Trading statement for the first quarter to 30 June 2019
Key strategic developments:
- EE successfully launched the UK’s first 5G mobile network in six cities
- BT named the UK’s major broadband universal service obligation provider by Ofcom
- 12 successive quarters of improvement in Group NPS1, up 0.3 points
- Openreach announced updated pricing for wholesale FTTP broadband and the next 36 locations in its FTTP rollout
- BT welcomes the Government’s ambition for full fibre broadband across the country and is ready to play its part to accelerate the pace of rollout
- Sale of BT Centre agreed for £210m and lease signed for new headquarters in Aldgate, London
- Openreach continues FTTP rollout at c.20k premises passed per week with 267k premises passed in the quarter; 3.7m ultrafast (FTTP and Gfast) premises passed to date
- Consumer fixed ARPC £37.9 flat year on year; postpaid mobile ARPC £20.7, down 4.6% on Q1 2018/19 due to the impact of regulation and lower RPI price increases
- Fixed churn down to 1.3% following customer experience improvements; postpaid mobile churn remains at 1.1%
- EE first in 15 out of 16 RootMetrics tests for mobile network performance
- Reported and adjusted1 revenue of £5,633m down 1% with decreases in Consumer, Enterprise and Global
- Adjusted EBITDA1 down 1%2 at £1,958m driven by lower revenues and higher spectrum fees and content costs, partly offset by reduction in costs from restructuring and transformation programmes
- Reported profit before tax of £642m and adjusted1 profit before tax of £749m, impacted by the higher upfront interest expense on the IFRS 16 lease liabilities recognised from 1 April 2019
- Normalised free cash flow1 of £323m down 36% reflecting increased capital expenditure and higher interest and tax payments, partially offset by working capital phasing
- Reported capital expenditure of £931m up 11% primarily due to network investment and customer driven costs
- Full year outlook maintained
Philip Jansen, Chief Executive, commenting on the trading update, said
“BT delivered results in line with our expectations for the quarter, with adjusted EBITDA declines in Consumer and Enterprise partly offset by growth in Global. We are on track to meet our outlook for the full year.
“We made good progress during the quarter, including launching the UK’s first 5G network, delivering an improvement to our group net promoter score for the twelfth consecutive quarter, announcing the first nine cities in our consolidated office footprint, and being named the major broadband universal service obligation provider for the UK.
“In building a better BT for the future we need to be even more competitive. We will continue to take decisive action, including on price, to further strengthen our customer propositions and market position, both to respond to any short-term market pressures and to capitalise on longer-term opportunities.
“On network investment, we welcome the Government’s ambition for full fibre broadband across the country and we are confident we will see further steps to stimulate investment. We are ready to play our part to accelerate the pace of rollout, in a manner that will benefit both the country and our shareholders, and we are engaging with the Government and Ofcom on this.”
1 See Glossary on page 5 2 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 basisn/m = IFRS 16 to IAS 17 comparison not meaningful
BT’s purpose is to use the power of communications to make a better world. It is one of the world’s leading providers of communications services and solutions, serving customers in 180 countries. Its principal activities include the provision of networked IT services globally; local, national and international telecommunications services to its customers for use at home, at work and on the move; broadband, TV and internet products and services; and converged fixed-mobile products and services. BT consists of four customer-facing units: Consumer, Enterprise, Global and Openreach.
For the year ended 31 March 2019, BT Group’s reported revenue was £23,428m with reported profit before taxation of £2,666m.
British Telecommunications plc (BT) 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 stock exchanges in London and New York.