Financial year 2022 has been rough for Telstra Corporation Ltd (ASX: TLS) so far – its share price slipped 4% on the back of its first half results – but the company's future CEO is "really excited" for the coming years.
Telstra's longstanding CEO, Andy Penn, announced his retirement last month. The company's current chief financial officer, Vicki Brady, is to take over the top job.
Today, Brady spoke at ASX CEO Connect. There, she detailed her outlook for the company's growth over the coming years.
Let's take a look at what she's expecting for the telco over the coming years.
At the time of writing, the Telstra share price is $4.01, 0.5% lower than its previous close.
Though, that's a better performance than that of the broader market on Tuesday. Right now, the S&P/ASX 200 Index (ASX: XJO) is down 0.66% and the All Ordinaries Index (ASX: XAO) has fallen 0.7%.
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"I do think this next decade, there's just profound opportunities for Telstra … [and] T25 – top of my list in terms of agenda," said Brady.
She's set to take the reins in September, just months after the company jumps into the growth-focused strategy.
For now, Telstra is focusing on "finishing the job on T22", said Brady. And it looks set to achieve 80% of the strategy's scorecard metrics.
Over the last 3 years, the company has "radically simplified" its business.
It has ditched numerous fees, signed 4 million customers to its loyalty program, and monetised $2 billion of assets to strengthen its balance sheet.
And, after a challenging period, the future is looking bright.
For the first half of this financial year, the telco reported a 14.8% drop in its earnings before interest, tax, depreciation, and amortisation (EBITDA), coming to $3.5 billion, and a 4.4% fall in revenue, which reached $10.5 billion.
However, its underlying earnings demonstrate "clear financial momentum", said the CFO. She continued:
In the half, we saw our underlying business continue to grow. We saw the benefits of our T22 strategy flowing through for our customers for customers and our shareholders. And we announced the transition to T25 – our new strategy for growth.
We achieved these results because we stayed disciplined and focused on achieving what we said we would. Our T22 Strategy has been a clear success.
We are now a vastly different company, and we are determined to finish the job …
We have confidence this momentum will continue, driven by product growth, delivery of productivity and diversifying our growth, including in infrastructure, health, energy, and through the Digicel acquisition.
Such growth would undoubtedly be good for the Telstra share price.
The company has ambitions (but hasn't solidified them into guidance) to report between $7.5 billion and $8 billion of EBITDA for financial year 2023.
It's also aiming to report a compound annual growth rate (CAGR) in the mid-single digits for underlying EBITDA and a CAGR in the high-teens for its earnings per share (EPS).
That will hopefully see it boosting its fully franked dividends over the coming year.
