TIDMBT.A
RNS Number : 9340N
BT Group PLC
04 February 2021
Trading update
Results for the nine months to 31 December 2020
BT Group plc
4 February 2021
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 NPS(1) ever, as
evidenced by strong BT sales and churn performance
-- Enterprise retail and wholesale order intakes up 8% to
GBP3.2bn and 5% to GBP1.2bn respectively on a 12-month rolling
basis
-- Global order intake up 1% to GBP4.1bn on a 12-month rolling basis
Financial:
-- Revenue GBP16,058m, 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
-- Adjusted(1) EBITDA GBP5,603m, 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 GBP1,591m, down 17%, due to reduced EBITDA
-- Normalised free cash flow(1) GBP830m, 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 GBP3,030m, primarily driven by
increased fixed and mobile network investment
-- Outlook for 2020/21: Unchanged except for lower end of
normalised free cash flow(1) outlook range raised to GBP1.3bn;
revised range GBP1.3bn-GBP1.5bn; the EBITDA outlook range remains
at GBP7.3bn-GBP7.5bn
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 WFTMR(2) 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 GBP7.9bn 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.
(1) See Glossary on page 5
(2) Wholesale Fixed Telecoms Market Review
Nine months to 31 December 2020 2019 Change
====== ======
GBPm GBPm %
Reported measures
Revenue 16,058 17,246 (7)
Profit before tax 1,591 1,911 (17)
Profit after tax 1,276 1,526 (16)
Capital expenditure 3,030 2,877 5
============================= ====== ====== =========
Adjusted measures
Adjusted(1) Revenue 16,084 17,192 (6)
Adjusted(1) EBITDA 5,603 5,900 (5)
Normalised free cash flow(1) 830 1,000 (17)
Net debt(1) 17,294 18,234 GBP(940)m
============================= ====== ====== =========
Overview of the nine months to 31 December 2020
CUSTOMER-FACING UNIT UPDATES
Adjusted(1) revenue Adjusted(1) EBITDA
Nine months to 31 2020 2019(2) Change 2020 2019(2) Change
December
GBPm GBPm % GBPm GBPm %
================== ======== ======= ====== ======= ======= ========
Consumer 7,494 7,895 (5) 1,610 1,800 (11)
Enterprise 4,086 4,445 (8) 1,268 1,436 (12)
Global 2,823 3,280 (14) 440 459 (4)
Openreach 3,898 3,817 2 2,211 2,139 3
Other 18 21 (14) 74 66 12
Intra-group items (2,235) (2,266) 1 - - -
================== ======== ======= ====== ======= ======= ======
Total 16,084 17,192 (6) 5,603 5,900 (5)
================== ======== ======= ====== ======= ======= ======
Third quarter to
31 December
================== ===== ===== ==== ===== ===== ====
Consumer 2,621 2,701 (3) 535 620 (14)
Enterprise 1,376 1,458 (6) 435 481 (10)
Global 907 1,084 (16) 151 155 (3)
Openreach 1,313 1,281 2 758 722 5
Other 6 7 (14) 3 (1) n/m
Intra-group items (746) (752) 1 - - -
================== ===== ===== ==== ===== ===== ====
Total 5,477 5,779 (5) 1,882 1,977 (5)
================== ===== ===== ==== ===== ===== ====
n/m = not meaningful
Unless otherwise stated, the following commentary relates to the
nine months to 31 December 2020
Consumer: Strong service performance, Covid-19 headwinds
continue
Revenue declined year on year as the negative impact of Covid-19
resulted in the continued partial closure of retail stores and pubs
& clubs regionally. Further pressures on mobile revenue were
reduced roaming and lower out of bundle usage; reduced prepaid
activity and increased SIM-only mix diluting postpaid ARPC, which
were partly offset by higher equipment revenue. Fixed revenue
declined through lower out of contract price rises and copper price
reductions to address back book pricing combined with a continued
decline of our voice only customer base and call volumes. EBITDA
declined in line with lower revenue and continued customer
investment in both copper to fibre migrations and growth of our
FTTP base, partially offset by H1 sports rights rebates and tight
cost management, boosted by our transformation programme. Broadband
base growth helped offset the ARPC decline aided by our largest
quarterly increase of 88k in the FTTP base which now stands at
686k. Our 5G ready customer base has increased to over 2.1m and 5G
is now live in 125 towns and cities. Our exclusive Full Works Plan
for iPhone supported a successful iPhone 12 launch, with EE
customers enjoying Apple Music, Apple TV+ and Apple Arcade for the
duration of their plan, along with unlimited mobile data on the
UK's number one network. Lockdown restrictions in Q4 are expected
to further impact trading performance with almost our entire retail
estate closed in addition to all pubs and clubs.
Enterprise: Continued Covid-19 impacts but ongoing focus on
transformation, innovation and partnerships
Revenue was down predominantly due to continued impacts from
Covid-19 and ongoing declines in legacy products. Excluding the
divestments of Fleet and Tikit in the prior year, revenue was down
6% and EBITDA was down 11%. The decline in profit was mainly a
result of Covid-19, partly offset by lower costs from our
transformation programme. In the quarter, cash benefited from the
monetisation of a non-strategic revenue stream generated from our
building infrastructure. Retail order intake increased 8% to
GBP3.2bn and wholesale order intake increased 5% to GBP1.2bn on a
12-month rolling basis, both helped by a strong performance in the
third quarter. Since the relaunch of our Halo business product last
year as part of our Small Business Support Scheme, 25k businesses
are now able to stay better connected to their customers when
working remotely or on the move. We have strengthened our support
for SMEs, adding a new mentoring programme in partnership with
Digital Boost. We also collaborated with the University of Warwick
and Warwickshire County Council to switch on the UK's first
dedicated public 5G network for a connected campus, bringing
ultrafast 5G mobile to students and staff through our EE mobile
network, as well as providing a series of 5G led use cases. We
extended our partnership with RingCentral, combining the best of
BT's network leadership and resources with RingCentral's
industry-leading technology. Our 'Cloud Work provided by
RingCentral' offering provides UK businesses and public sector
customers with a seamless communications experience for distributed
workforces to collaborate effectively. We expect Covid-19 to impact
trading and business insolvencies, particularly our direct and
indirect SME customers, in Q4 and into 2021/22. In addition, we
expect to see some opex investment in Q4 as part of our
transformation plans. In the quarter we also exercised our call
option to purchase the remaining 30% non-controlling interest in BT
OnePhone Limited. We expect to finalise the purchase in H1 2021/22,
the purchase price will be based on independent valuations.
(1) See Glossary on page 5. Commentary on revenue and EBITDA is
based on adjusted measures.
(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 will now be 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.
Global: Continued execution of strategy helping to reduce
Covid-19 impact
Revenue was negatively impacted by Covid-19, divestments of
domestic businesses in Spain, Latin America and France, mature and
legacy portfolio declines and an GBP8m negative impact from foreign
exchange movements. Revenue excluding divestments and foreign
exchange was down 10%. EBITDA was down reflecting the impact of
divestments, prior year favourable one-offs and a GBP4m negative
impact from foreign exchange movements. EBITDA, excluding
divestments, one-offs and foreign exchange was up 6%. The negative
impact of Covid-19 on revenue was more than offset by lower
operating costs reflecting ongoing transformation and Covid-19
mitigation actions. Order intake in the quarter was GBP1.2bn, up 1%
despite the impact of Covid-19. On a 12-month rolling basis it was
GBP4.1bn, also up 1% year on year. During the quarter we completed
the sale of selected domestic operations and infrastructure in
Latin America and France. We also agreed the sale of selected
business units in Italy serving domestic public administration and
SMEs. The transaction is subject to regulatory approval and is
expected to complete in Q1 2021/22. We continue to see a reduction
in spending and a more cautious approach from our multinational
customers resulting in cancellations and delays to purchasing
cycles, which will negatively impact revenue and EBITDA in Q4 and
subsequent periods.
Openreach: FTTP build remains on track
Revenue growth was driven by higher rental bases in
fibre-enabled products(1) , up 17%, and Ethernet, up 8% at quarter
end. This was partially offset by a decline in legacy copper
products. Openreach achieved record FTTP orders of 17k per week in
the quarter, and announced it will be extending several commercial
FTTP offers, including its FTTP-only offer. EBITDA grew 3% slightly
ahead of revenue growth. Operating costs were broadly flat, with
higher service costs as we continue to deliver against our
customers' increasing service expectations, increased FTTP
provisions and pay inflation, broadly offset by ongoing efficiency
programmes. Openreach's FTTP rollout reached record levels in the
third quarter, building at an average run rate of 42k premises
passed per week and reaching 4.1m premises at quarter end.
Openreach signed its third R100 contract, covering the North of
Scotland, extending a long-standing partnership with the Scottish
Government to connect thousands of the hardest-to-reach premises.
Looking ahead, we do not anticipate any material trading impacts
arising as a result of the latest Coronavirus restrictions across
the UK in the current financial year, although we do expect some
impact on FTTP and Gfast provisioning volumes, having temporarily
paused non-essential work inside customers' premises. Our FTTP
build remains on track to reach 4.5m premises by March 2021,
despite the latest restrictions.
(1) FTTP, FTTC and Gfast (including Single Order
migrations).
RESPONSE TO COVID-19
BT has played a critical role in keeping our customers and the
country connected throughout the pandemic with a wide range of
support programmes, including a number of recent initiatives during
Q3 and since the period end.
In response to tighter restrictions around Covid-19 and schools
closing, we have launched a 'Lockdown Learning' support scheme, and
announced plans to zero rate some of the most popular educational
content websites designed to support home learning for all EE, BT
Mobile and Plusnet Mobile customers, allowing customers and their
children to access educational content even if they have run out of
data.
We have also been working with the Department for Education to
ensure school children can continue to learn online whilst face to
face learning has been paused. We are giving unlimited mobile data
to children who need it the most, as well as thousands of free WiFi
vouchers to schools and charities to distribute to families without
an internet connection. We want our offer to be nationwide and we
are looking at the quickest route to extending the mobile data
programme to administrations in Northern Ireland, Scotland and
Wales.
In addition, we have launched our Stand Out Skills Campaign.
This initiative provides job-seekers of all ages with free tips,
resources and advice to help them build confidence and stand out in
a job search.
We have worked with the NHS to connect vaccination centres up
and down the country and our Life Lines Project, which allows
relatives to see and speak to their loved ones in intensive care
units via a video-enabled tablet, has now enabled more than 65k
virtual visits in NHS hospitals, accounting for more than 400k call
minutes across 180 hospitals.
FINANCIALS FOR THE NINE MONTHS TO 31 DECEMBER 2020
Income statement
Reported revenue was GBP16,058m, 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, but was partially offset by higher
rental bases of fibre-enabled products and Ethernet in
Openreach.
Adjusted(1) EBITDA of GBP5,603m was down 5% or GBP297m, mainly
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 was GBP1,591m, down 17% or GBP320m,
primarily reflecting the decline in adjusted EBITDA.
Tax
The effective tax rate was 19.8% on reported profit and 19.9% on
adjusted(1) profit, based on our current estimate of the full year
effective tax rate.
Capital expenditure
Capital expenditure was GBP3,030m (2019/20: GBP2,877m). Network
investment was up 10% to GBP1,669m, largely due to increased
network investment in FTTP. Other capital expenditure components
were largely flat, with GBP715m spent on customer-driven
investments, GBP558m on systems and IT, and GBP88m on non-network
infrastructure.
Normalised free cash flow
Normalised free cash flow(1) declined by GBP170m to an inflow of
GBP830m 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.
(1) See Glossary on page 5.
Net debt and liquidity
Net financial debt (which excludes lease liabilities) at 31
December 2020 was GBP11.0bn, GBP0.3bn lower than 31 March 2020
(GBP11.3bn), with net cash inflow from operating activities and net
proceeds from disposal of subsidiaries offsetting net capital
expenditure, net interest payments and lease payments.
Net debt(1) including lease liabilities was GBP17.3bn at 31
December 2020, GBP0.7bn lower than at 31 March 2020
(GBP18.0bn).
Outlook
No change to FY20/21 revenue, EBITDA or Capex guidance. The
EBITDA outlook range remains at GBP7.3bn-GBP7.5bn.
As a result of a cash receipt from the monetisation of a
non-strategic revenue stream generated from our building
infrastructure in Enterprise that more than offsets the negative
cash impact of Brexit planning and the Huawei pre-buy, we are
narrowing our FY20/21 normalised free cash flow guidance range to
GBP1.3bn-GBP1.5bn (from GBP1.2bn-GBP1.5bn).
(1) See Glossary on page 5.
OTHER DEVELOPMENTS
Regulation
Wholesale Fixed Telecoms Market Review (WFTMR) 2021-2026
In November, Ofcom published a further consultation on remedies.
We expect Ofcom to finalise its overall WFTMR proposals prior to
April 2021.
Broadband universal service obligation (USO)
In October, Ofcom opened an investigation into BT's compliance
with its obligations as a Universal Service provider. Ofcom is
gathering evidence and expects to provide an update by March
2021.
Spectrum auction
In December, we applied to bid in Ofcom's 700MHz and 3.6GHz
spectrum auction process. On 25 January, Ofcom announced that it is
planning for the principal stage of the auction (the start of
bidding) to begin in March 2021.
Consumer fairness
In November, we reported to Ofcom our adherence to its Fairness
for Customers commitments, in preparation for Ofcom's industry
report planned for Q4 2020/21. In December, Ofcom published
research on the affordability of telecoms services, calling on
communications providers (CPs) to do more to support customers in
financial difficulty. We are developing BT's new social tariff, and
we have continued to take action to address the Competition and
Markets Authority's "loyalty penalty" concerns. We committed to
carrying out regular account reviews for vulnerable customers, to
ensure they are on the best package to suit their needs.
European Electronic Communications Code (EECC)
We have made good progress in scoping and implementing the EECC
end-user rights. We are meeting with Ofcom to seek its view on how
it would assess compliance in areas that we have encountered
practical difficulties in implementing the requirements.
Wholesale Voice Markets Review
In November, we responded to Ofcom's Wholesale Voice Markets
Review consultation. The consultation covered mobile termination
rates, non-UK calls, point of interconnection migration, IP
interconnection services to wholesale call origination. This is a
critical piece of work from Ofcom as it regulates wholesale voice
services for the next five years when BT is planning an important
set of migrations and portfolio simplifications towards all-IP. The
ability to navigate this period with minimal and clear regulation
is essential for our business. Key risks we are seeking to mitigate
include revenue loss connected with lower termination charges, and
potential costs related to the introduction of new rules on IP
interconnection and uncertainty with the IP migration mentioned
above. Ofcom's final statement will be published in March 2021.
Other matters
Brexit
A post-Brexit deal on trade and other issues was agreed in
December between the UK and the EU. While there is clearly more for
the UK and EU to work through, we believe that the deal as agreed,
coupled with our own contingency planning, means we do not
currently expect any material financial or operational impact
resulting from Brexit. We're confident that we can continue
supporting and delivering great products and services for our UK
and global customers.
Government publishes draft telecommunications (security) bill
& spending review
In November, the Government published its draft
telecommunications (security) bill, which proposes to grant the
Government powers to enforce a ban on the use of high-risk vendor
equipment in UK telecommunications networks. It is understood that
the bill will go through the various parliamentary stages in early
2021. The costs to adhere with the draft telecommunications bill
are included within our outlook.
In November, the Government also published its spending review.
It committed GBP250m of funding to help diversify the UK 5G supply
chain; it changed its 2025 gigabit coverage target from all of the
UK to 85% of the UK; and it announced a plan to spend GBP1.2bn of
its committed GBP5bn rural subsidy for gigabit broadband by 2025,
which DCMS outlined in more detail on 22 December.
Contingent liabilities
The group is involved in various proceedings, including actual
or threatened litigation, and government or regulatory
investigations. Save for the updates provided below, there have
been no material updates relating to the legal proceedings and
regulatory matters as disclosed in our 31 March 2020 Annual Report
and our 30 September 2020 half year report.
Legal proceedings
In respect of each of the claims below, the nature and
progression of such proceedings and investigations can make it
difficult to predict the impact they will have on the group. There
are many reasons why we cannot make these assessments with
certainty, including, among others, that they are in early stages,
no damages or remedies have been specified, and/or the often slow
pace of litigation.
Brazilian tax claims
In October, the sale of BT Latam Inc. and its subsidiaries to
CIH Telecommunications Americas LLC was completed. As a result of
the sale the entities liable for the majority of all ICMS and
FUST/FUNTTEL matters are no longer a part of BT Group plc and it
will have no ongoing exposure with respect to those matters. The
retained business continues to be responsible for three ICMS cases
with a current estimated potential value of GBP11m, and 17
FUST/FUNTTEL cases with a current estimated potential value of
GBP4m. Other than these BT Group plc retains no material direct
exposures.
Class action claim
In January, law firm Mishcon de Reya applied to the Competition
Appeal Tribunal to bring a proposed class action claim for damages
estimated at GBP589 million on behalf of BT's landline-only
customers alleging anti-competitive behaviour through excessive
pricing by BT to customers with certain residential landline
services. BT intends to defend itself vigorously and regrets being
drawn into litigation on a topic which Ofcom considered more than
three years ago. At that time, Ofcom's final statement made no
finding of excessive pricing or breach of competition law more
generally. The claim seeks to hold against BT the fact that it
implemented a voluntary commitment to reduce prices for customers
that have a BT landline only and not to increase those prices
beyond inflation (CPI).
Regulatory and compliance matters
Northern Ireland Public Sector Shared Network contract
In December, Ofcom issued a final Confirmation Decision that BT
had contravened SMP Condition 5 (which requires BT to provide
network access on an 'Equivalence of Inputs' basis) in relation to
the above tender process. BT entered into a voluntary agreement
with Ofcom and paid a penalty of GBP6.3 million (which included a
30% discount for cooperating with Ofcom's investigation).
Other regulatory and compliance matters
In the ordinary course of business, we are periodically notified
of regulatory and compliance matters and investigations. We hold
provisions reflecting management's estimates of regulatory and
compliance risks across a range of issues, including price and
service issues. The precise outcome of each matter depends on
whether it becomes an active issue, and the extent to which
negotiation or regulatory and compliance decisions will result in
financial settlement.
Glossary
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.
Group NPS Group NPS measures Net Promoter Score in our retail
business and Net Satisfaction in our wholesale business.
Normalised free Free cash flow after net interest paid and payment
cash flow 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.
=================== ==============================================================
Our commentary focuses on the trading results on an adjusted
basis, which is a non-GAAP measure, being before specific items.
The directors believe that presentation of the group's results in
this way is relevant to an understanding of the group's financial
performance as specific items are those that in management's
judgement need to be disclosed by virtue of their size, nature or
incidence. This is consistent with the way that financial
performance is measured by management and reported to the Board and
the Executive Committee and assists in providing a meaningful
analysis of the trading results of the group. In determining
whether an event or transaction is specific, management considers
quantitative as well as qualitative factors such as the frequency
or predictability of occurrence. Reported revenue, reported
operating costs, reported operating profit and reported profit
before tax are the equivalent unadjusted or statutory measures.
Enquiries
Press office:
Tom Engel Tel: 020 7356 5369
Investor relations:
Mark Lidiard Tel: 020 7356 4909
We will hold a conference call for analysts and investors in
London at 9am today and a simultaneous webcast will be available at
www.bt.com/results
We are scheduled to announce the full year results for 2020/21
on 13 May 2021.
Forward-looking statements - caution advised
This results release contains certain forward-looking statements
which are made in reliance on the safe harbour provisions of the US
Private Securities Litigation Reform Act of 1995. These statements
relate to analyses and other information which are based on
forecasts of future results and estimates of amounts not yet
determinable. These statements include, without limitation, those
concerning: the potential impact of Covid-19 on our people,
operations, suppliers and customers, and BT's response to Covid-19;
the potential impact of Brexit on our people, operations, suppliers
and customers; current and future years' outlook; revenue and
revenue trends; EBITDA and profitability; free cash flow; capital
expenditure and costs; return on capital employed; return on
investment; shareholder returns including dividends and share
buyback; net debt; credit ratings; capital markets; our group-wide
transformation and restructuring programme (including the
establishment of any new business units), cost transformation plans
and restructuring costs; investment in and roll out of our fibre
network and its reach, innovations, increased speeds and speed
availability; our broadband-based service and strategy; investment
in and rollout of 5G; the investment in converged network;
improvements to the customer experience and customer perceptions;
our investment in TV, enhancing our TV service and BT Sport; the
recovery plan, operating charge, regular cash contributions and
interest expense for our defined benefit pension schemes; effective
tax rate; growth opportunities in technologies, networked IT
services, the pay-TV services market, broadband, artificial
intelligence and mobility and future voice; growth of, and
opportunities available in, the communications industry and BT's
positioning to take advantage of those opportunities; expectations
regarding competition, market shares, customers (including spend),
prices and growth; expectations regarding the convergence of
technologies; plans for the launch of new products, platforms and
services; retail and marketing initiatives including pricing and
account reviews; network performance and quality; the impact of
regulatory and/or legislative initiatives, decisions and outcomes
on operations; BT's possible or assumed future results of
operations and/or those of its associates and joint ventures;
investment plans (including mergers and acquisitions);
modernisation plans; adequacy of capital; financing plans and
refinancing requirements; divestments; demand for and access to
broadband and the promotion of broadband by third-party service
providers; improvements to the control environment; digital skills,
climate/environment, responsible tech/human rights and
diversity/inclusion targets (including plans in respect of
operations, progress monitoring/reporting, engagement, resources,
training and recruitment); investigations and litigation; and those
statements preceded by, followed by, or that include the words
'aims', 'believes', 'expects', 'anticipates', 'intends', 'will',
'should', 'plans', 'strategy', 'future', 'likely', 'seeks',
'projects', 'estimates' or similar expressions.
Although BT believes that the expectations reflected in these
forward-looking statements are reasonable, it can give no assurance
that these expectations will prove to have been correct. Because
these statements involve risks and uncertainties, actual results
may differ materially from those expressed or implied by these
forward-looking statements. Factors that could cause differences
between actual results and those implied by the forward-looking
statements include, but are not limited to: the duration and
severity of Covid-19 impacts on our people, operations, suppliers
and customers; failure to respond effectively to intensifying
competition and technology developments; failure to address the
lingering perception of slow pace and connectivity in broadband and
mobile coverage, which continues to be raised at a UK parliamentary
level; undermining of our strategy and investor confidence caused
by an adversarial political environment; challenges presented by
Covid-19 around network resilience, support for staff and
customers, data sharing and cyber security defence; unfavourable
regulatory changes; attacks on our infrastructure and assets by
people inside BT or by external sources like hacktivists,
criminals, terrorists or nation states; a failure in the supplier
selection process or in the ongoing management of a third-party
supplier in our supply chain, including failures arising as a
result of Covid-19; risks relating to our BT transformation plan;
failure to successfully manage our large, complex and high-value
national and multinational customer contracts (including the
Emergency Services Network and the Building Digital UK (BDUK)
programme) and deliver the anticipated benefits; changes to our
customers' needs, budgets or strategies that adversely affect our
ability to meet contractual commitments or realise expected
revenues, profitability or cash generation; customer experiences
that are not brand enhancing nor drive sustainable profitable
revenue growth; pandemics, natural perils, network and system
faults, malicious acts, supply chain failure, software changes or
infrastructure outages that could cause disruptions or otherwise
damage the continuity of end to end customer services including
network connectivity, network performance, IT systems and service
platforms; insufficient engagement from our people; adverse
developments in respect of our defined benefit pension schemes;
risks related to funding and liquidity, interest rates, foreign
exchange, counterparties and tax; failures in the protection of the
health, safety and wellbeing of our employees or members of the
public or breaches of health and safety law and regulations;
financial controls that may not prevent or detect fraud, financial
misstatement or other financial loss; security breaches relating to
our customers' and employees' data or breaches of data privacy
laws; failure to recognise or promptly report wrongdoing by our
people or those working for us or on our behalf (including a
failure to comply with our internal policies and procedures or the
laws to which we are subject); and the potential impacts of climate
change on our business.
BT undertakes no obligation to update any forward-looking
statements whether written or oral that may be made from time to
time, whether as a result of new information, future events or
otherwise.
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 GBP22,905m with reported profit before taxation of
GBP2,353m.
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 .
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END
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February 04, 2021 02:00 ET (07:00 GMT)
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