Vocus Retail New Zealand
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Vocus Group Vocus AUSTRALIAʼS SPECIALIST FIBRE | Annual Report 2019 AND NETWORK SOLUTIONS PROVIDER Annual Report 2019 For personal use only VOCUS GROUP Annual Report 2019 ABOUT THIS REPORT The Annual Report 2019 is a summary of Vocus operations, activities and financial position for the 12 month period to 30 June 2019. Vocus Group Limited is the parent company of the Vocus group of companies. In this report, unless otherwise stated, references to “Vocus”, “the Group”, “the Company”, “we”, “our” and “us” refer to Vocus Group Limited and its controlled entities. In this report, references to the financial year refer to the period 1 July to 30 June unless otherwise stated. All dollar figures are expressed in Australian dollars, unless otherwise stated. Our Corporate Governance Statement, detailing our compliance with the ASX Corporate Governance Council’s “Corporate Governance Principles & Recommendations – 3rd Edition” can be found online at our website via http://vocusgroup.com.au/ about-us/corporate-governance/. REPORT OBJECTIVES This report meets our governance and compliance requirements and has been written to provide shareholders and interested parties with clear, easy to understand information on the Company and its performance in FY19. ADDITIONAL INFORMATION This report can also be found online via http://vocusgroup.com.au/investors/ company-performance/annual-reports/ A full copy of our Sustainability Report, reviewing our environmental, social and economic impact, can be found online via http://vocusgroup.com.au/sustainability/ sustainability-report/. KEY DATES Financial Year End – 30 June 2019 Annual General Meeting – 29 October 2019 The 2019 Annual General Meeting will be held at the Warrane Theatre at the Museum of Sydney. Please refer to our website for further detail and a webcast of the meeting: www.vocusgroup.com.au. For personal use only Cable for the Tiwi Islands on board the ile de Brehart CONTENTS IFC About This Report 02 Key Highlights 04 Key Statistics 06 Business Units 08 Sustainability Priorities and Achievements 10 Chairman and CEO Report 12 Directors’ Report 18 Remuneration Report 35 Operating & Financial Review 48 Auditor’s Independence Declaration 49 Financial Statements 53 Notes to the Financial Statements 102 Directors' Declaration 103 Independent Auditor’s Report 108 ASX Additional Information 110 Corporate Directory For personal use only 01 VOCUS GROUP Annual Report 2019 KEY HIGHLIGHTS 2019 A year of significant change with turnaround foundations firmly ESTABLISHED Australia Singapore Cable generating strong sales Culture and values RESET Coral Sea Cable Tier One Executive and survey, design Senior Leadership team and manufacture ESTABLISHED completed and laying commenced For personal use only Implementing a digital Modernisation operating model program for legacy • Improving customer service experience technology approved • Reducing cost to serve and underway 02 Dodo brand refreshed MVNO agreement • Enhanced Dodo customer experience renegotiated with Optus • Improved mobile offers • Pathway to 5G and fixed wireless broadband Commander Enterprise and Retail brand refreshed products simplified • Commander Centre channel • Making our services easier to buy and use reinvigorated • Improving customer service experience • New centres opened Strong organisational clarity CLEAR VISION AND OPERATING STRUCTURE ESTABLISHED Vocus Network Systems availability Services resilience targets exceeded targets exceeded • Operating Support • IP Core Network Systems (OSS) • Edge network • Business Support • Voice Network Systems (BSS) For personal use only 138% • Transmission Network • IT Systems INCREASE in employee net promoter score 03 KEY STATISTICS HONG KONG SINGAPORE 15,020km OF 4,200 km OF SAN JOSE INTER-CAPITAL INTER-CAPITAL NETWORK USA HAWAII NETWORK IN Australia IN New Zealand LOS ANGELES JAKARTA North West Cable System OVER 9,500km of connecting offshore metropolitan and CHRISTMAS oil and gas facilities regional fibre IN ALL ISLAND DARWIN MAJOR CENTRES TOWNSVILLE ASC OUR NETWORK PORT HEDLAND WHANGAREI ALICE SPRINGS Vocus is Australia’s specialist fibre and network solutions AUCKLAND provider, connecting all mainland capitals with Asia. TAURANGA BRISBANE We are proud to have built a world class telecommunications HAMILTON GERALDTON infrastructure platform across Australia and New Zealand NEW PLYMOUTH to support the rapid growth in demand for increasingly resilient, secure and reliable network connectivity. PALMERSTON NTH NAPIER PERTH NEWCASTLE Our Australian fibre network connects capital mainland NELSON SYDNEY cities with Auckland, stretching across the Tasman and WELLINGTON connecting north and south islands of New Zealand and ADELAIDE CANBERRA to the United States and Hong Kong. From Australia’s CHRISTCHURCH west coast, our Australia Singapore Cable connects to MELBOURNE Indonesia and Singapore, extending the reach of our network and providing a secure southern route connecting VOCUS NETWORK RBBP FIBRE DUNEDIN South East Asia to North America via Australia. HOBART 3RD PARTY OUR CORE OUR PEOPLE Vocus strives to be the challenger customers deserve and our people For personal use only ASSETS are proud of every day. 04 More than 5,500 Connectivity TO 17 AUSTRALIA SINGAPORE ON-NET BUILDINGS MAJOR SPORTS STADIUMS CABLE gateway to Asia HONG KONG SINGAPORE SAN JOSE USA HAWAII LOS ANGELES JAKARTA CHRISTMAS ISLAND DARWIN TOWNSVILLE ASC PORT HEDLAND WHANGAREI ALICE SPRINGS AUCKLAND TAURANGA BRISBANE HAMILTON GERALDTON NEW PLYMOUTH PALMERSTON NTH NAPIER PERTH NEWCASTLE NELSON SYDNEY WELLINGTON ADELAIDE CANBERRA CHRISTCHURCH MELBOURNE VOCUS NETWORK RBBP FIBRE DUNEDIN HOBART 3RD PARTY Our Values One Team: we share Disruptive Thinking Every Connectivity means more to common goals, trust Day: we see and create us than fibre in the ground – our For personal use only each other and opportunities, move fast culture is connected to the way collaborate to deliver and set our own course we do business, the way we work together and the results for Our People are the Crazy About Customers: our customers and shareholders. Difference: we build we let our customers know, environments where through great service, our people thrive products and experiences 05 VOCUS GROUP Annual Report 2019 VOCUS NETWORK BUSINESS SERVICES Australia’s leading specialist fibre UNITS network solutions provider Three simple, stand-alone Untapped growth potential business units were created in FY19, - Core strategic fibre network designed to operate autonomously assets with independent resourcing in order for operations to be agile, - Targeting growth in Enterprise, and to win in-market. Government and Wholesale markets At 31 July 2019, Vocus had c.6% of the $9.6bn total addressable market across connectivity, network FY19 REVENUE $M security, voice and collaboration1 Vocus Network Services Vocus Retail New Zealand FY19 EBITDA (UNDERLYING) $M Vocus Network Services For personal use only Vocus Retail New Zealand 1. Sources: Management estimates based on Vocus billing data, Ovum, Gartner, IDC, company annual reports. 2. Source: Commerce Commission Telco Market Monitoring report 2018. Electricity company annual reports, Electricity authority – Electricity Market Information website. Chorus and MBIE UFB Quarterly connectivity update; management estimates. 06 VOCUS RETAIL VOCUS NEW ZEALAND Reseller of broadband, mobile, Full service offering of fibre voice and energy connectivity, broadband, voice energy and mobile Reset and Turnaround Strong performer with strategic - Multi-brand strategy across optionality Business and Consumer - Multi-brand strategy across - Underserviced Business market Business and Consumer - Competitive Consumer market - Sustained growth, driven - Structural headwinds in voice through well-established brands and broadband from introduction - Growth ambitions enabled of NBN to be offset by growth in energy and mobile At 31 July 2019, Vocus had c.13% of the Ultra Fast Broadband (UFB) At 31 July 2019, Vocus had less Services In Operation (consumer than 2% of the total addressable broadband market share) mobile market across Business and Consumer1 At 31 July 2019, Vocus had c.5% of the Enterprise & Government market share $5.4bn total addressable market The simplest choice for household across Business and Consumer2 services – fixed, mobile and energy “Simple, not stupid.” Serving Enterprise, Government and Wholesale For individuals on the go who always want to stay in touch. “The most flexible internet you can get.” Provider of IP Voice and small-medium business connectivity The small business telco that disrupts, to give Australian small businesses better value at speed. “Making business faster, faster.” Broadband, Power and Mobile for Kiwi families Fibre leader, driving innovation in residential and small business For personal use only 07 VOCUS GROUP Annual Report 2019 SUSTAINABILITY PRIORITIES AND ACHIEVEMENTS FY19 ACHIEVEMENTS FY20 PRIORITIES Community In FY19, we met our stated goal of maintaining the high level In FY20, we will make our volunteering activities of volunteering activity within our Team. Team dedication to more targeted to team interests, and through our volunteering was outstanding, and the coordination with Sustainability Committee we will empower our Telco Together gave us this great outcome. team to work in the areas where they want to effect positive change. Suppliers During FY19 we have renegotiated and extended for Preparation for publication of first report under Modern a further 5 years our Mobile Virtual