TPG Telecom (TPG) Status Update summary

Capital management and financial strategy

• Announced plans to return up to AUD 3 billion to shareholders via a pro rata capital reduction, with a reinvestment plan for minority shareholders to increase free float and minority ownership, subject to shareholder approval at an EGM in late 2025.

• Targeted repayment of up to AUD 2.4 billion in bank borrowings, reducing leverage to 1.3x pro forma EBITDA and maintaining an investment-grade credit position.

• Completion of the Vocus Transaction generated AUD 4.7 billion in net cash proceeds, enabling a simplified, scalable cost base and supporting capital management initiatives.

• Updated dividend policy targets AUD 0.18 per share in 2025, with intentions to grow dividends as profits and cash flow increase.

• Capital management actions are subject to regulatory engagement and execution risks, with a 'BBB' rating assigned and a negative outlook due to uncertainty around capital reinvestment and leverage targets.

Pro Forma financials and FY25 guidance

• Pro Forma FY25 EBITDA guidance is AUD 1.605–1.655 billion, about 2% higher than 2024, with CapEx guided at AUD 790 million.

• FY24 Pro Forma EBITDA (guidance basis) was AUD 1.6 billion, up 6.1% year-on-year, with operating free cash flow improving to AUD 346 million.

• Ongoing cost reduction target of approximately AUD 100 million from the FY25 Pro Forma cost base over FY26–FY29.

• CapEx expected to decline to AUD 550–650 million from FY27, supporting stronger free cash flow.

• Pro Forma financials reflect a simpler, more focused business post-Vocus transaction, with improved cash flow and lower CapEx.

Operational and trading update

• Mobile subscribers grew by 100,000 in 1H25 to 5.615 million, with ARPU rising to AUD 34.97; fixed subscribers at 2.021 million, with AMPU up to AUD 26.11.

• Divested EGW fixed commercial operations and network infrastructure, focusing on mobile and consumer fixed businesses, resulting in a leaner cost base.

• Regional network sharing drove subscriber growth and increased market share outside Sydney, with strong uptake across brands.

• Churn rates improved, especially in regional areas, and port-ins from competitors increased 48% year-on-year.

• 1H25 Pro Forma revenue was AUD 2.448 billion, with EBITDA (guidance basis) at AUD 786 million and operating free cash flow at AUD 171 million.