding75%
Scope 1-3
Emissions
Reduce absolute scope 1 and scope 2 GHG emissions
by at least 33.6% against baseline GHG performance.
Scope 3 - at least 70% of suppliers by spend have
established supplier science-based targets.
12.5%
Gender pay gap
(median)
Reducing gender pay gap by six percentage points
to 16%
12.5%
FY25 long-term incentive scheme
For FY25, members of the Leadership Squad, including the CEO, and selected senior
leaders will be granted options under a similar scheme as FY24 with performance measures
relating to Spark’s ESG performance alongside an absolute Total Shareholder Return (aTSR)
performance hurdle.
FY25 short-term incentive
scheme target
The mechanics of the FY25 STI will be the
same as those for FY24. Group results will
be the main determinate of the STI pool,
with substantively all participants sharing
the same Group measures. The FY25
Group measures will be a combination of
EBITDAI, customer experience, and our
three-year strategy.
MeasureWeighting
EBITDAI50%
Customer experience
(iNPS and digital)
30%
Digital infrastructure20%
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Employee remuneration
The table below shows the number of employees and former employees, not being directors of Spark, who, in their capacity as employees,
received remuneration and other benefits during FY24 totalling NZ$100,000 or more
1
.
RangeCurrentFormerTotalRangeCurrentFormerTotal
$100,000 – $110,00030322325$350,001 – $360,000202
$110,001 – $120,00030735342$360,001 – $370,000303
$120,001 – $130,00030316319$370,001 – $380,000415
$130,001 – $140,00027519294$380,001 – $390,000101
$140,001 – $150,00029817315$390,001 – $400,000325
$150,001 – $160,00027919298$400,001 – $410,000202
$160,001 – $170,00021118229$420,001 – $430,000011
$170,001 – $180,0001368144$430,001 – $440,000101
$180,001 – $190,0001147121$440,001 – $450,000202
$190,001 – $200,0001038111$450,001 – $460,000011
$200,001 – $210,00055964$460,001 – $470,000101
$210,001 – $220,00057360$470,001 – $480,000112
$220,001 – $230,00042547$480,001 – $490,000011
$230,001 – $240,00039544$510,001 – $520,000101
$240,001 – $250,00020626$530,001 – $540,000101
$250,001 – $260,00013114$550,001 – $560,000202
$260,001 – $270,00012113$580,001 – $590,000101
$270,001 – $280,00010212$590,001 – $600,000112
$280,001 – $290,000516$600,001 – $610,000011
$290,001 – $300,00011011$620,001 – $630,000101
$300,001 – $310,00012113$660,001 – $670,000101
$310,001 – $320,00017219$670,001 – $680,000101
$320,001 – $330,000415$710,001 – $720,000101
$330,001 – $340,000505$770,001 – $780,000101
$340,001 – $350,000505$860,001 – $870,000101
2,6682152,883
1. The table includes base salaries, short-term incentives and vested long-term incentives. The table does not include: amounts paid after 30 June 2024 relating to FY24;
long-term incentives that have been granted and have yet to vest (based on grant values, the total value of which was NZ$12.8 million as at 30 June 2024); product and
service concessions received by employees; contributions paid towards health and other insurances; and contributions paid to the Government Superannuation Fund
(a legacy benefit provided to a small number of employees). As a result of organisational changes in FY24 a significant number of employees with base salaries under
$100,000 appear in this table due to redundancy payments.
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77
Spark New Zealand Annual Report FY24
Employee benefits
The following table sets out benefits provided to employees during FY24 by employee group:
1
Full-time
permanent
employees
Part-time
permanent
employees
Fixed-term /
casual employees
Parental leaveYe sYe sYe s
2
Insurance cover:
• Medical
• Life and terminal illness
• Income protection
• Trauma
Ye sYe s
3
No
Spark account credit
4
Ye sYe sNo
Ability to participate in Spark
Share
5
Ye sYe sNo
Volunteer day
6
Ye sYe sNo
Spark Give
7
Ye sYe sNo
8
Eligibility to join Marram
9
Ye sYe sNo
Eligible for purchased leave
10
Ye sYe sNo
Mahi Tahi – wellbeing support
11
Ye sYe sYe s
Leadership Squad
remuneration
All Leadership Squad packages include a
fixed remuneration component that is set
based on contribution, experience, and
market relativities. Fixed remuneration
supports the attraction, motivation, and
retention of highly skilled executives.
Fixed remuneration consists of base salary.
A component of each executive's
remuneration package is at risk in the form
of a discretionary annual cash-based STI.
Spark’s STI scheme rewards executives for
the achievement of annual performance
objectives, which vary from year to year.
Executives are also granted options
annually under the Spark LTI scheme.
Under that scheme, participants are
granted options at the start of a three-year
vesting period with vesting subject to a
performance hurdle or hurdles.
1. Excludes benefits offered to some subsidiaries,
which differ from Spark’s overall benefits suite.
2. Eligibility for Parental Leave is in accordance with
government legislation.
3. Employees must work at least 15 hours a week to
be eligible.
4. Employees with active Spark mobile or
broadband accounts will receive monthly credits
of $120, which can be used towards Spark
products or services.
5. Spark’s employee share purchase scheme
provides a simple and cost effective way for
Spark NZ employees to acquire discounted
shares through an interest free loan paid off over
three years, giving employees a real stake in the
future success of the company.
6. The opportunity for Spark employees to take a
day of paid volunteer leave.
7. For specific charities, Spark will match employee
donations dollar-for-dollar, up to a $500 annual
matching cap.
8. Casual employees are ineligible.
9. Marram Trust offers access to accommodation
across New Zealand for discounted rates, as well
as providing a basic level of healthcare cover.
10. The ability to purchase additional annual leave
via a deduction of base salary.
11. Wellbeing support includes access to Clearhead
including funded therapy sessions, specialist
clinical support from our in-house
psychotherapist and health psychologist, and
subscription to the Take A Breath Platform.
Remuneration mix
The table below shows the standard FY25
remuneration mix for the Leadership Squad
expressed as a percentage of fixed
remuneration. The Short-Term Incentive
(STI) scheme is expressed at target, with
payment range from no payment, where no
target thresholds are met to a maximum
payment of double the target value, where
all stretch targets are met. The Long-Term
Incentive scheme (LTI) values represent the
maximum LTI value.
Leadership Squad remuneration
Long-term incentive40% of
base
Short-term incentive50% of
base
SalaryBase
Performance evaluation
The CEO annually reviews the performance
of her direct reports. The evaluation is
undertaken using criteria set by the CEO,
including the performance of the business,
the accomplishment of strategic and
operational objectives, and other non-
quantitative objectives agreed with the
HRCC at the beginning of each financial
year. The last Leadership Squad evaluations
were undertaken during June 2024. Spark
undertakes appropriate checks before
appointing someone onto the
Leadership Squad.
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CEO remuneration
Remuneration policy, strategy,
and governance
CEO Jolie Hodson’s remuneration
package reflects the scope, risk, and
complexity of her role and is set by the
Board with reference to the remuneration
of CEOs of similarly sized organisations.
The Board reviewed the CEO
remuneration package and it remains
unchanged at 1 July 2024.
CEO remuneration FY24
For FY24 the CEO’s remuneration package
comprised a fixed cash component, an
at-risk short-term incentive, and an at-risk
long-term incentive, to be awarded under
the Spark Long-Term Incentive Scheme.
The targets and operation of the CEO’s
STI and LTI is the same as described
under Short-term incentive schemes and
Long-term incentive scheme at pages 75
– 76. The construct of the CEO’s
remuneration package is such that 60% of
her remuneration package is at risk.
The table below shows the target
remuneration mix:
Long-term incentive75% of
base
Short-term incentive75% of
base
SalaryBase
The CEO is also expected to maintain a
holding of Spark shares as set out on
page 80 of this report.
Remuneration components
Short-term incentive scheme
The CEO is eligible for an annual cash-
based short-term incentive, subject to the
achievement of specific performance
objectives set by the Board based on
Spark’s strategy and business plan for the
respective financial year. These objectives
will be a combination of financial and
non-financial measures. This is covered in
more detail in the earlier STI scheme
section. The Board assesses the CEO’s
performance at the end of the financial
year to determine the actual payment value
of her short-term incentive, which is in the
range of 0% to 200% of her target value.
The FY24 Group performance outcome, as approved by the Board and applicable to the
CEO, is summarised as follows:
Performance metric%TargetOutcomeResult
Group EBITDAI50%$1,245m0%Did not meet
threshold
Customer experience -
iNPS and digital journey
completion rate (JCR)
25%+37 (iNPS)
55% (JCR)
28%Exceeded target (iNPS)
Achieved threshold
(JCR)
High tech revenue (MATTR,
Qrious, IoT, Spark Health)
25%$196m0%Did not meet
threshold
Total100%0%No payment through
STI scheme as EBITDAI
threshold was not met
Long-term incentive scheme
For FY24 the CEO’s annual LTI was granted
as share options under the Spark Long
Term Incentive Scheme. This is covered in
more detail in the LTI scheme section. The
LTI component of the CEO’s remuneration
package is designed to link part of her
remuneration to the long-term
performance of Spark, and align her
interests with those of shareholders,
through the grant of options with a
post-allocation performance hurdles.
Performance hurdles
Performance hurdles apply to long-term
incentives made to the CEO. The hurdles
are agreed by the Board and set a
minimum level of performance that is
required to be achieved over the period of
each grant, for the LTI to be eligible to vest.
For FY24, the targets were Spark’s aTSR
over the period to meet or exceed Spark’s
cost of equity plus 1.5% compounding
annually (75% of grant) and three ESG
targets (25% of grant).
Spark must meet or exceed these targets
over the period of the grant (from the date
the options are granted to the date three
years after that date) for the relevant
proportion of the options to vest. If Spark
does not meet the target, the associated
proportion of those options will lapse.
Testing to determine whether the aTSR and
ESG performance hurdles have been met
will occur at the end of the vesting period
of the grant. The Board will receive
independent advice to the effect that each
performance hurdle has been met, or not
met, in determining whether the CEO can
exercise the options or whether the options
will lapse.
CEO termination
Spark may terminate the CEO’s
employment with three months’ notice.
A payment of nine months base
remuneration will be made, plus
entitlements for annual performance
incentives and long-term incentives, subject
to the rules relating to these incentives, in
the case of termination by Spark, other than
for termination for cause.
If there is a change of control that results
in the CEO no longer being the CEO of a
publicly listed company, then she will be
able to terminate her employment with
three months’ notice and receive payment
as if Spark had terminated her employment.
Spark may also terminate the CEO’s
employment without notice for defined
causes, in which case she will receive no
further entitlement to any remuneration.
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79
Spark New Zealand Annual Report FY24
CEO remuneration
The total remuneration earned or paid in FY24, and anticipated target remuneration expected to be earned or paid in FY25, by and to the
CEO, Jolie Hodson is as follows:
PeriodBase salary
1
Short-term incentive
2
Long-term incentive
3
FY24 actual remunerationNZ$1,266,900NZ$0NZ$950,175, in the form of share options
FY25 anticipated target remunerationNZ$1,266,900 NZ$950,175NZ$950,175 in the form of share options
1. Base salary excludes employer contributions towards KiwiSaver and is not at risk.
2. The gross amount earned in FY23 and paid in FY24 was $501,692.
3. FY24 long-term incentive was granted in 2023 and, subject to performance hurdles, will vest in September 2026.
The CEO’s FY21 long-term grant, issued in 2020, did not vest in FY24 (2023) as the Absolute TSR hurdle was not achieved:
Grant yearSecurities
Performance
period
Performance
measure
Vesting
outcomeShares lapsedValue transferred
FY21OptionsSeptember 2020
– September 2023
Absolute Total
Shareholder
Return (aTSR),
hurdle – Spark’s
annual cost of
equity + 1%
compounding
100% - 3-year TSR
result was 20.35%
compared with a
31.60% target
187,430NZ$0
The CEO is expected to acquire and hold shares that are at least equivalent in value to 25% of the CEO’s base salary but ideally would increase
this shareholding to 100% of base salary subject to the vesting of shares under any long-term incentive schemes. To fulfil this expectation,
shares are to be acquired within a four-year period from 1 July 2019. As at 30 June 2024 the CEO holds 311,830 ordinary shares which exceeds
the ideal shareholding requirement to hold shares that are at least equivalent in value to 100% of the CEO’s base salary.
Board remuneration
Director remuneration
The remuneration of directors is reviewed annually by the Human Resources and Compensation Committee (HRCC), taking account of the
company’s size and complexity and the responsibilities, skills, performance, and experience of the directors, with recommendations made to
the Board for approval. Specialist independent consultants may be engaged from time to time to provide advice and ensure that the
remuneration of Spark’s directors is appropriate and comparable to that of similar companies in New Zealand and Australia.
Apart from the CEO, no Director of Spark receives compensation in the form of share options or restricted shares, nor do they participate in any
bonus or profit-sharing plan. Non-executive directors are, however, expected to maintain a holding of Spark shares as set out on page 160 of
this report. As is the case for employees, directors are required to comply with the Insider Trading Policy when buying or selling Spark shares
and any such transactions are disclosed to the market.
Remuneration components
No superannuation or retirement allowance was paid to any Spark Director during FY24. Spark does not have service contracts with any
Director, apart from the CEO, that provide for any benefits or remuneration in the event that a Director’s service with Spark is terminated. New
Zealand-based non-executive directors are eligible for Spark-funded medical insurance, and all non-executive directors are also eligible for
Spark-funded life insurance.
FY24 Director remuneration
The total remuneration available to non-executive directors is fixed by shareholders. The current annual remuneration limit is $1,630,000
approved at the annual meeting held in November 2017.
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Remuneration report
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The fees payable to non-executive directors during FY24 were:
Board/Committee
1
Chair
2
Member
3
Board of Directors$381,700$150,300
Audit and Risk Management Committee (ARMC)$40,500$19,700
Human Resources and Compensation Committee (HRCC)$34,700$17,400
1. All non-executive directors are members of the Nominations and Corporate Governance Committee (NOMs) and receive no additional fees for this role.
2. Committee chair and member fees were not payable to the Chair of the Board. Committee member fees were not payable to committee chairs.
3. Member fees were payable for each Committee.
There is no increase to non-executive Director fees for FY25. Fees will continue to be paid out of the current shareholder-approved annual
remuneration limit of $1,630,000.
Committee membership as at 30 June 2024 was as follows:
Human Resources and
Compensation Committee
Audit and Risk
Management Committee
Nominations and
Corporate Governance Committee
Alison Barrass (Chair)
Sheridan Broadbent
David Havercroft
Lisa Nelson
Justine Smyth
Gordon MacLeod (Chair)
Warwick Bray
Sheridan Broadbent
Lisa Nelson
Justine Smyth (ex officio)
Justine Smyth (Chair)
Alison Barrass
Warwick Bray
Sheridan Broadbent
David Havercroft
Jolie Hodson
Gordon MacLeod
Lisa Nelson
The total remuneration received by non-executive directors of Spark during FY24 was as follows:
1
Name of DirectorBoard fees
2
Audit & Risk
Management
Committee fees
Human Resources
and Compensation
Committee fees
Total
remuneration
3
Justine Smyth$381,700––$381,700
Alison Barrass$150,300–$34,700$185,000
Warwick Bray$150,300$19,700 $170,000
Sheridan Broadbent$150,300$19,700$17,400$187,400
David Havercroft$150,300–$17,400$167,700
Gordon MacLeod
4
$150,300$33,378–$183,678
Lisa Nelson
5
$22,297$2,922$2,581$30,025
6
Charles Sitch
7
$51,869$13,976–$65,845
Total$1,207,366$89,676$72,081$1,371,348
1. The figures shown are gross amounts and exclude GST (where applicable) and are rounded to the nearest dollar.
2. All non-executive directors are members of the Nominations and Corporate Governance Committee (NOMs) and receive no additional fees for this role.
3. This table excludes contributions towards medical and life insurance of a total of $17,154. Spark meets costs incurred by directors that are incidental to the
performance of their duties. This includes providing New Zealand-based directors with mobile phones and $120 per month which can be used towards Spark products
or services and overseas-based directors with $400 per month phone allowances. Spark also meets the costs of directors’ Spark-related travel. As these costs are
incurred by Spark to enable directors to perform their duties, no value is attributable to them as benefits to directors for the purposes of the above table.
4. Mr MacLeod was appointed Chair of the ARMC from 3 November 2023.
5. Ms Nelson was appointed a Director and a member of the ARMC and HRCC from 8 May 2024.
6. This figure includes the additional $2,225 Ms Nelson earned as a member of the MATTR Investment Committee during FY24 (as a pro-rata payment based on her time
served on the Committee). Prior to joining the Board, Ms Nelson earned US$36,000 as a consultant to MATTR during FY24.
7. Mr Sitch resigned as a Director from 3 November 2023.
Other directors’ fees
Mr Richard Quince received a Director’s fee of NZ$10,000 (excluding GST) for acting as a Director of Teleco Insurance (NZ) Limited.
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81
Spark New Zealand Annual Report FY24
To achieve our purpose, Spark must
successfully execute our business strategy
while maintaining high standards of
operational performance and corporate
governance.
Our Sustainability Framework focusses our
ESG (Environmental, Social, Governance)
activities in the areas we can make the most
meaningful impact – New Zealand’s
economic transformation, digital equity,
and our own sustainable business
practices. To realise these ambitions ESG is
integrated into our ways of operating and
governance, as outlined in this section.
Maintaining high
standards of corporate
governance
The Board regularly reviews and assesses
Spark’s governance structures and
processes to ensure that they are consistent
with international best practice, in both
form and substance.
Spark has complied with the
recommendations of the NZX Corporate
Governance Code and substantially
complied with the principles and
recommendations of the ASX Corporate
Governance Council’s Principles and
Recommendations (4th Edition) for the
FY24 reporting period. You can read about
how we have complied with these
recommendations and principles in Spark’s
Annual Corporate Governance Statement
FY24: www.spark.co.nz/online/about/
our-company/governance
Copies of, and details about, Spark’s
corporate governance policies, practices,
and processes can be found on our
website at: www.spark.co.nz/online/about/
our-company/governance
Our Sustainability
Framework
Toitū Sustainability at Spark is integrated
into SPK-26 and outlines our approach to
ESG at Spark. Our Framework includes
three key focus areas – Economic
Transformation, Digital Equity, and a
Sustainable Spark. These commitments sit
alongside our Māori Strategy, Te Korowai
Tupu, which informs how we develop
strong connections with Māori and builds
our understanding of Te Ao Māori.
The framework is informed by our
materiality assessment (see page 163).
While the three focus areas are enduring,
the activities within them will evolve over
time to ensure we are responsive to our
changing operating environment and the
needs of our stakeholders.
ESG reporting
We seek to present a clear and transparent
assessment of our ESG performance in our
reporting. This report is prepared in
accordance with the International <IR>
Framework and with the Global Reporting
Initiative (GRI).
We focus our reporting on sustainability
topics that substantively influence the
assessments and decisions of stakeholders
or have a significant environmental, social,
or economic impact. We also consider
whether a matter could substantively affect
our ability to create value in the short,
medium, or long term.
A detailed appendix to this report (see
pages 163 – 174) includes a summary of
our approach to materiality, our GRI Index,
and information on our stakeholders and
memberships of organisations.
Climate change and emissions
reporting
Our FY24 report incorporates climate-
related disclosures, which have been
prepared in compliance with the Aotearoa
New Zealand Climate Standards (NZ CS 1,
NZ CS 2 and NZ CS 3) issued by the
External Reporting Board (XRB). Our
climate-related disclosures are on page 90.
Our governance and ESG management
Spark’s standalone Greenhouse Gas
Inventory Report provides a detailed
account of our emissions. Deloitte provides
limited assurance of the emissions included
in the report, which is available here:
www.spark.co.nz/online/about/our-
company/governance
In the past we have chosen to participate
in voluntary disclosures to the Carbon
Disclosure Project (CDP). However, with
the introduction of mandatory climate
disclosures in New Zealand we have
chosen to focus our attention on our
expanded disclosures against the new local
reporting standards, meaning we will not
submit a CDP response in FY24. We will
review this position in future years.
Modern slavery and human rights
reporting
Spark publishes a dedicated annual
Modern Slavery and Human Rights
Statement.
We report how we are identifying,
mitigating, and remedying modern slavery
risks in our business and our supply chain,
including actions taken over the past year
to strengthen our systems and processes
and audit and engage our suppliers.
This statement provides a detailed
summary of our approach to upholding our
Human Rights Policy within our business,
including our approach to human rights
due diligence and how we are approaching
the acceleration of technologies, such as
AI and Generative AI.
You can find this at: www.spark.co.nz/
online/about/our-company/governance
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Our governance and ESG management
Our governance and ESG management
1. Excluding subsidiaries 2. Covering purchased goods and services and capital goods 3. Joint Audit Cooperation
TOITŪ SUSTAINABILITY
AT SPARK
TŪHONO: we connect WHAKAMANA: we empower MATOMATO: we succeed together MĀIA: we are bold
Economic
Transformation
Empower
New Zealand
to transform to a
high productivity,
low carbon
economy
Our commitmentKPIs
Sustainable
Development Goals
Sustainable
Spark
Be bold in our
business to have a
positive impact on
our people, the
environment and
our communities
Champion digital
equity so all
New Zealanders
can thrive in a
digital future
Digital
Equity
Emerging technology:
we will invest in the digital
technologies and
infrastructure Aotearoa needs
to transform
• Deliver 5G Standalone
nationwide by FY26 to
enable innovation
Digital infrastructure:
we will expand connectivity
to more of the places
New Zealanders live and work
• Increase 5G connectivity to
all towns with a population
>1,500 by end FY26
Business digitisation:
we will support businesses to
harness the power of
technology to become more
sustainable
• Champion the integration
of digital technology into
Aotearoa’s climate change
planning
Products and services:
we will increase accessibility
and maintain the highest
security and privacy standards
• Maintain top quartile position
in the Worldwide
Benchmarking Alliance’s annual
Digital Inclusion Benchmark
Skills and pathways:
we will focus Spark and Spark
Foundation investment on
increasing Māori and Pasifika
participation in the
technology sector
• Increase Māori and Pasifika
participation within Spark
by 5 percentage points by
end FY26¹
Affordability:
we will support low income
households to participate in
the digital world
• Extend the reach of our
not-for-profit broadband
service Skinny Jump, with
YoY growth
Our people:
we will invest in the
capabilities and wellbeing of
our people and champion
diversity and inclusion
• Achieve 40:40:20 gender
representation across Spark
• Spark has a top decile
innovation culture by FY26
Our environment:
we will reduce our impact on
the natural environment
• Science-based target (SBTi):
reduce Scope 1 and 2
emissions 56% from FY20–
FY30 and ensure 70% of our
suppliers by spend
2
have
SBTi-aligned targets in place
by 2026
Governance:
we will operate a responsible
and ethical business and
supply chain
• Maintain top quartile
benchmark in the annual
Corporate Sustainability
Assessment
• Complete five JAC
3
aligned
supplier location audits annually
83
Spark New Zealand Annual Report FY24
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Sustainability Governance
Our sustainability governance structure helps us ensure sustainability is overseen at the highest levels of our organisation and embedded
throughout our everyday operations.
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Our governance and ESG management
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Leadership Squad
Corporate Relations and Sustainability Director
and Sustainability Team
Steering Committees and Governance Forums:
Human Rights and Supply Chain, Data Ethics, Climate Disclosures
Quarterly Business Review (QBR)
All Spark people
Sustainability Framework
Digital
Equity
Sustainable
Spark
Economic
Transformation
Emissions
Reduction
Squads
Spark
Foundation /
Skinny Jump
Squad
Human Rights
and Supply
Chain Squad
Governance
and Reporting
Squad
Spark New Zealand Board of Directors
Sets three-year business strategy and approves Sustainability
Framework, including key policies and KPIs. Reviews
sustainability progress quarterly. Reviews climate change and
modern slavery risks.
Corporate Relations and Sustainability Director has
overarching responsibility for the Sustainability Framework
and Spark’s progress against it. Sustainability Lead and
Environment and Sustainability Manager lead execution
through squads and reporting.
Steering Committees and Governance Forums established
to ensure Leadership Squad and subject matter expert oversight
of progress against material sustainability focus areas and risks,
where appropriate.
Spark’s business strategy is executed through a Quarterly Business
Review (QBR) process, with priorities agreed every three months.
Sustainability is a standing priority on the QBR.
Support execution of Sustainability Framework priorities and
consider sustainability impacts in decision making.
Identifies most material focus areas
to guide activity and resource allocation.
Cross-functional squads established to improve sustainability
performance and integrate it across Spark.
Spark Foundation has a sole focus on digital equity and is
governed by a Board of Trustees. Skinny Jump is operated by a
dedicated squad. Spark’s new Digital Equity Lead will report into
the Corporate Relations and Sustainability Director, and have
overarching responsibility for Spark’s digital equity investments.
Approval of business strategy and Sustainability Framework,
including key policies and KPIs. Reviews sustainability progress
quarterly. Reviews climate change and modern slavery risks.
Integrating ESG into our
governance processes
Spark is committed to the continuous
improvement of our ESG performance.
Our sustainability governance structure
helps us ensure sustainability is overseen
at the highest levels of our organisation
and embedded throughout our
everyday operations.
Our Board and Leadership Squad have
oversight of our sustainability performance.
Quarterly updates on our performance
against our sustainability KPIs are provided
to the Leadership Squad, which serves as a
business-wide sustainability steering
committee. The Board has overall
governance responsibility for sustainability
and is provided with a quarterly update
on sustainability performance. The Board
also approves the sustainability framework
and reviews and approves key policies
related to ESG.
In the past year we have evolved the
structure of our squads that support our
ESG performance. Our long-standing ESG
Squad has been split into a Governance
and Reporting Squad and a Human Rights
and Supply Chain Squad. The Governance
and Reporting Squad is an evolution of the
ESG Squad, a cross-functional group
accountable for our performance,
reporting, and risk management, including
representatives from Spark’s financial, risk,
legal, investor relations, regulatory affairs,
people and culture, and corporate relations
functions. The squad is led by Spark’s
Sustainability Lead.
The newly established Human Rights and
Supply Chain Squad is focussed on actions
to further embed these topics into Spark’s
day-to-day operations. The squad is also
led by Spark’s Sustainability Lead, and
includes representative from our value
management (supply chain), legal, digital
trust, and Entelar Group teams. This Squad
reports to a dedicated Steering Committee
including Leadership Squad representation
from the Corporate Relations and
Sustainability, Network and Operations,
and People and Culture directors.
Our Emissions Reduction Squad is led
by Spark’s Environment Manager and
comprises 20 employees working across
the Spark Group. This Squad is split into
three workstreams, focussed on mobile
networks, data centres, and fleet. We
measure and report our energy use and
emissions on a quarterly basis to the
Leadership Squad. For more information
see the Our Environment section on
page 47.
In the past year we established a new Data
Ethics Committee, which replaces our
Data Governance Risk Committee.
The Committee includes representatives
from the Leadership Squad and provides
oversight of our Artificial Intelligence
Principles and how they are embedded
into our ways of working, processes, and
systems. For more information see our
section on AI Governance on page 34.
With the incoming Aotearoa New Zealand
Climate Standards, the Board and
Leadership Squad also adopted a formal
due diligence process for Spark’s climate
disclosures, including the creation of a Due
Diligence Committee. The Committee
includes representatives from the
Leadership Squad who reviewed the
disclosures against the requirements
and principles of the Climate Standards.
For more information see our section on
climate-related disclosures on page 90.
We publish a summary of our approach
to sustainability at Spark on our website:
www.spark.co.nz/online/about/
sustainability
Benchmarking our ESG
performance
We benchmark our performance using
a number of international frameworks,
including the Corporate Sustainability
Assessment (CSA). The CSA is a
comprehensive benchmark of our ESG
maturity against our peers, with good
coverage against our material sustainability
issues. The CSA is now a part of S&P Global
and is the assessment framework behind
inclusion in the Dow Jones Sustainability
Index (DJSI) global series.
Our approach to ESG management has
seen our score, and relative ranking against
global industry peers, increase year-on-
year in the CSA benchmark into the top
quartile of all global telecommunications
companies. As a result, and in recognition
of our progress and regional leadership,
Spark is a member of the DJSI Australia
Index, first joining in FY23 and maintaining
our place on the index in FY24.
We also participate in the Worldwide
Benchmarking Alliance’s annual Digital
Inclusion Benchmark. This includes an
assessment of our broader social
responsibility governance alongside a
detailed assessment of our digital inclusion
programmes. Spark is currently ranked in
the top quartile of this benchmark.
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85
Spark New Zealand Annual Report FY24
Public policy and lobbying
commitment
Spark publishes a Public Policy and
Lobbying Commitment that sets clear rules
and processes for us to follow as we seek
to engage on public policy, either directly
or via government relations agencies.
This is available on our website here:
www.spark.co.nz/online/about/
our-company/governance
This Commitment includes our policy to
not make donations to political parties in
New Zealand or any other jurisdictions.
We also committed to disclosing our
engagement with lobbying services
providers. In the past year we have retained
the services of government relations
agency Thompson Lewis. As one of
New Zealand’s largest businesses and
a lifeline utility, we have an important role
to play in the development of policies
relevant to our sector and operations.
We use this agency to provide additional
resource that enables us to effectively
fulfil this role.
Our approach to tax
The Spark Group Tax Strategy reflects our
responsible and transparent approach to
tax. We recognise that the taxes we pay
help underpin Aotearoa’s economy in the
same way that our ongoing investment in
digital infrastructure will underpin
Aotearoa’s digital economy. As a
New Zealand-based company we believe
that it is important to clearly articulate our
tax contribution to provide certainty and
confidence to all stakeholders. As a large
business, we make a significant
contribution to New Zealand’s tax base,
including $189 million of New Zealand
income taxes during FY24 (before any tax
credits were applied).
In FY24 Spark’s effective tax rate was 38.5%,
which is higher than the New Zealand
domestic tax rate of 28%, primarily due to
the one-off tax impact arising from the
removal of tax depreciation on commercial
buildings that formed part of the
New Zealand Government’s 2024 Budget
announcements.
Breakdown of income tax
payments FY24
0
20
40
60
80
100
120
140
160
180
200
$ MILLION
OVERSEAS
TAX PAYMENTS
TOTAL INCOME
TAX PAID
NZ INCOME TAX
CONTRIBUTED
TAX CREDITS
(INC. FITC)
PROVISIONAL
TAX PAID
$189m
$0m
$189m($48m)
($141m)
In addition to income tax paid by Spark, the
Spark Group has payment and collection
obligations across a wide range of tax types
resulting in an excess of $586 million of
taxes under management during FY24.
Taxes under management
OTHER
NZ INCOME TAX
PAYE
GST
$
1
6
0
M
$
2
6
M
$
1
8
9
M
$
2
1
1
M
The full tax strategy is available online:
www.spark.co.nz/online/about/our-
company/governance
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Our governance and ESG management
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87
Spark New Zealand Annual Report FY24
of the Quarterly Business Review process.
Each quarter the Leadership Squad
communicates the top priorities for the
business to the Wider Leadership Group,
and supports execution with strategic
guidance and access to extra resources
as needed.
Performance
This domain involves maintaining a
portfolio view of risks under active
management. Examples include
maintaining a principal risk profile that is
used by the ARMC and Leadership Squad
to understand relevant risks and how they
are being managed. It also focuses on the
quality of the embedded risk management
practices that are used within functions
across the business. These two views
enable in-depth analysis of relevant
business risks and how they are being
managed from a top-down and bottom-up
perspective.
Review and revision
This domain involves identifying and
implementing opportunities to
continuously improve risk management
practices. Examples include regular internal
and external assessments of the policy and
framework.
Information, reporting, and
communication
This domain focusses on guiding Spark
on how to use the policy and framework.
Examples include information pages,
access to support channels, and education
sessions.
The policy and framework are assessed
annually, and externally every three years
to ensure they remain effective. All
assessment results and agreed actions
are shared with the ARMC to ensure they
remain informed about the status of the
policy and framework.
Spark’s principal
business risks
Principal risk profiles are updated twice
yearly. The last update was finalised in
May 2024. The principal risk themes
identified were:
Protecting Spark and its customers
from a major cyber-attack or data
breach
Evolving external threats, changing
legislation, and high expectations from
customers and stakeholders mean robust
security and privacy roadmaps, and strong
governance through the Information Security
Risk Management Committee (which
includes five members from the Leadership
Squad is needed to ensure that significant
risks are managed. The Cyber Security tribe
is responsible for critical operational controls
to ensure standards and compliance are
upheld. Our Digital Trust team sets privacy
frameworks and standards that Agile units
need to apply to maintain appropriate
operational controls for privacy. Spark also
has a data retention policy, that sets out
considerations and, in some cases, rules for
data retention. Adherence audits for
compliance with the data retention policy
are performed by the Internal Audit team.
Our risk management
Managing risk
Our risk policy and framework help our
people to manage uncertainty and adapt
to challenges as they pursue Spark’s
strategy. Oversight by the Audit and Risk
Management Committee (ARMC) and the
diligent application of the defined roles
and responsibilities across the business
ensures our risk management system
remains effective.
The policy and framework are
benchmarked to COSO ERM 2017 (COSO),
a leading practice risk management
standard. We also use other leading risk
management standards like
ISO31000:2018 and specific standards and
guidance, where available, to benchmark
and inform our risk management practices.
Spark’s framework is structured into five risk
management domains that all work
together to enable a robust system for risk
management. Below is a description of
each domain and some examples of
activities by domain to help understand the
framework in more depth. These five
domains are embedded in Spark’s
Managing Risk Framework and ensure the
‘Three Lines of Defence’ Risk Model (1. Own
and manage 2. Monitor and 3. Provide
independent assurance) is utilised.
Governance and culture
This domain reinforces the importance of
risk management and influences how
people apply the framework. Managing
risk is embedded in our organisational
structure, our functional activities, and is
supported by specialist resources from the
Risk team. Examples include the risk policy
and the defined governance structure that
supports its application across Spark.
More information on the roles and
responsibilities are included in the table
on page 162.
Strategy and objective setting
This domain focuses on integrating risk
management into strategy setting and
business planning. Examples include the
consideration of risks and opportunities to
business objectives when making strategy
decisions and checking in with every
function using a systematic method as part
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Our risk management
Our risk management
External reviews and certifications help to
ensure that comprehensive security
measures exist for the critical elements of
our cyber security framework. These reviews
include security maturity assessments and
security device configuration audits to
ensure our processes meet expected
standards.
Maintaining a resilient network
and delivering technology and
network leadership
The use of established and proven delivery
methods for large-scale network and
technology projects (such as our 5G rollout)
will help us to manage potential risks created
by the delivery of new technologies and will
also sustain our existing technology. This also
includes long-term physical risk to
infrastructure from climate change. With a
high share of operational cost, Spark’s
technology units also continue to execute
net-cost reduction while maintaining
operational standards. In addition to cost
optimisation mitigations, technology units
have robust operational risk management
processes, which provide visibility and
enable a coordinated response to risk.
Estimating economic environment
impacts and responding with
balanced judgement
The economic environment remains
challenging, characterised by high costs,
elevated interest rates, and rising
unemployment, which is having a
significant impact on customer behaviour.
As a result, customers across all business
segments are increasingly looking for ways
to reduce their spending. The SME sector,
in particular, is experiencing a higher rate
of business closures, while the enterprise
and government sector is experiencing the
impact of government agency spending
reductions and reduced private sector
investment. Although Spark has been
impacted less than some parts of the
economy, Management continues to
monitor this risk closely by adapting its
strategies to ensure resilience and
sustainability in our operations.
Delivering planned artificial
intelligence (AI) and business
system transformation objectives
Delivering planned AI and business system
investments is a key enabler of SPK-26.
A dedicated Transformation Lead and
Programme has been established to lead
these investments and ensure they are
deployed in a complementary manner.
Dedicated squads have been established
to ensure deployment by teams with the
required skills.
Spark has identified key use cases for
Generative AI to support growth and
improved efficiency across the business.
As Generative AI is developing rapidly,
Spark’s Data and AI Governance approach
has evolved during the year, to build on
existing policies and practices that ensure
a safe and ethical deployment of AI within
the business. This is detailed on page 34.
Migrating large corporate customers from
legacy technologies and products, whilst
balancing customer experience and churn
remains a challenge when implementing
business system transformation. This is
managed through high levels of
collaboration from internal resources
and tools that model and support
decision-making.
Achieving revenue growth
As Spark strives to achieve revenue growth,
there is inherent risks associated with both
our traditional and emerging revenue
streams. Growth in our traditional revenue
sources, such as mobile and broadband
services, continue to face challenges from
increased competition and market
saturation. Meanwhile, our new revenue
streams, including data centres, cloud,
and high-tech, are subject to rapid
technological changes, competition, and
market acceptance risk. To mitigate these
risks and ensure sustainable growth, our
Leadership Squad continuously monitors
and manages business strategies. This
involves proactive intervention to address
any issues and staying up to date with
industry trends and technological
advancements. Our aim is to strike a
balance between risk and opportunity,
and to steer Spark towards a future of
innovation, while creating diverse and
long-term revenue growth.
Cost optimisation while
maintaining operational standards
and resilient service
Executing net cost reduction is a strength
for Spark, and we do it in a way that
ensures operational delivery standards for
customers are maintained. The recent
redesign of the operating model, AI and
automation, ongoing simplification, and
digitising customer journeys help to
provide Spark with a more sustainable
operating model and cost base moving
forward. To mitigate unintended risks (for
example, customer service disruptions), the
Leadership Squad has established a strong
governance structure, coupled with a
formal delivery methodology to ensure all
initiatives are robustly tested. Trajectory
toward targets is measured, which enables
intervention and course corrections when
required.
Business continuity and crisis
management
The Business Continuity and Crisis
Management Policy protects customers
from the impact of disruptive events and
ensures value-generating activities are
resilient and comply with relevant external
standards, for example Civil Defence and
111 obligations.
Spark’s framework is benchmarked to
ISO 22301 and ISO 22313, which are
acknowledged as leading practice
standards for business continuity. It is
overseen by the ARMC in a similar way to
the Managing Risk Policy and Framework.
An internal Governance Committee
consisting of tribe leads from across Spark,
oversees and supports the implementation
and maintenance of Business Continuity
programme activities across the Spark
Group. Regular reviews of the framework
are performed by the Service Resilience
and Risk and Internal Audit teams to ensure
it is effective. External reviews and testing
of key elements of the framework such as
the Level One Crisis Management Plan and
Team are also done to validate the
effectiveness of Spark’s business continuity
framework. Our continued investment in
network resiliency, as outlined on page 42,
also demonstrates application of the
framework in practice.
Ko te pae anamata, whakamaua
89
Spark New Zealand Annual Report FY24
Spark New Zealand Limited is a climate-
reporting entity under Part 7A of the
Financial Markets Conduct Act 2013 (FMA).
These climate statements relate to the
Spark Group, which consists of Spark
New Zealand Limited and its subsidiaries.
While Spark Finance Limited (a subsidiary
of Spark New Zealand Limited) also meets
the definition of a climate-reporting entity
under the FMA, the Financial Markets
Conduct (Climate Statements – Spark
Finance Limited) Exemption Notice 2024
(available at www.fma.govt.nz/assets/
Exemption/Financial-Markets-Conduct-
Climate-Statements-Spark-Finance-
Limited-Exemption-Notice-2024.pdf)
exempts it from the requirement to prepare
climate statements.
This section of our Annual Report is
structured around the four themes of
climate governance, strategy, risk
management, and metrics and targets.
However, in some instances, information is
included in these climate statements by
cross-reference to other sections of our
Annual Report or to our stand-alone
Greenhouse Gas Inventory Report. Deloitte
provides limited assurance of the emissions
included in the report, which is available
here: https://investors.sparknz.co.nz/
investor-centre/?page=annual-reports.
A table showing the location of each of our
disclosures referenced against the
requirements of the Aotearoa New Zealand
Climate Standards is included on page
167.
Approved on behalf of the Board on
22 August 2024.
Justine Smyth CNZM
Chair
Gordon MacLeod
Chair Audit and Risk Management
Committee
Spark climate-related disclosures
Introduction
Climate change has the potential to cause
significant disruption to all New Zealand
businesses, including Spark. This includes
risks to our business due to changing
economic conditions, disruption to our
supply chain, operations, and infrastructure,
and to our customers. Climate change also
creates opportunities for Spark to support
our customers to reduce their emissions
and adapt to the potential impacts of a
warming climate.
Compliance with Climate Standards
Spark introduced climate risk reporting,
aligned to the international Task Force on
Climate-related Financial Disclosures
(TCFD) framework, in our FY21 Annual
Report. This year’s report marks the first
time we have reported under the new
mandatory disclosure regime, which builds
on the foundations of the voluntary TCFD
standards.
These climate statements have been
prepared in compliance with the Aotearoa
New Zealand Climate Standards (NZ CS 1,
NZ CS 2 and NZ CS 3) issued by the
External Reporting Board (XRB). Climate
Standard NZ CS 2 provides a number of
adoption provisions, which reporters may
elect to use. Spark New Zealand has elected
to apply the following adoption provisions
in our first mandatory reporting period:
• Adoption provision 1 (related to current
financial impacts)
• Adoption provision 2 (related to
anticipated financial impacts)
• Adoption provision 3 (related to
transition plan). We have included
details of the transition plan aspects of
our strategy in this report, however
intend to refine these disclosures in
FY25 once anticipated regulatory
guidance has been released.
• Adoption provision 5 (related to
comparatives for Scope 3 GHG
emissions)
• Adoption provision 6 (related to
comparatives for metrics)
• Adoption provision 7 (related to
analysis of trends)
Important notice, challenges, and uncertainties
Our climate-related disclosures and the conclusions we make in these
disclosures reflect our current understanding as at August 2024. This
includes current and forward-looking information regarding climate change,
its impact on Spark, and our response to it. Climate change, and the impacts
it will have on individual businesses, is subject to significant uncertainty. The
information in this report is based on estimates, judgements, assumptions,
and incomplete data that we consider to be appropriate under current
circumstances. As such, we caution reliance being placed on information
that is subject to significant uncertainty and data limitations.
This report includes forward-looking statements, including in relation to climate-related
scenarios, targets, risks and opportunities, anticipated impacts, and transition plans.
Such forward-looking statements are based on the beliefs of, and assumptions made
by, our Management, along with information currently available at the time such
statements were made. These forward-looking statements are not guarantees or
predictions of future performance. Any statements in these climate statements that are
not historical facts are forward looking statements.
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Spark climate disclosures
Spark climate disclosures
Climate governance
Governance body oversight of
climate risk and opportunities
The Spark Board is the governance body
responsible for oversight of climate-related
risks and opportunities. The Board is
informed and engaged on climate change
through a number of regular processes:
• through oversight of Spark’s
overarching enterprise risk
management system (via the ARMC),
which incorporates our most material
climate risks
• through approval of, and engagement
in, Spark’s climate scenario risk analysis
processes and annual climate risk
reporting
• through quarterly sustainability updates
from the Corporate Relations and
Sustainability Director, and non-cyclical
Board papers which include climate
related risks or opportunities
The Audit and Risk Management
Committee (ARMC), a subcommittee of the
Spark Board, assists the Board in relation to
the oversight of the risk management
framework and monitoring compliance
with that framework. The ARMC meets at
least four times each year and receives
regular updates on all principal business
risks, including regular updates on the key
risk ‘Maintaining a resilient network’, which
includes physical adaptation risk to our
networks, and risk in our network supply
chain (see detailed climate risk tables on
pages 97). The papers from ARMC
meetings are available to the Board and all
directors may attend meetings of the ARMC.
The Board is also responsible for Spark’s
external climate reporting published with
our annual financial disclosures. This
includes review and approval of the climate
risks and opportunities identified, which is
published alongside our emissions metrics
and performance against our climate
targets. For this year’s disclosures the Board
was engaged in our refreshed climate
scenario analysis, to pressure test the
climate scenario narratives and validate the
identified effects on Spark.
The Board is provided a sustainability
update on a quarterly basis, including as
part of annual integrated reporting for year-
end. In FY24, these updates covered a range
of topics, including performance against
KPIs (including tracking emissions and
energy use) and also on broader topics,
such as climate risk. This, together with
additional papers that contain climate-
related content, mean that climate-related
risks and opportunities are discussed
regularly at Spark Board meetings.
As the governance body for significant
sustainability and climate-related decisions,
the Board approves Spark’s sustainability
framework, policies, and targets (such as
Spark’s science-based emissions reduction
target, approved in FY21), and approval
of key initiatives, such as our renewable
energy partnership with Genesis Energy
(see page 51).
Our directors are expected to continuously
educate themselves to ensure that they
have the appropriate expertise and can
effectively perform their duties.
Sustainability, together with risk
management and regulatory, is one of the
competencies assessed in our Board Skills
Matrix (see page 21). The Board has been
provided with briefings and sessions during
FY24 to support further development of
skills relating to the oversight and
management of climate risk and to foster its
climate expertise. Expertise is also gained
by directors who have directorships in
industries with related climate risks. Jolie
Hodson, Spark CEO and Board member,
is also a member of the Climate Leaders
Coalition's Steering Committee.
A description of how the Board considers
climate-related opportunities when
developing and overseeing Spark's
strategy, and the way in which resiliency
(related to physical risk) is integrated into
our business, is set out on page 93.
The Board is also responsible for
remuneration policies. For our Leadership
Squad and a select group of senior leaders,
a long-term incentive (LTI) forms part of
their remuneration package. This scheme is
tied to performance measures relating to
Spark’s ESG performance, including
performance against our emissions
reduction target, which constitutes 12.5%
of the LTI performance assessment
weighting.
An overview of the climate-related risks
and opportunities responsibilities as
between the Spark Board and
Management is described on page 92.
Flooding caused by Cyclone Gabrielle.
Ko te pae anamata, whakamaua
91
Spark New Zealand Annual Report FY24
Management’s role in climate risk
and opportunities
Climate-related responsibilities are
assigned across a number of the Spark
Leadership Squad (direct reports to the
CEO) and supported by a number of
internal governance groups and processes:
• The Finance Director is responsible for
management of our overarching risk
management system
• The Corporate Relations and
Sustainability Director is responsible
for Spark’s overall sustainability strategy
• The Network and Operations Director
is responsible for our most material
climate change risks, which are
integrated into the key risk ‘Maintaining
a resilient network’ in our enterprise risk
management system, and progress
against our emissions reduction target
For the preparation of these climate
statements in FY24, the Board and
Leadership Squad established a formal
due diligence process and approved
the establishment of a Due Diligence
Committee to oversee the preparation of
the climate statements. This Committee is
comprised of the Leadership Squad
members identified above, as well as the
Spark General Counsel.
For broader issues the full Leadership
Squad serves as Spark’s sustainability
steering group, with a standing agenda
item each quarter to review performance
against sustainability KPIs, discuss risks and
opportunities and make decisions related
to climate change and our broader
sustainability work. The Corporate Relations
and Sustainability Director then provides a
quarterly sustainability update to the Spark
Board. The key sustainability KPI that relates
to climate change is our emissions
reduction target – see page 105 for more
information.
In FY24, the Leadership Squad was also
engaged in our refreshed climate scenario
analysis, supporting the development of
our climate scenario narratives and
exploring the identified effects on Spark.
The Leadership Squad is also engaged in
the annual preparation and review of our
Annual Report, meaning all Leadership
Squad members are informed about
climate-related risks and opportunities on
an annual basis.
The Leadership Squad is also regularly
updated on risks identified in our
Enterprise Risk Management System.
Spark’s Risk, Audit and Fraud Lead provides
a quarterly update to the ARMC, a
subcommittee of the Board. Our risk
management system helps our people
to manage uncertainty and adapt to
challenges as they pursue our strategy.
A number of supporting squads are led
by Spark’s Sustainability Lead and
Environment Manager. This includes our
Governance and Reporting Squad and
Emissions Reduction Squad. These squads
report progress to the Leadership Squad
and Board through the quarterly
sustainability updates.
The Governance and Reporting squad is
an evolution of the ESG Squad, a cross-
functional group accountable for our
performance, reporting, and risk
management, including representatives
from Spark’s financial, risk, legal, investor
relations, regulatory affairs, people and
culture, and corporate relations functions.
The squad is led by Spark’s Sustainability
Lead. The Emissions Reduction Squad is
led by Spark’s Environment Manager and
comprises 20 employees working across
the Spark Group, mostly in Network and
Operations. This squad is split into three
workstreams, focussed on mobile networks,
data centres, and fleet.
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Spark climate disclosures
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Risk, Audit and Fraud Lead reports
direct to Chair of ARMC, with parallel
reporting line to Finance Director
Spark Leadership Squad
Sub-set of Leadership Squad with delegated climate change responsibilities,
including as members of Due Diligence Committee established by the Spark Board
for FY24 climate-related disclosures
Sustainability
Lead
Reporting and
Governance
Squad
Risk, Audit and
Fraud Lead
Environment
Manager
Emissions
Reduction
Squad
Audit and Risk Management Committee
Finance
Director
Network and
Operations
Director
Corporate
Relations and
Sustainability
Director
General
Counsel
Spark Board
Strategy and climate
change
Integration of climate change and
transition planning into strategy
Spark does not have a stand-alone climate
transition plan. Our climate strategy and
transition plan actions are integrated into
our overarching strategy and business
processes. Because of this
interconnectedness we have chosen to
integrate our climate disclosures within our
integrated annual report. Our climate-
related risk and opportunity tables (see
pages 97 to 101) report the actions we are
taking against each of the climate change
risks and opportunities we have identified.
As an infrastructure provider with assets
distributed across New Zealand, we have
robust processes established to manage
physical risk across our business, which
includes resilience to climate change
alongside other hazards such as
earthquake risk. We focus on ensuring that
these existing business processes are
prepared for the increase in frequency and
severity of climate incidents, and that our
investment in the resilience of our
infrastructure is informed by the latest
climate science. Resiliency (related to
physical risk) is a key input into our network
capital deployment and funding. For
information on our investment into
resilience see page 42.
The Board and Leadership Squad
considered opportunities from climate
change when setting Spark’s three-year
strategy launched in FY23. A key focus of
the strategy is enabling New Zealand
businesses to grow and become more
productive and sustainable through
technology, which explains how we will
support New Zealand’s transformation to a
high-productivity, low-carbon economy.
The aspects of our strategy aligned to
transition planning inform our capital
deployment and funding decision-making
process. For example, in October we
acquired Adroit, a leading IoT provider that
specialises in technology solutions for
real-time environmental monitoring, with
solutions that are used across worksites,
construction, agriculture, aquaculture,
councils, and infrastructure sectors. In the
past year we have also added formal
climate and emissions considerations into
our capital deployment and funding
decision-making processes.
The sustainability elements of our strategy
are expanded in our Toitū Sustainability at
Spark framework, published on page 84 of
this report. We include a description of our
business model and strategy, using the
<IR> Integrated Reporting capitals model,
on page 6 of this report.
Digital equity is a pillar of our sustainability
framework. We know that as our economy
decarbonises digital skills and access will
become increasingly important for
participation in society and the workplace,
meaning digital equity is a key element of
a socially just transition. See the Our
Community section on pages 56 – 61 to
learn more about our digital equity work.
Another commitment, under the
Sustainable Spark pillar of our sustainability
framework, is to reduce our impact on the
natural environment. This includes our
plans to transition our operations towards a
lower emissions future. We have set an
emissions reduction target with the Science
Based Targets Initiative (SBTi) to reduce our
scope 1 and 2 emissions by 2030, as
explained further on page 105.
As the majority of our scope 1 and 2
emissions are from electricity, supporting
investment in new renewable energy
generation is our strategy to decouple our
business growth from emissions growth,
alongside other energy efficiency
initiatives.
Our SBTi target also includes a supplier
engagement target that 70% of our
suppliers by spend, covering purchased
goods and services and capital goods, will
have SBTi-aligned targets in place by 2026.
To achieve this, we are engaging with
suppliers to support and encourage them
to establish their own science-based
emissions reduction targets.
Current impacts of climate change
When considering physical impacts of
climate change, over the last year we
experienced no specific climate-related
incidents beyond normal weather-related
outages. In the previous year, the impact of
Cyclone Gabrielle was significant. The
cyclone caused significant and sustained
power outages and destroyed many roads
and bridges that hold fibre backhaul, which
connects mobile towers to mobile
exchanges. As a result of this, more than
600 mobile towers (across Spark, One
New Zealand, and 2degrees) went offline
during the storm. Within our network,
only one of our cell sites sustained
physical damage – all our outages were
caused by power outages or fibre cuts.
The Telecommunications Emergency Forum,
a working party made up of key network
operators and retailers, coordinated by
the Telecommunications Forum (TCF),
was activated immediately and worked
alongside the National Emergency
Management Agency (NEMA) to coordinate
an urgent industry response. Generators
and satellite units were flown into the
affected areas via helicopter, and our teams
were on the ground to restore connectivity
as soon as it was safe to do so. As a result of
these efforts, within 96 hours, more than
90% of impacted towers were back online.
When considering transition opportunities,
we continue to see growth in our high-tech
revenues, which includes our IoT business.
Much of this is driven by monitoring,
including energy, water, and environmental
monitoring. Although this is not driven by
specific climate regulation, it is indicative of
an increased focus among our customer
base on investing in technology solutions
for sustainability issues. We also continue to
see interest from investors and customers in
our climate change performance, including
our emissions reduction target and
reporting. This includes an increase in
customer requests for scope 3 emissions
data related to the products and services
we supply. The role of satellite-enabled
services is also evolving, both for fixed-
broadband and direct to mobile services.
Although resilience to weather events is
one driver for early adoption, much of this
market shift is driven by non-climate-related
factors, such as coverage in rural areas.
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93
Spark New Zealand Annual Report FY24
Our climate risk tables outline all climate
impacts and opportunities identified
through our scenario analysis and internal
risk processes. These include current
impacts, which may increase over time, and
potential future impacts.
Climate scenario analysis
Spark has undertaken climate scenario
analysis to help it to identify its climate-
related risks and opportunities and develop
a better understanding of the resilience of
our business model and strategy.
Climate scenarios provide an opportunity
for organisations to develop their internal
capacity to better understand and prepare
for the uncertain future impacts of climate
change. They are plausible, challenging
descriptions of how the future may
develop based on a coherent and
consistent set of assumptions about
physical and transition risks:
• Physical risks: risks relating to the
physical impacts of climate change.
Physical risks emanating from climate
change can be event-driven (acute)
such as increased severity of extreme
weather events. They can also relate to
longer-term shifts (chronic) in
precipitation and temperature and
increased variability in weather patterns,
such as sea level rise
• Transition risks: risks related to the
transition to a low-emissions, climate-
resilient global and domestic economy,
such as policy, legal, technology,
market and reputation changes
associated with the mitigation and
adaptation requirements relating to
climate change.
Over the past year Spark co-led a sector-
wide approach to scenario development.
A shared sector approach is recommended
by the XRB. The sector scenarios were
developed through a series of workshops,
facilitated by environmental consultancy
Tonkin + Taylor and our industry body The
Telecommunications Forum (TCF). The
process was guided by a focal question:
“How could climate change plausibly
disrupt the telecommunications sector over
the short (5 years), medium (15 years), and
long-term (30+ years)?”
The sector-wide approach to climate risk
supports collective engagement with other
sectors and stakeholders. This is particularly
important to inform long-term
collaboration and planning and will be an
important input to New Zealand’s next
National Climate Change Risk assessment
due to be published by the Climate
Change Commission in 2026. Throughout
the process the sector consulted with the
Ministry for the Environment, the Climate
Change Commission, and representatives
from the energy sector who were
integrated into the TCF process.
Our three climate scenarios
The three climate scenarios the
telecommunications sector selected are
outlined in the tables on pages 97–101.
These scenarios align to the requirements
in NZ CS 1 for entities to analyse three
scenarios, and each draw from a range of
widely used global and local scenario
archetypes, for example the
Intergovernmental Panel on Climate
Change (IPCC) Shared Socioeconomic
Pathways (SSPs), the National Institute of
Water and Atmospheric Research (NIWA)
representative concentration pathways
(RCP) and the New Zealand Climate
Change Commission decarbonisation
pathways. They are also based on scenario
archetypes that are consistent with those
used by other infrastructure sectors in
New Zealand to develop sector scenarios.
The scenarios were designed and agreed
in consultation across the sector. Given the
broad range of inputs and alignment to
recognised scenario archetypes we believe
the scenarios capture a broad set of
possible outcomes that are relevant and
appropriate to assessing the resilience of
our business model and strategy to
climate-related risks and opportunities.
A full report of the sector climate scenarios
is published on the TCF and Spark websites.
Entelar Group loading helicopter with power generators for our cell sites in Gisborne during Cyclone Gabrielle.
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This includes detailed descriptions of the
emissions reduction pathways in each
scenario and the assumptions underlying
pathway development over time, including
the policy and socioeconomic assumptions
and macroeconomic trends.
1
It also
includes full descriptions of the relevant
scenario narratives, and an outline of
the process followed to develop the
scenarios. The report is available here:
https://s.spark.co.nz/4fXRsoH.
These three scenarios have driven Spark’s
internal climate scenario analysis, which
applied the detailed scenarios to our
business and strategy, to identify risks and
opportunities specific to Spark. This was a
stand-alone process, independent of our
existing risk governance. The scope of our
climate scenario analysis covers all of
Spark's operations and the entire value
chain, from upstream supply chain impacts
to downstream impacts on our customers
and the broader economy. It covers all
business activities, operating companies,
and subsidiaries. The scenario analysis
builds upon our previous scenario analysis
and climate risk reporting, which mapped
against scenarios equivalent to the
‘disorderly’ (RCP 4.5) and ‘hothouse’ (RCP
8.5) scenarios. While external stakeholders
and partners were involved in the
sector-based scenario development,
Spark’s internal process did not involve any
external partners or stakeholders.
The Spark Board and Leadership Squad
were engaged in the scenario analysis,
developing and pressure testing the
potential effects on Spark across each of
the three scenarios against a number of
categories:
• Economic
• Business-to-business customers
• Consumer customers
• Government and policy
• Infrastructure
• Supply chain
• Investors
• Managed retreat
• Social
As noted on page 90, the Board has
approved the climate-related risks and
opportunities identified as a result of the
scenario analysis process.
Physical risk analysis
As part of our scenario analysis process in
FY24, we also updated our physical risk
analysis against updated data and climate
models newly released by the Ministry for
the Environment in July 2024. This analysed
risk to our infrastructure and assets against
the risks of sea level rise/coastal flooding,
temperature, wind and rain pattern
changes. This modelling provides
information on the number and location of
sites that may be of greater risk, and
enables us to quantify the scale of potential
impact and the investment required to
mitigate risk, for example by strengthening
or relocating vulnerable sites. Through the
analysis we identified a small number of
assets vulnerable to direct physical risks.
This includes 24 mobile sites and one
regional exchange vulnerable to coastal
flooding under a 20cm sea level rise
scenario. This is less than 2% of our
infrastructure sites. We acknowledge the
limitations and uncertainty of this mapping
approach, including the lack of localised
information on interconnected physical risk.
We will continue to update our physical risk
analysis as new data becomes available,
particularly data on supporting
infrastructure. This will be an important
input into our disclosure of anticipated
financial impacts in future years.
1 See Section 4 and Appendix A of the sector climate scenarios. The assumptions used to create the sector scenarios were those that were
considered to be most relevant to the sector. Specific assumptions were not included relating to energy pathways, carbon sequestration from
afforestation, climate technology such as negative emissions technology, and nature-based solutions.
Global climate
and socioeconomic
disruption
New Zealand
pathways and
projections
New Zealand
telecommunications
sector impacts and
scenarios
Scenario analysis
of specific
impacts and
effects to Spark
Disclosure
Stages of scenario analysis
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Spark New Zealand Annual Report FY24
Scenario #1:
Orderly transition
Scenario #2:
Disorderly transition
Scenario #3:
Hothouse
Brief description of
scenario narrative (further
detail included in sector
scenarios)
New Zealand and the world
transitions to net zero by 2050
with strong policy and market
changes clearly signalled by the
government. Physical impacts
from climate change are limited
and align with the SSP1-1.9
scenario. Average global
temperatures are limited to 1.5
degrees above pre-industrial
levels by 2050.
New Zealand and the developed
world are delayed in their
transition to net zero. This results
in a steady increase in
temperature and physical
impacts in alignment with
SSP2-4.5 (2 degrees by mid-
century). By 2030, prompted by a
number of significant weather
events, New Zealand and the
developed world realise that
urgent action is needed to reach
net zero, which results in poorly
signalled policy and market
changes coinciding with
increased adaptation and
recovery costs creating significant
medium-term challenges.
New Zealand and the world
abandon net zero targets, and
there is no national or global
movement to reduce emissions.
Existing policies are reversed,
and fossil fuel use continues.
Physical impacts from climate
change are severe with annual
average global temperatures
rising to 2 degrees above
pre-industrial levels by 2050 and
3.6 degrees by 2100 (in
alignment with SSP3-7.0).
Scenario datasets• Intergovernmental Panel on
Climate Change: SSP1-1.9
• NIWA: RCP 2.6
• Climate Change Commission:
Tailwinds pathway
• Intergovernmental Panel on
Climate Change: SSP2-4.5
• NIWA: RCP 4.5
• Climate Change Commission:
Headwinds pathway
• Intergovernmental Panel on
Climate Change: SSP3-7.0
• NIWA: RCP 8.5
• Climate Change Commission:
Current policy
Global temperature change1.5 ̊C2 ̊C>3 ̊C
Transition riskHighestMediumLowest
Physical riskLowestMedium Highest
Policy responseEarly and strategicSlow until 2030, then reactive and
significant
Slow, market-led, focussed on
adaptation
Economic impactHighest in 5-year horizon, lowest
over 30+ years
Highest over 15-year horizonHighest over 30+ year horizon
Time horizons for scenario analysis
Short termMedium termLong term
Time horizon5 years15 years30 + years*
Year relative to 2024203020402055+
Rationale for selection and
link to strategic planning
horizons and capital
deployment plans
Aligns with emissions reduction
target and with future-facing
investment horizon
Aligned with typical life of
technology assets
Aligned with further
materialisation of physical risks,
particularly on infrastructure
* For risk analysis we used a timebound 30-year horizon. The 30+ year time horizon was used for long-term scenario development.
Our climate scenarios
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Climate-related risks and opportunities
The tables below outline the climate-related risks and opportunities that Spark has identified over the short, medium and long-term, together
with the anticipated impacts of those climate-related risks and opportunities. As many of the risks and opportunities identified are present
across all time horizons, we have explained the trend that these risks and opportunities follow across time horizons, identifying the horizon in
which the risk or opportunity is most significant.
Physical risks
Risk description
Scenario where
risk is greatest
Time
horizon(s)
Potential impacts
(anticipated impacts
pre-mitigation)
Mitigations
(transition plan actions integrated into strategy)
Physical risk
Damage
to Spark
infrastructure
Increased weather
events result in
increased
damage to Spark
sites. This includes
mobile network
equipment,
exchanges, data
centres, data
transport
networks
Present in all
scenarios, but
most significant
under the
Hothouse
scenario
Increasing in
severity over
time, most
significant in the
30+ year time
horizon
Increased reactive
maintenance costs
(labour, fleet,
contractors, and parts)
Our physical risk analysis against the latest
climate models shows only a small number of
Spark sites are likely to face significant risk of
direct physical damage, with a small number
of mobile sites, and one regional exchange,
in locations vulnerable to coastal inundation
and flooding over a 30-year horizon.
Adaptation cost to reinforce or relocate these
sites is unlikely to be material over a 30-year
time horizon.
Exchange buildings and data centres are
carefully located considering physical
hazards. New data centre builds account for
future climate scenarios. Our three
geographically diverse, highly resilient
network data centres provide core voice and
mobile services, with each core able to
operate independently.
We already make significant investments into
network resilience annually and continue to
introduce new resilience initiatives. This
sustained investment will lessen the impact of
any future resilience standards Government
may choose to introduce.
See mitigations below for further detail or
refer to the Enhancing the resilience of our
network section on page 42
Increased customer
disruptions impact
revenue, brand, and
reputation
One-off adaptation
costs for site
strengthening and/or
relocation
Increased costs of new
infrastructure builds to
meet higher climate
resilience standards,
e.g. data centres
Increased insurance
cost or withdrawal of
insurance
Disruption to
supporting
infrastructure
Increased weather
events result in
more outages and
disruption to
infrastructure that
supports Spark’s
operations
Present in all
scenarios, but
most significant
under the
Hothouse
scenario
Increasing in
severity over
time, most
significant in the
30+ year time
horizon
Passive tower
infrastructure: increase
in damage to passive
tower infrastructure
(e.g. tower masts)
causes outages or
creates damage to
Spark’s active
infrastructure
We make significant investments into network
resiliency annually and will continue to invest in
new initiatives to adapt to our warming climate.
This includes plans to extend battery life on
major, critical mobile sites to ensure they can
withstand power outages for longer periods of
time, alongside improvements to cell tower
management during outages to prioritise
connectivity for essential communications
functions, such as calls and texts.
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Spark New Zealand Annual Report FY24
Risk description
Scenario where
risk is greatest
Time
horizon(s)
Potential impacts
(anticipated impacts
pre-mitigation)
Mitigations
(transition plan actions integrated into strategy)
Physical risk (continued)
Disruption to
supporting
infrastructure
(continued)
Electricity: increase in
frequency and
duration of grid
outages results in
increased network
outages
For prolonged outages portable generators
are used to provide power to mobile sites.
Large-scale fixed generators are in place at
critical exchange and data centre sites, which
can operate continuously without grid power.
To improve backhaul resiliency we have
established a network of satellite-connected
temporary small cells throughout the country
for use in emergencies. We are also
implementing backup satellite backhaul at a
number of permanent cell towers. We are
providing business grade Starlink satellite
services to our business customers, while
trialling direct satellite-to-mobile technology
with our partner Lynk Global, before offering
the service to Spark customers at scale as
more satellites are deployed.
Ongoing investment in our Optical Transport
Network (OTN) provides multiple redundancy
paths and ‘self-healing’ capabilities. Our
access and aggregation network will provide
diverse and self-healing pathways between
our cell towers and our networks.
We also have plans to continue to work
alongside our industry peers through the TCF
to prepare for future events cohesively across
our sector. Over the last year, mobile network
operators have identified critical sites offering
widespread coverage so they can be
prioritised for restoration.
For more detail refer to the Enhancing the
resilience of our network section on page 42
Fibre backhaul:
increased frequency of
backhaul (fibre)
outages caused by
flooding, landslips, and
road and/or bridge
damage along
transport corridors
Road transport: road
transport network
damage limits ability to
reach sites to perform
maintenance and
upgrades or address
outages, e.g. installing
and/or fuelling
generators, restoring
backhaul connectivity
Supply chain
disruption
Physical climate
impacts (e.g.
factory fire/
flooding) disrupt
global supply for
critical inputs,
including network
equipment and
customer devices.
Increased global
weather events
increase
competition and
demand for
network spares.
Present in all
scenarios, but
most significant
under the
Hothouse
scenario
Increasing in
severity over
time, most
significant in the
30+ year time
horizon
Constrained supply of
network equipment
increases costs, limits
ability to respond to
reactive maintenance
needs, and slows
opportunities for
investment in new
technologies
We are engaging with our suppliers to
understand their climate risk processes and
critical failure points.
For critical inventory items and spares we
continually review our working capital levels
to hold appropriate levels of stock in-country.
Disruption to supply
chain for customer
devices (e.g. mobile
handsets, modems
etc.) limits ability to
serve customers,
impacting revenue,
brand, and reputation
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Risk description
Scenario where
risk is greatest
Time
horizon(s)
Potential impacts
(anticipated impacts
pre-mitigation)
Mitigations
(transition plan actions integrated into strategy)
Transition risk
Telecommunications
market disruption
Customers in rural or
vulnerable locations shift
to satellite or alternative
technologies
Present in all
scenarios
Already
happening to
a degree, likely
to increase to
be most
material in the
15-year time
horizon
Loss of customers in
rural and/or
vulnerable locations
to satellite providers
Technology evolution will continue to
influence the market. Over the short/
medium term it is clear that satellite can
complement telecommunications,
enabling customers to be served in areas
where it is uneconomic to provide mobile
connectivity or there is greater risk of
service disruption due to climate-related
events. Many people in remote locations
have already adopted satellite
broadband for non-climate reasons. We
are working in partnership with satellite
providers to provide satellite-enabled
services to our customers.
Over the long-term 30+ year horizon
there is lower certainty on the impact of
technology evolution on Spark.
Regulation and
government
intervention
Regulation of network
resilience standards,
coordination of managed
retreat
Most likely
under the
Orderly
scenario
Most likely in
the short-term
5-year horizon
Inflexible regulation
could mandate
inefficient investment
and reduce ability to
innovate and adapt to
evolving technologies,
e.g. satellite
We are engaging with local and central
Government to advocate for a coordinated
approach to adaptation and resilience with
clear cost benefit analysis supporting any
new standards.
For more detail refer to the Enhancing the
resilience of our network section on
page 42
Most likely
under the
Disorderly
scenario
Most likely in
the 15-year
time horizon
Uncoordinated
approach to managed
retreat may lead to
investment
uncertainty
Supply chain
disruption
Rapid adoption of
low-emissions
technologies disrupts
supply of input materials
to digital technologies
Most likely
under the
Orderly
scenario
Most likely in
the short-term
5-year horizon
Constrained supply of
network equipment
increases costs and
limits ability to
respond to reactive
maintenance needs,
also slowing
opportunities for
investment in new
technologies
We are engaging with our suppliers to
understand their climate risk processes
and critical failure points. For critical
inventory items and spares we work with
our suppliers and partners to ensure we
hold appropriate levels of stock in-country.
Most likely
under the
Disorderly
scenario
Most likely in
the 15-year
time horizon
Disruption to supply
chain for customer
devices (e.g. mobile
handsets, modems
etc.) limits ability to
serve customers,
impacting revenue,
brand and reputation
Transition risks
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Spark New Zealand Annual Report FY24
Risk description
Scenario where
risk is greatest
Time
horizon(s)
Potential impacts
(anticipated impacts
pre-mitigation)
Mitigations
(transition plan actions integrated into strategy)
Transition risk (continued)
Economic
disruption
GDP reduction caused by
economic transformation
and climate events
Present across all scenarios and
time horizons, but most material
across the following:
Reduced revenue
caused by reduced
economic activity that
is unevenly
distributed across
customer sectors
We maintain a flexible business plan and
can adjust to shifting economic
conditions. We are planning for long-term
climate impacts across our customer base
by understanding exposure to high-risk
sectors and regions.
Disorderly due
to combined
transition and
physical
impacts
15-year
Hothouse due
to significant
long-term
physical
impacts
30+ year
Meeting
stakeholder
expectations
Increased investor,
customer, and
community expectations
drive behaviour change
and impact investment
opportunities
Most likely
under the
Orderly
scenario
Most likely in
the short-term
5-year horizon
Investors: shifting
capital to low-carbon,
low-risk organisations
that are well-
positioned for climate
transition and other
ESG risks
ESG is integrated into our business
strategy. We have a Sustainability
Framework that guides continual
improvement, and clearly established
governance frameworks with oversight at
the highest level, through our Board.
We have established a near-term
science-based emissions reduction target
for our scope 1 and 2 emissions, which
has been verified by the SBTi. This
establishes our own internal
decarbonisation pathway, which we are
making progress against, including our
10-year Power Purchase Agreement with
Genesis Energy that supports the
generation of new renewable energy in
New Zealand.
We benchmark our performance via the
Corporate Sustainability Assessment,
which informs the Dow Jones
Sustainability Index.
For more detail refer to our governance
and ESG management section on page 82.
Customers:
consumers and
business customers
shifting spend to
organisations aligned
to their climate
expectations and
broader sustainability
concerns
Renewable energy:
risk that insufficient
new renewable
energy generation
capacity limits data
centre growth
opportunities due to
customer
requirements and
national
decarbonisation
expectations
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Risk description
Scenario where
risk is greatest
Time
horizon(s)
Potential impacts
(anticipated impacts
pre-mitigation)
Mitigations
(transition plan actions integrated into strategy)
Transition risk (continued)
Access to capital
Disruption to global
markets limits access to
capital
Most
significant
under the
Hothouse
scenario
Not a
short-term risk.
Most
significant in
the 30+ year
time horizon
Limited access to
capital for future
investment
We are not a heavy emitting business, and
as outlined above, we have an approach
to ESG that drives continual improvement.
As a digital services company, we enable
climate mitigation and adaptation through
the services we provide.
We maintain a Capital Management
Framework that emphasises financial
strength and flexibility of the balance sheet
through an investment grade credit rating.
Climate-related opportunities
Risk description
Scenario where
risk is greatest
Time
horizon(s)
Potential impacts
(anticipated impacts
pre-mitigation)
Mitigations
(transition plan actions integrated into strategy)
Climate-related opportunities
Opportunity for
climate mitigation
services
Innovation and provision
of digital and high-tech
services that support
customers to become
more productive,
efficient, and sustainable.
Most
significant
under the
Orderly
scenario
Most
significant in
the 5 and
15-year
horizons
Increased revenue
from advanced and /
or converged digital
solutions
This opportunity is integrated into our
FY26 strategy. We have converged
technology use cases in trial with
customers. Our IoT business provides
solutions to customers that deliver
environmental benefits, with connections
and revenues continuing to grow
year-on-year.
We have completed research on the key
sectors where the greatest emissions
reduction opportunities lie. We have
partnered with NZTech to explore how to
integrate these opportunities into
New Zealand’s second Emissions
Reduction Plan.
Opportunities for
climate adaptation
services
Providing services to
enable customers to
adapt to climate change,
including environmental
monitoring to track
physical risks such as
flooding, wind, fire etc.
Present across all scenarios and
time horizons, but most material
across the following:
Increased revenue
from IoT and
monitoring services,
which monitor climate
risks
Our IoT business provides solutions to
customers that deliver environmental
benefits, with connections and revenues
continuing to grow year-on-year. In FY24
we bolstered our capability with the
acquisition of environmental IoT
company Adroit, which now forms part of
Spark IoT.
Disorderly15-year
Hothouse30+ year
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Spark New Zealand Annual Report FY24
Climate risk management
Processes and tools for identifying,
assessing, and managing climate-
related risks and integration into
overall risk management
processes
Our climate scenario analysis is our primary
process for identifying new and emerging
risks and opportunities from climate
change. We completed our first climate
scenario analysis in FY21, the results of
which were published in our FY21 Annual
Report. The risks and opportunities
identified through this process have been
reviewed and approved annually by our
Board and Leadership Squad as part of
annual reporting processes. For FY24 we
refreshed our scenario analysis – see the
Climate Scenario Analysis section on
page 94 for more information on the
processes we have followed to identify and
assess risk, and the time horizons
considered by our analysis. Our analysis
included physical risk analysis and a
high-level quantification of potential
financial risks. As noted in the Strategy
section of these climate statements, the
scenario analysis process undertaken in
FY24 considered Spark's entire value chain.
Our climate scenario analysis is an input
into our overarching risk governance. Our
risk policy and framework are
benchmarked to COSO ERM 2017 (COSO),
a leading practice risk management
standard. We also use other leading risk
management standards like
ISO31000:2018 and specific standards and
guidance, where available, to benchmark
and inform our risk management practices.
Within our overarching risk framework, we
update our principal risk profiles twice a
year. Our risk framework is how we
prioritise different types of risks across the
organisation. This considers risks to Spark
delivering against its three-year strategy.
The materiality of risks is considered
against the likelihood of occurrence and
the scale of financial impact. ‘Maintaining a
resilient network’ is one of the principal
risks, which includes physical adaptation
risk to our networks, and risk in our network
supply chain, aligned to the physical risks
identified through our climate scenario
analysis. See our managing risk section
(page 88) for more detailed information on
how Spark manages principal risks.
To ensure linkage between all of our
sustainability/ESG risks (including climate
change) we include a summary of
sustainability risks in quarterly risk reporting
to our Board and Leadership Squad. This
lists our most material sustainability topics,
identified through our sustainability
materiality processes and our climate
scenario analysis. We also map these topics
across to our principal risks to show how
we have integrated emerging and
longer-term issues into our enterprise risk
management approach.
The timeframes for our climate scenario
analysis (5, 15 and 30+ years) extend
beyond the time horizons considered by
our principal risk assessment which is
aligned to our three-year strategy horizon.
For emerging risks that fall outside of the
principal risks described above, we identify
actions for managing those risks outside
the enterprise risk system. An example of
an action from previous climate risk
assessment is the research published into
the role of digital technology in supporting
emissions reductions (see page 47 for
more information).
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Climate metrics and targets
Climate-related metrics
The table below sets out our key climate-related metrics for FY24, by reference to the relevant paragraph of NZ CS 1. Outside of the metrics
below, Spark does not use any industry-based metrics or key performance indicators to measure and manage climate-related risks and
opportunities. We have included information relating to the methods, assumptions and uncertainties associated with the below metrics within
the table, with further detail of the methods, assumptions and uncertainties relating to our GHG emissions outlined in our GHG Inventory
Report. Deloitte provides limited assurance of the emissions included in the report, which is available here: https://investors.sparknz.co.nz/
investor-centre/?page=annual-reports
Metric categoryMetricNotes
22(a)(i) Scope 1 emissions (including
comparatives and analysis of trends)
FY24: 4,670 tCO
2
e
FY23: 2,694 tCO
2
e
FY22: 2,372 tCO
2
e
See our GHG Inventory Report for breakdown of
scope 1 emissions (page 15) and comparatives/
analysis of trends (pages 9, 10)
22(a)(ii) Scope 2 emissions (location-based)
(including comparatives and analysis of
trends)
FY24: 11,684 tCO
2
e
FY23: 10,301 tCO
2
e
FY22: 16,318 tCO
2
e
Using location-based method required by NZ CS 1.
See our GHG Inventory Report for breakdown of
scope 2 emissions (page 15) and comparatives/
analysis of trends (pages 9, 11)
Scope 2 emissions (market-based)
(including comparatives and analysis of
trends)
FY24: 12,204 tCO
2
e
FY23: 10,624 tCO
2
e
FY22: 16,609 tCO
2
e
Using market-based approach aligned to our
existing GHG reporting against our SBTi target. See
our GHG Inventory Report for breakdown of scope 2
emissions (page 15) and comparatives/analysis of
trends (pages 9, 11)
22(a)(iii) Scope 3 emissionsFY24: 397,290 tCO
2
eSee our GHG Inventory Report for breakdown of
scope 3 emissions (page 16) and comparatives/
analysis of trends for selected categories (page 13)
22(b) GHG emissions intensity 0.107 kgCO
2
e / $ revenue. Calculated as total scope 1, 2 (market-based) and 3
emissions divided by revenue.
22(c) Transition risks – amount or percentage
of assets or business activities
vulnerable to transition risks
Not quantifiable for
individual assets or
activities.
We have identified enterprise-wide transition risks,
with the most material risks related to medium/
long-term economy-wide economic impacts of
climate change. As such, these relate to the entire
Spark business rather than to an identifiable amount
or percentage of assets or business activities.
22(d) Physical risks – amount or percentage
of assets or business activities
vulnerable to physical risks
<2% of all sites identified
in physical risk analysis.
Refer to the Physical risk analysis section on page 95.
22(e) Climate-related opportunities: amount
of percentage of assets or business
activities aligned with climate related
opportunities
Not quantifiable for
individual assets or
activities.
It is not possible to distinguish climate-related
opportunities from broader telecommunications and
digital service assets and activities. Our infrastructure,
(e.g. mobile networks, data centres) supports
solutions aligned to climate-related opportunities, as
they enable technologies and services that deliver
climate mitigation and adaptation.
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Spark New Zealand Annual Report FY24
Metric categoryMetricNotes
22(f) Capital deployment: amount of capital
expenditure, financing, or investment
deployed toward climate-related risks
and opportunities
Not quantifiableDue to the nature of our business the majority
of Spark’s capital expenditure is to build capacity,
coverage, or resilience of our infrastructure – all of
which contribute towards to both climate risk and
opportunity. For example, our investment in network
resilience, expanded mobile networks and data
centres.
22(g) Internal emissions price: price per
metric tonne of CO
2
e used
Range considered,
escalating over time:
$72.1-88.3 (2024)...
$100.0-144.0 (2030)...
We use a range of escalating emissions prices,
including an emissions price aligned to the Climate
Change Commission’s demonstration pathway, to
assess emissions reduction opportunities.
We have built indirect carbon cost into energy costs
models for investment analysis, incorporating
Renewable Energy Certificate (REC) costs into
lifecycle energy cost.
22(h) Management remuneration linked to
climate-related risks and opportunities
Refer to the Climate Governance section on page 91.
24(a)GHG measurement / reporting
standards
Our GHG Inventory report has been prepared in
accordance with The Greenhouse Gas Protocol:
A Corporate Accounting and Reporting Standard
(2004) (‘the GHG Protocol’).
24(b)GHG consolidation approach Operational control
approach
A detailed description of consolidation approach is
available in on page 18 of our GHG Inventory
Report: ‘Appendix A: Organisational boundary’
24(c)Source of emissions factors and
GWP rates
A detailed list of emissions factor and greenhouse
warming potential (GWP) rate sources is available on
page 24 of our GHG Inventory Report: ‘Guidance
documents used in the preparation of Carbon
Footprint’.
24(d)Summary of specific exclusions from
emissions reporting
A detailed description of our reporting methodology
and approach is available in on pages 21–24 of our
GHG Inventory Report: ‘Appendix B: Operational
boundary’.
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Our emissions reduction target
Spark’s emissions reduction target received
verification by the Science Based Targets
initiative (SBTi) in 2021. SBTi targets must
have a strict absolute reduction target for
scope 1 and 2 emissions, and also include
a separate scope 3 target if these emissions
are greater than 40% of the total footprint.
SBTi targets are set against sector-specific
emissions trajectories. The ICT sector
pathways were developed with the
International Telecommunications Union
(ITU) based on projected growth and
efficiency gains. The wording of SBTi
targets are set and verified by the Science
Based Targets initiative, and follow a
common format requiring companies to
‘commit’ to the target that has been
established. For Spark this is as follows:
• Spark New Zealand commits to reduce
absolute scope 1 and 2 GHG emissions
56% by 2030 from a FY2020 base year.
• Spark New Zealand commits that 70%
of its suppliers by spend covering
purchased goods and services and
capital goods, will have SBTi-aligned
targets in place by 2026.
This means Spark is committed to pursuing
this target and we are working towards it.
For clarity, this is not a guarantee that we
will meet this target.
Our scope 1 and 2 target has been verified
by SBTi as in line with a 1.5 degree
pathway. Our supplier target is an
engagement target, which means that it
does not directly require us to reduce our
emissions, but indirectly contributes to
limiting global warming to 1.5 degrees by
requiring us to engage with our suppliers
in relation to setting their own science-
based targets.
To achieve our target, we are pursuing
emissions reductions within our direct
value chain. Spark does not intend to use
carbon offsets to achieve our target. This
approach aligns to SBTi rules which do not
allow carbon offsets to be counted against
emission targets. This target is a near-term
target to FY30, and a first step towards
establishing a long-term target contributing
to New Zealand’s net-zero ambition to
2050, which we plan to explore in the
coming year. Further information on our
SBTi target is available on page 48 of this
report, together with a description of our
performance against the target.
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105
Spark New Zealand Annual Report FY24
Financial statements
Financial statements
106
Notes to the financial statements
111
Section 1 - General information
1.1About this report111
1.2Key estimates and assumptions111
1.3Significant transactions and events112
Section 2 - Financial performance information
2.1Segment information
113
2.2Operating revenues and other gains
114
2.3Operating expenses
117
2.4Finance income, finance expense, depreciation,
amortisation and net investment income
118
2.5Non-GAAP measures
119
Section 3 – Assets
3 .1Receivables and prepayments
121
3.2Inventories
124
3.3Long-term investments
125
3.4Right-of-use assets
126
3.5Leased customer equipment assets
127
3.6Property, plant and equipment
128
3.7Intangible assets
130
3.8Net tangible assets
131
Section 4 – Liabilities and equity
4 .1Payables, accruals and provisions
132
4.2Lease liabilities
133
4.3Debt
135
4.4Capital risk management
136
4.5Equity and dividends
137
Section 5 – Financial instruments
5 .1Derivatives and hedge accounting
139
5.2Financial risk management
143
Section 6 – Other information
6 .1Income tax
146
6.2Employee share schemes
148
6.3Related party transactions
149
6.4Subsidiaries
150
6.5Reconciliation of net earnings to net cash flows from
operating activities
151
6.6Commitments and contingencies
151
Independent auditor’s report
152
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Statement of profit or loss and other comprehensive income
YEAR ENDED 30 JUNE
20242023
NOTES$M$M
Operating revenues and other gains
1
2.2 3,861 4,491
Operating expenses
1
2.3 (2,698) (2,769)
Earnings before finance income and expense, income tax, depreciation, amortisation and net
investment income (EBITDAI)2.5 1,163 1,722
Finance income2.4 30 32
Finance expense2.4 (144) (99)
Depreciation and amortisation2.4 (527) (504)
Net investment income
1
2.4 (8) 1
Net earnings before income tax 514 1,152
Income tax expense
1
6.1 (198) (17)
Net earnings 316 1,135
Other comprehensive income
Items that will not be reclassified to profit or loss:
Revaluation of long–term investments designated at fair value through other comprehensive
income3.3 (20) (44)
Items that may be reclassified to profit or loss:
Translation of foreign operations (1) –
Change in hedge reserves net of tax5.1 1 2
Other comprehensive income (20) (42)
Total comprehensive income 296 1,093
Earnings per share
Basic earnings per share (cents)
1
17.3 60.7
Diluted earnings per share (cents)
1
17.3 60.6
Weighted average ordinary shares (millions) – used for basic earning per share 1,825 1,870
Dilutive potential ordinary share (options) – 3
Weighted average ordinary shares (millions) – used for diluted earnings per share 1,825 1,873
See accompanying notes to the financial statements.
1 The 2023 comparative items were materially impacted by the Connexa transactions and the Spark Sport provision, see note 2.5 for further details.
Financial statements
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Statement of financial position
AS AT
30 JUNE 2024
AS AT
30 JUNE 2023
NOTES$M$M
Current assets
Cash 59 100
Short–term receivables and prepayments3.1 915 899
Short–term derivative assets5.1 1 1
Inventories3.2 89 79
Taxation recoverable 6 –
Total current assets 1,070 1,079
Non–current assets
Long-term receivables and prepayments3.1 515 432
Long-term derivative assets5.1 25 27
Long-term investments3.3 206 254
Deferred tax assets6.1 17 55
Right-of-use assets3.4 487 488
Leased customer equipment assets3.5 70 77
Property, plant and equipment3.6 1,394 1,264
Intangible assets3.7 851 806
Total non–current assets 3,565 3,403
Total assets 4,635 4,482
Current liabilities
Short-term payables, accruals and provisions4.1 550 507
Taxation payable – 25
Short-term derivative liabilities5.1 – 4
Short-term lease liabilities4.2 96 78
Debt due within one year4.3 414 236
Total current liabilities 1,060 850
Non–current liabilities
Long-term payables, accruals and provisions4.1 56 82
Long-term derivative liabilities5.1 78 94
Long-term lease liabilities4.2 646 700
Long-term debt4.3 1,205 816
Total non–current liabilities 1,985 1,692
Total liabilities 3,045 2,542
Equity
Share capital 810 965
Reserves (414) (396)
Retained earnings 1,194 1,371
Total equity 1,590 1,940
Total liabilities and equity 4,635 4,482
See accompanying notes to the financial statements.
On behalf of the Board
Justine Smyth, CNZM Jolie Hodson, MNZM
Chair Chief Executive
Authorised for issue on 23 August 2024
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Statement of changes in equity
SHARE
CAPITAL
RETAINED
EARNINGS
HEDGE
RESERVES
SHARE–BASED
COMPEN–
SATION
RESERVE
REVALUATION
RESERVE
FOREIGN
CURRENCY
TRANSLATION
RESERVETOTAL
YEAR ENDED 30 JUNE 2024NOTES$M$M$M$M$M$M$M
Balance at 1 July 2023 965 1,371 11 2 (387) (22) 1,940
Net earnings – 316 – – – – 316
Other comprehensive income – – 1 – (20) (1) (20)
Total comprehensive income – 316 1 – (20) (1) 296
Contributions by, and distributions to, owners:
Dividends1.3, 4.5 – (494) – – – – (494)
Supplementary dividends – (48) – – – – (48)
Tax credit on supplementary dividends – 48 – – – – 48
Share buy-back1.3 (159) – – – – – (159)
Issuance of shares under share schemes 4 – – 3 – – 7
Other transfers – 1 – (1) – – –
Total transactions with owners (155) (493) – 2 – – (646)
Balance at 30 June 2024 810 1,194 12 4 (407) (23) 1,590
SHARE
CAPITAL
RETAINED
EARNINGS
HEDGE
RESERVES
SHARE–BASED
COMPEN–
SATION
RESERVE
REVALUATION
RESERVE
FOREIGN
CURRENCY
TRANSLATION
RESERVETOTAL
YEAR ENDED 30 JUNE 2023NOTES$M$M$M$M$M$M$M
Balance at 1 July 2022 1,105 722 8 5 (343) (22) 1,475
Net earnings – 1,135 – – – – 1,135
Other comprehensive income – – 2 – (44) – (42)
Total comprehensive income – 1,135 2 – (44) – 1,093
Contributions by, and distributions to, owners:
Dividends4.5 – (486) – – – – (486)
Supplementary dividends – (50) – – – – (50)
Tax credit on supplementary dividends – 50 – – – – 50
Share buy-back1.3, 4.5 (146) – – – – – (146)
Issuance of shares under share schemes 4 – – (3) – – 1
Other transfers 2 – 1 – – – 3
Total transactions with owners (140) (486) 1 (3) – – (628)
Balance at 30 June 2023 965 1,371 11 2 (387) (22) 1,940
See accompanying notes to the financial statements.
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Statement of cash flows
YEAR ENDED 30 JUNE
20242023
NOTES$M$M
Cash flows from operating activities
Receipts from customers 3,711 3,790
Receipts from interest 28 29
Payments to suppliers and employees (2,653) (2,730)
Payments for income tax (189) (190)
Payments for interest on debt (80) (55)
Payments for interest on leases (46) (37)
Payments for interest on leased customer equipment assets (7) (7)
Net cash flows from operating activities6.5 764 800
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 34 11
Proceeds from sale of business
1
4 893
Proceeds from long-term investments 7 –
Receipts from finance leases 1 3
Receipts from loans receivable 10 11
Payments for purchase of business, net of cash acquired (5) –
Payments for, and advances to, long-term investments (1) (3)
Payments for purchase of property, plant and equipment, intangibles (excluding spectrum)
and capacity (582) (475)
Payments for purchase of spectrum intangible assets (8) (6)
Payments for capitalised interest (10) (9)
Net cash flows from investing activities (550) 425
Cash flows from financing activities
Net proceeds from/(repayments of) debt4.4 510 (463)
Payments for dividends4.5 (494) (486)
Payments for share buy-back1.3 (159) (146)
Payments for leases (78) (64)
Payments for leased customer equipment assets (34) (37)
Net cash flows from financing activities (255) (1,196)
Net cash flows (41) 29
Opening cash position 100 71
Closing cash position 59 100
See accompanying notes to the financial statements.
1 The 2023 comparative was the net cash flow on the sale of Connexa.
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1
Section 1
General
information
1.1 About this report
Reporting entity
These financial statements are for Spark New Zealand Limited (the
Company) and its subsidiaries (together Spark or the Group).
Spark is a major supplier of telecommunications and digital
services in New Zealand. Spark provides a full range of
telecommunications, information technology, media and other
digital products and services, including: mobile services;
broadband services; IT products; IT services; voice services;
procurement and partner services; high-tech and data centres.
The Company is incorporated and domiciled in New Zealand,
registered under the Companies Act 1993 and is an FMC reporting
entity under the Financial Markets Conduct Act 2013. The
Company is listed on the New Zealand Stock Exchange (NZX) and
the Australian Securities Exchange (ASX) and the address of its
registered office is Spark City, 167 Victoria Street West, Auckland
1010, New Zealand.
Basis of preparation
The financial statements have been prepared in accordance with
Generally Accepted Accounting Practice in New Zealand (NZ
GAAP). They comply with New Zealand equivalents to IFRS
Accounting Standards (NZ IFRS) and other applicable Financial
Reporting Standards, as appropriate for profit-oriented entities.
The financial statements also comply with IFRS Accounting
Standards (IFRS).
The measurement basis adopted in the preparation of these
financial statements is historical cost, modified by the revaluation of
certain investments and financial instruments, as identified in the
accompanying notes. These financial statements are expressed in
New Zealand dollars, which is Spark's functional and presentation
currency. All financial information has been rounded to the nearest
million, unless otherwise stated. Certain comparative information
has been updated to conform with the current year's presentation.
The material accounting policies applied in the preparation of
these financial statements are set out in the accompanying notes
where an accounting policy choice is provided by NZ IFRS. A policy
is also included when it is new, has changed, is specific to Spark's
operations or is material. Where NZ IFRS does not provide an
accounting policy choice, Spark has applied the requirements of
NZ IFRS but a detailed accounting policy is not included.
New and amended standards
NZ IFRS 17 Insurance Contracts (NZ IFRS 17), is effective for FY24
and while Spark does have subsidiaries which provide insurance,
this is not material to the Group, therefore there is no material impact
on these financial statements from the adoption of NZ IFRS 17.
NZ IFRS 18 Presentation and Disclosure in Financial Statements (NZ
IFRS 18) will replace NZ IAS 1 Presentation of Financial Statements
and may have a material impact on Spark’s disclosures. NZ IFRS 18
has been issued but is not yet effective until periods commencing
on or after 1 January 2027.
NZ IFRS 18 sets out the requirements for the presentation and
disclosure of information in financial statements, and will not
change net profit reported, but how results are presented on the
statement of profit or loss and other comprehensive income and
what information is disclosed in the notes. Spark is yet to determine
the disclosure impacts of this standard and whether it will adopt it
prior to the year ending 30 June 2028. The key changes of NZ IFRS
18 are expected to be:
• A more structured statement of profit or loss and other
comprehensive income, including new subtotals, and income
and expenses classified into three categories (operating,
investing and financing).
• Non-GAAP, management performance measures are required to
be disclosed in the financial statements and subject to audit.
• New disclosures are required for items currently labelled as
‘other’, with enhanced guidance on how to group information
within the financial statements.
1.2 Key estimates and assumptions
The preparation of these financial statements requires
Management to make estimates and assumptions. These affect the
amounts of reported revenues and expenses and the measurement
of assets and liabilities as at 30 June. Actual results could differ
from these estimates.
The principal areas of judgement and estimation for Spark in
preparing these financial statements are found in the following
notes:
• Note 2.2 Operating revenues and other gains
• Note 3.1 Receivables and prepayments
• Note 3.4 Right-of-use assets
• Note 3.6 Property, plant and equipment
• Note 3.7 Intangible assets
• Note 4.2 Lease liabilities
NOTES TO THE FINANCIAL STATEMENTS
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NOTES TO THE FINANCIAL STATEMENTS: GENErAL INFOrMATION
1.3 Significant transactions and events
The following significant transactions and events affected the
financial performance and financial position of Spark for the year
ended 30 June 2024 or subsequent to balance date:
Share buy-back (see note 4.5)
• On 6 April 2023, Spark commenced an on-market share
buy-back, which was further extended on 8 April 2024. The
shares were acquired on the NZX and ASX, at prices in line with
the prevailing market price from time to time during the period
of the buy-back. As at 30 June 2024, 60 million shares with a
value of $305 million had been repurchased and cancelled
under the scheme. In the year ended 30 June 2024, 32 million
shares with a value of $159 million were repurchased. The last
purchase was made in December 2023. The on-market share
buy-back programme has now been withdrawn.
Dividends (see note 4.5)
• Dividends paid during the year ended 30 June 2024 in relation
to the H2 FY23 second-half dividend (ordinary dividend of
13.5 cents per share) and H1 FY24 first-half dividend (ordinary
dividend of 13.5 cents per share) totalled $494 million or
27.0 cents per share.
Debt programme (see note 4.3)
• On 27 October 2023, Spark extended the term of its
$200 million committed revolving Sustainability-Linked Loan
facility with Westpac New Zealand Limited by three years, to
mature on 30 November 2026.
• On 7 March 2024, $125 million of unsecured, unsubordinated
fixed-rate bonds with a coupon rate of 3.37% matured.
• On 18 March 2024 Spark issued two series of unsecured,
unsubordinated fixed-rate bonds; $125 million with a coupon
rate of 5.21%, maturing on 18 September 2029, and $175 million
with a coupon rate of 5.45%, maturing on 18 September 2031.
• On 29 April 2024, Spark extended the term of its $200 million
committed standby revolving credit facility provided through
participating Australasian and global banks by one year, to
mature on 30 April 2027.
• On 30 May 2024, Spark established a $100 million committed
revolving facility with Bank of New Zealand, maturing on
30 May 2025.
Long-term investments (see note 3.3)
• The fair value of Spark's investment in Hutchinson
Telecommunications Australia Limited decreased by $20 million
during the year due to a decrease in its quoted share price from
AU$0.042 to AU$0.028. The change in fair value is recognised
within other comprehensive income.
• Spark contributed no further equity to its Southern Cross
investment during FY24. Southern Cross has now fully repaid its
shareholder loan, with $10 million received in FY24, and Spark
received an additional $7 million in FY24 in the form of a capital
reduction.
Capital expenditure (see notes 2.5, 3.4, 3.6 and 3.7)
• Spark's additions to property, plant and equipment, intangible
assets (excluding spectrum) and capacity right-of-use assets
were $518 million, details of which are provided in notes 2.5, 3.4,
3.6 and 3.7 and on page 17 of this Annual Report.
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2
Section 2 Financial performance
information
2.1 Segment information
The segment results disclosed are based on those reported to the Chief Executive and are how Spark reviews its performance.
Spark's segments are measured based on product margin, which includes product operating revenues and direct product costs. The
segment results exclude other gains, labour, other operating expenses, finance income and expense, depreciation and amortisation, net
investment income and income tax expense, as these are assessed at an overall Group level by the Chief Executive.
Comparative segment results
Spark has reclassified the comparative segment results to:
• Redistribute certain revenues between two new categories IT products (previously cloud, collaboration, managed data and networks)
and IT services (previously service management and security)
• Move Qrious, Internet of Things, and MATTR from other products into a new high-tech category
• Split data centres out from cloud, and split co-location out from other products to create a combined data centres category.
There is no change to the overall Spark reported result because of these changes.
20242023
YEAR ENDED 30 JUNE
OPERATING
REVENUES
$M
PRODUCT
COSTS
$M
PRODUCT
MARGIN
$M
OPERATING
REVENUES
$M
PRODUCT
COSTS
$M
PRODUCT
MARGIN
$M
Mobile 1,474 (484) 990 1,470 (486) 984
Procurement and partners 548 (483) 65 584 (517) 67
Broadband 613 (325) 288 626 (328) 298
IT products 527 (252) 275 509 (230) 279
Voice 180 (81) 99 231 (98) 133
IT services 165 (43) 122 194 (33) 161
High-tech 79 (34) 45 65 (19) 46
Data centres 37 (2) 35 24 (2) 22
Other products
1
136 (45) 91 172 (89) 83
Segment results 3,759 (1,749) 2,010 3,875 (1,802) 2,073
1 See note 2.2 for a description of other products.
Reconciliation from segment product margin to consolidated net earnings before income tax
20242023
YEAR ENDED 30 JUNE $M$M
Segment product margin 2,0102,073
Other gains 102616
Labour (512)(511)
Other operating expenses
2
(437)(456)
Earnings before finance income and expense, income tax, depreciation, amortisation and net
investment income (EBITDAI) 1,1631,722
Finance income 3032
Finance expense (144)(99)
Depreciation and amortisation (527)(504)
Net investment income (8)1
Net earnings before income tax 5141,152
2 See note 2.3 for a break down of other operating expenses.
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NOTES TO THE FINANCIAL STATEMENTS: FINANCIAL pErFOrMANCE INFOrMATION
2.2 Operating revenues and other gains
The accounting policies specific to Spark’s operating revenues are outlined below:
Contracts with customers
Spark records revenue from contracts with customers in accordance with the five steps in NZ IFRS 15:
1. Identify the contract with a customer
2. Identify the performance obligations in the contract
3. Determine the transaction price, which is the total consideration provided by the customer
4. Allocate the transaction price amount to the performance obligations in the contract based on their relative stand-alone selling prices
5. Recognise revenue when or as the performance obligation is satisfied.
Spark often provides products and services in bundled arrangements (for example, a broadband modem together with a broadband
service). Where multiple products or services are sold in a single arrangement, revenue is recognised in relation to each distinct good or
service. A product or service is distinct where, amongst other criteria, a customer can benefit from it on its own or together with other
resources that are readily available. Revenue is allocated to each distinct product or service in proportion to its stand-alone selling price
and recognised when, or as, control is transferred to the customer.
Generally, control for products is transferred and revenue recognised at the point in time it is delivered to the customer and for services,
control is transferred, and revenue recognised, over time as the service is provided. Revenue for performance obligations satisfied over
time is recognised using the 'resources consumed by customers' method or the 'time-elapsed' method, as these best depict the transfer
of goods or services to customers.
Performance obligations, where Spark acts as an agent, includes some third-party media services and certain cloud, security and service
management contracts. Contracts with a significant financing component include those that have goods that were purchased on interest-
free payment terms of greater than 12 months.
The nature of the various performance obligations in our contracts with customers and when revenue is recognised is outlined below:
PERFORMANCE OBLIGATIONS
FROM CONTRACTS WITH CUSTOMERS
TIMING OF SATISFACTION
OF THE PERFORMANCE OBLIGATION AND PAYMENT
Mobile services, broadband services, media services, cloud,
security and service management services, managed data services
and rental of equipment
As the service is provided (usually monthly). Generally billed and
paid on a monthly basis.
Usage, other optional or non-subscription services, and pay-per-
use services
As the service is provided. Generally billed and paid on a monthly
basis.
Fixed modems, mobile handsets and other distinct goodsWhen control is passed to the customer, generally when the
customer takes possession of the goods. For goods sold in packages
or on interest-free terms, customers usually pay in equal instalments
over 6 to 36 months.
Installation or set-up services (where distinct)As the service is provided. Generally billed and paid following the
provision of the service.
Network infrastructureAs the goods or services are provided. Generally billed when
milestones are completed and revenue recognised when the
milestones are completed or once control of goods passes to the
customer.
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2.2 Operating revenues and other gains (continued)
20242023
YEAR ENDED 30 JUNE $M$M
Operating revenues
Mobile 1,474 1,470
Procurement and partners 548 584
Broadband 613 626
IT products 527 509
Voice 180 231
IT services 165 194
High-tech 79 65
Data centres 37 24
Other products 136 172
3,759 3,875
Other gains
Net gain on sale of Connexa – 583
Gain on sale and acquisition of property, plant and equipment 62 20
Gain on lease modifications and terminations 36 13
Gain on sale of long-term business 4 –
102 616
Total operating revenues and other gains 3,861 4,491
Other products
Included in other products is revenue from mobile infrastructure, exchange building sharing arrangements and Spark Sport (in the
comparative).
Other gains
In the year ended 30 June 2024, other gains comprise gains on the sale of property, plant and equipment, together with the fair value of
vendor funded equipment to support revenue growth opportunities (primarily in relation to mobile and data centre network equipment
and other assets) of $62 million, gains from lease modifications and terminations of $36 million (primarily relates to mobile sites), and gain
on sale of long-term business of $4 million.
In the year ended 30 June 2023, other gains included the net gain on sale of Connexa of $583 million, gain on the sale and acquisition of
property, plant and equipment (primarily in relation to mobile and data centre network equipment and other assets of $20 million), and
gains from lease modifications and terminations of $13 million.
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NOTES TO THE FINANCIAL STATEMENTS: FINANCIAL pErFOrMANCE INFOrMATION
2.2 Operating revenues and other gains (continued)
Key estimates and assumptions
Determining the transaction price
Determining the transaction price of Spark’s contracts requires judgement in estimating the amount of revenue we expect to be
entitled to for delivering the performance obligations within a contract. The transaction price is the amount of consideration that
is enforceable and to which we expect to be entitled in exchange for the goods and services we have promised to our customer.
We determine the transaction price by considering the terms of the contract and business practices that are customary within
that product, as well as adjusting the transaction price for estimated variable consideration and for any effects of the time value
of money. The 'expected value' or 'most likely' amount methods are used to determine variable consideration and any amount
where it is determined that it is highly probable a revenue reversal will not subsequently occur is included in the transaction
price. In making this determination consideration is given to the likelihood and potential magnitude of the revenue reversal, as
well as factors outside of Spark’s influence, the time when the uncertainty is expected to be resolved and Spark’s experience with
similar types of contracts. Judgement is required to determine the discount rate underlying any time value of money calculations,
as well as whether the financing component in a contract is significant. Discounts, rebates, refunds, credits, price concessions,
incentives, penalties and other similar items are reflected in the transaction price at contract inception.
Determining the stand-alone selling price and the allocation of the transaction price
Determining the stand-alone selling price of performance obligations and the allocation of the transaction price between
performance obligations involves judgement. The transaction price is allocated to performance obligations based on the relative
stand-alone selling prices of the distinct goods or services in the contract. The best evidence of a stand-alone selling price is the
observable price of a good or service when the entity sells that good or service separately in similar circumstances and to similar
customers. If a stand-alone selling price is not directly observable, we estimate the stand-alone selling price taking into account
reasonably available information relating to the market conditions, entity-specific factors and the class of customer. In
determining the stand-alone selling price, we allocate revenue between performance obligations based on expected minimum
enforceable amounts to which Spark is entitled. Any amounts above the minimum enforceable amounts are recognised as
revenue as they are earned.
Distinct goods and services
We make judgements in determining whether a promise to deliver goods or services is considered distinct. We account for
individual products and services separately if they are distinct (i.e. if a product or service is separately identifiable from other
items in the bundled package and if the customer can benefit from it). The consideration is allocated between separate products
and services in a bundle based on their stand-alone selling prices.
Timing of satisfaction of performance obligations
We make judgements in determining whether performance obligations are satisfied over time or at a point in time, as well as the
methods used for measuring progress towards completed satisfaction of performance obligations. Refer to page 114 for Spark's
accounting policy on timing of satisfaction of performance obligations.
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2.3 Operating expenses
20242023
YEAR ENDED 30 JUNE$M$M
Product costs 1,749 1,802
Labour 512 511
Other operating expenses
Network support costs 73 65
Computer costs 115 109
Accommodation costs 96 83
Advertising, promotions and communication 54 56
Bad debts 15 9
Spark Sport provision 1 54
Other 83 80
Total other operating expenses 437 456
Total operating expenses 2,698 2,769
Cost of inventories recognised as an expense
The cost of inventories recognised as an expense in relation to broadband modems, mobile devices and other accessories was
$354 million (30 June 2023: $376 million). In the prior year, before Spark Sport was withdrawn from service, a content rights amortisation
charge of $26 million was recognised in operating expenses.
Lease expenses
Expenses relating to short-term leases and leases of low-value assets were $7 million (30 June 2023: $6 million).
Donations
Donations for the year ended 30 June 2024 were $2,181,000 and comprised Spark's donation to Spark Foundation of $2,099,000
and payroll giving and other donations of $82,000 (30 June 2023: $1,767,000, comprised Spark's donation to the Spark Foundation of
$1,635,000 and other donations of $132,000). Spark made no donations to political parties in the years ended 30 June 2024 or
30 June 2023.
Auditor’s remuneration
20242023
YEAR ENDED 30 JUNE$’000$’000
Audit of financial statements
Audit and review of financial statements
1
1,283 1,142
Other services
Regulatory audit work
2
62 58
Other assurance services
3
44 35
Other non–assurance services
4
17 17
Total fees paid to auditor 1,406 1,252
1 The audit fee includes fees for both the annual audit of the financial statements and the review of the interim financial statements.
2 Regulatory audit work consists of the audit of telecommunications-related regulatory disclosures and reporting on solvency returns.
3 Other assurance services relate to assurance over the Group's greenhouse gas emissions.
4 Other non-assurance services relate to administrative and other advisory services for the Corporate Taxpayer Group of which Spark, alongside a number of
organisations, is a member.
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NOTES TO THE FINANCIAL STATEMENTS: FINANCIAL pErFOrMANCE INFOrMATION
2.4 Finance income, finance expense, depreciation, amortisation
and net investment income
20242023
YEAR ENDED 30 JUNENOTES$M$M
Finance income
Finance lease interest income 8 8
Other interest income 22 24
30 32
Finance expense
Finance expense on debt (75) (50)
Lease interest expense4.2 (48) (39)
Leased customer equipment interest expense (8) (7)
Other interest and finance expenses (23) (12)
(154) (108)
Plus: interest capitalised
1
10 9
(144) (99)
Depreciation and amortisation expense
Depreciation – property, plant and equipment3.6 (235) (227)
Depreciation – right–of–use assets3.4 (89) (75)
Depreciation – leased customer equipment assets3.5 (33) (36)
Amortisation – intangible assets3.7 (170) (166)
(527) (504)
Net investment income
Share of associates' and joint ventures' net losses
2
3.3 (17) (16)
Interest income on loans receivable from associates and joint ventures 12 8
Impairment of investments (2) -
Net disposal and remeasurement of equity-accounted investments
2
(1) 9
(8) 1
1 Interest was capitalised on property, plant and equipment and intangible assets under development for the year ended 30 June 2024 at an annualised rate of 5.7% (30
June 2023: 4.3%).
2 Included within share of associates' and joint ventures' net losses in the 2023 comparative is $4 million of transaction costs incurred by Connexa in relation to the
2degrees transaction which diluted Spark's investment in the Connexa group. Therefore, this and the net gain on remeasurement of equity accounted investments
represent the net gain on dilution of the investment in the Connexa group which is excluded from the comparative adjusted result in note 2.5.
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2.5 Non–GAAp measures
Spark uses non-GAAP financial measures that are not prepared in accordance with NZ IFRS. Spark believes that these non-GAAP financial
measures provide useful information to readers to assist in the understanding of the financial performance, financial position or returns of
Spark. These measures are also used internally to evaluate performance of products, to analyse trends in cash-based expenses, to
establish operational goals and allocate resources. However, they should not be viewed in isolation, nor considered as a substitute for
measures reported in accordance with NZ IFRS, as they are not uniformly defined or utilised by all companies in New Zealand or the
telecommunications industry.
Earnings before finance income and expense, income tax, depreciation, amortisation and net investment income
(EBITDAI)
Spark calculates EBITDAI by adding back finance expense, depreciation and amortisation and income tax expense, subtracting finance
income and adjusting for net investment income (which includes Spark’s share of net profits or losses from associates and joint ventures,
interest income on loans receivable from associates and joint ventures, net gain on remeasurement of equity accounted investments and
dividend income) to net earnings. A reconciliation of Spark’s EBITDAI is provided below and based on amounts taken from, and consistent
with, those presented in these financial statements.
20242023
YEAR ENDED 30 JUNE$M$M
Net earnings reported under NZ IFRS 316 1,135
Less: finance income (30) (32)
Add back: finance expense 144 99
Add back: depreciation and amortisation 527 504
Add/(Less): net investment income 8 (1)
Add back: income tax expense 198 17
EBITDAI 1,163 1,722
Adjusted EBITDAI and adjusted net earnings
Spark’s policy is to present ‘adjusted EBITDAI’ and ‘adjusted net earnings’ when a financial year includes significant items (such as gains,
expenses and impairments) individually greater than $25 million. In the year ended 30 June 2024, the tax effects resulting from the
zero-rating of tax depreciation on buildings effective for Spark from 1 July 2024 of $26 million was deemed a significant item to adjust.
In the year ended 30 June 2023, the net gain on sale of Connexa of $583 million together with the subsequent $5 million net gain arising
from the dilution of the investment in the Connexa group and the one off provision of $54 million for Spark Sport were deemed significant
items to adjust.
20242023
YEAR ENDED 30 JUNE$M$M
EBITDAI 1,163 1,722
Less: net gain on sale of Connexa– (583)
Add: Spark Sport provision– 54
Adjusted EBITDAI 1,163 1,193
Net earnings reported under NZ IFRS 316 1,135
Less: net gain on sale of Connexa – (583)
Add: Spark Sport provision – 54
Less: net gain on dilution of the investment in the Connexa group
1
– (5)
Less: tax effect of net gain on sale of Connexa, Spark Sport provision and dilution of the investment in the
Connexa group – (168)
Add: tax effects resulting from the zero-rating of tax depreciation on buildings effective for Spark from
1 July 2024 26 –
Adjusted net earnings 342 433
1 This includes the net gain on remeasurement of equity accounted investments, less costs associated with the transaction recognised in share of associates' and joint
ventures' net losses. See note 2.4 for more details.
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Spark New Zealand Annual report Fy24
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NOTES TO THE FINANCIAL STATEMENTS: FINANCIAL pErFOrMANCE INFOrMATION
2.5 Non–GAAp measures (continued)
Capital expenditure
Capital expenditure is the additions to property, plant and equipment and intangible assets (excluding spectrum, goodwill, acquisitions,
assets fully funded by customers or vendors and other non-cash additions that may be required by NZ IFRS, such as decommissioning
costs) and additions to capacity right-of-use assets where such additions are paid up front.
20242023
YEAR ENDED 30 JUNENOTES$M$M
Additions to property, plant and equipment3.6 387 379
Additions to intangible assets3.7 213 133
Additions to capacity right-of-use assets3.4 10 25
Total additions 610 537
Less: assets fully funded by customers or vendors3.6, 3.7 (50) (22)
Less: spectrum additions3.7 (23) –
Less: addition to intangible assets on acquisition
1
3.7 (11) –
Less: other (8) –
Capital expenditure 518 515
1 Acquisition of Adroit Holdings Limited and Circle Investments Limited in FY24.
Net debt
Net debt at hedged rates, the primary net debt measure Spark monitors, includes long-term debt at the value of hedged cash flows due to
arise on maturity, plus debt due within one year, less any cash. Net debt at carrying value includes the non-cash impact of fair value hedge
adjustments and any unamortised discount.
Net debt at hedged rates is a non-GAAP measure and is not defined in accordance with NZ IFRS but is a measure used by management.
A reconciliation of net debt at hedged rates and net debt at carrying value is provided in note 4.4.
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Section 3 Assets
3.1 receivables and prepayments
20242023
AS AT 30 JUNE$M$M
Short-term receivables and prepayments
Trade receivables 431 410
Short-term prepayments 135 154
Short-term unbilled revenue 276 261
Short-term contract assets 2 2
Short-term contract costs 47 42
Short-term finance lease receivables 6 9
Other short-term receivables 18 21
915 899
Long-term receivables and prepayments
Long-term unbilled revenue 111 95
Long-term prepayments 66 6
Long-term contract costs 91 98
Long-term finance lease receivables 75 74
Long-term loans receivable 166 159
Other long-term receivables 6 –
515 432
Amounts are stated at their net carrying value, including expected credit loss allowance provisions. The fair value of finance lease
receivables is estimated to be $72 million (30 June 2023: $75 million) and the carrying amount of all other receivables, measured at
amortised cost, are approximately equivalent to their fair value.
Contract assets
Contract assets primarily relate to Spark's rights to consideration for performance obligations delivered but not billed at the reporting
date. Contract assets are transferred to receivables when the rights become unconditional.
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NOTES TO THE FINANCIAL STATEMENTS: ASSETS
3.1 receivables and prepayments (continued)
Contract costs
Contract costs include costs to obtain a contract and costs to fulfil a contract. These costs are expected to be recovered and are therefore
initially deferred to the statement of financial position and then recognised within operating expenses on a systematic basis that is
consistent with the transfer to the customer of the goods or services to which the asset relates. The following summarises changes in those
balances:
20242023
COSTS TO
OBTAIN A
CONTRACT
COSTS TO
FULFIL A
CONTRACTTOTAL
COSTS TO
OBTAIN A
CONTRACT
COSTS TO
FULFIL A
CONTRACTTOTAL
YEAR ENDED 30 JUNENOTES$M$M$M$M$M$M
Opening balance as at 1 July 21 119 140 17 91 108
Additions 13 52 65 10 61 71
Transferred to leased customer equipment assets3.5 – (4) (4) – – –
Transferred to intangible assets3.7 – (4) (4) – – –
Transferred to property, plant and equipment3.6–(1)(1)–––
Amortisation recognised in operating expenses (8) (50) (58) (6) (33) (39)
Closing balance as at 30 June 26 112 138 21 119 140
Short-term contract costs 6 41 47 4 38 42
Long-term contract costs 20 71 91 17 81 98
Key estimates and assumptions
Determining the costs incurred to obtain or fulfil a contract that meet the deferral criteria within NZ IFRS 15 requires significant
judgement. Further, where such costs can be deferred, determining the appropriate amortisation period to recognise the costs
within operating expenses requires management judgement, including assessing the expected average customer tenure for
consumer customers and the expected contract term for enterprise customers.
Expected credit loss allowance provision
Movements in the loss allowance provision are as follows:
20242023
YEAR ENDED 30 JUNE$M$M
Opening balance as at 1 July 17 15
Charged to costs and expenses 17 11
Bad debts recovered (2) (2)
Utilised(12)(7)
Closing balance as at 30 June20 17
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3.1 receivables and prepayments (continued)
Spark has applied the simplified approach to providing for expected credit losses, which requires the recognition of a lifetime expected
loss provision for short-term: trade receivables, unbilled revenue, contract assets, contract costs, finance lease receivables and loans
receivable. The calculation of the allowance provision incorporates Spark's previous collection history and forward-looking information,
such as forecasted economic conditions.
The expected credit loss allowance provision has been determined as follows:
CURRENT≤ 1 MONTH> 1 MONTHTOTAL
AS AT 30 JUNE 2024$M$M$M$M
Expected loss rate1.2%1.4%8.8%1.6%
Gross carrying amount 1,107 74 68 1,249
Expected credit loss allowance provision 13 1 6 20
Short-term loss allowance provision 8 1 6 15
Long-term loss allowance provision 5 – – 5
AS AT 30 JUNE 2023$M$M$M$M
Expected loss rate1.1%1.7%9.5%1.4%
Gross carrying amount 1,087 59 42 1,188
Expected credit loss allowance provision 12 1 4 17
Short-term loss allowance provision 8 1 4 13
Long-term loss allowance provision 4 – – 4
The composition of the credit loss allowance provision between receivable types is as follows:
20242023
AS AT 30 JUNE$M$M
Trade receivables 8 7
Unbilled revenue 7 6
Contract assets and contract costs 3 2
Finance lease receivables 1 1
Loans receivable 1 1
Expected credit loss allowance provision 20 17
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of
recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could
generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be
subject to enforcement activities to comply with the Group’s procedures for recovery of amounts due.
Key estimates and assumptions
The expected credit loss allowance provision is determined based on assumptions about the risk of default and expected loss
rates of customers and other counterparties. Spark uses judgement in making these assumptions and selecting the inputs to the
impairment calculation based on Spark's past collection history, existing market conditions, as well as forward-looking estimates
at the end of the reporting period. Forward-looking estimates include assessment of forecasted changes to interest rates,
unemployment rates and Gross Domestic Product in New Zealand.
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Spark New Zealand Annual report Fy24
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NOTES TO THE FINANCIAL STATEMENTS: ASSETS
3.1 receivables and prepayments (continued)
Finance lease receivables
Spark has a number of leases for space in exchange buildings, including as a lessor for space in Spark exchanges and a lessee for space in
Chorus exchanges. These leases include a legal right of offset, as Spark and Chorus settle the payments on a net basis and are therefore
shown as a net finance lease receivable or net lease liability on the statement of financial position.
In FY23, Spark assigned its ground leases for the mobile site assets sold to Connexa, which resulted in Spark recording finance lease
receivables equal to the lease liabilities for these leases. Spark is unwinding these balances over the remaining term to the next right of
renewal, at which point these will be novated.
In addition, Spark subleases a number of office building floors. Where subleases are for the whole of the remaining non-cancellable term
of the head lease, these are classified as a finance lease.
The profile of lease net receipts is set out below:
20242023
UNDISCOUNTEDDISCOUNTEDUNDISCOUNTEDDISCOUNTED
AS AT 30 JUNE$M$M$M$M
Less than one year
1
11 4 14 7
Between one and five years 30 5 31 5
More than five years 135 71 141 69
Net finance lease receivables 176 80 186 81
Plus short-term portion of finance lease receivables in liability position – 1 – 2
Total finance lease receivables 176 81 186 83
Less unearned finance income (95) – (103) –
Present value of finance lease receivables 81 81 83 83
Short-term finance lease receivables 6 9
Long-term finance lease receivables 75 74
1 Included within the discounted balance as at 30 June 2024 are $5 million sublease receivable assets, offset by a $1 million liability relating to the Chorus finance lease
receivable (30 June 2023: $9 million sublease receivable asset, offset by a $2 million liability relating to the Chorus finance lease receivable).
The lease with Chorus, where Spark is the lessor, has multiple rights of renewals and the full lease term has been used in the majority of
the calculation of the financial lease receivable at lease inception, as it was likely that because of the specialised nature of the buildings,
the lease would be renewed to the maximum term.
3.2 Inventories
20242023
AS AT 30 JUNE$M$M
Goods held for resale 89 79
Total inventories 89 79
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3.3 Long–term investments
20242023
AS AT 30 JUNEMEASUREMENT BASIS$M$M
Shares in HutchisonFair value through other comprehensive income 41 61
Investment in associates and joint venturesEquity method 161 187
Other long-term investmentsCost 4 6
206 254
Spark holds a 10% interest in Hutchison Telecommunications Australia Limited (Hutchison), which is quoted on the Australian Securities
Exchange (ASX) and its fair value is measured using the observable bid share price as quoted on the ASX, classified as being within Level 1
of the fair value hierarchy. As at 30 June 2024 the quoted price of Hutchison’s shares on the ASX was AU$0.028 (30 June 2023: AU$0.042).
The decrease in fair value of $20 million is recognised in other comprehensive income (30 June 2023: $44 million decrease).
Included within investment in associates and joint ventures is $71 million (30 June 2023: $85 million) for Spark’s investment in the
Connexa group.
Investment in associates and joint ventures
Spark's investment in associates and joint ventures at 30 June 2024 consists of the following:
NAMETYPECOUNTRYOWNERSHIPPRINCIPAL ACTIVITY
Flok LimitedAssociate New Zealand38%Hardware and software development
FrodoCo Holdings LimitedAssociate New Zealand17%A holding company for Connexa
Hourua LimitedJoint VentureNew Zealand50%Delivering the Public Safety Network
Pacific Carriage Holdings Limited, Inc.AssociateUnited States41%A holding company
Rural Connectivity Group LimitedJoint VentureNew Zealand33%Rural broadband
Southern Cross Cables Holdings LimitedAssociateBermuda41%A holding company
TNAS LimitedJoint VentureNew Zealand50%Telecommunications development
All investments in associates and joint ventures are measured using the equity method. Changes in the aggregate carrying amount of
Spark's investment in associates and joint ventures were as follows:
20242023
ASSOCIATESJOINT VENTURESTOTALASSOCIATESJOINT VENTURESTOTAL
YEAR ENDED 30 JUNE$M$M$M$M$M$M
Opening balance as at 1 July 168 19 187 82 19 101
Additional investments during the year – 1 1 92 1 93
Disposals (3) – (3) – – –
Return of capital (7) – (7) – – –
Share of net losses (15) (2) (17) (15) (1) (16)
Remeasurement on dilution – – – 9 – 9
Closing balance as at 30 June 143 18 161 168 19 187
Spark has suspended equity accounting for Pacific Carriage Holdings Limited Inc and Southern Cross Cables Holdings Limited (together
‘Southern Cross’) as their carrying values were reduced to nil. Spark has no obligation to fund Southern Cross deficits or repay dividends.
For the year ended 30 June 2024, Spark's share of Southern Cross profits was not recognised because of the existence of historic
cumulative Southern Cross deficits. In the current year Southern Cross profit was $46 million (30 June 2023: $34 million).
125
Spark New Zealand Annual report Fy24
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NOTES TO THE FINANCIAL STATEMENTS: ASSETS
3.4 right–of–use assets
Spark is a lessee for a large number of leases, including:
• Property – Spark leases a number of office buildings and retail stores. Some of these leases have rights of renewal that are reasonably
certain to be exercised and therefore may have long expected lease terms
• Capacity arrangements – Spark enters into a number of indefeasible right-of-use capacity arrangements for cable capacity
• Mobile sites – Spark has entered into a number of agreements to allow the operation of mobile network infrastructure throughout
New Zealand
• Motor vehicles – Spark leases motor vehicles for use in sales, field operations and maintenance of infrastructure equipment
• Other - Spark leases equipment that is held at Spark premises and used to provide services to customers
PROPERTYCAPACITY
MOBILE
SITES
MOTOR
VEHICLESOTHERTOTAL
YEAR ENDED 30 JUNE 2024NOTES$M$M$M$M$M$M
Opening net book value186 212 65 3 22 488
Additions and acquisitions10 10 13 4 60 102
Transferred from leased customer equipment
assets3.5– – – – 8 8
Disposals(3)– – – – (3)
Remeasurements
1
4.2(29)– 7 1 7 (19)
Depreciation charge(32)(25)(7)(3)(22)(89)
Closing net book value132 197 78 5 75 487
PROPERTYCAPACITY
MOBILE
SITES
MOTOR
VEHICLESOTHERTOTAL
YEAR ENDED 30 JUNE 2023$M$M$M$M$M$M
Opening net book value250 211 19 3 25 508
Additions9 25 42 2 8 86
Assets transferred back from held for sale
2
– – 7 – – 7
Assets classified as held for sale and other
disposals(3)– (3)– – (6)
Remeasurements
1
(39)– 5 – 2 (32)
Depreciation charge(31)(24)(5)(2)(13)(75)
Closing net book value186 212 65 3 22 488
1 Remeasurements to property in FY24 and FY23 primarily relate to modifications for corporate property leases. The reduction in property right-of-use assets for
corporate property leases is substantially offset by a reduction in property lease liabilities (see note 4.2).
2 Relates to right-of-use assets that were held for sale as at 30 June 2022 but not sold as part of the Connexa transaction and therefore transferred back to right-of-use
assets.
All capacity additions for the years ended 30 June 2024 and 30 June 2023 were fully paid on control being obtained and therefore
deemed capital expenditure as defined and reconciled in note 2.5.
Income from subleasing right-of-use assets for the year ended 30 June 2024 was $2 million (30 June 2023: $2 million).
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3.4 right–of–use assets (continued)
Key estimates and assumptions
At inception of a contract Spark assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess
whether a contract conveys the right to control the use of an identified asset, Spark assesses whether:
• The contract involves the use of an identified asset
• Spark has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use
• Spark has the right to direct the use of the asset
At inception or on reassessment of a contract that contains a lease component, Spark allocates the consideration in the contract
to each lease component on the basis of their relative stand-alone prices. Spark recognises a right-of-use asset at the lease
commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an
estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is
located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of
the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are
determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically assessed for
impairment losses and adjusted for certain remeasurements of the lease liability.
3.5 Leased customer equipment assets
Spark acts as the intermediate party (as a lessee and a lessor) in a number of lease arrangements for customer premises equipment. Such
arrangements may also include an initial sale and leaseback transaction. A sale and leaseback transaction contains a genuine sale if control
of an asset is transferred under NZ IFRS 15. For Spark’s back-to-back lease arrangements we have assessed that a sale does not occur, as
control over the equipment remains with Spark instead of passing to the buyer-lessor. Spark also acts as a lessor, where there is no
intermediate party, for customer premises equipment.
Spark as the seller-lessee or lessor (when the lease is an operating lease) continues to recognise the leased customer equipment asset,
which is initially measured at cost. The asset is subsequently depreciated using the straight-line method based on the expected lease term.
Movements in leased customer equipment assets are summarised below:
20242023
YEAR ENDED 30 JUNENOTES$M$M
Opening net book value77 90
Additions32 32
Transferred to right-of-use assets3.4(8)–
Transferred from contract costs3.14 –
Disposals (2)(9)
Depreciation charge(33)(36)
Closing net book value70 77
AS AT 30 JUNE
Cost205 216
Accumulated depreciation and impairment losses(135)(139)
Closing net book value70 77
Leased customer equipment assets are leased to customers under operating leases. Revenue received from these arrangements and
other operating leases for the year ended 30 June 2024 were $50 million (30 June 2023: $50 million).
127
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NOTES TO THE FINANCIAL STATEMENTS: ASSETS
3.6 property, plant and equipment
TELECOMMUNI–
CATIONS
EQUIPMENT
AND PLANTFREEHOLD LANDBUILDINGSOTHER ASSETS
WORK IN
PROGRESSTOTAL
YEAR ENDED 30 JUNE 2024NOTE$M$M$M$M$M$M
Opening net book value730 61 254 65 154 1,264
Additions and acquisitions
1
1 – 1 26 359387
Transfers243 (2)28 47 (316)–
Disposals(5)– – (18)– (23)
Transfer from contract costs3.1––––11
Depreciation charge(179)– (25)(31)– (235)
Closing net book value790 59 258 89 198 1,394
AS AT 30 JUNE 2024
Cost3,470 59 619 520 198 4,866
Accumulated depreciation and impairment losses(2,680)– (361)(431)– (3,472)
Closing net book value790 59 258 89 198 1,394
TELECOMMUNI–
CATIONS
EQUIPMENT
AND PLANTFREEHOLD LANDBUILDINGSOTHER ASSETS
WORK IN
PROGRESSTOTAL
YEAR ENDED 30 JUNE 2023$M$M$M$M$M$M
Opening net book value 631 61 213 73 131 1,109
Additions
1
2 – – 5 372 379
Transfers 265 – 63 21 (349) –
Assets transferred back from held for sale
2
– – 2 – – 2
Depreciation charge (169) – (24) (34) – (227)
Foreign exchange movement 1 – – – – 1
Closing net book value 730 61 254 65 154 1,264
AS AT 30 JUNE 2023
Cost 3,614 61 598 523 154 4,950
Accumulated depreciation and impairment losses (2,884) – (344) (458) – (3,686)
Closing net book value 730 61 254 65 154 1,264
1 Included in additions is $42 million (30 June 2023: $22 million) of assets fully funded by customers or vendors.
2 Relates to assets that were held for sale as at 30 June 2022, but not sold as part of the Connexa transaction and therefore transferred back to property, plant and
equipment.
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3.6 property, plant and equipment (continued)
Joint arrangement
Spark has a joint arrangement relating to the construction and operation of the Tasman Global Access fibre-optic submarine cable
between Australia and New Zealand. As at 30 June 2024, the carrying value of Spark's share of property, plant and equipment, intangible
assets and capacity right-of-use assets in the joint operation was $31 million (30 June 2023: $30 million).
Key estimates and assumptions
Spark's property, plant and equipment is measured at cost and depreciation is charged on a straight-line basis over the assets'
estimated useful lives. Determining the appropriate useful life of property, plant and equipment requires Management
judgement, including the expected period of service potential, the likelihood technological advances will make the asset
obsolete, the likelihood of Spark ceasing to use it and the effect of government regulation.
The estimated useful lives of Spark's property, plant and equipment are as follows:
Telecommunications equipment
Links and cables 9 - 50 years
Network transport 2 - 15 years
Mobile radio access network 5 - 25 years
Customer premises equipment 3 - 5 years
International cable and satellite 10 - 15 years
Buildings
Buildings 15 - 53 years
Furniture and fittings 3 - 20 years
Air conditioning 5 - 20 years
Power systems 3 - 25 years
Batteries 5 - 15 years
Other
Motor vehicles 6 years
Computer equipment 2 - 8 years
Internal IT system assets 3 - 15 years
The assessment of assets for impairment is based on a large number of factors, such as changes in current competitive
conditions, expectations of growth in the telecommunications industry, the discontinuance of services, the expected future cash
flows an asset is expected to generate and other changes in circumstances that indicate an impairment exists. Key judgements
include rates of expected revenue growth or decline, expected future margins and the selection of an appropriate discount rate
for valuing future cash flows.
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NOTES TO THE FINANCIAL STATEMENTS: ASSETS
3.7 Intangible assets
SOFTWARE
SPECTRUM
LICENCES
OTHER
INTANGIBLESGOODWILL
WORK IN
PROGRESSTOTAL
YEAR ENDED 30 JUNE 2024NOTE$M$M$M$M$M$M
Opening net book value 310 158 16 234 88 806
Additions and acquisitions
1
32 23 11 10 137 213
Transfers 152 – 2 – (154) –
Transfer from contract costs3.1 – – – – 44
Disposals (2) – – – – (2)
Amortisation charge (144) (18) (8) – – (170)
Closing net book value 348 163 21 244 75 851
AS AT 30 JUNE 2024
Cost 1,750 355 116 292 75 2,588
Accumulated amortisation and impairment losses (1,402) (192) (95) (48) – (1,737)
Closing net book value 348 163 21 244 75 851
1 Included in additions is $8 million (30 June 2023: nil) of assets fully funded by customers or vendors.
SOFTWARE
SPECTRUM
LICENCES
OTHER
INTANGIBLESGOODWILL
WORK IN
PROGRESSTOTAL
YEAR ENDED 30 JUNE 2023$M$M$M$M$M$M
Opening net book value 326 175 21 234 83 839
Additions
1
– – – – 133 133
Transfers 128 – – – (128) –
Amortisation charge (144) (17) (5) – – (166)
Closing net book value 310 158 16 234 88 806
AS AT 30 JUNE 2023
Cost 2,022 334 103 282 88 2,829
Accumulated amortisation and impairment losses (1,712) (176) (87) (48) – (2,023)
Closing net book value 310 158 16 234 88 806
1 Total software capitalised in the year ended 30 June 2024 includes $84 million (30 June 2023: $69 million) of internally generated assets. Other software capitalised in
the year includes software licences and externally supplied labour.
Key estimates and assumptions
Intangible assets are amortised over their useful lives on a straight-line basis, except goodwill, which is tested for impairment
annually. Determining the appropriate useful life of an intangible asset requires Management judgement, including assessing the
expected period of service potential, the likelihood technological advances will make it obsolete and the likelihood of Spark
ceasing to use it.
The estimated useful lives of Spark’s intangible assets are as follows:
Spectrum licences 2 – 21 years
Software 2 – 16 years
Customer contracts and brands 5 – 10 years
Other intangible assets 2 – 100 years
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3.7 Intangible assets (continued)
Goodwill
Goodwill by cash–generating unit (CGU) is presented below:
20242023
1
AS AT 30 JUNE$M$M
Mobile 34 34
Broadband 3 3
IT Products 117 117
IT Services 53 53
High-tech 20 14
Digital Island 17 13
244 234
1 Spark changed its cash-generating units from 1 July 2023 in line with the changes in Spark's segment reporting as outlined in note 2.1, the 2023 comparative has been
restated to align with the updated CGUs.
On 19 October 2023, Spark increased its holding in its investment in associate, Adroit Holdings Limited, an environmental IoT solutions
company, from 47% to 100% making it a wholly owned subsidiary. Goodwill recognised from the acquisition of $6 million has been
allocated to the High-tech CGU as this is the CGU that is expected to benefit from the synergies of the transaction.
In addition, on 31 January 2024, Spark's subsidiary, Digital Island purchased 100% of the ordinary share capital of Circle Investments
Limited, goodwill of $4 million was recognised on acquisition and has been allocated to the Digital Island CGU.
During the years ended 30 June 2024 and 30 June 2023 no impairment arose as a result of the assessment of the carrying value of
goodwill. Headroom currently exists in each CGU and, based on the sensitivity analysis performed, no reasonably possible changes in the
assumptions would cause the carrying amount of the CGUs to exceed their recoverable amounts.
Key estimates and assumptions
Goodwill is assessed annually for impairment using a value-in-use model, which estimates the future cash flows, based on the
FY25 Board-approved business plan, applied to the next three years, with key assumptions being forecast earnings and capital
expenditure for each CGU. The forecast financial information is based on both past experience and future expectations of CGU
performance. The major inputs and assumptions used in performing an impairment assessment that require judgement include
revenue forecasts, operating cost projections, customer numbers and customer churn, discount rates, growth rates and future
technology paths.
Nil terminal growth was applied to all CGUs and a pre-tax discount rate of 11.3% was utilised for the year ended 30 June 2024
(30 June 2023: 11.7%).
3.8 Net tangible assets
The calculation of Spark's net tangible assets per share and its reconciliation to the statement of financial position is presented below:
20242023
AS AT 30 JUNE$M$M
Total assets 4,635 4,482
Less: intangible assets (851) (806)
Less: total liabilities (3,045) (2,542)
Net tangible assets 739 1,134
Number of shares outstanding (in millions) 1,814 1,845
Net tangible assets per share$0.41$0.61
Net tangible assets per share is a non-GAAP financial measure that is not defined in NZ IFRS. Total assets include assets held for sale and
right-of-use assets. Total liabilities include lease liabilities. Net tangible assets per share declined by $0.20 per share from 30 June 2023 as
the prior year calculation was high due to lower debt levels following the sale of the Connexa business. The FY24 calculation was more
aligned to the FY22 net tangible assets per share calculation of $0.34.
131
Spark New Zealand Annual report Fy24
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NOTES TO THE FINANCIAL STATEMENTS: LIAbILITIES ANd EquIT y
Section 4 Liabilities and equity
4.1 payables, accruals and provisions
20242023
AS AT 30 JUNE$M$M
Short-term payables, accruals and provisions
Trade accounts payable and accruals 299 290
Revenue billed in advance 112 96
Accrued personnel costs 36 39
Accrued interest 6 3
GST payable 51 21
Short-term sale and leaseback liabilities 26 30
Short-term provisions 12 19
Other short-term payables and accruals 8 9
550 507
Long-term payables, accruals and provisions
Long-term sale and leaseback liabilities 34 45
Long-term provisions 15 32
Other long-term payables and accruals 7 5
56 82
Trade accounts payable and sale and leaseback liabilities are financial instruments held at amortised cost.
Provisions
The following table summarises movements in provisions in the year:
SPARK SPORT
PROVISION
MAKE-GOOD
PROVISIONS TOTAL
YEAR ENDED 30 JUNE 2024$M$M$M
Opening balance as at 1 July 46 5 51
Additional provisions made in the year 1 - 1
Amounts utilised during the year (27) (1) (28)
Unwinding of discount 3 - 3
Closing balance at 30 June 23 4 27
Short-term provisions 11 1 12
Long-term provisions 12 3 15
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4.2 Lease liabilities
PROPERTYCAPACITY
MOBILE
SITES
MOTOR
VEHICLESOTHERTOTAL
YEAR ENDED 30 JUNE 2024$M$M$M$M$M$M
Opening lease liability balance 220 2 529 3 22 776
Leases entered into during the year 10 – 13 4 61 88
Transferred from sale and leaseback liabilities – – – – 8 8
Disposals (3) – (1) – – (4)
Interest expense 8 – 36 – 4 48
Principal repayments (45) (1) (60) (3) (19) (128)
Remeasurements
1
(28) 1 (29) 1 8 (47)
Balance at the end of the year 162 2 488 5 84 741
Short-term portion of finance lease receivable 1 – – – – 1
Total lease liability balance 163 2 488 5 84 742
Short-term lease liabilities 37 – 30 2 27 96
Long-term lease liabilities 126 2 458 3 57 646
Lease liabilities - non-cancellable commitments
2
277 2 496 5 90 870
PROPERTYCAPACITY
MOBILE
SITES
MOTOR
VEHICLESOTHERTOTAL
YEAR ENDED 30 JUNE 2023$M$M$M$M$M$M
Opening lease liability balance 290 3 20 3 26 342
Leases entered into during the year9 – 492 2 8 511
Transferred back from held for sale
3
– – 34 – – 34
Liabilities classified as held for sale and other disposals(4)– (2)– – (6)
Interest expense11 – 27 – 1 39
Principal repayments(45)(1)(41)(2)(13)(102)
Remeasurements
1
(41)– (1)– – (42)
Balance at the end of the year220 2 529 3 22 776
Short-term portion of finance lease receivable2 – – – – 2
Total lease liability balance222 2 529 3 22 778
Short-term lease liabilities40 – 28 2 8 78
Long-term lease liabilities182 2 501 1 14 700
Lease liabilities - non-cancellable commitments
2
296 2 524 3 22 847
1 Remeasurements in FY24 and FY23 primarily relate to modifications for corporate property leases and mobile sites. For corporate properties, the reduction in lease
liabilities is substantially offset by a reduction in property right-of-use assets (see note 3.4). For mobile site remeasurements there is not a corresponding adjustment in
right-of-use assets as the majority of these adjustments relate to Connexa leases which have a smaller right-of-use asset due to the sale and leaseback transaction.
2 Relates to the discounted lease liability for future minimum rental commitments for non-cancellable periods of leases, excluding rights of renewal, which are at Spark's
option, including leases committed to that have not yet commenced.
3 Relates to lease liabilities that were held for sale as at 30 June 2022, but either assigned or, not sold as part of the Connexa transaction and therefore transferred back
to lease liabilities.
133
Spark New Zealand Annual report Fy24
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NOTES TO THE FINANCIAL STATEMENTS: LIAbILITIES ANd EquIT y
4.2 Lease liabilities (continued)
Key estimates and assumptions
Spark recognises a lease liability at the lease commencement date. The lease liability is initially measured at the present value of
the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that
rate cannot be readily determined, Spark's incremental borrowing rate. Generally, Spark uses its incremental borrowing rate as
the discount rate, with adjustments for the type and term of the lease.
Lease payments included in the measurement of the lease liability comprise:
• Fixed payments, including in-substance fixed payments
• Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement
date
• Amounts expected to be payable under a residual value guarantee
• The exercise price under a purchase option that Spark is reasonably certain to exercise
• Lease payments in an optional renewal period if Spark is reasonably certain to exercise an extension option
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in
future lease payments arising from a change in an index or rate, if there is a change in Spark's estimate of the amount expected
to be payable under a residual value guarantee or if Spark changes its assessment of whether it will exercise a purchase or
extension option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use
asset or it is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
Spark has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have lease terms of
12 months or less and leases of low-value assets. Spark recognises the lease payments associated with these leases within
operating expenses on a straight-line basis over their lease terms.
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4.3 debt
Debt is initially recognised at fair value less attributable transaction costs. Subsequent to initial recognition, debt is classified and
measured at amortised cost plus, for hedged liabilities that are in a fair value hedging relationship, adjustments for fair value changes
attributable to the risk being hedged. Any difference between cost and redemption value (including fair value changes) is recognised in
the statement of profit or loss over the period of the borrowings, using the effective interest rate method.
20242023
$M$M
AS AT 30 JUNENOTEFACILITYCOUPON RATEMATURITY
Debt due within one year
Commercial paperVariable< 3 months 208 90
208 90
Supplier financing arrangements
1
Variable< 31/01/2029 21 9
21 9
Bank funding
Westpac New Zealand Limited
2
200 million NZDVariable30/11/2023 – 15
Commonwealth Bank of Australia
2
100 million NZDVariable30/11/2024 100 –
Bank of New Zealand100 million NZDVariable30/05/2025 85 –
185 15
Domestic notes
125 million NZD3.37%07/03/2024 – 122
– 122
Total debt due within one year4.4 414 236
Long-term debt
Supplier financing arrangements
1
Variable< 31/01/2029 49 –
49 –
Bank funding
Westpac New Zealand Limited
2
200 million NZDVariable30/11/2026 – –
Commonwealth Bank of Australia
2
100 million NZDVariable30/11/2025 – 100
MUFG Bank Ltd.
2
125 million NZDVariable30/11/2025 125 –
125 100
Domestic notes
125 million NZD3.94%07/09/2026 117 116
100 million NZD
3
4.37%29/09/2028 100 100
125 million NZD5.21%18/09/2029 124 –
175 million NZD5.45%18/09/2031 174 –
515 216
Foreign currency Medium Term Notes
Australian Medium Term Notes – 100 million AUD1.90%05/06/2026 102 97
Australian Medium Term Notes – 150 million AUD4.00%20/10/2027 156 154
Australian Medium Term Notes – 125 million AUD2.60%18/03/2030 116 112
Norwegian Medium Term Notes – 1 billion NOK
4
3.07%19/03/2029 142 137
516 500
Total long-term debt4.4 1,205 816
Total debt 1,619 1,052
1 With respect to arrangements with outstanding liabilities at 30 June 2024, including those entered into in prior years, financing providers have paid suppliers a total of
$124 million and Spark has made payments against these arrangements of $54 million, resulting in a closing liability of $70 million as at 30 June 2024. Amounts paid
under these arrangements are presented in the statement of cash flows within financing activities. (30 June 2023: financers have paid suppliers $30 million, payments
of $21 million have been made by Spark, resulting in a closing liability of $9 million).
2 These facilities are Sustainability-Linked Loans. Spark will receive lower interest rates if it achieves sustainability targets or pay higher rates on the loans if it falls short of
these targets.
3 This bond is a Sustainability-Linked Bond. The bond includes an interest rate step up depending on the achievement of a sustainability target as at 30 June 2026.
4 Norwegian krone.
135
Spark New Zealand Annual report Fy24
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NOTES TO THE FINANCIAL STATEMENTS: LIAbILITIES ANd EquIT y
4.3 debt (continued)
None of Spark's debt is secured and all debt ranks equally with other liabilities. There are no financial covenants over Spark's debt,
however, there are certain triggers in the event of default, as defined in the various debt agreements. There have been no events of default
over Spark's debt in the years ended 30 June 2024 and 30 June 2023.
The fair value of total debt based on market observable prices was $1,635 million compared to a carrying value of $1,619 million as at
30 June 2024 (30 June 2023: fair value of $1,063 million compared to a carrying value of $1,052 million).
4.4 Capital risk management
Spark manages its capital considering shareholders' interests, the value of Spark’s assets and the Company’s credit rating. The Board is
committed to the Company maintaining an investment grade rating and its capital management policies are designed to ensure this
objective is met. As part of this commitment, and in line with credit rating metrics, Spark currently manages its debt levels to ensure that
the ratio of adjusted net debt at hedged rates (being inclusive of associated derivatives and leases) to adjusted EBITDAI does not exceed
1.7 times on a long-run basis. At 30 June 2024, Spark's net debt to EBITDAI (including lease liabilities) ratio was 2.1x, temporarily
exceeding the 1.7x metric. Management remains committed to ensuring net debt to EBITDAI does not exceed 1.7x on a long-run basis.
As at 30 June 2024, the Company’s S&P Global credit ratings for long-term and short-term debt was, respectively, A- and A-2 with outlook
stable (30 June 2023: same).
Net debt
A reconciliation of net debt at hedged rates and net debt at carrying value is provided below:
20242023
AS AT 30 JUNE$M$M
Cash (59) (100)
Debt due within one year at face value 418 240
Long-term debt at face value 1,267 885
Net debt at face value 1,626 1,025
To retranslate debt balances at swap rates where hedged by currency swaps 10 14
Net debt at hedged rates
1
1,636 1,039
Non-cash adjustments
Impact of fair value hedge adjustments
2
911
Unamortised discount (7) (1)
Net debt at carrying value 1,638 1,049
1 Net debt at hedged rates is the value of hedged cash flows due to arise on maturity and includes an adjustment to state the principal of foreign currency medium term
notes at the hedged currency rate.
2 Fair value hedge adjustments arise on domestic notes in fair value hedges and foreign currency medium term notes in dual fair value and cash flow hedges. These have
no impact on the cash flows to arise on maturity.
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4.4 Capital risk management (continued)
A reconciliation of movements in net debt is provided below:
CASH FLOWSNON–CASH MOVEMENTS
YEAR ENDED 30 JUNE 2024
AS AT 1 JULY
2023
$M
PROCEEDS
$M
PAYMENTS
$M
INTEREST
AMORTISATION
$M
FAIR VALUE
CHANGES
$M
FOREIGN
EXCHANGE
MOVEMENT
$M
OTHER
$M
AS AT 30 JUNE
2024
$M
Cash(100)(19,625)19,666––––(59)
Debt due within one year 2362,101(1,947)13–20414
Long-term debt81613,729(13,373)–104191,205
Derivatives97–––(14)(4)(1)78
Net debt at carrying value 1,049 (3,795) 4,346 1 (1) – 38 1,638
CASH FLOWSNON–CASH MOVEMENTS
YEAR ENDED 30 JUNE 2023
AS AT 1 JULY
2022
$M
PROCEEDS
$M
PAYMENTS
$M
INTEREST
AMORTISATION
$M
FAIR VALUE
CHANGES
$M
FOREIGN
EXCHANGE
MOVEMENT
$M
OTHER
$M
AS AT 30 JUNE
2023
$M
Cash(71)(13,908)13,879––––(100)
Debt due within one year293307(496)1––131236
Long-term debt1,2338,864(9,138)1(3)(17)(124)816
Derivatives76–––417–97
Net debt at carrying value 1,531 (4,737) 4,245 2 1 – 7 1,049
4.5 Equity and dividends
Share capital
Movements in the Company’s issued ordinary shares were as follows:
20242023
YEAR ENDED 30 JUNENUMBERNUMBER
Shares at the beginning of the year 1,845,000,906 1,871,587,475
Cancelled shares acquired under the on-market share buy-back programme (31,803,206) (28,197,250)
Dividend reinvestment plan – –
Issuance of shares under share schemes and other transfers 957,780 1,610,681
Shares at the end of the year 1,814,155,480 1,845,000,906
All issued shares are fully paid and have no par value. Shareholders of ordinary shares have the right to vote at any general meeting of the Company.
Dividends
1
20242023
YEAR ENDED 30 JUNE
CENTS PER
SHARE$M
CENTS PER
SHARE$M
Previous year second half-year dividend 13.5 249 12.5 234
First half-year dividend 13.5 245 13.5 252
Total dividends in the year 27.0 494 26.0 486
Second half-year dividend declared subsequent to balance date not provided for 14.0 254 13.5 249
1 Dividends paid disclosed above exclude supplementary dividends. For the year ended 30 June 2024, supplementary dividends paid were $48 million (30 June 2023:
$50 million).
137
Spark New Zealand Annual report Fy24
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NOTES TO THE FINANCIAL STATEMENTS: LIAbILITIES ANd EquIT y
4.5 Equity and dividends (continued)
Events after balance date
On 22 August 2024 the Board approved the payment of a second-half ordinary dividend of 14.0 cents per share or
approximately $254 million. This ordinary dividend will be 100% imputed. In addition, supplementary dividends totalling
approximately $25 million will be payable to shareholders who are not resident in New Zealand. In accordance with the Income
Tax Act 2007, Spark will receive a tax credit from Inland Revenue equivalent to the amount of supplementary dividends paid.
H1 FY24 H2 FY24
ORDINARY DIVIDENDS ORDINARY DIVIDENDS
Dividends declared
Ordinary shares 13.5 cents 14.0 cents
American Depositary Shares
1
45.59 US cents 42.39 US cents
Imputation
Percentage imputed100%100%
Imputation credits per share 5.2500 cents 5.4444 cents
Supplementary dividend per share
2
2.3824 cents 2.4706 cents
‘Ex’ dividend dates
New Zealand Stock Exchange21/03/2412/09/24
Australian Securities Exchange21/03/2412/09/24
American Depositary Shares 21/03/2413/09/24
Record dates
New Zealand Stock Exchange22/03/2413/09/24
Australian Securities Exchange22/03/2413/09/24
American Depositary Shares 22/03/2413/09/24
Payment dates
New Zealand and Australia 5/04/244/10/24
American Depositary Shares 15/04/2414/10/24
1 Spark’s American Depositary Shares, each representing five ordinary Spark shares and evidenced by American Depositary Receipts (ADRs), are traded over-the-counter
in the United States. This is a Level 1 ADR programme that is sponsored by Bank of New York Mellon. For H2 FY24 these are based on the exchange rate at 16 August
2024 of NZ$1 to US$0.6055 and a ratio of five ordinary shares per one American Depositary Share. The actual exchange rate used for conversion is determined in the
week prior to payment when the Bank of New York Mellon performs the physical currency conversion.
2 Supplementary dividends are paid to non-resident shareholders.
Dividend Reinvestment Plan
The dividend reinvestment plan has been reinstated for the H2 FY24 dividend after being suspended in 2022. Shares issued under the
dividend reinvestment plan will be issued at a 3% discount to the prevailing market price around the time of issue. The last date for
shareholders to elect to participate in the dividend reinvestment plan for the H2 FY24 dividend is 16 September 2024. Spark’s Dividend
Reinvestment Plan Offer Document and Participation Notice can be found on Spark’s Investor Centre Website: investors.sparknz.co.nz.
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Section 5 Financial instruments
5.1 derivatives and hedge accounting
20242023
DERIVATIVE
ASSETS
DERIVATIVE
LIABILITIES
DERIVATIVE
ASSETS
DERIVATIVE
LIABILITIES
AS AT 30 JUNE$M$M$M$M
Designated in a cash flow hedge26 – 27 (1)
Designated in a fair value hedge– (10)– (13)
Designated in a dual fair value and cash flow hedge– (68)– (84)
Other– – 1 –
26 (78)28 (98)
Short-term derivatives1 – 1 (4)
Long-term derivatives25 (78)27 (94)
Spark’s derivatives are held at fair value, calculated using discounted cash flow models and observable market rates of interest and foreign
exchange prices. This represents a level two measurement under the fair value measurement hierarchy, being inputs other than quoted
prices included within level one that are observable for the asset or liability. As at 30 June 2024 and 30 June 2023 no derivative financial
assets or derivative financial liabilities have been offset in the statement of financial position. The potential for offsetting of any derivative
financial instruments is $11 million (30 June 2023: $13 million), which if applied would result in a reduction of derivative assets and
derivative liabilities.
Hedge accounting
Derivatives are hedge accounted when they are designated into an effective hedge relationship as a hedging instrument. The nature and
the effectiveness of the hedge accounting relationship will determine where the gains and losses on remeasurement are recognised.
Derivatives are designated as:
• Fair value hedges, where the derivative is used to manage interest rate risk in relation to debt
• Cash flow hedges, where the derivative is used to manage the variability in cash flows of highly probable forecast transactions
• Dual fair value and cash flow hedges, where the derivative is used to hedge the interest rate risk on foreign debt and the variability in
cash flows due to movements in foreign exchange rates.
At inception, each hedge relationship is formalised in hedge documentation. Hedge accounting is discontinued when the hedge
instrument expires or is sold, terminated, exercised or no longer qualifies for hedge accounting. Spark determines the existence of an
economic relationship between the hedging instrument and the hedged item based on the currency, amount and timing of respective
cash flows, reference interest rates, tenors (time to maturity), repricing dates, maturities and notional amounts. Spark assesses whether the
derivative designated in each hedging relationship is expected to be, and has been, effective in offsetting the changes in cash flows of the
hedged item using the hypothetical derivative method.
Derivatives in hedge relationships are designated based on a hedge ratio of 1:1. In these hedge relationships the main source of
ineffectiveness is the effect of the counterparty and Spark's own credit risk on the fair value of the derivatives, which is not reflected in the
change in the fair value of the hedged item attributable to changes in foreign exchange and interest rates.
Cash flow hedges
Cross-currency interest rate swaps and interest rate swaps are jointly designated in cash flow hedges to manage interest and foreign
exchange rate risk on debt. The hedged cash flows will affect Spark's statement of profit or loss and other comprehensive income as
interest and principal amounts are repaid over the remaining term of the debt.
Interest rate swaps are designated in cash flow hedges to manage the interest rate exposure of highly probable forecast variable rate
debt and aggregate variable interest rate exposures created by swapping local or foreign currency floating-rate (variable) debt into
fixed-rate debt.
Spark also enters into forward exchange contracts to hedge forecast foreign currency purchases, the majority expected to be made within
12 months. The related cash flows are recognised in the statement of profit or loss and other comprehensive income over this period.
139
Spark New Zealand Annual report Fy24
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NOTES TO THE FINANCIAL STATEMENTS: FINANCIAL INSTruMENTS
5.1 derivatives and hedge accounting (continued)
A reconciliation of movements in the hedge reserves, net of tax, is outlined below:
20242023
YEAR ENDED 30 JUNE$M$M
Opening balance as at 1 July 11 8
Loss recognised in other comprehensive income (9) (4)
Amount reclassified to finance expense 9 5
Amount reclassified to property, plant and equipment/intangible assets and inventory 1 1
Total movements to other comprehensive income 1 2
Other transfers – 1
Closing balance as at 30 June 12 11
Included within the closing balance at 30 June 2024 is $4 million relating to the cost of hedging reserve (30 June 2023: $4 million).
The movement in the hedge reserves includes $1 million for forward foreign exchange contracts (30 June 2023: $8 million in the change
in fair value of interest rate swaps less $2 million associated deferred tax and $3 million for forward foreign exchange contracts ).
Fair value hedges
Interest rate swaps are designated in a fair value hedge to manage interest rate risk in relation to debt. The gain or loss from remeasuring
the interest rate swaps and debt at fair value is recognised in the statement of profit or loss and other comprehensive income. During the
year ended 30 June 2024, there has been no material ineffectiveness on fair value hedging relationships (30 June 2023: no material
ineffectiveness) and as a result, no material changes have been recognised in profit and loss.
Dual fair value and cash flow hedges
Spark has Australian dollar (AUD) and Norwegian krone (NOK) denominated debt. As part of Spark's risk management policy, cross-
currency interest rate swaps (CCIRSs) are entered into to convert all of the proceeds of the debt issuances to New Zealand dollars and
convert the foreign currency fixed rate of the debt issuance to a New Zealand dollar floating rate. To mitigate profit or loss volatility, the
CCIRSs were designated into a dual fair value and cash flow hedge relationship. The foreign currency basis element of the CCIRSs are
excluded from the designation and are separately recognised in other comprehensive income in a cost of hedging reserve.
For fair value hedges, the gain or loss from remeasuring the CCIRSs and debt at fair value is recognised in the statement of profit or loss
and other comprehensive income. For cash flow hedges, gains or losses deferred in the cash flow hedge reserve will be reclassified to
Spark's statement of profit or loss and other comprehensive income as interest and principal amounts are repaid over the remaining term
of the debt.
The change in fair value of the hedging instruments relating to the foreign currency basis component of the CCIRSs are recognised in
other comprehensive income and accumulated in a cost of hedging equity reserve. Subsequently, the cumulative amount is transferred to
profit or loss at the same time as the hedged item impacts profit or loss.
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5.1 derivatives and hedge accounting (continued)
The details of the hedging instruments are as follows:
NOTIONAL
AMOUNT OF
HEDGING
INSTRUMENT
STATEMENT
OF FINANCIAL
POSITION
LINE ITEM
CARRYING AMOUNT OF
THE HEDGING INSTRUMENT
LIFE–TO–DATE
CHANGE–IN–
VALUE USED FOR
CALCULATING
HEDGE
INEFFECTIVE–
NESSASSETSLIABILITIES
AS AT 30 JUNE 2024$M$M$M
Cash flow hedges
Interest rate swaps NZD 1b Derivatives 25 – 25
Forward foreign exchange contracts NZD 96m Derivatives 1 – 1
Fair value hedges
Interest rate swaps NZD 425m Derivatives – (10) (10)
Fair value and cash flow hedges
Cross-currency swaps AUD 150m Derivatives – (11) (11)
Cross-currency swap NOK 1b Derivatives – (32) (32)
Cross-currency swaps AUD 125m Derivatives – (19) (19)
Cross-currency swaps AUD 100m Derivatives – (6) (6)
26 (78) (52)
NOTIONAL
AMOUNT OF
HEDGING
INSTRUMENT
STATEMENT
OF FINANCIAL
POSITION
LINE ITEM
CARRYING AMOUNT OF
THE HEDGING INSTRUMENT
LIFE–TO–DATE
CHANGE–IN–
VALUE USED FOR
CALCULATING
HEDGE
INEFFECTIVE–
NESSASSETSLIABILITIES
AS AT 30 JUNE 2023$M$M$M
Cash flow hedges
Interest rate swaps NZD 620m Derivatives 26 – 26
Forward foreign exchange contracts NZD 77m Derivatives 1 (1) –
Fair value hedges
Interest rate swaps NZD 250m Derivatives – (13) (13)
Fair value and cash flow hedges
Cross-currency swaps AUD 150m Derivatives – (14) (14)
Cross-currency swap NOK 1b Derivatives – (37) (37)
Cross-currency swaps AUD 125m Derivatives – (23) (23)
Cross-currency swaps AUD 100m Derivatives – (10) (10)
27 (98) (71)
141
Spark New Zealand Annual report Fy24
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NOTES TO THE FINANCIAL STATEMENTS: FINANCIAL INSTruMENTS
5.1 derivatives and hedge accounting (continued)
The details of hedged items are as follows:
STATEMENT OF
FINANCIAL POSITION
LINE ITEM
CARRYING AMOUNT OF
THE HEDGED ITEM
ACCUMULATED AMOUNT OF FAIR
VALUE HEDGE ADJUSTMENTS ON
THE HEDGED ITEM INCLUDED IN
THE CARRYING AMOUNT OF THE
HEDGED ITEM
LIFE–TO–DATE
CHANGE–IN–
VALUE USED FOR
CALCULATING
HEDGE
INEFFECTIVE–
NESSASSETSLIABILITIESASSETSLIABILITIES
AS AT 30 JUNE 2024$M$M$M$M$M
Cash flow hedges
Aggregated variable interest rate exposure – – – – – (25)
Committed foreign exchange transactions – – – – – (1)
Fair value hedges
Domestic Notes Long–term debt – (415) 10 – 10
Fair value and cash flow hedges
Australian Medium Term Note (AUD 100m) Long–term debt – (102) 8 – 6
Australian Medium Term Note (AUD 150m) Long–term debt – (156) 7 – 11
Australian Medium Term Note (AUD 125m) Long–term debt – (116) 21 – 19
Norwegian Medium Term Note (NOK 1b) Long–term debt – (142) 12 – 32
– (931) 58 – 52
STATEMENT OF
FINANCIAL POSITION
LINE ITEM
CARRYING AMOUNT OF
THE HEDGED ITEM
ACCUMULATED AMOUNT OF
FAIR VALUE HEDGE ADJUSTMENTS
ON THE HEDGED ITEM INCLUDED
IN THE CARRYING AMOUNT OF
THE HEDGED ITEM
LIFE–TO–DATE
CHANGE–IN–
VALUE USED FOR
CALCULATING
HEDGE
INEFFECTIVE–
NESSASSETSLIABILITIESASSETSLIABILITIES
AS AT 30 JUNE 2023$M$M$M$M$M$M
Cash flow hedges
Aggregated variable interest rate exposure – – – – – (26)
Fair value hedges
Domestic Notes Long–term debt
and debt due
within one year
– (238) 13 – 13
Fair value and cash flow hedges
Australian Medium Term Note (AUD 100m) Long–term debt – (97) 11 – 10
Australian Medium Term Note (AUD 150m) Long–term debt – (154) 9 – 14
Australian Medium Term Note (AUD 125m) Long–term debt – (112) 23 – 23
Norwegian Medium Term Note (NOK 1b) Long–term debt – (137) 15 – 37
– (738) 71 – 71
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5.2 Financial risk management
a) Market risk
Spark is exposed to market risk primarily from changes in foreign
currency exchange rates and interest rates. Spark employs risk
management strategies, including the use of derivative financial
instruments, to manage these exposures through a Board-
approved treasury policy, which provides the framework within
which treasury-related activities are conducted.
Spark manages the concentration of exposures using well-defined
market and credit risk limits and through timely reporting to senior
management. All contracts have been entered into with high-credit
quality financial institutions. The risk associated with these
transactions is that the fair value or cash flows of financial
instruments will change due to movements in market rates or, in
the case of default by a counterparty, through the cost of
replacement at the current market rates.
Currency risk
Nature of the risk
Currency risk is the risk that eventual New Zealand dollar net cash
flows from transactions undertaken by Spark will be adversely
affected by changes in foreign currency exchange rates.
Exposure and risk management
Spark’s total net exposure (from non-derivative financial
instruments) to foreign currency as at 30 June 2024 is $565 million
(30 June 2023: $553 million). This includes $154 million long-term
debt principal denominated in NOK (30 June 2023: $152 million)
and $411 million long-term debt principal denominated in AUD
(30 June 2023: $408 million). The remaining exposure is primarily
trade payables and other receivables denominated in United
States dollars (USD).
Spark manages currency risk arising from foreign currency debt
through hedging. Spark’s long-term debt issued in NOK and AUD
is fully hedged using cross-currency interest rate swaps to convert
foreign currency cashflows into floating-rate New Zealand dollar
exposures.
Currency risk from capital and operational expenditure in foreign
currencies (and related trade payables) has been substantially
hedged by entering into forward exchange contracts.
Sensitivity to foreign currency movements
As at 30 June 2024, a movement of 10% in the New Zealand dollar
would (after hedging) impact the statement of profit or loss by less
than $1 million (30 June 2023: less than $1 million) and the
statement of changes in equity by less than $13 million (30 June
2023: less than $11 million). This analysis assumes a movement in
the New Zealand dollar across all currencies and only includes the
effect of foreign exchange movements on monetary financial
instruments.
Interest rate risk
Nature of the risk
Interest rate risk is the risk that fluctuations in interest rates impact
Spark’s cash flows, financial performance or the fair value of its
holdings of financial instruments.
Exposure and risk management
Spark is exposed to interest rate risk from its financing activities,
which primarily include loans and debt issuance either at fixed or
floating rates. For floating-rate exposures Spark employs the use of
derivative financial instruments to reduce its exposure to
fluctuations in interest rates, with the objective to minimise the cost
of net borrowings and to minimise the impact of interest rate
movements on interest expense and net earnings.
Cross-currency interest rate swaps are used to convert foreign
currency debt into floating-rate New Zealand dollar exposures.
Interest rate swaps are used to convert floating-rate exposures into
fixed-rate exposures and vice versa. As a result, Spark’s interest rate
exposure is limited to New Zealand only.
Sensitivity to interest rate movements
As at 30 June 2024, a movement in interest rates of 25 basis points
would (after hedging) impact the statement of profit or loss by less
than $1 million (30 June 2023: less than $1 million) and the
statement of changes in equity by less than $5 million (30 June
2023: less than $1 million).
143
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NOTES TO THE FINANCIAL STATEMENTS: FINANCIAL INSTruMENTS
5.2 Financial risk management (continued)
b) Credit risk
Nature of the risk
Credit risk arises in the normal course of Spark’s business on cash,
receivables and derivative financial instruments if a counterparty
fails to meet its contractual obligations.
Exposure and risk management
Spark is exposed to credit risk if customers and counterparties fail
to make payments in respect of:
• Payment of trade and other receivables as they fall due; and
• Contractual cash flows of derivative assets held at fair value.
Spark’s assets subject to credit risk as at 30 June 2024 were
$1,314 million (30 June 2023: $1,299 million).
Spark considers the probability of default upon initial recognition
of cash, receivables and derivative assets and whether there has
been a significant and ongoing increase in credit risk at the end of
each reporting period. To assess this Spark compares the risk of
default occurring on these assets at the reporting date, with the risk
of default at the date of initial recognition. Available, reasonable
and supportive forward-looking information is considered,
especially the following indicators:
• External credit rating (as far as available)
• Actual or expected significant adverse changes in business,
financial or economic conditions that are expected to cause a
significant change to the customer or counterparty's ability to
meet their obligations
• Significant changes in the value of the collateral supporting the
obligation or in the quality of third-party guarantees or credit
enhancements.
Spark considers a financial asset to have low credit risk when the
asset is held with a high-credit quality financial institution or with a
party that has a strong financial position with no past due amounts.
Spark manages its exposure using a credit policy that includes
limits on exposures with significant counterparties that have been
set and approved by the Board and are monitored on a regular
basis. Spark places its cash and derivative financial instruments
with high-credit quality financial institutions and does not have
significant concentration of risk with any single financial institution.
Spark has significant shareholder loans and finance lease
receivables which are deemed low credit risk. Concentration of
credit risk for trade and other receivables is limited because of
Spark’s large customer base.
Spark has certain derivatives and debt arrangements that are
subject to bilateral credit support agreements that require Spark or
its counterparties to post collateral funds to support the value of
certain derivatives subject to certain agreed threshold amounts. As
at 30 June 2024, no collateral was posted (30 June 2023: nil).
Letters of credit and guarantees may be held over some receivable
amounts. The carrying amounts of financial assets represent the
maximum credit exposure.
c) Liquidity risk
Nature of the risk
Liquidity risk represents Spark's ability to meet its contractual
obligations as they fall due.
Exposure and risk management
Spark uses cash and derivative financial instruments to manage
liquidity and evaluates its liquidity requirements on an ongoing
basis. In general, Spark generates sufficient cash flows from its
operating activities to meet its financial liabilities. As at 30 June
2024, Spark had current assets of $1,070 million and current
liabilities of $1,060 million (30 June 2023: current assets of
$1,079 million and current liabilities of $850 million). Positive
operating cash flows enable working capital to be managed to
meet short-term liabilities as they fall due.
In the event of any shortfalls Spark has the following financing
programmes:
• An undrawn committed standby facility of $200 million with a
number of creditworthy banks (30 June 2023: $200 million)
• Committed bank facilities of $525 million with $310 million
drawn as at 30 June 2024 (30 June 2023: $425 million facilities
with $115 million drawn)
• Undrawn committed bank overdraft facilities of $15 million with
New Zealand banks (30 June 2023: $15 million).
There are no compensating balance requirements associated with
these facilities.
Spark's liquidity policy is to maintain unutilised committed facilities
of at least 110% of the next 12 months’ forecast peak net funding
requirements, including coverage for short-term capital market
issues. Spark's funding policy requires that no more than 30% of
long-term debt (including undrawn and standby facilities) can
mature within the next 12 months, which has been met.
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5.2 Financial risk management (continued)
c) Liquidity risk (continued)
Maturity analysis
The following table provides an analysis of Spark's remaining contractual cash flows relating to financial liabilities. Contractual cash flows
include contractual undiscounted principal and interest payments.
CARRYING
AMOUNT
CONTRACTUAL
CASH FLOWS0–6 MONTHS6–12 MONTHS1–2 YEARS2–5 YEARS5+ YEARS
AS AT 30 JUNE 2024$M$M$M$M$M$M$M
Non-derivative financial liabilities
Trade accounts payable and accruals299 299 299 – – – –
Sale and leaseback liabilities 60 66 19 15 23 9 –
Lease liabilities 742 1,025 65 63 118 283 496
Short and long-term debt 1,619 1,911 554 42 185 666 464
Derivative financial liabilities
Interest rate swaps (net settled) 10 (10) (5) (3) (1) (1) –
Cross-currency interest rate swaps (gross
settled)
Inflows – (636) (6) (11) (126) (353) (140)
Outflows 68 717 21 19 142 395 140
Forward exchange contracts (gross settled)
Inflows – (11) (11) – – – –
Outflows – 11 11 – – – –
2,798 3,372 947 125 341 999 960
CARRYING
AMOUNT
CONTRACTUAL
CASH FLOWS0–6 MONTHS6–12 MONTHS1–2 YEARS2–5 YEARS5+ YEARS
AS AT 30 JUNE 2023$M$M$M$M$M$M$M
Non-derivative financial liabilities
Trade accounts payable and accruals 290 290 290 – – – –
Sale and leaseback liabilities 75 76 18 17 20 21 –
Lease liabilities 778 1,224 57 56 104 274 733
Short and long-term debt 1,052 1,285 227 150 36 469 403
Derivative financial liabilities
Interest rate swaps (net settled) 13 (14) (3) (3) (5) (2) (1)
Cross-currency interest rate swaps (gross
settled)
Inflows – (650) (6) (11) (17) (315) (301)
Outflows 84 755 22 21 38 351 323
Forward exchange contracts (gross settled)
Inflows – (46) (46) – – – –
Outflows 1 46 46 – – – –
2,293 2,966 605 230 176 798 1,157
145
Spark New Zealand Annual report Fy24
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NOTES TO THE FINANCIAL STATEMENTS: OTHEr INFOrMATION
Section 6 Other information
6.1 Income tax
Income tax expense
The income tax expense is determined as follows:
20242023
YEAR ENDED 30 JUNE$M$M
Statement of profit or loss and other comprehensive income
Current income tax
Current year income tax expense (excluding adjusting items) (148) (209)
Current year income tax expense on adjusting items
1
– 31
Adjustments in respect of prior periods (10) (3)
Deferred income tax
Depreciation, provisions, accruals, tax losses and other adjustments (excluding adjusting items) (42) 24
Depreciation, provisions, accruals, tax losses and other adjustments on adjusting items
2
– 137
Adjustments in respect of prior periods 2 3
Income tax expense recognised in the statement of profit or loss and other comprehensive income (198) (17)
1 The comparative includes $26 million for the costs associated with assets disposed of in the sale of Connexa, $2 million for the unwind of the deferred tax asset
explained below for the Connexa transaction and $2 million of current tax for the Spark Sport provision.
2 Due to the difference between the right-of-use assets and lease liabilities recognised at the date of the sale of Connexa in the prior year, a deferred tax asset of $126
million was recognised in FY23, with a corresponding adjustment (reduction) to tax expense. The balance of the deferred tax asset at 30 June 2023 was $124 million.
The Spark Sport provision had a deferred tax impact at 30 June 2023 of $12 million. The current tax impact of adjusting items of $31 million together with the deferred
income tax impact of $137 million is $168 million (see note 2.5). The total tax expense on an adjusted (non-GAAP) basis for FY23 was $185 million.
Reconciliation of income tax expense
20242023
YEAR ENDED 30 JUNE$M$M
Net earnings before income tax 514 1,152
Tax at current rate of 28% (144) (323)
Adjustments to taxation
Non-assessable gains on sale
1
– 317
Other non-assessable items (11) (6)
Tax effects of non-New Zealand profits (9) (5)
Tax effects of tax depreciation on buildings (26) –
Adjustments in respect of prior periods (8) –
Total income tax expense
2
(198) (17)
1 In the prior year this comprised the tax effect of the $583 million net gain on sale of Connexa, being $163 million, the $126 million deferred tax impact described above
and the $26 million current tax impact of the costs associated with the assets disposed of and other adjustments of $2 million.
2 The comparative includes the tax effect of the net gain on sale of Connexa and the Spark Sport provision, being a credit to tax of $168 million (see note 2.5). The total
tax expense on an adjusted (non-GAAP) basis for FY23 was $185 million.
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6.1 Income tax (continued)
Tax depreciation on buildings
As announced as part of their election campaign, the Government enacted legislation to remove the tax depreciation on commercial and
industrial buildings, effective from income tax years on or after 1 April 2024. This reduces the tax base of the building assets back to nil
because depreciation can no longer be claimed on these assets from FY25 onwards. As deferred tax is calculated on the difference
between the carrying amount of the asset and its tax base, the decrease of the tax base has reduced Spark’s deferred tax asset by
$26 million. This also results in a one-off increase in tax expense of $26 million.
Pillar Two legislation
The OECD model GloBE rules, first released by the OECD in December 2021, are intended to ensure that large multinational enterprises
(MNE) with annual revenue of €750m or more pay a minimum level of tax (based on an effective tax rate of 15%) on income arising in each
country where they operate.
Spark is an ‘in-scope‘ MNE under the GloBE rules due to its scale in New Zealand (where its Ultimate Parent Entity (UPE) is located)
combined with its small international footprint of constituent entities (CE).
The rules are complex with different adoption and implementation dates applying in different countries meaning the transformation of the
international tax environment will continue unabated for some time. Spark has undertaken an initial impact assessment and has
determined that the rules do not apply in relation to its financial year ended 30 June 2024. Spark expects GloBE reporting obligations to
apply to its 30 June 2025 financial year (in respect of its CE’s in Australia and the United Kingdom). Additional GloBE reporting is expected
to commence in other regions in relation to Spark’s 2026 financial year. However, no top up taxes are expected to be paid due to the
availability of certain temporary safe harbours that apply through to 2028.
Deferred tax assets and liabilities
Deferred tax assets and liabilities are offset in the statement of financial position and presented as a net deferred tax asset. The movement
in the deferred tax assets and liabilities is provided below:
FIXED ASSETSLEASES
PROVISIONS &
ACCRUALSOTHERTOTAL
ASSETS/(LIABILITIES)$M$M$M$M$M
Opening balance as at 1 July 2023 (62) 123 21 (27) 55
Amounts recognised in the statement of profit or loss and other
comprehensive income
Relating to the current period (26) (16) (16) 16 (42)
Adjustments in respect of prior periods – (1) 6 (3) 2
Amounts recognised in equity relating to the current year – – – 2 2
Closing balance as at 30 June 2024 (88) 106 11 (12) 17
FIXED ASSETSLEASES
PROVISIONS &
ACCRUALSOTHERTOTAL
ASSETS/(LIABILITIES)$M$M$M$M$M
Opening balance as at 1 July 2022 (58) (3) (7) (40) (108)
Amounts recognised in the statement of profit or loss and other
comprehensive income
Relating to the current period
1
9 123 14 15 161
Adjustments in respect of prior periods
2
(13) 3 14 (1) 3
Amounts recognised in equity relating to the current year – – – (1) (1)
Closing balance as at 30 June 2023 (62) 123 21 (27) 55
1 Amounts relating to the current period for the comparative include timing differences for the Connexa lease and the Spark Sport provision.
2 In the prior year, adjustments in respect of prior periods reflect changes in the prior year tax balances used for financial reporting and tax return completion, in the
current year these primarily relate to reclassifications between categories to align with the current year's presentation.
147
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NOTES TO THE FINANCIAL STATEMENTS: OTHEr INFOrMATION
6.1 Income tax (continued)
Spark has not recognised the tax effect of accumulated unrestricted losses and temporary differences amounting to AU$461 million at
30 June 2024 based on the relevant corporation tax rate of Australia (30 June 2023: AU$461 million). These losses and temporary
differences may be available to be carried forward to offset against future taxable income. However, utilisation is contingent on the
production of taxable profits over a significant period of time and is subject to compliance with the relevant taxation authority
requirements.
Spark has a negative 67 million imputation credit account balance as at 30 June 2024 due to the timing of dividend and tax payments
(30 June 2023: negative 32 million). The imputation credit account had a positive balance as at 31 March 2024.
6.2 Employee share schemes
Spark operates a share-based compensation plan that is equity settled as outlined below.
Share option scheme
From September 2019, members of the Leadership Squad (including the CEO) and selected senior leaders have been granted options
under the new Spark Long-Term Incentive (LTI) scheme. Under the scheme participants are granted options at the start of the three-
year vesting period. The number of options granted equals the gross LTI value divided by the volume weighted average price of Spark
New Zealand shares for the 20 days prior to the grant date. Subject to satisfaction of the performance hurdle and continued employment,
at vesting each option converts to a Spark share based on a zero exercise price. If the target is not met (or the participant leaves Spark
employment) then the options simply lapse, with exceptions for redundancy, death and disablement. Spark enables participants to meet
tax obligations through PAYE by authorising the sale of a sufficient number of shares on their behalf.
Vesting of the LTI grants are contingent on participants’ continued employment with Spark for three years from grant date (subject to
exceptions) and the Company achieving the specified performance hurdles. The performance hurdle targets are set annually and for
grants issued in 2020 and 2021 this was the Company’s cost of equity plus 1% compounding annually. For grants issued in 2022 and 2023,
75% of the allocated shares will vest based on the performance hurdle target of the Company's cost of equity plus 1.5% compounding
annually and 25% will vest based on performance against environmental and diversity targets. Options with an intrinsic value of $13
million (30 June 2023: $15 million) remain outstanding at 30 June 2024 and have a weighted average remaining life of 1.3 years (30 June
2023: 1.3 years).
Information regarding options awarded under this scheme is as follows:
20242023
OPTIONSOPTIONS
NUMBER OF
OPTIONS
NUMBER OF
OPTIONS
Opening balance as at 1 July 2,926,064 2,840,293
Granted 1,313,428 1,144,179
Vested – (964,574)
Lapsed (1,018,509) (93,834)
Closing balance as at 30 June 3,220,983 2,926,064
Percentage of total ordinary shares0.18%0.16%
The fair value of the employee services received in exchange for the grant of equity instruments is recognised as an expense, with a
corresponding entry in equity. The total charge recognised for this scheme for the year ended 30 June 2024 was $1.6 million (30 June
2023: $1.4 million). As at 30 June 2024, $2.5 million of share scheme awards remain unvested and not expensed (30 June 2023: $2.1
million). This expense, measured at its fair value based on a valuation model, will be recognised over the remaining vesting period of the
awards. On 3 October 2023 the options granted in September 2020 lapsed.
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6.3 related party transactions
Related parties of Spark include the associate and joint venture companies listed in note 3.3 and key management personnel detailed below.
Interest of directors in certain transactions
A number of the Company's directors are also directors of other companies and any transactions undertaken with these entities have been
entered into on a commercial basis.
Transactions with associate and joint venture companies
Spark's transactions with associates and joint ventures include the following:
• Spark provided network operations and management services to Southern Cross in respect of its operations in New Zealand
• Spark made payments to Southern Cross in connection with capacity it has purchased on Southern Cross’ network
• Spark made payments to Southern Cross for operational expenditure relating to cable maintenance
• Southern Cross fully repaid the shareholder loan and returned capital to Spark through a capital reduction
• Spark made payments to Adroit Holdings Limited for operational expenditure relating to environmental IoT services and hardware and
received payments for IoT warehousing until the full acquisition of the entity on 19 October 2023
• Spark received revenue from Rural Connectivity Group for the sale of mobile backhaul equipment
• Spark received payments from Hourua Limited for milestones delivered for the Public Safety Network and for use of Spark's corporate
office space
• Spark made payments to Connexa for access to mobile towers, this includes lease and operating charges. Spark also received payments
from Connexa for transition services, rental recovery, maintenance, site build and interest on shareholder loans.
Balances and amounts in respect of these transactions with associate and joint venture companies excluding Connexa are set out in the
table below:
20242023
AS AT AND FOR THE YEAR ENDED 30 JUNE$M$M
Revenues 18 7
Expenses (11) (14)
Capacity acquired and other capital expenditure
1
(10) (18)
Receivables 3 11
Payables– (4)
1 As at 30 June 2024, Spark has committed to purchases of $22 million for cable capacity from Southern Cross (30 June 2023: $22 million).
Given the significant nature of the balances and transactions with Connexa, these are separately disclosed below:
20242023
AS AT AND FOR THE YEAR ENDED 30 JUNE$M$M
Revenues
1
28 14
Expenses (15) (9)
Receivables
2
172 156
Lease liabilities
3
(447) (482)
Revenue billed in advance(4)–
1 Including interest income on shareholder loans.
2 Receivables include shareholder loans to Connexa, including one non-interest bearing loan, and one interest bearing loan set at a market rate at the time of drawdown.
3 Related party lease liabilities have an initial term of 15 years with options for right of renewal which have not been included in the measurement of the lease liability.
Payments made for related party lease liabilities in the year were $47 million (30 June 2023: $28 million).
149
Spark New Zealand Annual report Fy24
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NOTES TO THE FINANCIAL STATEMENTS: OTHEr INFOrMATION
6.3 related party transactions (continued)
Key management personnel compensation
20242023
YEAR ENDED 30 JUNE$’000$’000
Directors’ remuneration
1
1,371 1,473
Salary and other short–term benefits 6,575 7,509
Share–based compensation 784 784
8,730 9,766
1 Excludes Chief Executive remuneration.
The table above includes remuneration of the Chief Executive and the other members of the Leadership Squad, including amounts paid
to members of the Leadership Squad who left during the year ended 30 June or were in acting Leadership Squad positions. Like other
Spark employees, members of the Leadership Squad also receive product and service concessions. In addition, where members of the
Leadership Squad are KiwiSaver members, they receive contributions towards their KiwiSaver schemes.
6.4 Subsidiaries
Subsidiaries are all entities over which Spark has control. The significant subsidiary companies of Spark and their activities are as follows:
NAMECOUNTRYOWNERSHIPPRINCIPAL ACTIVITY
Computer Concepts LimitedNew Zealand100%IT infrastructure and business cloud services
Digital Island LimitedNew Zealand100%Business telecommunications provider
Entelar Group LimitedNew Zealand100%
Telecommunications and IT infrastructure build and maintenance
services, and distribution and supply chain services
Gen-i Australia Pty LimitedAustralia
1
100%
Provides international wholesale and outsourced telecommunications
services
Mattr LimitedNew Zealand 97%Software company focused on decentralised identity and verifiable data
Qrious LimitedNew Zealand100%Data analytics business
Revera LimitedNew Zealand100%IT infrastructure and data centre provider
Spark Finance LimitedNew Zealand100%A Group finance company
Spark New Zealand Trading LimitedNew Zealand100%Telecommunications and digital services company
TCNZ (Bermuda) LimitedNew Zealand100%A holding company
Teleco Insurance LimitedBermuda
1
100%A Group insurance company
Telecom New Zealand USA LimitedUnited States
1
100%Provides international wholesale telecommunications services
Telecom Southern Cross LimitedNew Zealand100%A holding company
1 These foreign incorporated entities are tax resident in New Zealand.
The financial year end of all significant subsidiaries is 30 June.
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6.5 reconciliation of net earnings to net cash flows from operating activities
20242023
YEAR ENDED 30 JUNE$M$M
Net earnings for the year 316 1,135
Adjustments to reconcile net earnings to net cash flows from operating activities
Depreciation and amortisation 527 504
Bad and doubtful accounts 17 10
Deferred income tax
1
38 (159)
Share of associates' and joint ventures' net losses 17 16
Interest income on loans receivable from associates and joint ventures (12) (8)
Impairment of investments 2 –
Net disposal and remeasurement of equity accounted investments 1 (9)
Gain on sale and acquisition of property, plant and equipment and intangibles (62) (20)
Gain on lease modifications and terminations (36) (13)
Net gain on sale of Connexa – (583)
Gain on sale of long-term businesses (4) –
Spark Sport provision 1 54
Other 12 (7)
Changes in assets and liabilities net of effects of non-cash and investing and financing activities
Movement in receivables and related items (84) (110)
Movement in inventories (8) 28
Movement in current taxation (31) (14)
Movement in payables and related items 70 (24)
Net cash flows from operating activities 764 800
1 The 2023 comparative primarily relates to the net gain on sale of Connexa.
6.6 Commitments and contingencies
Capital and other commitments
As at 30 June 2024, capital expenditure contracted for, but not yet incurred, was $684 million (30 June 2023: $515 million) with
$185 million due in the year ending 30 June 2025. Commitments principally relate to spectrum, telecommunications network equipment,
data centre infrastructure and cable capacity.
As at 30 June 2024, Spark had other supplier commitments of $879 million (30 June 2023: $588 million), with $593 million due in the year
ending 30 June 2025. Commitments include mobile handsets, subscription services, modems, licences, service and maintenance
renewals, and power purchase agreements.
Contingencies
No ongoing claims, investigations or inquiries are expected to have a significant effect on Spark's financial position or profitability.
151
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Independent auditor’s report
To the Shareholders of Spark New Zealand Limited
Opinion
We have audited the consolidated financial statements of Spark New Zealand Limited and its subsidiaries (the
‘Group’), which comprise the consolidated statement of financial position as at 30 June 2024, and the
consolidated statement of profit and loss and other comprehensive income, statement of changes in equity
and statement of cash flows for the year then ended, and notes to the consolidated financial statements,
including material accounting policy information.
In our opinion, the accompanying consolidated financial statements, on pages 106 to 151, present fairly, in all
material respects, the consolidated financial position of the Group as at 30 June 2024, and its consolidated
financial performance and cash flows for the year then ended in accordance with New Zealand Equivalents to
IFRS Accounting Standards (‘NZ IFRS’) as issued by the External Reporting Board and IFRS Accounting
Standards (‘IFRS’) as issued by the International Accounting Standards Board
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (‘ISAs’) and International
Standards on Auditing (New Zealand) (‘ISAs (NZ)’). Our responsibilities under those standards are further
described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1 International Code
of Ethics for Assurance Practitioners (including International Independence Standards) (New Zealand) issued by
the New Zealand Auditing and Assurance Standards Board and the International Ethics Standards Board for
Accountants’ International Code of Ethics for Professional Accountants (including International Independence
Standards), and we have fulfilled our other ethical responsibilities in accordance with these requirements.
Our firm carries out other assignments for Spark New Zealand Limited in relation to regulatory audit
requirements, other assurance related services (such as trustee reporting, Greenhouse Gas Emissions limited
assurance and agreed upon procedures in relation to the sustainability-linked loans) and non-assurance
services provided to the Corporate Taxpayers Group, of which the Group is a member. These services have not
impaired our independence as auditor of the Company and Group. In addition to this, the Chief Executive has
both a sister and brother-in-law that are partners at Deloitte. These Deloitte partners are not involved in the
provision of any services to the Group and its subsidiaries, and this matter has not impacted our
independence. Also, partners and employees of our firm deal with the Group on normal terms within the
ordinary course of trading activities of the business of the Company and its subsidiaries. The firm has no other
relationship with, or interest in, the Group.
Audit materiality
We consider materiality primarily in terms of the magnitude of misstatement in the financial statements of the
Group that in our judgement would make it probable that the economic decisions of a reasonably
knowledgeable person would be changed or influenced (the ‘quantitative’ materiality). In addition, we also
assess whether other matters that come to our attention during the audit would in our judgement change or
influence the decisions of such a person (the ‘qualitative’ materiality). We use materiality both in planning the
scope of our audit work and in evaluating the results of our work.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the consolidated financial statements of the current period. These matters were addressed in the context of
our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.
Independent auditor’s report
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Independent auditor’s report
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Key audit matterHow our audit addressed the key audit matter
Revenue recognition
The Group recognised total revenues excluding other gains of
$3,759m (2023: $3,875m) including:
• Mobile $1,474m (2023: $1,470m)
• Broadband $613m (2023: $626m)
• Procurement and partners $548m (2023: $584m)
• Voice $180m (2023: $231m)
• IT products $527m (2023: $509m)
• IT services $165m (2023: $194m)
• High-tech $79m (2023: $$65m)
• Data centres $37m (2023: $24m)
• Other operating revenues $136m (2023: $172m)
Revenue recognition is considered to be a key audit matter.
For Mobile and Broadband revenue, and to a lesser extent other
revenue streams, there is an inherent risk around the accuracy
and timing of revenue recognition given the complexity of
systems and the large volume of data processed; moreover,
judgement is required for multiple element arrangements. This
risk is most pronounced for new or changing product plans and
prices.
IT products and IT services require significant management
judgements and estimates, particularly for larger contracts,
which are bespoke and cover several accounting periods.
The judgements and estimates that significantly impact the
accuracy of revenue recognition for these contracts include:
• identifying the separate performance obligations;
• assessing whether the performance obligations are satisfied
at a point in time or over time; and
• determining the amount and appropriate method of
measuring the costs of fulfilling the performance obligations
or, where appropriate, the completeness and valuation of
provisions against contracts that are expected to be loss-
making.
Disclosures relating to revenue recognition and the revenue
stream breakdown can be found in Note 2.2. Operating
revenues and other gains.
Our audit approach included both controls testing and substantive
procedures. For our procedures on the design and operating
effectiveness of controls over significant IT systems, we involved our
IT specialists.
Our audit procedures included:
Across Mobile, Voice and Broadband, and IT products and IT
services revenue streams:
• Assessing the appropriateness of the revenue recognition policies
for the products and services offered by the Group, which
included but were not limited to:
• challenging the Group’s assessment for each performance
obligation about whether the customer can benefit from the
product or service on its own or together with readily available
resources;
• assessing the allocation of the transaction price to the
performance obligations by comparing the stand-alone selling
price assigned to observed market prices or estimated prices;
and
• examining the stages at which revenue for each performance
obligation is recognised.
Mobile, Voice and Broadband:
• testing the design and implementation, and the operating
effectiveness of automated controls and interfaces between
relevant IT applications, measurement and billing of revenue, and
the recording of entries in the general ledger. We also tested the
access controls and change management controls over the
relevant billing systems;
• testing the design and implementation, and the operating
effectiveness of manual controls over the initiation, authorisation,
recording and processing of revenue transactions. This included
evaluating process controls over authorising new price plans and
rate changes and the adjustments to the relevant billing systems;
• testing the design and implementation of revenue recognition
controls, including rating and billing during the year as it relates to
new or changing product plans;
• recalculating revenue recognised to evaluate that the processing
by the relevant telecommunication system is materially correct;
• reviewing new product plans in the current year to understand
each of the performance obligations in the bundled offering;
• for new product plans that provide a bundle of services, assessing
whether the customer can benefit from the product or service on
its own or together with readily available resources; and
• assessing the recognition and timing of costs to acquire and costs
to fulfil customer contracts.
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Spark New Zealand Annual Report FY24
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Key audit matterHow our audit addressed the key audit matter
IT products and IT services:
• testing IT products and IT services contracts for appropriate
revenue recognition and provisioning for contracts that were
expected to be loss-making. We considered the future forecast
profitability and the contractual terms to assess the recoverability
of the contract-specific assets and to determine whether any
contracts required loss provisions; and
• testing a sample of revenue transactions recorded during the year
by agreeing to supporting evidence, which included cash receipts,
customer contracts, and invoices. We focussed our work on
contracts which we regarded as higher risk because of the nature
of the contract and the stage of delivery.
Carrying value of property, plant & equipment and intangible
assets
The Group has property, plant & equipment of $1,394m (2023:
$1,264m) and intangible assets excluding goodwill of $607m
(2023: $572m).
There are a number of areas where judgements significantly
impact the carrying value of property, plant & equipment and
intangible assets excluding goodwill, and their respective
depreciation and amortisation profiles. These areas are as follows:
• the impact of planned or unexpected replacement technology
which will impact the way in which an asset is used or is
expected to be used;
• the determination whether to capitalise or expense costs,
particularly for capitalised labour;
• the useful economic life of the asset; and
• the timely transfer and commencement of depreciation of
assets transferred from work in progress.
Changes in these judgements may have a significant impact on
the results of the Group. Due to the significance of these
judgements and the materiality of these assets to the Group’s
Statement of Financial Position, this is considered a key audit
matter.
Refer to Notes 3.6 Property, plant and equipment and 3.7
Intangible assets.
• Our audit procedures included the following:
• testing of the design and implementation of controls over the
acquisition and disposal of assets;
• assessing the appropriateness of capitalisation of costs incurred
on capital projects, by examining a sample of additions to identify
whether the expenditure meets the definition of an asset in
accordance with the applicable accounting standards;
• assessing the reasonableness of the internal labour rates used to
capitalise internal labour;
• assessing the appropriateness of the date from which assets
commenced being depreciated;
• assessing the application of the Group’s annual asset life review.
This included assessing judgements made by the Group on:
• the appropriateness of asset lives applied in the calculation of
depreciation and amortisation;
• the nature and impact of changes on the business from Spark’s
strategy, including which specific assets are impacted; and
• the extent of the impact of these changes on the carrying value
of identified property, plant and equipment and software
intangible assets.
• It also included:
• assessing the allocated useful economic lives, by comparing to
industry benchmarks and our knowledge of the business and its
operations; and
• reviewing Board minutes and performing enquiries with various
management personnel around the prevailing risks of
technological obsolescence and assessing their impact on the
useful lives/impairment risk of existing assets.
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Independent auditor’s report
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Other information
The directors are responsible on behalf of the Group for the other information. The other information
comprises the information in the Annual Report that accompanies the consolidated financial statements and
the audit report.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
Our responsibility is to read the other information and consider whether it is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated. If so, we are required to report that fact. We have nothing to report in this regard.
Directors’
responsibilities for the
consolidated financial
statements
The directors are responsible on behalf of the Group for the preparation and fair presentation of the
consolidated financial statements in accordance with NZ IFRS and IFRS, and for such internal control as the
directors determine is necessary to enable the preparation of consolidated financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible on behalf of the Group for
assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to liquidate the
Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
for the audit of the
consolidated financial
statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs and ISAs (NZ) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is located on
the External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-1
This description forms part of our auditor’s report.
Restriction on use
This report is made solely to the Company’s shareholders, as a body. Our audit has been undertaken so that
we might state to the Company’s shareholders those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company’s shareholders as a body, for our audit work, for this report,
or for the opinions we have formed.
Jason Stachurski, Partner for Deloitte Limited
Auckland, New Zealand
23 August 2024
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Spark New Zealand Annual Report FY24
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Other
information
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Other information
Other information
Stock exchange listings
Spark’s ordinary shares are listed on the NZX and ASX. Spark is admitted to the Official List of ASX as a foreign exempt issuer. As a NZX listed
issuer and ASX foreign exempt issuer, Spark complies with NZX Listing Rules and applicable ASX Listing Rules.
Spark’s American Depositary Shares, each representing five ordinary Spark shares and evidenced by American Depositary Receipts (ADRs),
are traded over-the-counter in the United States. This is a Level 1 ADR programme that is sponsored by Bank of New York Mellon.
Spark Finance Limited, a wholly owned subsidiary of Spark New Zealand Limited, has debt securities listed on the NZDX. Details of debt
securities issued by Spark Finance Limited can be found in Spark Finance Limited’s reports at: https://investors.sparknz.co.nz/Investor-Centre
Board and committee meeting attendance for FY24
The Board held eight formal meetings and one special meeting during FY24. The table below shows director attendance at these Board
meetings and committee member attendance at committee meetings. Sub-committees of the Board also met regularly throughout the year to
consider matters of special importance.
BoardARMCHRCCNOMs
Total number of meetings held9753
Alison Barrass9–53
Warwick Bray97–3
Sheridan Broadbent9753
David Havercroft8–53
Jolie Hodson
1
9753
Gordon MacLeod97–3
Lisa Nelson
2
221–
Charles Sitch
3
32–1
Justine Smyth
4
9753
1. Ms Hodson attended ARMC and HRCC meetings as Executive Director.
2. Ms Nelson appointed as a director and a member of the ARMC, HRCC and NOMs from 8 May 2024.
3. Mr Sitch resigned as a director from 3 November 2023.
4. Ms Smyth attended ARMC meetings in an ex officio capacity.
Director independence
As part of the formal independence assessment, the Board considered all business relationships and close personal ties between Spark and
any companies of which a non-executive director is an employee, director or substantial shareholder (if any). The Board has determined, based
on information provided by directors regarding their interests, that at 30 June 2024 Ms Barrass, Mr Bray, Ms Broadbent, Mr MacLeod, Ms
Nelson and Ms Smyth were independent. The Board (other than Ms Smyth) has considered the tenure of Ms Smyth who has been a Director for
12.7 years, and Chair for 5.9 years as at 30 June 2024. The Board determined that Ms Smyth’s understanding of Spark and experience and skills
in the industry add ongoing value to Spark. The Board are of the view that Ms Smyth’s tenure does not interfere with her capacity to bring an
independent judgment to bear on issues before the Board, to act in the best interests of Spark, and to represent the interests of its financial
product holders generally.
The Board determined that Ms Hodson was not independent due to her position as CEO, and Mr Havercroft was not independent due to his
prior relationships with Spark, which have now ceased.
The criteria for determining director independence and conflict of interest may be found in the Board Charter at:
www.spark.co.nz/online/about/our-company/governance
Corporate governance disclosures
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157
Spark New Zealand Annual Report FY24
Director interests
In accordance with sections 140 and 211(e) of the Companies Act 1993, the table below lists the general disclosures of interests made by
Directors in the interests register that remain current, including changes made to those interests, during FY24:
DirectorEntityRelationship
Alison BarrassRockit Global Limited (and related companies)
Tom & Luke Holdings Limited
Babich Wines Limited
Zespri Group Limited
Institute of Directors
AA Insurance Limited
Vero Insurance New Zealand Limited
Asteron Life Limited
Vero Liability Insurance Limited
Director and shareholder
Director and Chair
Chair
Director
Chair of the Nominations Committee
Appointed Board Chair
Director
Director
Director
Warwick BrayWoolworths Group LimitedDirector
Sheridan BroadbentManawa Energy Limited
Pipeline and Civil Limited
Pipeline Group Limited
PLC Plant Limited
Business Leaders’ H&S Forum
Downer EDI Limited
Director
Ceased to be a Director and Chair
Ceased to be a Director and Chair
Ceased to be a Director and Chair
Deputy Chair
Appointed director
David HavercroftW3 Capital Limited
Westpac New Zealand Limited
The Guitar Gallery Limited
Director and shareholder
Director
Director and shareholder
Jolie HodsonMATTR Limited
NZ Telecommunications Forum Inc.
Climate Leaders Coalition
Director
Appointed chair
Convenor of the Coalition’s CEO Steering Group
Gordon MacLeodDelegat Group Limited
Spanbild Holdings Limited
Breast Cancer Foundation NZ
Director
Appointed Advisory Chairman
Trustee
Lisa NelsonAstra Space Inc
Destiny Tech100 Inc
Seattle Bank
MATTR Limited Investment Committee
Banqer Limited
Director and Compensation Committee chair
Director and Audit Chair
Director
Committee Member
Director
Justine SmythMondiale VGL Group Limited
Breast Cancer Foundation NZ
MATTR Limited
Director and Chair
Chair and Trustee
Director
Directors disclosed, pursuant to section 148 of the Companies Act 1993, the following acquisitions and disposals of relevant interests in Spark
shares during FY24:
NameDate Nature of transactionConsideration Number of shares
Sheridan Broadbent22 August 2023Purchase of ordinary shares by
Mariachi Desperados Trust
$25,3105,000
8 September 2023Purchase of ordinary shares by
Mariachi Desperados Trust
$24,8065,000
4 December 2023Purchase of ordinary shares by
Mariachi Desperados Trust
$25,7145,000
Jolie Hodson18 September 2023Issue of optionsServices to Spark188,467
3 October 2023Lapse of optionsServices to Spark187,430
Gordon MacLeod21 August 2023Purchase of ordinary shares$50,96310,000
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Directors’ insurance
Directors disclosed, for the purposes of section 162 of the Companies Act 1993, that insurance was renewed for Spark’s directors and senior
managers for the 12-month period from 1 June 2024 and deeds of indemnity provided to all directors and specified senior managers of Spark.
Shareholdings
As at 30 June 2024 there were 1,814,155,480 Spark ordinary shares on issue, each conferring to the registered holder the right to one vote on
a poll at a meeting of shareholders on any resolution, held as follows:
Size of holdingNumber of holders
1
%Number of shares%
1–1,00012,25629.506,094,2590.34
1,001–5,00017,58542.3245,780,2892.52
5,001–10,0005,98514.4044,223,8582.44
10,001–100,0005,49713.23128,912,5807.10
100,001 and over2290.551,589,144,49487.60
Total41,552100.001,814,155,480100.00
1. Includes:
• 410,834 shares on issue held by Spark Trustee Limited on behalf of 346 holders for Spark Share; and
• 1,636,356 shares on issue held by Sharesies Nominee Limited on behalf of 1,474 holders of Spark Share.
FY23: 1,777,157 shares on issue held by Spark Trustee Limited on behalf of 1,283 holders of Spark Share.
The 20 largest registered holders of Spark shares at 30 June 2024 were:
Name
1
Number of shares%
1.HSBC Nominees (New Zealand) Limited
2
347,482,25119.15
2.HSBC Nominees (New Zealand) Limited
2
174,986,6609.65
3.JP Morgan Chase Bank151,948,7678.38
4.BNP Paribas Nominees NZ Limited
3
118,373,1606.52
5.Citibank Nominees (NZ) Limited108,416,5675.98
6.Custodial Services Limited64,967,6623.58
7.Accident Compensation Corporation61,875,5323.41
8.HSBC Custody Nominees (Australia) Limited61,182,3693.37
9.New Zealand Superannuation Fund Nominees Limited49,045,7572.70
10.Citicorp Nominees Pty Limited41,865,1242.31
11.FNZ Custodians Limited34,025,2331.88
12.Forsyth Barr Custodians Limited32,001,1451.76
13.New Zealand Depository Nominee30,504,9841.68
14.Tea Custodians Limited 28,742,4761.58
15.JB Were (NZ) Nominees Limited27,706,3051.53
16.New Zealand Permanent Trustees Limited27,122,2091.50
17.Premier Nominees Limited23,768,3701.31
18.BNP Paribas Nominees NZ Limited
3
23,038,1471.27
19.JP Morgan Nominees Australia Pty Limited20,860,1591.15
20.Public Trust18,448,8591.02
1. The shareholding of New Zealand Central Securities Depository Limited (custodian for members trading through NZClear) has been reallocated to the applicable
members.
2. Has a different holder identification number to the other HSBC Nominees (New Zealand) Limited entry.
3. Has a different holder identification number to the other BNP Paribas Nominees NZ Limited entry.
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159
Spark New Zealand Annual Report FY24
According to substantial holder notices as at 30 June 2024 the substantial holders in Spark were as follows:
NameNumber of ordinary shares% of ordinary shares on issue
1
Blackrock Investment Management (Australia) Limited161,169,5328.88
1. Based on issued share capital of 1,814,155,480 as at 30 June 2024.
As at 30 June 2024 directors, or entities related to them, held relevant interests (as defined in the Financial Markets Conduct Act 2013) in Spark
shares as follows:
Name
Relevant interest in Spark shares as at 30 June 2024
Number%
1
Alison Barrass37,716
2
0.002
Warwick Bray31,230
3
0.002
Sheridan Broadbent30,000
4
0.002
David Havercroft100,0860.006
Jolie Hodson869,013
5
0.048
Gordon MacLeod10,0000.0005
Justine Smyth500,201
6
0.028
1. Each percentage stated has been rounded to the nearest 1/1000th of a percent.
2. Relevant interest in beneficial ownership of 37,716 ordinary shares held by Sharesies Nominee Limited.
3. Relevant interest in beneficial ownership of 31,230 ordinary shares held by WDB Insight Pty Limited.
4. Relevant interest in beneficial ownership of 30,000 ordinary shares held by Mariachi Desperados Trust.
5. Includes 311,830 ordinary shares and 557,183 options.
6. Relevant interest in beneficial ownership of 375,201 ordinary shares held by Miksha Trust and beneficial ownership of 125,000 ordinary shares held by PJ Trust.
All non-executive directors are expected to hold Spark shares. Subject to personal circumstances (that should be discussed with the Chair or,
in the case of personal circumstances of the Chair, with the Chair of the ARMC, as appropriate), there is an expectation that each non-executive
director will purchase and hold an amount of shares that are at least equivalent in value to the non-executive director base member fee as
at the date of their appointment or, in the case of directors appointed before 1 July 2017, this was as at 1 July 2017. Shares are to be purchased
within a three-year period from the date of appointment or, in the case of directors appointed before 1 July 2017, this was within a three-year
period from that date. To assess whether this expectation has been met, the aggregate purchase price for all shares acquired, less the
aggregate sale price for all shares disposed (if any), is used to calculate value.
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Subsidiary company directors
The following people held office as directors of subsidiary companies at 30 June 2024. Alternate directors are indicated with an (A).
Subsidiary companyPrincipal activityCurrent directorsDirectors who retired
during the year
Adroit Holdings LimitedEnvironmental IoT solutionsS Knight, M StriblingR Mateparae, M Sheppard
Adroit IoT LimitedEnvironmental IoT solutionsS Knight, M Stribling
Adroit Research LimitedEnvironmental IoT solutionsS Knight, M Stribling
Circle Investments LimitedDelivers innovative and cost-effective
solutions to the Contact Centre Industry
L Sheehan, D WerderS Knight, M Beder
Computer Concepts LimitedIT infrastructure and Cloud services M Anastasiou, M Beder,
S Knight
Digital Island LimitedBusiness telecommunications providerS Knight, G Clark
Entelar Group LimitedTelecommunications and IT infrastructure
build and maintenance services, and
distribution and supply chain services
H Polglase, M Sheppard,
R Mateparae
M Beder
Gen-i Australia Pty LimitedProvides international wholesale and
outsourced telecommunications services
F Evett, I Hopkins
MATTR LimitedSoftware company focussed on
decentralised identity and verifiable data
C Barber, J Hodson, J Smyth,
S Knight
MATTR Trading Australia Pty LimitedSoftware company focussed on
decentralised identity and verifiable data
F Evett, M Leydin
MATTR Trading US, IncSoftware company focussed on
decentralised identity and verifiable data
N Fitzgerald
Qrious LimitedData analytics businessS Knight, M Anastasiou
Revera LimitedIT infrastructure and data centre providerM Anastasiou, S Knight,
M Beder
Spark Finance LimitedGroup finance companyM Anastasiou, M Sheppard,
S Knight
A White
Spark New Zealand Cables LimitedInvestment companyM Sheppard, L Urquhart
Spark New Zealand Trading LimitedTelecommunications and digital services
company
M Anastasiou, S Knight,
M Beder
Spark Trustee LimitedTrustee companyM Anastasiou, S Knight
TCNZ Australia Investments Pty LimitedAustralian operationsF Evett, I Hopkins
TCNZ (Bermuda) LimitedHolding companyJ Wesley-Smith, J Wong
TCNZ Financial Services LimitedInvestment companyM Anastasiou, F Evett
TCNZ (United Kingdom)
Securities Limited
Holding/investment companyF Evett, J Reader,
ManCorp (UK) Limited
Teleco Insurance LimitedGroup insurance companyS Knight, N Frost, F Evett (A)A White, C Phipps,
C Feathers
Teleco Insurance (NZ) LimitedMobile phone insuranceS Knight, R QuinceA White
Telecom Capacity LimitedHolding companyS Knight, J Wong
Telecom Enterprises LimitedInvestment companyM Anastasiou, S Knight
Telecom New Zealand (UK) Enterprises
Limited
Holding/investment companyF Evett, M Sheppard
Telecom New Zealand USA LimitedProvides international wholesale
telecommunications services
J Wong, J MartinA Preston
Telecom Pacific LimitedHolding companyM Anastasiou, M Sheppard
Telecom Southern Cross LimitedHolding companyM Anastasiou, S Knight
Telecom Wellington Investments LimitedInvestment companyM Anastasiou, F Evett
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Spark New Zealand Annual Report FY24
Spark’s managing risk framework roles
and responsibilities
Activity performed
Board
& ARMC
Leadership
Squad Risk
Legal
(Digital
Trust)
Org Unit
Leads
Centre of
Excellence
leads
Policy
owners
All
Spark
people
Approves the Managing Risk Policy
✔
Monitors the managing risk framework
✔
Reviews principal risk dashboard (quarterly)
✔
Performs other items from its charter
✔
Prepares strategy and annual plan
✔
QBR process and next 90-day priorities
✔
Coaches and guides Leads
✔
Owner for principal risks
✔
Designs and continuously improves the managing
risk framework
✔
Helps the business apply the framework
✔
Profiles the principal and next 90-day risks for LS and
ARMC
✔
Helps Leads to capture their risks for the QBR Memo
✔
Executes Internal Audit plan (objective assurance)
✔
Designs and continuously improves the
empowerment framework
✔
Creates empowerment & functional guidance kits
✔
Oversees essential policies and webpage
✔
Creates and delivers training modules
✔
Use the Empowerment and Managing
Risk Frameworks
✔
Understand and adhere with the essential policies
✔
Maintain view of risks for OKRs and fill in QBR Memo
✔
Provide input into principal risk process
✔
Escalate risks to LS or Risk Team (if required)
✔
Review risk sections in QBR packs across Spark
✔
Maintain view of risks for their OKRs and fill in QBR
✔
Support Leads to manage identified risks
✔
Provide input into principal risks
✔
Maintain policy and guidance material
✔
Complete assessments of effectiveness
✔
Participate in policy owner working groups
✔
Follow this framework and the essential policies
✔
Make informed decisions after assessing the benefits
and risks
✔
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As an integrated report we have included disclosure on our sustainability performance throughout this report. Pages 6 and 7 detail our
integrated reporting value creation model, aligned to the ‘capitals’ which each have a dedicated section in the report.
This report is prepared in accordance with the International <IR> Framework and with the Global Reporting Initiative (GRI) Core Option. It also
incorporates climate-related disclosures that have been prepared in compliance with the Aotearoa New Zealand Climate Standards (NZ CS 1,
NZ CS 2 and NZ CS 3) issued by the External Reporting Board (XRB).
We publish a summary of our approach to sustainability at Spark on our website. www.spark.co.nz/online/about/sustainability/
Materiality
To prioritise Spark’s reporting on sustainability topics we follow the GRI materiality principle and processes (set out in GRI 3: Material Topics
2021) to identify and prioritise topics which substantively influence the assessments and decisions of stakeholders or have a significant
environmental, social, or economic impact. We also consider the materiality principles of the Integrated Reporting International <IR>
Framework, considering whether a matter could substantively affect Spark's ability to create value in the short, medium, or long term.
We refresh our materiality analysis annually, as part of our integrated reporting process. Our assessment of material topics includes analysis of
stakeholder feedback, review of industry peers, and interviews with external stakeholders. In previous years we have also engaged an external
sustainability consultancy to independently review our materiality prioritisation. Internally we consult with a range of employees, including
members of our strategy, finance, community, corporate relations, risk, legal, and HR teams, to determine Spark’s view of topics meeting the
GRI materiality principle criteria.
The purpose of our annual materiality review is to ensure we are capturing all topics that are material to our stakeholders, with a particular focus
on identifying emerging topics. We have updated our materiality matrix for FY24. This reflects feedback from various stakeholders which has
highlighted the increasing importance of data ethics, including data governance and sovereignty, with the increased profile and application of
AI technologies. In the previous year changes included increasing the importance of disaster crisis response and the role of digital technology
in addressing sustainability challenges.
Sustainability appendix
• Customer experience, support and partnership
• AI and data ethics, privacy and governance
• Digital equity
• Building the workplace of the future
• Operational excellence and financial performance
• Partnering with Aotearoa
• Resilient infrastructure and climate adaptation
• Role of digital technology in addressing
sustainability challenges
• Disaster and crisis response
• Cyber security
• Competition and regulation
• Diversity and Inclusion
• Ethical behaviour in our business
• Ethical supply chain and procurement practices
• Responsible employment practices
• Operational efficiency, emissions and waste
• Heath, Safety and Wellbeing
• Investment in innovation
• Product stewardship and circular economy
• Responsible and safe use of our products
and services
• Community investment
• Infrastructure impact
• Ta x
SIGNIFICANCE OF ECONOMIC, ENVIRONMENTAL AND SOCIAL IMPACTS
INFLUENCE ON STAKEHOLDER ASSESSMENTS AND DECISIONS
Our materiality matrix maps our material topics, with our assessment of the significance of economic, environmental and
social impacts mapped on the horizontal ‘x’ axis, and the scale of influence on stakeholder assessments and decisions
mapped on ‘y’ vertical axis, reflecting feedback and questions received from stakeholders related to our ESG reporting.
Ko te pae anamata, whakamaua
163
Spark New Zealand Annual Report FY24
Our most material sustainability issues
TopicTopic description and scopeReference
Resilient infrastructure and
climate adaptation
The resilience of our infrastructure. Our long-term adaptation to
climate change.
Our network and technology
Pages 36 – 45
Climate-related disclosures
Pages 90 – 105
Customer experience, support
and partnership
Providing high-quality, reliable products and services that enable
our customers. Rectifying issues where they may arise.
Our customers
Pages 24 – 35
Cyber securityThe security of our networks and products and the security
support we provide to our business customers.
Our customers
Pages 24 – 35
AI and data ethics, privacy,
and governance
How we collect, use, store, and share personal information and
how we keep it safe. Building trust in our products and services.
Ethical use of data and data techno
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Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.