29
October
2020
|
07:00
Europe/London

Results for the half year to 30 September 2020

london-at-night
london-at-night

BT Group plc (BT.L) today announced its results for the half year to 30 September 2020.

Key strategic developments:

  • All of Openreach's major CP1 customers now selling FTTP with strong increase in sales in Q2

  • Consumer aligns pricing policies across all products and services to CPI plus 3.9% per annum to provide consistent, predictable pricing for new and regrading customers and to support network investment

Operational:

  • Strong operating performance despite the ongoing impact of Covid-19

  • FTTP rollout reached record levels in Q2 with run-rate of 40k premises per week; 3.5m premises passed to date

  • Openreach to stop selling copper products to c.1.8m FTTP-enabled premises by September 2021 latest

  • 5G-ready customer base now over 1m and 5G now live in 112 towns and cities

  • Strong increase in Consumer FTTP customer base up 60% year on year; fixed and mobile convergence at 21.4%

  • Enterprise agrees landmark partnership with Belfast Harbour to deploy 5G Private Network

  • Modernisation programme delivers £352m gross annualised savings at a cost of £163m

Financial:

  • Revenue relatively resilient at £10,590m, down 8%, primarily due to the impact of Covid-19 including reduced BT Sport revenue and a reduction in business activity in our enterprise units, and declines in legacy products

  • Adjusted2 EBITDA £3,721m, down 5%, driven by the fall in revenue, partly offset by sports rights rebates, savings from our modernisation programme and other cost initiatives including Covid-19 mitigating actions

  • Reported profit before tax £1,062m, down 20%, driven primarily by reduced EBITDA

  • Net cash inflow from operating activities £2,713m; normalised free cash flow2 £422m, down 30%, primarily due to reduced EBITDA and offsetting movements in working capital and timing of tax payments

  • Capital expenditure £1,969m, up 5%, primarily driven by fixed and mobile network investment

  • Lower end of the adjusted2 EBITDA outlook range for 2020/21 raised to £7.3bn; revised range £7.3bn - £7.5bn

  • Adjusted2 EBITDA outlook of at least £7.9bn in 2022/23, underpins planned reinstated dividend from 2021/22 and value-creating investment plans

Philip Jansen, Chief Executive, commenting on the results, said

"BT delivered financial results in-line with expectations for the first half of the year, thanks to strong operational performance during exceptional circumstances. Customer demand during the pandemic has shown how critical our networks have become, and our significant network investments have helped us double the number of Openreach’s FTTP orders compared to this time last year and have seen our leading 5G network expand to 112 towns and cities across the UK.

"We continue to invest to make BT more competitive and I’m pleased to see the quality of our products and services improving. At the same time we are firmly on track with the delivery of our modernisation programme and have delivered £352m in cost savings in the first half of the year.

"This performance has given us confidence to raise the lower end of our EBITDA outlook range for this year and publish an EBITDA expectation of at least £7.9bn for 2022/23, with sustainable growth from this level forward. This growth will be driven by the continued recovery from Covid-19, enhanced by sales of our converged and growth products, and by significant savings from our modernisation and cost saving programme. In combination these factors will more than offset legacy product declines.

"The growth in EBITDA underpins the planned reinstatement of our dividend next year whilst ensuring that we can continue to drive value-creating investments in our networks and products."
q2-20-results
q2-20-results

1 Communications provider
2 See Glossary on page 2

 

Customer-facing unit results for the half year to 30 September 2020

q2-20-cfu-results
q2-20-cfu-results

1 See Glossary below
2 On 1 April 2020, Supply Chain and Pelipod, which serve several parts of BT, were transferred from Enterprise to the central procurement team and as a result are now reported in Group ‘Other’ financial results. The prior year comparative for the Enterprise and Other CFU results has been restated to reflect this. Refer to the announcement on 29 June 2020 for further information

 

Glossary of alternative performance measure

Adjusted

Before specific items. Adjusted results are consistent with the way that financial performance is measured by management and assist in providing an additional analysis of the reporting trading results of the group.

EBITDA

Earnings before interest, tax, depreciation and amortisation.

Adjusted EBITDA

EBITDA before specific items, share of post tax profits/losses of associates and joint ventures and net non-interest related finance expense.

Free cash flow

Net cash inflow from operating activities after net capital expenditure.

Capital expenditure

Additions to property, plant and equipment and intangible assets in the period.

Normalised free cash flow

Free cash flow after net interest paid and payment of lease liabilities, before pension deficit payments (including the cash tax benefit of pension deficit payments) and specific items.

Net debt

Loans and other borrowings and lease liabilities (both current and non-current), less current asset investments and cash and cash equivalents, including items which have been classified as held for sale on the balance sheet. Currency denominated balances within net debt are translated into sterling at swapped rates where hedged. Fair value adjustments and accrued interest applied to reflect the effective interest method are removed.

Specific items

Items that in management’s judgement need to be disclosed separately by virtue of their size, nature or incidence. In the current period these relate predominantly to retrospective regulatory charges, restructuring charges linked with our modernisation programme and other cost initiatives, and divestment related items. Further information is provided in note 6 on page 22.

We assess the performance of the group using a variety of alternative performance measures. Reconciliations from the most directly comparable IFRS measures are in Additional Information on pages 30 to 32.

 

 

DownloadDownload - Results for the half year to 30 September 2020

 

About BT

BT Group is the UK’s leading telecommunications and network provider and a leading provider of global communications services and solutions, serving customers in 180 countries. Its principal activities in the UK include the provision of fixed voice, mobile, broadband and TV (including Sport) and a range of products and services over converged fixed and mobile networks to consumer, business and public sector customers. For its global customers, BT provides managed services, security and network and IT infrastructure services to support their operations all over the world. BT consists of four customer-facing units: Consumer, Enterprise, Global and its wholly-owned subsidiary, Openreach, which provides access network services to over 650 communications provider customers who sell phone, broadband and Ethernet services to homes and businesses across the UK.

For the year ended 31 March 2020, BT Group’s reported revenue was £22,905m with reported profit before taxation of £2,353m.

British Telecommunications plc is a wholly-owned subsidiary of BT Group plc and encompasses virtually all businesses and assets of the BT Group. BT Group plc is listed on the London Stock Exchange.

For more information, visit www.bt.com/about