REG - BT Group PLC - Trading Statement

BTAnnouncement

25/07/2024 07:00

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RNS Number : 7393X  BT Group PLC  25 July 2024

 

Trading update for the three months to 30 June 2024

BT Group plc - 25 July 2024

 Allison Kirkby, Chief Executive, commenting on the results, said

 "We've made a solid start to the year, with excellent growth in both fibre
 build and connections, and increased EBITDA.

 "Openreach continues to build at pace and with even more efficiency, passing
 the milestones of 5 million connections and - just yesterday - 15 million
 premises built. In Consumer, the widespread availability of FTTP and 5G
 combined with our new EE propositions has contributed to an improved trend in
 our customer base, in what remains a very competitive market. In Business, we
 also saw improved trends, as we continue to modernise our portfolio and our
 operations towards a simpler business, delivering secure, cloud-based
 connectivity and communication services for all our customers.

 "Our ongoing cost transformation contributed to EBITDA growth, and more than
 offset the expected revenue declines in Consumer and Business in the quarter.
 There is much more to do to simplify BT Group and deliver for our customers.
 We remain on track to deliver our financial outlook for this year and our cash
 flow inflection to c. £2.0bn in 2027 and c. £3.0bn by the end of the
 decade."

Strategic priorities delivering to plan:

•   Record FTTP build of over 1m premises passed in the quarter at an
average build rate of 78k per week; FTTP footprint is now 15m with 4.2m rural
premises passed and around a further 6m where initial build is underway

•   FTTP customer base surpassed 5m during the quarter; strong FTTP demand
with orders up 29% year-on-year; take up rate is at 34% with continued strong
net adds of 387k

•   Openreach broadband ARPU grew by 6% year-on-year due to price rises
and increased volumes of FTTP; Openreach broadband line losses of 196k, with
moderately higher competitor losses combined with a weaker overall broadband
and new homes market

•   Consumer broadband ARPU up 1% year-on-year to £42.4 and Consumer
postpaid mobile ARPU increased 0.5% year-on-year to £19.8, with positive mix
effects offsetting the expected tougher pricing comparative

•   Consumer base trend improved despite a competitive market, with the
broadband base down 28k quarter-on-quarter (0.3% decline) and postpaid mobile
base down 15k quarter-on-quarter (0.1% decline)

•   Business financial performance continues to be impacted by legacy
managed contract declines, reduced low margin sales activity and contraction
in the portfolio unit offset by cost transformation

•   Retail FTTP base grew year-on-year by 36% to 2.7m of which Consumer
2.6m and Business 0.1m; 5G base 11.3m, up 22% year-on-year

•   BT Group NPS of 25.1, up 0.3pts year-on-year, demonstrating further
improving customer experience

•   BT Group has been recognised by TIME Magazine and Statista as one of
the "World's Most Sustainable Companies 2024"

 

Transformation and tight cost control delivers EBITDA growth:

•   Adjusted(1) revenue £5.1bn, down 2% on Q1 FY24 due to legacy managed
contract declines, reduced low margin sales activity and contraction in the
portfolio unit within Business, and the continued shift to mobile SIM only and
a lower CPI benefit in a competitive market in Consumer. This is partly offset
by price increases and FTTP and Ethernet base growth in Openreach; reported
revenue £5.0bn was down 2%

•   Adjusted(1) EBITDA £2.1bn, up 1% with transformation and tight cost
control, including lower staff costs, partly offset by revenue decline

•   Reported profit before tax of £520m, down 3%, with decreased revenue
broadly offset by reduction in reported operating costs

•   Reconfirming all FY25 financial outlook metrics

 

                               Adjusted(1) revenue                           Adjusted(1) EBITDA
 Three months to 30 June 2024  2024     2023     Change                      2024     2023     Change
                               £m       £m       %                           £m       £m       %
 Consumer                      2,399    2,423                (1)             659      673                  (2)
 Business                      1,933    2,027                (5)             378      386                  (2)
 Openreach                     1,558    1,526       2                        1,021    965         6
 Other                         3        5        n/m                         3        9        n/m
 Intra-group items             (841)    (817)                (3)             -        -            -
 Total                         5,052    5,164                (2)             2,061    2,033       1

(1) See Glossary on page 2

n/m: comparison not meaningful

Glossary

Our commentary focuses on the trading results on an adjusted basis. 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. Reported revenue
and reported profit before tax are the equivalent unadjusted or statutory
measures and are reconciled in pages 231 to 233 of the Annual Report 2024.

 Adjusted revenue  Adjusted revenue is 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.
 Adjusted EBITDA   Earnings before interest, tax, depreciation and amortisation, before specific
                   items, share of post tax profits/losses of associates and joint ventures and
                   net finance expense.
 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 to
                   changes to our assessment of our provision for historical regulatory matters,
                   restructuring charges, divestment-related items and net interest expense on
                   pensions. 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.

 

About BT Group

BT Group is the UK's leading provider of fixed and mobile telecommunications
and related secure digital products, solutions and services. We also provide
managed telecommunications, security and network & IT infrastructure
services to customers across 180 countries.

BT Group consists of three customer-facing units: Consumer serves individuals
and families in the UK; Business covers companies and public services in the
UK and internationally; Openreach is an independently governed, wholly owned
subsidiary wholesaling fixed access infrastructure services to its customers -
over 700 communications providers across the UK.

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

 

Registered in England and Wales no. 4190816

Enquiries

 Press office:        Richard Farnsworth  Tel: 07734 776 317

                      Alex Buckley        Tel: 07501 236 297
 Investor relations:  Nick Delfas         Tel: 0800 389 4909

 

We are scheduled to announce the second quarter and half year results for FY25
on 7 November 2024.

 

Forward-looking statements - caution advised

Certain information included in this announcement is forward looking and
involves risks, assumptions and uncertainties that could cause actual results
to differ materially from those expressed or implied by forward looking
statements. Forward looking statements cover all matters which are not
historical facts and include, without limitation, projections relating to
results of operations and financial conditions and the Company's plans and
objectives for future operations. Forward looking statements can be identified
by the use of forward looking terminology, including terms such as 'believes',
'estimates', 'anticipates', 'expects', 'forecasts', 'intends', 'plans',
'projects', 'goal', 'target', 'aim', 'may', 'will', 'would', 'could' or
'should' or, in each case, their negative or other variations or comparable
terminology. Forward looking statements in this announcement are not
guarantees of future performance. All forward looking statements in this
announcement are based upon information known to the Company on the date of
this announcement. Accordingly, no assurance can be given that any particular
expectation will be met and readers are cautioned not to place undue reliance
on forward looking statements, which speak only at their respective dates.
Additionally, forward looking statements regarding past trends or activities
should not be taken as a representation that such trends or activities will
continue in the future. Other than in accordance with its legal or regulatory
obligations (including under the UK Listing Rules and the Disclosure Guidance
and Transparency Rules of the Financial Conduct Authority), the Company
undertakes no obligation to publicly update or revise any forward looking
statement, whether as a result of new information, future events or otherwise.
Nothing in this announcement shall exclude any liability under applicable laws
that cannot be excluded in accordance with such laws.

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