TPG Telecom (TPG) investor relations material

Executive summary

• FY25/2025 was a transformational year, marked by regional network sharing, sale of fiber and EGW Fixed operations, and significant capital management initiatives, strengthening the financial position.

• Achieved market-leading trading performance in core mobile business, with subscriber growth accounting for the majority of industry net adds and increased market share, especially via digital-first brands.

• Cash flow and ROIC momentum increased due to cost control, investment cycle completion, and debt reduction.

• Returned over AUD 3.3 billion to shareholders and paid down AUD 2.7 billion in debt, with dividends franked at 30% and targeted to grow in line with profit and cash flow.

• Customer wellbeing initiatives were expanded, focusing on vulnerable customers and accessibility.

Financial highlights

• Service revenue up 2.2% to AUD 4.179 billion year-over-year, driven by strong mobile subscriber and ARPU growth.

• Mobile service revenue up 4.2% to AUD 2.423 billion; gross margin up 1.7% to AUD 2.002 billion; excluding regional sharing costs, gross margin up 3.6%.

• Pro forma EBITDA up 2% to AUD 1.637 billion, above guidance midpoint; would have been 5.7% without regional expansion costs.

• Operating free cash flow nearly doubled to AUD 1.291 billion; free cash flow to equity surged to AUD 5.751 billion, enabling significant debt repayment and capital return.

• ROIC (pro forma) improved by 0.66 ppt to 5.42%.

• Ordinary dividends declared at AUD 0.18 per share, with total dividends (including special) at AUD 0.27 per share, 30% franked.

Outlook and guidance

• FY26 EBITDA guidance: AUD 1.665–1.735 billion (midpoint AUD 1.7 billion), representing just under 4% pro forma growth, driven by mobile revenue growth and cost discipline.

• CapEx guidance for FY26: AUD 750 million, with significant reductions expected from FY27 onward.

• Free cash flow to equity expected to reach around AUD 600 million by FY27, with continued EBITDA growth and CapEx reduction.

• Dividend growth expected to continue, supported by strong balance sheet and cash flow.

• Continued focus on organic cash flow generation and further deleveraging.