Ann: ADDRESS: SPK: Spark New Zealand Annual Meeting 2015 - Chairman's Address

• Release Date: 06/11/15 09:28
• Summary: ADDRESS: SPK: Spark New Zealand Annual Meeting 2015 - Chairman's Address
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					SPK
06/11/2015 09:28
ADDRESS
NOT PRICE SENSITIVE
REL: 0928 HRS Spark New Zealand Limited

ADDRESS: SPK: Spark New Zealand Annual Meeting 2015 - Chairman's Address

Market Announcement

6 November 2015

Chairman's Address delivered at the 2015 Annual Meeting, Spark City, Auckland
at 10:00 am on 6 November 2015

Kia ora and good morning.

On behalf of the Board, management and staff of Spark New Zealand, thank you
for attending the 2015 Annual Meeting. My name is Mark Verbiest and I am
Spark New Zealand's Chairman.

Spark New Zealand is now visibly different from the Telecom of old.
Exemplifying the difference, you will be aware that we have provided an
opportunity for shareholders to participate virtually in this annual meeting,
a first for a listed company in Australasia.

We've gone from a traditional infrastructure based Telco to a competitive
digital services retailer. Our reliance on legacy voice and plain old
telephone products is shrinking while we are increasing focus on data, mobile
and ICT platform services. This is reflected in our financial performance,
and shareholders will note that revenues from the basic copper telephone
rental and toll services are becoming a much less significant portion.

We've continued to simplify our business and significantly reduce costs. From
serving many markets we are focused solely on New Zealand. We have a fast
rising Spark brand with much wider market appeal. And to support our main
brand, we have specialty service brands such as Revera, Skinny, Bigpipe and
Lightbox, which are all top rated brands in their field.

We believe we are making the right investments. We've invested in fibre and
4G mobile, supported by a huge core Optical Transport Network and
best-in-class data centre and Cloud computing capability. We've rebuilt our
IT stack to put customers at the centre of our systems and enable much more
digital-based customer services. And we've invested in new products like
Lightbox TV, Putti apps, Qrious big data analytics and Morepork home
security.

Spark New Zealand's ability to deliver on its strategic intent is now proven.
Over the last two years, we have set ambitious goals and worked relentlessly
to achieve them. As a consequence, improved financial results are following
and, importantly, more New Zealanders are choosing Spark.

In August this year we reported a return to modest profit growth from
continuing operations after many years of financial decline.

Particularly pleasing is the significant underlying improvement in free cash
flow. This provided the Board with the confidence to increase the dividend
payment to shareholders from 17 cents per share in FY14 to 20 cents per share
in FY15. For FY16, the Board's intention is to pay annual dividends of 22
cents per share and special dividends of 3 cents per share (subject to there
being no material changes in operating outlook). Combined with the share
buyback programme we commenced in June this year, these special dividends
will also assist to return gearing to more appropriate levels.

It's been a good start to the FY16 year. The first quarter results are
on-plan, and we remain pleased with the progress we are making as a business.
Simon will touch on this later in his own comments to the annual meeting,
however I will take this opportunity to reaffirm our guidance for the
full-year.

While the forward indicators are positive, we can't stand still. The next
growth phase of the strategy won't be easy. Whilst demand for data and for
mobile is booming and we see significant opportunities, monetising this
growth in demand will require relentless execution, and investments in new
digital services will take time to realise potential revenue growth. Our
competitors will not be standing still either. And we are acutely aware that
a challenging fibre order process within our industry is putting pressure on
customer service. This has meant a disappointing service experience for too
many of our customers, something we are determined to fix over FY16 as we
work with all involved parties to find solutions.

Yet we have advantages that give us confidence. We have a clear long-term
strategy. We have a proven ability to execute. We have invested judiciously
in network leadership, in digital capability and in growth opportunities.

We have outstanding leadership and a talented team of people who are
committed to serving our customers. We have a wide range of talent and
leadership development programmes now in place, and we have a greater focus
on ensuring our people better reflect the diversity of New Zealand and the
digital future that is coming.

We also work hard to put the right incentives in place to ensure that first
and foremost we create value for customers and shareholders. Two of the
resolutions before you today relate to this. Approval is sought for the
issuance of shares and for the provision of financial assistance to the
Managing Director, via two performance and incentive schemes. His
remuneration package has been independently benchmarked. The fixed
remuneration remains the same as at his appointment in 2012. Almost two
thirds of his total potential remuneration is 'at-risk' and linked to annual
financial performance or long term shareholder value. We believe this firmly
aligns the Managing Director's remuneration with the interests of
shareholders and ensures any grant reflects actual performance.

We have a Board with diverse and relevant skills that actively engages with
investors, and an ongoing board succession programme. This saw the arrival of
Silicon Valley based digital entrepreneur Ido Leffler in 2014, and we are
actively recruiting for a replacement for Maury Leyland, taking the time to
ensure we get the right set of skills to add to the Board.

I'd like to thank the management and staff of Spark New Zealand for their
ongoing commitment to Spark New Zealand. I'd also like to thank you, our
shareholders, for your continued support. It's a privilege to serve as your
Chairman. As shareholders, I encourage you to be our champions. This really
matters. Our success depends on how well we deliver for customers in just one
market - New Zealand. And New Zealand's success is our success.

Thank you.

-ENDS-

For media queries, please contact:
Richard Llewellyn
Head of Corporate Communications +64 (0) 27 523 2362

For investor relations queries, please contact:
Stefan Knight
General Manager Finance and Business Performance +64 (0) 27 252 9438
End CA:00272955 For:SPK    Type:ADDRESS    Time:2015-11-06 09:28:07