BT Group Newsroom

BT Group makes Cost of Living Pay Rise as union recommends end to strikes

Mon, 28 Nov 2022 14:30:00 +0000

BT Group has today announced plans for a UK Cost of Living Pay Rise to all but the highest paid staff. Chief Executive, Philip Jansen, presenting the company’s half year results this month, had made clear his determination to make such an award. Subsequent discussions with the Communication Workers Union (CWU) and Prospect have led to both unions recommending agreement.

Details of the Cost of Living Pay Rise are:

£1,500 pay rise for all UK colleagues who currently earn £50,000 or less from 1 Jan 2023
Consolidated salary increase, not one-off payment
Covers 100% of frontline staff (and others at ‘Team Member’ grade), and 51% of managers in the UK. In total, 85% of UK-based BT Group colleagues
Highly competitive pay award when combined with the increase made in April, bringing the total percentage pay rise for the lowest paid to over 15% since this time last year
Includes Openreach

The Cost of Living Pay Rise is being communicated to all UK BT Group staff today. At the same time, CWU and Prospect will communicate to their members, and will run consultative ballots recommending people vote in favour. The outcome of those ballots will be announced in mid-December, and in the case of the CWU would end industrial action if members are supportive.

BT Group has committed to still run a 2023 pay review for UK colleagues but this will now move to September 2023 and take into account the January Cost of Living Pay Rise.

Announcing the new Cost of Living Pay Rise, BT Group Chief Executive, Philip Jansen said:

“This award is based on the principles we have followed throughout this difficult period. It gets help to as many of our colleagues as possible; favours our lower paid colleagues; and gives people the security of a built-in, pensionable increase to their pay.

“Crucially, it has been worked on in conjunction with the CWU. As I’ve said throughout, whatever our differences, our unions are vital partners. We will now build on this collaboration: We have agreed with both our union partners that we will all lean into the opportunities and challenges the future will bring, specifically our transformation plans and the delivery of the £3bn cost savings by the end of FY25. Ultimately, we all want BT Group to be successful so that we can do the best by our people and customers for years to come.”

Trading update results for the nine months to 31 December 2021

Thu, 03 Feb 2022 07:00:00 +0000

BT Group plc (BT.L) today announced its trading update for the nine months to 31 December 2021.

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

“BT has had a good quarter with encouraging market share performance, and we continued to make significant improvements in customer service, although revenue from our enterprise divisions was softer than we expected.

We had another record-breaking quarter on our full fibre build and a pleasing 37% increase in FTTP connections following the launch of Openreach’s wholesale pricing offer. Our 5G build is also on track and now covers over 40% of the UK population with independently verified network leadership.

Today sees two important strategic partnership announcements on how BT moves forward in the fast-evolving content and TV business. The agreement in principle with Sky will provide our customers more choice and more flexibility for the next decade. Separately, we are excited at the prospect of a new joint venture between BT Sport and Eurosport UK as we enter into exclusive discussions with Discovery.”

Strong operating momentum delivered by record customer experience and FTTP build:

Reached agreement in principle with Sky for a new longer-term reciprocal channel supply deal to beyond 2030
Separately, entered exclusive discussions with Discovery to create a joint venture with BT Sport and Eurosport UK
Delivered record FTTP build of 662k at an average rate of over 50k per week in the quarter with footprint now at 6.5m, including 2m rural premises
FTTP take up accelerated to 1.5m premises driven by Openreach's Equinox offer
5G ready customer base over 6.4m; 5G now covers more than 40% of the UK population
According to RootMetrics, EE again has the UK's best 4G and 5G networks
Highest ever NPS result for BT Group

Continued EBITDA growth with revenue challenges due to delayed Covid-19 recovery and supply chain issues¹:

Revenue £15,676m, down 2%; declines primarily in Global and Enterprise partly offset by growth in Openreach; adjusted² revenue down 3%
Adjusted² EBITDA £5,708m, up 2%; driven by tight cost management, lower indirect commissions and higher revenue from Ethernet and fibre-enabled products, partly offset by declining revenue in Global and Enterprise
Reported profit before tax £1,537m, down 3%, primarily due to higher finance expenses and depreciation and amortisation, partly offset by increased EBITDA
Normalised free cash flow² £878m, up 6%, primarily due to increased EBITDA, lower cash tax payments and improved working capital, offset by higher cash capital expenditure and one-off items in the prior year
Capital expenditure up 24% to £3,752m, primarily due to investment in spectrum, FTTP and mobile network
Group adjusted² revenue now expected to be down around 2% for FY22 as a result of Covid-19 and supply chain issues; all other outlook metrics unchanged

Download - Trading update results for the nine months to 31 December 2021

_{¹ All commentary relates to the nine months to 31 December 2021 unless otherwise stated.}
_{²See Glossary on page 4.}
_{³Net debt was £17,802m at 31 March 2021.}

Trading update results for the three months to 30 June 2021

Thu, 29 Jul 2021 07:02:10 +0100

BT Group plc (BT.L) today announced its trading update for the three months to 30 June 2021.

Key strategic developments:

Openreach announced an offer for communications providers giving long-term price certainty on FTTP to drive widespread adoption of ultrafast, ultra-reliable full fibre broadband

Announced long-term mobile network plans including: a 5G network that covers over 90% of the UK’s landmass by 2028; 4,500 square miles of new rural 4G coverage by 2025; and retiring legacy 3G services by 2023

Announced a strengthened strategic partnership with Microsoft to accelerate innovation across enterprise voice, cyber security and industry-focussed services

Reached agreement with the CWU¹ that recognises the need for change, ensures our colleagues continue to be treated fairly and with respect as we remain on track to modernise BT

Announced the launch of our new SoHo (Single/Small office, Home office) unit in Enterprise

Completed the sale of business units in Italy serving customers in the public administration and SME sectors

Invested in Safe Security, a leader in cyber risk quantification, reflecting our increased focus on security

Launched our Hope United campaign using the power of football to tackle online hate, as we continue to lead on the responsible use of technology

Strong operational performance with continued focus on our network growth:

Openreach FTTP network now covers 5m premises; increased our rural FTTP target to 6.2m premises as part of our programme to reach 25m premises by the end of 2026

Openreach announced it will stop selling legacy products to a total of 3m premises across 297 exchanges from April 2022

Launched Home Essentials, an industry-leading social tariff available to 4.6m low income households

Strong growth in FTTP connections and 5G-ready customer base in Consumer

Revamped our converged Halo for business broadband bundles to provide 900Mbps full fibre and Unbreakable Wi-Fi

Half of total Global orders won in the quarter were for products in our growth portfolio

Financials on track to deliver outlook and a path to growth:

Revenue £5,071m, down 3%; revenue has grown in Consumer and Openreach, and remained flat in the SME sector, more than offset by declines in the Corporate and Public Sector segment in Enterprise and in Global

Adjusted² EBITDA £1,866m, up 3%; all units have delivered EBITDA growth, with the exception of Global

Reported profit before tax £536m, down 4% despite higher adjusted² EBITDA, primarily due to the prior year gain on disposal of our domestic Spanish operations

Reported profit after tax £2m, down £446m, due to a one-off tax charge in the quarter to reflect the remeasurement of deferred tax balances following the enactment of the new UK corporation tax rate of 25% from April 2023

Normalised free cash flow² £(43)m, up 12%, due to improved EBITDA and lower cash tax payments, offset by higher cash capital expenditure

Capital expenditure up 63% to £1,507m, primarily due to investment in spectrum; capital expenditure excluding spectrum payments up 9% to £1,011m, primarily due to FTTP provisioning activities, mobile network spend and non-network infrastructure due to the Better Workplace programme

No change to FY22 or FY23 outlook

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

Our operational performance remained strong and our EBITDA grew during the first three months of the year, reflecting improved trading across most of our business and the positive benefits of our plans to modernise BT. Our results were overall in line with our expectations during the quarter, with good performance in the UK offsetting challenging conditions in Global's markets.

We’re powering ahead with our network build programmes: Openreach has now built full fibre broadband to more than 5m premises with growing customer demand; EE has set out plans for 5G on demand anywhere in the UK by 2028. We’ve also reached a partnership agreement with our largest trade union, the CWU¹ , allowing us to keep our modernisation plans on track.

We continue to invest in new strategic growth areas and have also today announced a strengthened strategic partnership with Microsoft that will see us accelerate co-innovation across all areas of our business, including enterprise voice and cyber security, supporting our growth strategy.

With trading conditions expected to see some improvement through the year, we have confirmed our outlook and remain confident that BT is on a path to growth.

Download - Trading update for the three months to 30 June 2021

_{¹ Communications Workers Union.
² See Glossary on page 3.
³ Net debt was £17,802m at 31 March 2021.}

Trading update results for the nine months to 31 December 2020

Thu, 04 Feb 2021 07:00:26 +0000

BT Group plc (BT.L) today announced its trading update for the nine months to 31 December 2020.

Key strategic developments:

Creation of a new technology unit - Digital - to lead our digital innovation agenda from 1 April 2021; Digital will lead the IT, process and business transformation of BT and develop and deliver new growth products, platforms and services

Sale agreed of selected business units in Italy
Continued progress on our wider modernisation programme including the creation of a standalone procurement company

Operational:

Openreach’s FTTP network now reaches 4.1m premises, built at an average run rate of 42k premises passed per week in the quarter; remains on track to achieve 4.5m by March 2021
Openreach's first copper stop-sell now live in Salisbury, extending to 2.2m premises by January 2022

FTTP commercial offers extended; all of Openreach's major communications provider customers now selling FTTP with strong increase in sales in Q3; Openreach achieved record 17k FTTP orders per week

5G in 125 locations and 5G ready customer base now over 2.1m; EE has taken top spot in Rootmetrics' latest national results for the 15th consecutive time with 5G in more places than any other network according to Rootmetrics

Consumer fixed ARPC down 5.8% year on year due to commitments to meet our fairness agenda, investment in our long term strategic base and declining voice usage; postpaid mobile ARPC down 6.9% year on year due to increased SIM-only mix, decline in roaming and out of bundle revenue

In Consumer, BT brand at its highest NPS¹ ever, as evidenced by strong BT sales and churn performance

Enterprise retail and wholesale order intakes up 8% to £3.2bn and 5% to £1.2bn respectively on a 12-month rolling basis

Global order intake up 1% to £4.1bn on a 12-month rolling basis

Financial:

Revenue £16,058m, down 7% due primarily to the impact of Covid-19 on Consumer and our enterprise units, ongoing legacy product declines and divestments of domestic businesses in Spain, Latin America and France
Adjusted¹ EBITDA £5,603m, down 5%, driven by the fall in revenue, partially offset by H1 sports rights rebates, savings from our modernisation programme and other cost initiatives including Covid-19 mitigating actions
Reported profit before tax £1,591m, down 17%, due to reduced EBITDA
Normalised free cash flow¹ £830m, down 17%, due to reduced EBITDA and higher cash capital expenditure, offset by a cash receipt from the monetisation of a non-strategic revenue stream generated from our building infrastructure and timing of tax payments
Capital expenditure up 5% to £3,030m, primarily driven by increased fixed and mobile network investment
Outlook for 2020/21: Unchanged except for lower end of normalised free cash flow¹ outlook range raised to £1.3bn; revised range £1.3bn-£1.5bn; the EBITDA outlook range remains at £7.3bn-£7.5bn

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

During the current Covid-19 pandemic, BT has continued to deliver for our customers and invest in our networks, our modernisation programme, and our products and services in recognition of the ever increasing need for improved and faster connectivity. We delivered results in line with our expectations for the third quarter and remain on track to deliver our 2020/21 outlook despite even greater Covid-19 restrictions than previously forecast. BT has shown again that it has the spirit and determination to step up and deliver for our customers, keeping them connected with a range of initiatives. I am particularly proud of the ongoing work and investments we are making to support school children, SMEs and the NHS during the pandemic.

We continue to make significant investments in our industry leading networks; with FTTP having now passed over 4m premises and 5G available in 125 towns and cities, we're firmly on track to deliver our March 2021 targets. Openreach FTTP orders accelerated even further to reach another record level of 17k per week. We have demonstrated continued improvement in our operational performance, including acceleration of FTTP and 5G take-up, and customer satisfaction metrics. This reflects our progress in creating valued, reliable, stand out customer experiences and propositions; the next evolution of our flagship convergence proposition, Halo 3+, will drive even further progress.

As the WFTMR² consultation process draws to a close we're focused on ensuring the new regulation will create an environment to allow for fair returns across our industry including the additional significant network investment we are poised to undertake. The latest proposals from Ofcom are positive for investment in many areas, but there are key points of clarity still needed to unlock the fibre investment the country needs; and we still need to see concrete progress from Government on the things they can do to support the fibre roll out.

With no material impact expected from the Brexit deal and our resilient results so far this year I remain confident in our EBITDA expectation of at least £7.9bn for 2022/23. Looking further ahead our new Digital unit will enable us to accelerate our digital and business transformation programmes and to deliver digital platforms that bring together best-in-class services for our customers, further securing a brighter and more sustainable future for the group.

Download - Trading update for the nine months to 31 December 2020

_{¹ See Glossary on page 5
² Wholesale Fixed Telecoms Market Review}

Results for the half year to 30 September 2020

Thu, 29 Oct 2020 07:00:41 +0000

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."

_{¹ Communications provider
² See Glossary on page 2}

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

_{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.

Download - Results for the half year to 30 September 2020

Trading update for the nine months to 31 December 2019

Thu, 30 Jan 2020 07:00:25 +0000

BT Group plc (BT.L) today announced its trading update for the nine months to 31 December 2019.

Key strategic developments - continued delivery in line with strategy:

Ofcom's consultation on the Wholesale Fixed Telecoms Market Review is an important step forward in incentivising investment in the UK's digital infrastructure and toward enabling BT to significantly increase its FTTP target
Exclusive rights to UEFA Champions League, UEFA Europa League and UEFA Europa Conference League secured until 2024
On-shoring of BT brand sales and service calls completed; nearly 500 retail stores now BT/EE dual branded
Our Better Workplace programme confirmed further long-term locations in Birmingham and Bristol
Sale agreed of our domestic operations in Spain
Important clarification on use of certain vendors in 5G and full fibre networks - estimated impact of c.£500m over 5 years

Operational:

5G now live in over 50 locations; EE found to have broadest 5G network by RootMetrics
Openreach accelerates FTTP build at c.26k premises passed per week; 2.2m FTTP premises passed to date
Openreach awarded two of three lots to provide superfast speeds to Scotland; vast majority of build to be FTTP
Consumer fixed ARPC £38.2, down 4% year on year due to decline in voice revenue; postpaid mobile ARPC £20.3, down 5% due to impact of regulation and continued trend towards SIM-only; RGUs per address 2.38
Postpaid mobile churn remains low at 1.3% in Q3 despite impact of auto switching; fixed churn at 1.3% in Q3 down from 1.4% in prior year following customer experience improvements and new pricing strategy

Financial:

Reported revenue £17,246m and adjusted² revenue £17,192m, both down 2%¹ primarily due to ongoing headwinds from regulation, competition and legacy product declines
Reported profit before tax of £1,911m; adjusted² EBITDA £5,900m, down 3%¹, due to the fall in revenue, higher spectrum fees, investment in customer experience and higher operating costs in Openreach
Normalised free cash flow² of £1,000m, down 42% due to increased cash capital expenditure, deposit for UEFA club football rights, higher interest and tax payments and working capital, partially offset by one-off cash flows
Capital expenditure £2,877m. Up £251m excluding BDUK funding deferral, driven by fixed and mobile network investment
Overall financial outlook maintained; we expect normalised free cash flow², for timing reasons, to be in lower half of the £1.9bn - £2.1bn full year guidance range

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

“BT delivered results slightly below our expectations for the third quarter of the year, but we remain on track to meet our outlook for the full year.

“We continue to invest in the business. During the quarter we launched Halo, the UK’s ultimate converged plan, which will give homes and businesses the best connection and service. We’ve continued to use our national scale and local presence across the UK to provide customers with the best possible experience, for example by meeting our promise to answer all customer calls in the UK and Ireland and bringing BT sales and service back to the high street in nearly 500 BT/EE stores.

“Underpinning the ongoing development of market-leading propositions, we continue to invest in the best converged network. We welcomed the direction of Ofcom’s recent consultation, which is an important step forward towards a widely-shared ambition to invest in fibre across the whole of the UK. We’re also investing in 5G, making it available in over 50 locations, with the first customers enjoying a great experience.

"The security of our network is paramount for BT. We therefore welcome and are supportive of the clarity provided by Government around the use of certain vendors in networks across the UK and agree that the priority should be the security of the UK’s communications infrastructure. We are in the process of reviewing the guidance in detail to determine the full impact on our plans and at this time estimate an impact of around £500 million over the next 5 years.

“I’m really excited about the long-term prospects for this great company and I‘m confident our plans will enable us to be bolder, smarter, and faster to ensure that we remain successful and create a better BT for the future.”

_{¹ Changes on prior year are presented on an IAS 17 basis where meaningful except for adjusted EBITDA, which is presented on an IFRS 16 pro forma basis
² See Glossary on page 5
n/m = IFRS 16 to IAS 17 comparison not meaningful}

Download full trading update

Results for the half year to 30 September 2019

Thu, 31 Oct 2019 07:01:00 +0000

BT Group plc (BT.L) today announced its results for the half year to 30 September 2019.

Key strategic developments:

Launched a host of new products for consumer and business segments, including the new BT Halo converged product plans and BT Mobile 5G
Introduced a range of new service initiatives including bringing the BT brand to the high street in over 600 EE/BT dual-branded stores, and to answer 100% of customer calls in the UK & Ireland from January 2020
Continued to make progress on the BT modernisation agenda, including delivering over £1.1bn transformation benefits, announcing the first locations in our Better Workplace Programme, and disposal of BT Fleet Solutions
Outlined our Skills for Tomorrow programme to provide digital skills training for 10m UK children, families and businesses

Operational:

5G network live in over 20 cities and large towns; 5G smartphone plans now available on both EE and BT brands
Openreach announced the launch of new FTTP 1Gbps and 550Mbps products. FTTP rollout at c.23k premises passed per week; 4.2m ultrafast (FTTP and Gfast) premises passed to date; currently announced plans to build FTTP in 103 locations
Consumer fixed ARPC £38.5, broadly flat year on year; postpaid mobile ARPC £20.8, down 5.5% year on year due to impact of regulation and continued trend towards SIM-only; RGUs per address up to 2.38
Postpaid mobile churn remains low at 1.2% in Q2 despite impact of auto switching; fixed churn at 1.3% in Q2 down from 1.6% in prior year

Financial:

Reported revenue £11,467m, down 1%¹ mainly reflecting the impact of regulation, declines in legacy products, and strategically reducing low margin business
Reported profit before tax £1,333m, broadly flat year on year; adjusted² EBITDA £3,923m, down 3%¹ due to lower revenues, increased spectrum fees, content costs and investment to improve competitive positioning partly offset by cost savings from transformation programmes
Net cash inflow from operating activities of £2,173m; normalised free cash flow² of £604m, down 38% due to increased capital expenditure, higher interest and tax payments, partially offset by one-off cash flows
Capital expenditure £1,882m. Up £225m excluding BDUK grant funding deferral, driven by increased network investment
Net debt² increased primarily due to implementation of IFRS 16, £6.1bn, and net business cash outflows, £1.2bn
Interim dividend of 4.62p per share; 30% of last year’s full-year dividend of 15.4p per share
Overall financial outlook maintained

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

“BT delivered results in line with our expectations for the second quarter and first half of the year, and we remain on track to meet our outlook for the full year.

“We’ve invested to strengthen our competitive position. We’ve accelerated our 5G and FTTP rollouts, introduced an enhanced range of product and service initiatives for both consumer and business segments, and announced price and technology commitments to deliver fair, predictable and competitive pricing for customers.

“Openreach is significantly accelerating its pace of FTTP build and is now passing a home or business every 26 seconds. Openreach announced a further 29 locations in its build plan to reach 4m premises by March 2021, and we continue to make positive progress with Government and Ofcom on the enablers to stimulate further investment in full fibre.

“We continue to make progress on the BT modernisation agenda, delivering over £1.1bn in annualised cost savings, and announcing locations in our Better Workplace Programme.”

Customer-facing unit results for the half year to 30 September 2019

Glossary of alternative performance measures

Adjusted	Before specific items
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. 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
IFRS 16 pro forma	On 1 April 2019, BT adopted IFRS 16 Leases, which replaced IAS 17 Leases. To aid comparability, pro forma financial information for 2018/19 has been presented to reflect how the results would have looked like if the accounting standard had been adopted last year. See page 9 for more details.
Specific items	Items that in management’s judgement need to be disclosed separately by virtue of their size, nature or incidence. Further information is provided in note 6 on page 25

_{We assess the performance of the group using a variety of alternative performance measures. The rationale for using adjusted measures is explained in note 1 on page 32. Results on an adjusted basis are presented before specific items. Reconciliations from the most directly comparable IFRS measures are in Additional Information on pages 32 to 34.}

Results for the full year to 31 March 2019

Thu, 09 May 2019 06:00:00 +0100

BT Group plc (BT.L) today announced its results for the full year to 31 March 2019.

Key strategic developments:

FTTP build targets increased from 3m to 4m premises passed by March 2021; FTTP ambition increased from 10m to 15m by mid-2020s and remains subject to conditions being right
EE to launch 5G imminently and on track to go live in 16 cities in 2019 with a range of device partners
Continued quarterly improvement in customer experience metrics; Group NPS¹ up 6.5 points, Right First Time² up 5.4%
Initiatives to transform our business are on track; restructuring programme achieved annualised cost savings of £875m

Operational:

Openreach passed c.2m premises with Gfast and c.1.2m with FTTP; now passing c.20,000 premises with FTTP per week
BT Plus takeup remains encouraging with around 1 million subscribers since May 2018 launch
Consumer fixed ARPC down 0.3% in the quarter to £38.8 reflecting retail market competition; postpaid mobile ARPC down 0.9% in the quarter to £20.9 due to increased mix of SIM only; RGUs per address stable at 2.37
Mobile churn down to 1.1% reflecting improved retention and successful device launches; fixed churn flat at 1.4%

Financial:

Reported revenue of £23,428m and adjusted revenue of £23,459m both down 1%⁴ as growth in Consumer was offset by regulated price reductions in Openreach and declines in our enterprise businesses, in particular in fixed voice
Reported profit before tax of £2,666m, up 2%; adjusted³ EBITDA of £7,392m, down 2%⁴
Net cash inflow from operating activities of £4,256m, down 14% mainly due to pension deficit payments, increased capital expenditure and lower EBITDA; normalised free cash flow³ of £2,440m, down 18%
Capital expenditure £3,963m, up £441m, of which £213m relates to BDUK grant funding deferral including the change in take-up assumption announced in Q2, and the remainder primarily to increased investment in FTTP
Proposed final dividend of 10.78p pence per share, giving a full-year dividend of 15.4p; unchanged on last year
Outlook for 2019/20: adjusted³ revenue down c.2%, adjusted³ EBITDA £7.2bn - £7.3bn, capital expenditure⁵ £3.7bn - £3.9bn and normalised free cash flow³ of £1.9bn - £2.1bn

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

“BT delivered solid results for the year, in line with our guidance, with adjusted profit growth in Consumer and Global Services offset by declines in Enterprise and Openreach.

“Since joining the company three months ago, it has become clear to me just how fundamental BT’s role is in connecting our society. While we are really well positioned in a very challenging and competitive UK market, we have a lot of work to do to ensure we remain successful and deliver long term sustainable value to our shareholders. We need to invest to improve our customer propositions and competitiveness. We need to invest to stay ahead in our fixed, mobile and core networks, and we need to invest to overhaul our business to ensure that we are using the latest systems and technology to improve our efficiency and become more agile.

“Our aim is to deliver the best converged network and be the leader in fixed ultrafast and mobile 5G networks. We are increasingly confident in the environment for investment in the UK. We have already announced the first 16 UK cities for 5G investment. Today we are announcing an increased target to pass 4m premises with ultrafast FTTP technology by 2020/21, up from 3m, and an ambition to pass 15 million premises by the mid-2020s, up from 10 million, if the conditions are right, especially the regulatory and policy enablers.

“For 2018/19 the Board has decided to hold the full year dividend unchanged at 15.4p per share. The Board also expects to hold the dividend unchanged in respect of the current financial year given our outlook for earnings and cash flow.”

_{¹ Group NPS measures Net Promoter Score in our retail business and Net Satisfaction in our wholesale business

² Measured against Group-wide ‘Right First Time’ (RFT) index

³ See Glossary on page 2

⁴ Measured against IFRS 15 pro forma comparative period in the prior year

⁵ Excluding BDUK clawback}

Customer facing unit results for the full year to 31 March 2019

Performance against 2018/19 outlook

_{¹ See Glossary below

² Excluding BDUK clawback

n/m = not meaningful}

Glossary of alternative performance measures

Adjusted	Before specific items
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 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, before pension deficit payments (including the cash tax benefit of pension deficit payments) and specific items
Net debt	Loans and other borrowings (both current and non-current), less current asset investments and cash and cash equivalents. Currency denominated balances within net debt are translated to 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. Further information is provided in note 6 on page 26
Underlying	Excludes specific items, foreign exchange movements and the effect of acquisitions and disposals. Further information is provided in note 1 on page 36

We assess the performance of the group using a variety of alternative performance measures. The rationale for using adjusted measures is explained in note 1 on page 36. Results on an adjusted basis are presented before specific items. Reconciliations from the most directly comparable IFRS measures are in Additional Information on pages 36 to 38.