Download Complete Annual Report
Total Page:16
File Type:pdf, Size:1020Kb
AWESOME CUSTOMER SERVICE 2 INITIATE AND EMBRACE POSITIVE CHANGE Photograph by Lynton Haggett, Contact Centre Team Leader. PASSION FOR WHAT WE DO Photograph by Maria Galeano, Customer Service Manager. 3 SHARE IDEAS AND WORK TOGETHER FOR A BETTER RESULT IMAGINE A BETTER WAY 4 CELEBRATING 1993 - 2013 TWENTY YEARS ON OUR VISION IS STILL TO LEAD THE INDUSTRY WITH PRODUCTS THAT HARNESS THE POTENTIAL OF THE 5 INTERNET AND TO STAND APART FROM THE REST WITH OUR AWARD-WINNING CUSTOMER SERVICE. 6 CONTENTS ABOUT US 8 CHAIRMAN’S REVIEW 14 MANAGING DIRECTOR’S REPORT 20 BOARD OF DIRECTORS 28 7 EXECUTIVE MANAGEMENT TEAM 32 DIRECTORS’ REPORT 37 REMUNERATION REPORT 44 AUDITOR’S INDEPENDENCE DECLARATION 61 CORPORATE GOVERNANCE STATEMENT 63 CORPORATE SUSTAINABILITY 70 FINANCIAL REPORT 75 8 ABOUT US iiNET STARTED OUT IN A PERTH SUBURBAN 9 GARAGE IN 1993. AS WE CELEBRATE OUR 20-YEAR ANNIVERSARY, iiNET HAS GROWN TO BE A TRULY NATIONAL BRAND. TODAY, iiNET IS THE CLEAR NUMBER TWO DSL BROADBAND PROVIDER IN AUSTRALIA – WITH SERVICES NOW EXTENDING ACROSS TELEPHONY, TELEVISION AND MOBILE. OUR CUSTOMERS CONTINUE TO BE THE CORNERSTONE OF OUR PHILOSOPHY. iiNet employs more than 2,000 staff across three countries – 80 10 per cent of whom are employed to directly service our 900,000 customers. We maintain our own super-fast broadband network and support over 1.7 million broadband, telephony and Internet Protocol TV (IPTV) services nationwide. The company has a long history of innovation, being one of the first competitors to build a national ADSL iiNetwork in 2005, the first to offer Naked DSL nationally in 2007, and the first to offer true IPTV in 2010. iiNet was also a launch partner for the National Broadband Network, and now has more than 20,000 customers connected to super-fast NBN services. As we approach our twentieth birthday, we are proud that our customers continue to be the cornerstone of our philosophy. From our early days in the garage, iiNet has helped people connect and get the most out of their technology. Twenty years on and not much has changed; our vision is to lead the industry with products that harness the potential of the Internet, and to stand apart from the rest with our award-winning customer service. Photograph by Maria Galeano, Customer Service Manager. Photograph by Lynton Haggett, Contact Centre BEST Team Leader. BROADBAND AWARDS ISP ■ iiNet and Internode won at the ACOMM Awards 2013, winning Commitment to Customer Service, Partnership for Growth (iiNet & CSIRO) and Innovation for Internode’s IPv6 program. ■ Best Home/Remote Agent category in the Contact Centre World Awards 2013, APAC division – the second year in a row iiNet has won gold in the APAC division. GOLD AT THE ■ Bronze in the Contact Centre World Awards 2012 for Best Home/ CONTACT CENTRE Remote Agent Program – World Division. WORLD AWARDS ■ Two top honours at the Roy Morgan Customer Satisfaction Awards for 2012. iiNet picked up the Home Phone Provider of the Year award while Internode won the Home Internet Service Provider of the Year award for the second year in a row. ■ Best Broadband ISP in the 2012 Lifehacker and Gizmodo Awards, 11 taking out both the Reader’s choice awards and the Editor’s Picks. ■ CeBIT.AU Business Award 2013 for Service Distinction, recognising iiNet’s awesome customer service not only on the phone but also in person in the iiStore. ■ At the Australian Teleservices Association Awards in 2013, iiNet’s Melbourne contact centre wins Contact Centre of the Year for Full CSIA LARGE Time Employees (FTE) 150 plus category for Victoria, and iiNet’s Perth BUSINESS Contact Centre wins in the FTE 150 plus category for WA. AWARD ■ iiNet won Bronze for its FY12-13 Annual Report in the Australasian Reporting Awards 2013. ■ Merit award for Budii™ at the 22nd Annual WA Information TWO TOP Technology and Telecommunications Awards (WAiTTA) 2013. HONOURS AT THE ■ WA Large Business award in the Customer Service Institute of ROY MORGAN Australia (CSIA) Awards 2012, as well as being highlycommended for CUSTOMER its Work from Home program. SATISFACTION ■ Silver medal for the Large Category in the National Customer Service Excellence Awards 2012. AWARDS MEMORY LANE 1993 1997 2000 iiNET COMMENCES iiNET MODEMS GO iiNET INTRODUCES BUSINESS DIGITAL BROADBAND iiNet becomes the first organisation in WA to iiNet introduces its first digital modems. iiNet launches various broadband offer dialup Internet access to the public. The Not only are these smaller (with 60 digital services, giving customers more options initial modems are a combination of 2,400 modems fitting into the space occupied by to get online - Cable Internet Access, and 14,400bps and the price is $25/month 16 of the superseded analogue modems) Cityspan Wireless Internet Access and flat rate. but also faster. This provides a significant ADSL Internet Access. competitive advantage to the company, as it is one of the first in WA to adopt such technology. 12 2007 2009 2010 THE NAKED REVOLUTION THE PHONE AND CRACKING THE MILLION iiNet leads the pack in November as the INTERNET ARE ONE - iiNet becomes the 2nd biggest ADSL first national provider of Naked DSL. Naked HALLELUJAH FOR BOBTM provider in Australia! Total customer delivers broadband without a landline phone, numbers double over only two years to meaning customers can wave goodbye to Around the iiNet offices, waiting for reach a total 1.3 million services in 2010. phone line rentals. BoBTM to launch is like waiting for a birth. On August 16, he enters the world at GO FETCH! After months of research (and late nights), approximately 500 grams. After the success of BoBTM, iiNet moves to iiNet’s lovable Irishman ‘Finn’ bursts on to revolutionise TV by becoming the first ISP the scene in Manifesto - iiNet’s first major to offer FetchTV. advertising campaign. 13 ■ The NBN arrives in Perth and iiNet celebrates by hitting 15,000 NBN customers across Australia. ■ iiNet Limited’s shares are officially listed on the S&P ASX 200. The shares continue to climb in popularity and are traded more than ever before. 2013 ■ BudiiTM, iiNet’s comprehensive NBN-ready, entertainment and network hub, home smartphone, and tablet all-in-one package is introduced to the world. iinet.net.au/about/history 14 CHAIRMAN’S MICHAEL REVIEW SMITH THE PAST TWELVE MONTHS HAVE SEEN CONTINUED GROWTH LEVERAGING OUR iiNet has yet again produced a record breaking result SCALE, INNOVATION during the past financial year. AND MARKET In an increasingly competitive market for LEADING SERVICE telecommunications services in Australia, iiNet’s 15 financial performance over the twelve months AND REPUTATION, ended 30 June 2013 (FY13) reflects: RE-AFFIRMING THAT ■ our culture of providing excellent customer WE ARE THE CLEAR service; ■ our desire to continue to challenge the status NUMBER TWO IN quo in providing the sector’s leading DSL BROADBAND IN innovation and brand; and AUSTRALIA. ■ our continued ability to successfully integrate acquisitions to build scale. On 21 December 2012, we entered the S&P/ASX 200 Index, Earnings before interest, tax, depreciation and amortisation reflecting the significant improvement in the Company’s share (EBITDA*) was up 29% to $187 million. This growth reflected liquidity. This is a major milestone for the Company since its listing increased revenues and growing margins, the benefits of on the ASX 15 years ago, and a stark contrast from iiNet’s humble acquisition synergies flowing through, lower operating costs, suburban garage beginnings in 1993. Such a feat is in no small the benefits of economies of scale and a rebate of $8 million part due to the dedication of our entire team, the loyalty of our relating to Internal Interconnection Charges (IIC) in prior periods customer base and the ongoing support of our shareholders. recognised in December 2012. It was also an exceptional year for share price performance, increasing 101% over the financial year to close at $6.20 on 30 *Refer to page 42 for profit before tax reconciliation to EBITDA. June 2013. Importantly, we have strengthened our position as the clear number two broadband DSL provider and the third largest iiNET TOTAL provider of residential fixed broadband services in Australia, REVENUE following the acquisitions of TransACT and Internode. We now supply over 1.7 million broadband, telephony, mobile, Internet ($m) 16 Protocol TV (IPTV) and other services to over 900,000 broadband subscribers. FY13 has also seen continued low levels of churn, further development of our market leading products for residential and business customers, increasing brand awareness, and continued growth in the company’s small business customers, leading to iiNet’s best ever financial result. Another record year of revenue and earnings Revenue was up 13% to $941 million reflecting recent acquisitions, continued growth in our product range and number of services per customer, growth in our small business segment, and continued low levels of churn. FY09 418 FY10 474 FY11 699 FY12 831 FY13 941 ANOTHER RECORD RECORD ANOTHER YEAR OF REVENUE YEAR OF AND EARNINGS SHARE (CENTS) SHARE PER EARNINGS FY09 16.9 FY10 22.8 FY11 22.0 FY12 23.9 FY13 37.8 17 Continued increase in dividends Leveraging iiNet’s scale Your Board has declared a total dividend for the 2013 financial year of 19.0 This year we have seen significant synergy benefits and cost reduction cents per share fully franked, up 36% on FY12’s total dividend. This is not flowing from the integration of TransACT and Internode. We have only due to the earnings growth, strong cash flows and robust balance strengthened our position as the clear number two DSL broadband provider, sheet for the last twelve months, but also reflects the Board’s confidence and have continued to expand our presence in the small business market.