Spark's 2024 Annual Meeting Materials

Spark New Zealand Limited ARBN 050 611 277 Spark City, 167 Victoria Street West, Private Bag 92028,
Auckland, New Zealand


MARKET RELEASE – FRIDAY, 1 NOVEMBER 2024
Chair’s Address and Chief Executive Officer’s Review
delivered at Spark New Zealand Limited’s 2024 Annual
meeting, held at 10 am on 1 November 2024

Chair’s Address (Justine Smyth)
Nau mai, haere mai ki tēnei hui ā-tau.
Ko Justine tōku ingoa.
Nō reira, tēnā koutou, tēnā koutou, tēnā koutou katoa.
Good morning, my name is Justine Smyth, and I am Chair of Spark New Zealand.
On behalf of the Board, I’d like to welcome you to Spark’s 2024 Annual Meeting of Shareholders.
For those of you joining us virtually, you’ll be able to vote and submit questions during the
meeting. We will respond to questions on the resolutions when we get to that part of the
proceedings, and we will also have time to respond to general questions after the resolutions.
Before we get started, some housekeeping matters.
Bathrooms are located in the atrium. In the unlikely event of an emergency, please leave the
venue using the nearest exit and follow the instructions of Spark employees.
With that taken care of, I would now like to declare the meeting open.
Based on the information conveyed to me I confirm there is a quorum of shareholders, and the
meeting is duly convened.
Today you will hear from me as Chair of the Board and from our CEO Jolie Hodson. We will then
put forward the resolutions as described in the Notice of Meeting and respond to general
questions put to us by shareholders.
I would like to introduce my fellow Directors and Management who are on stage with me today.
Gordon MacLeod;
Sheridan Broadbent;
Warwick Bray;
Lisa Nelson;
Jolie Hodson, Director and CEO;
David Havercroft;
Alison Barrass;
and
Stefan Knight, Chief Financial Officer
Also present today is our General Counsel, our Company Secretary, auditors from Deloitte,
lawyers from Russell McVeagh, and our share Registrar.
Turning now to our financial performance.
FY24 was a challenging year for Spark, and while some green shoots are emerging, these
challenges have persisted into FY25.

Spark New Zealand Limited ARBN 050 611 277 Spark City, 167 Victoria Street West, Private Bag 92028,
Auckland, New Zealand
This is why we announced to the market on Wednesday that we would be reducing FY25
EBITDAI, capex, and dividend guidance.
I want to acknowledge that this falls short of expectations, and we understand the
disappointment our shareholders will be feeling. You will rightly want to understand the drivers of
the change, and our plans to get performance back to where it needs to be.
So I will start with a summary of FY24, then outline the drivers of our updated FY25 guidance,
and finally overview the actions we are taking to reset performance, before moving on to the
broader AGM programme.
During FY24 we saw the economic environment in New Zealand significantly deteriorate, and
while our business is resilient to economic shocks, it is not immune.
Our country entered a recession, which we are still yet to fully emerge from. We saw significant
spending cuts across the public and private sectors, and high inflation resulted in lower
consumer spending and weak business investment.
The material reduction in demand across the public and private sectors had a significant impact
on IT revenues; lower household spending saw a decline in sales of mobile devices and
accessories; and we saw more price-driven competition in both the mobile and broadband
markets.
To mitigate the impact of these challenging market conditions, we introduced the
SPK-26 Operate Programme and delivered labour and opex efficiencies across the business.
Despite the headwinds we experienced, we did see strong growth in many areas of the business.
In mobile we saw service revenues exceed $1 billion for the first time, and data centres and IoT
continued to grow.
This was not enough however, to offset reduced demand in other areas.
As you will remember, Spark’s FY24 results are cycling the significant net profit declared in
FY23, primarily due to the TowerCo transaction. As such, both reported and adjusted year-on-
year comparisons are provided in our Annual Report and on screen now. I will speak to the
adjusted numbers, which strip out the impact of the one-off gain so as to provide a like-for-like
performance comparison.
On an adjusted basis, FY24 revenue declined 1.2% to $3.8 billion, EBITDAI declined 2.5% to
$1.1 billion, and net profit after tax declined 21% to $342 million. The reduction in NPAT includes
a one-off $26 million adjustment due to recent policy changes the Government made to no longer
allow depreciation on buildings.
The impact to topline performance put pressure on our free cash flow, which reduced to $330
million, and our net debt to EBITDAI ratio increased to 2.1x. We remain committed to reducing
net debt back to targeted levels of 1.7x.
We declared a total FY24 dividend of 27.5 cents per share.
Let me turn now to our updated FY25 guidance.
Since the conclusion of FY24, we have seen inflation reduce and multiple OCR movements,
which is a welcome change that will put more money in the pockets of kiwis and improve
confidence over time.
But the key words are over time. The rationale for the most recent 50-basis point OCR drop was
telling – pointing to subdued economic activity, weak business investment, weak consumer
spending, and low productivity growth.
That is the economic environment we are experiencing, and these challenging conditions have
impacted our markets of mobile and IT.
Mobile service revenue is now expected to be largely flat year-on-year compared to our original
FY25 ambition of around 3% growth, driven by lower anticipated growth in overall mobile
connections and pressure on ARPU.
In IT, our original FY25 guidance assumed stabilisation in the rate of decline of IT services in the
second half, and based on the first quarter of trading this remains on track. However, in IT
products the mix shift between private and public cloud has accelerated, impacting margins.

Spark New Zealand Limited ARBN 050 611 277 Spark City, 167 Victoria Street West, Private Bag 92028,
Auckland, New Zealand
Finally, our original FY25 guidance assumed we would deliver an $80 million net cost reduction
across labour and opex. We are on track to deliver our net labour cost reduction target in-year.
Work continues towards the net opex target, and to support this we intend to expand the SPK-26
Operate Programme to deliver materially higher cost reductions overall, but these will now be
realised over FY25 and FY26 collectively.
As a result of these changes, we reduced our EBITDAI guidance range by $45 million or 4% to
$1.12-$1.18 billion, to reflect the softer trading conditions we have experienced. In accordance
with our standard practice, this updated EBITDAI guidance excludes any gains on sale and
transformation costs that are greater than $25 million.
In line with this change, we right sized our capex guidance to our new earnings profile, with a
reduction to around $415m-$435 million. As a result, our free cash flow aspiration remains
unchanged at $400-$440 million.
The Board then made the difficult but necessary decision to reduce FY25 dividend guidance to
25 cents per share, 75% imputed. In making this decision we considered updated EBITDAI
guidance and our current performance context, balanced against a focus on shareholder returns.
Looking forward, we are focussed on resetting performance in four key ways. I will summarise
the actions we plan to take now, and Jolie will talk to them in more detail shortly.
Firstly, we are focussed on building momentum in our telco core. This includes a substantial
pipeline of activity in our consumer business to stimulate demand over our key sales period and
beyond, as well as an ongoing focus on our priority markets and portfolio simplification in
Enterprise & Government.
Secondly, we intend to expand the SPK-26 Operate Programme to further transform our cost
base across the business.
Thirdly, to support the focus on our telco core, we are undertaking a strategic review of all our
non-core assets.
We will consider if Spark retains ownership of these assets, or whether more value could be
created for shareholders through divestment or by bringing on new partners.
As part of this review, we have made the decision to divest our remaining shareholding in mobile
towers business Connexa. While a transaction is not yet certain, we believe the strong levels of
interest we have received is reflective of the high quality of the Connexa business.
We will provide a further update on the review at our interim results in February, or earlier in the
case of any material developments.
Finally, is our data centre growth strategy.
As your Board, we are focussed not only on resetting performance and returning Spark to its
strong track record of consistent, stable returns in the short term, but on ensuring we are also
growing value over the longer term. And we have a significant opportunity to do this in data
centres.
To illustrate the value opportunity, a telecommunications focussed business like Spark is
generally valued at around 8x EBITDAI. A data centre business can achieve valuations as high
as 20-25x EBITDAI at maturity.
This demonstrates the future value to shareholders of building on Spark’s existing market share
and capability in this market.
To do that we need the capital to fund our development pipeline, which we anticipate will be $1
billion over the next 5-7 years. We are currently exploring capital partnerships to achieve this.
Turning now to our non-financial performance.
We recognise the importance of maintaining our licence to operate and the strength of our brand
with our customers and communities, for the long-term benefit of our shareholders.
In FY24 we continued to support economic transformation across the economy, with $350 million
of our capital investment supporting improved network performance, resilience, and digital
infrastructure. We were pleased to claim the top spot in Opensignal’s research report as the
country’s most reliable mobile network, with the widest coverage experience.

Spark New Zealand Limited ARBN 050 611 277 Spark City, 167 Victoria Street West, Private Bag 92028,
Auckland, New Zealand
We are proud to see our not-for-profit broadband service, Skinny Jump, now supporting nearly
32,000 households in need across the country.
Looking at our own sustainability performance, in FY24 we saw our scope 1 and 2 emissions
increase 26.7%, largely due to a one-off event, when an alarm triggered the release of a fire
suppressant at an exchange. This means we were above our Science Based emissions
reduction target for FY24.
We did, however, make strong progress on future emissions reductions when we signed a
renewable energy deal with Genesis. This will meet around 60% of our current annual electricity
requirements make a significant contribution towards our scope 1 and 2 emissions reduction
target in the years ahead.
Overall, we were pleased to maintain inclusion in the Dow Jones Sustainability Australia Index.
Before I hand over to Jolie, I want to acknowledge that our share price is not where any of us
want it to be.
Our clear priority is resetting performance in our telco core. We will simplify our portfolio to
enable this focus and significantly reduce our cost base to offset market headwinds, while
investing prudently for long-term growth.
Our underlying drivers of growth are enduring, as the demand for data and compute power and
storage continues to grow with every year.
We deliver a return on invested capital of around 15% for our shareholders, ranking ahead of our
industry peers globally.
While we are transitioning through a challenging period, Spark has market leading positions in
core segments and strong fundamentals that we have every intention of retaining.
We believe in this business, in the role it plays in Aotearoa, and in the long-term value it will
deliver to our shareholders.
I will now invite Jolie to provide the CEO Review.
Tēnā koutou katoa, ngā mihi nui kia koutou.

Chief Executive Officer’s Review (Jolie Hodson)
Thank you, Justine, and good morning everyone.
I would like to echo Justine’s comments and personally acknowledge that we have work to do to
win back the confidence of our shareholders, and we are committed to that work.
This was a challenging year not only for Spark but for businesses across the country, and these
economic challenges persist today.
Justine has outlined a comprehensive performance reset, and I will now provide more detail in
key areas.
Our absolute focus is building momentum in our telco core.
The heart of Spark’s business is mobile. We are the #1 network operator by both connections
and mobile service revenue. Our network is the most reliable, with the widest coverage. While
the market has been tough in recent times, our long-term value drivers remain.
Demand for data continues to grow year-on-year, our brand health across both Spark and Skinny
is strong and growing, and we are focussed on stimulating growth into the second half through
pricing, new campaigns, and an Endless plan line-up that will deliver our customers higher data
allowances than ever before. When combined with easing monetary policy, we are confident
these tailwinds will continue to support a strong and growing mobile business into the future.
In Enterprise and Government, our number one focus is also connectivity – which includes
mobile, managed networks, and Internet of Things. Cloud also remains an important part of our
business, but over time we anticipate an ongoing structural shift from private to public cloud. Our
focus is on ensuring our cost base aligns to that changing market, and that we continue to deliver
our customers the best hybrid cloud solutions available.

Spark New Zealand Limited ARBN 050 611 277 Spark City, 167 Victoria Street West, Private Bag 92028,
Auckland, New Zealand
With clarity on our priority markets, we are undertaking a significant product portfolio
rationalisation across Enterprise and Government, to simplify and further focus the business.
Turning now to our cost programme. At our FY24 results we outlined three key focus areas of
this programme – a $50 million net labour cost reduction through changes to our operating
model; a $30 million net opex reduction; and implementing scale AI across the business.
We are on track to deliver our net labour cost reduction target in-year, which will be delivered
primarily through the transformation of our Enterprise and Government division.
We are undertaking extensive remodelling of this part of the business – integrating our
subsidiaries into Spark to remove duplication and improve efficiency.
Our introduction of new Generative AI use cases across the business is progressing to plan, and
we continue to work towards our net opex target. To support this, we intend to expand the scope
of our Operate Programme to include a broader transformation of our technology delivery model.
To ensure considered execution, this transformation would be phased over FY25 and FY26.
Our technology delivery model refers to how we manage and deliver our network and IT
infrastructure, and includes the costs associated with this – such as labour, support and
maintenance, licensing, and infrastructure.
Our objective is to accelerate our current strategic focus on automation, simplification, and
resilience, while delivering a significantly reduced cost base.
We will provide more details on the benefits and associated transformation costs at our interim
results in February 2025.
I will now provide some more detail on our data centre strategy.
As Justine touched on earlier, this presents a significant growth opportunity for our shareholders,
and we will be exploring capital partnerships to secure our long-term funding outside the free
cash flow of our core business.
This is not a market that is new to Spark. We have been operating a data centre business for
over a decade.
Our own usage of data centres is significant, we have complementary digital infrastructure,
existing relationships with hyperscalers, and we provide products and services such as cloud. As
a result, we have the optimal mix of specialist skills and a deep understanding of New Zealand
customers to compete effectively.
What is new is the size of the prize in this market.
The New Zealand data centre market is predicted to grow from around 90MW today to around
500MW by 2030 as AI accelerates and as businesses continue to migrate to the cloud. We
already have around 25% of the market, which is a strong position to build from.
To succeed in this market, you need the specialist skills as well as the land, power, and fibre in
the right places to appeal to potential customers.
Auckland is New Zealand’s primary market for data centres, evidenced by the fact the
hyperscalers have established cloud regions here. In Auckland we have three high quality sites
primed for development – including our existing sites in the CBD and Takanini, and a new site on
the north shore. Across these three sites we have a significant pipeline of 118MW available to
develop.
Data centres, much like any type of property development, scale over time as builds commence
and complete and tenants occupy the buildings.
The capital investments we make today are building long-term, stable, annuity revenues for our
shareholders, and as we invest in this growth opportunity, we are targeting returns of around 10-
15%.
I would also like to touch briefly on our people at Spark. We know investment in our people and
our culture is key to business success and this remains a priority.
Over the last year we have had to make tough but necessary decisions to transform our cost
base, which has impacted some of our people. We never make these decisions lightly, and we

Spark New Zealand Limited ARBN 050 611 277 Spark City, 167 Victoria Street West, Private Bag 92028,
Auckland, New Zealand
have done as much as possible to support our people who have been impacted during this
transition.
We have also continued to invest in the skills our people need to adapt to new ways of working
and new technologies, to support our future growth.
Our people’s wellbeing continues to be a focus, particularly in the context of what has been a
challenging year for many New Zealanders. We enhanced our Mahi Tahi wellbeing programme
with access to new support services. In our last culture survey of FY24, 88% of our people said
they believe their wellbeing is supported by their leaders at Spark.
Finally, I will end by focussing on the people who underpin the success of our business – our
customers.
While it has been a challenging year, we have not wavered from our enduring focus on improving
the experiences of our 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), increasing a significant 7 points to +38 in FY24.
As we look to the year ahead and continue to transform our business to compete effectively in
our markets, our customers will remain at the heart of what we do.
In closing, I want to acknowledge the support of our shareholders and reaffirm my commitment,
and the commitment of my team, to resetting performance and ensuring that Spark continues to
deliver long-term, sustainable value.
Nō reira, tēnā koutou, tēnā koutou, tēnā tatou katoa.

Authorised by:
Stefan Knight
Finance Director

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:
Stefan Knight
Finance Director
(64) 27 252 9438
stefan.knight@spark.co.nz


About Spark
As New Zealand's largest telecommunications and digital services company, Spark’s purpose is
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

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Annual Shareholder
Meeting 2024

Chair’s Address

Introductions
Chair’s Address
CEO’s Review
Resolutions
Resolutions Q&A
Conduct of Polls
General Q&A
Order of Meeting

Introductions
•Gordon MacLeod
•Sheridan Broadbent
•Warwick Bray
•Lisa Nelson
•Jolie Hodson, Director and CEO
•David Havercroft
•Alison Barrass
•Stefan Knight, CFO

FY24 financial performance
Reported result
Revenue: $3,861million (-14.0%)
EBITDAI: $1,163million (-32.5%)
Net Profit After Tax: $316 million (-72.2%)
Adjustedresult
Revenue: $3,861 million(-1.2%)
EBITDAI: $1,163 million (-2.5%)
Net Profit After Tax: $342million (-21.0%)
$330m
32.5% decrease vs. FY23
FREE CASH FLOW
$518m
0.6% increase vs. FY23
CAPEX
27.5 cps
0.5cps increase vs. FY23
TOTAL FY24 DIVIDEND

Updated FY25 Guidance
(1)
Original FY25 GuidanceUpdated FY25 Guidance
Adjusted EBITDAI$1,165m-$1,220m
$1,120m-$1,180m
(excluding gains on sale and
transformation costs that are
greater than $25m)
Capital expenditure
(2)
~$460m-$480m~$415-$435m
Dividend per shareTotal 27.5 cps
(75% imputed)
Total 25.0 cps
(75% imputed)
(1)
Subject to no material adverse change in operating outlook.
(2)
Total capital expenditure including growth capex and excluding expenditure on mobile spectrum.

Resetting performance
Simpler
portfolio:
Strategic review of
non-core assets
Transformed
cost base:
SPK-26 Operate
Programme
Long-term
value creation:
Data centre
growth strategy
Building market
momentum:
Focussed in
telco core

Sustainability performance
•Maintained inclusion
in the Dow Jones
Sustainability
Australia Index
•Skinny Jump now
supports nearly 32,000
households in need
across the country
•$350 million of capital
investment supporting
improved network
performance, resilience,
and digital infrastructure

Looking ahead.

CEO Review

Building momentum in our telco core
•Maintaining Spark’s #1
position in the market
1
•Stimulating growth into H2
through pricing, campaigns,
and new product line-up
Mobile
•Focussing on core markets of
connectivity (mobile, managed
networks, and IoT) and cloud
•Resetting cost base and
rationalising product portfolio
Enterprise & Government
1
By service revenue and total connections (Source: IDC)

SPK-26 Operate Programme
Operating model:
$50 million net
labour cost reduction
Operating costs:
$30 million net opex
cost reduction
Scale AI:
expanded use of
Generative AI
New:
Technology
delivery model
On Track
On Track
Work Underway

Data centre strategy
10-year renewable deal with
Genesis Energy
25% market share – a
strong position to build on
118MW development pipeline,
targeting returns of ~10-15%

Our people

Our customers
interaction net
promoter score (iNPS)
up 7 points in FY24
+38

Ngā mihi. Thank You.

Changes to our Board

Alison Barrass

Resolution
Auditor’s Remuneration
Proxy VotingVotes
For1,115,914,957
Against899,378
Discretionary10,215,862
Abstain364,827

Resolution
Re-election of
David Havercroft
Proxy VotingVotes
For1,074,339,391
Against42,124,822
Discretionary10,210,648
Abstain720,163

Resolution
Re-election of
Lisa Nelson
Proxy VotingVotes
For1,081,187,654
Against35,302,781
Discretionary10,200,230
Abstain704,359

Resolution
Re-election of
Warwick Bray
Proxy VotingVotes
For1,094,022,869
Against22,425,087
Discretionary10,220,186
Abstain726,882

Voting

Questions?

Ngā mihi. Thank You.

Disclaimer
This announcement may include forward-looking statements regarding future events and the future financial performance of Spark New Zealand. Such
forward-looking statements are based on the beliefs of and assumptions made by management along with information currently available at the time
such statements were made.
These forward-looking statements may be identified by words such as ‘guidance’, ‘anticipate’, ‘believe’, ‘estimate’, ‘expect’, ‘intend’, ‘will’, ‘plan’, ‘may’,
‘could’, ‘ambition’, ‘aspiration’ and similar expressions. Any statements in this announcement that are not historical facts are forward-looking
statements. These forward-looking statements are not guarantees or predictions of future performance, and involve known and unknown risks,
uncertainties and other factors, many of which are beyond Spark New Zealand’s control, and which may cause actual results to differ materially from
those projected in the forward-looking statements contained in this announcement.
Factors that could cause actual results or performance to differ materially from those expressed or implied in the forward-looking statements are
discussed herein and also include Spark New Zealand's anticipated growth strategies, Spark New Zealand's future results of operations and financial
condition, economic conditions and the regulatory environment in New Zealand, competition in the markets in which Spark New Zealand operates, risks
related to the sharing arrangements with Chorus, any impacts or risks to Spark’s anticipated growth strategies, future financial condition and operations,
economic conditions or the regulatory environment in New Zealand arising from or otherwise with Covid, other factors or trends affecting the
telecommunications industry generally and Spark New Zealand’s financial condition in particular and risks detailed in Spark New Zealand's filings with
NZX and ASX. Except as required by law or the listing rules of the stock exchanges on which Spark New Zealand is listed, Spark New Zealand undertakes
no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.