TIDMBT.A
RNS Number : 5440D
BT Group PLC
29 October 2020
Results for the half year to 30 September 2020
BT Group plc
29 October 2020
This announcement contains inside information
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 CP(1) 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 GBP352m gross annualised savings at a cost of GBP163m
Financial:
-- Revenue relatively resilient at GBP10,590m, 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
-- Adjusted(2) EBITDA GBP3,721m, 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 GBP1,062m, down 20%, driven primarily by reduced EBITDA
-- Net cash inflow from operating activities GBP2,713m;
normalised free cash flow(2) GBP422m, down 30%, primarily due to
reduced EBITDA and offsetting movements in working capital and
timing of tax payments
-- Capital expenditure GBP1,969m, up 5%, primarily driven by fixed and mobile network investment
-- Lower end of the adjusted(2) EBITDA outlook range for 2020/21
raised to GBP7.3bn; revised range GBP7.3bn - GBP7.5bn
-- Adjusted(2) EBITDA outlook of at least GBP7.9bn 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 GBP352m 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 GBP7.9bn 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."
Half year to 30 September 2020 2019 Change
====== ======
GBPm GBPm %
=============================== ====== ====== ===========
Reported measures
Revenue 10,590 11,467 (8)
Profit before tax 1,062 1,333 (20)
Profit after tax 856 1,068 (20)
Basic earnings per share 8.6p 10.8p (20)
Net cash inflow from operating
activities 2,713 2,243 21
Interim dividend 0p 4.62p
Capital expenditure 1,969 1,882 5
=============================== ====== ====== =========
Adjusted measures
Adjusted(2) Revenue 10,607 11,413 (7)
Adjusted(2) EBITDA 3,721 3,923 (5)
Normalised free cash flow(2) 422 604 (30)
Net debt(2) 17,627 18,347 (GBP720m)
=============================== ====== ====== ===========
Customer-facing unit results for the half year to 30 September
2020
Adjusted(1) revenue Adjusted(1) EBITDA Normalised free cash
flow(1)
Half year 2020 2019(2) Change 2020 2019(2) Change 2020 2019(2) Change
to
30 September GBPm GBPm % GBPm GBPm % GBPm GBPm %
============ ========= ========= ====== ======== ======== ====== ========= ========= ========
Consumer 4,873 5,194 (6) 1,075 1,180 (9) 315 534 (41)
Enterprise 2,710 2,987 (9) 833 955 (13) 474 622 (24)
Global 1,916 2,196 (13) 289 304 (5) 57 40 43
Openreach 2,585 2,536 2 1,453 1,417 3 20 197 (90)
Other 12 14 (14) 71 67 6 (444) (789) 44
Intra-group
items (1,489) (1,514) 2 - - - - - -
============ ========= ========= ====== ======== ======== ====== ========= ========= ======
Total 10,607 11,413 (7) 3,721 3,923 (5) 422 604 (30)
============ ========= ========= ====== ======== ======== ====== ========= ========= ======
Second quarter
to
30 September
=============== ===== ===== ==== ===== ===== ==== === === ====
Consumer 2,511 2,644 (5) 574 592 (3)
Enterprise 1,358 1,504 (10) 427 490 (13)
Global 926 1,111 (17) 148 164 (10)
Openreach 1,299 1,268 2 724 700 3
Other 8 6 33 35 19 84
Intra-group
items (745) (753) 1 - - -
=============== ===== ===== ==== ===== ===== ==== === === ====
Total 5,357 5,780 (7) 1,908 1,965 (3) 471 281 68
=============== ===== ===== ==== ===== ===== ==== === ===
(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 after net interest paid and payment
free 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. 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.
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 third quarter results for
2020/21 on 4 February 2021.
Click on, or paste the following link into your web browser, to
view the associated PDF document.
http://www.rns-pdf.londonstockexchange.com/rns/5440D_1-2020-10-28.pdf
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