REG - BT Group PLC - Trading update for nine months to 31 December 2024

BTAnnouncement

30/01/2025 07:00

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RNS Number : 1957V  BT Group PLC  30 January 2025

Trading update for the quarter and nine months to 31 December 2024

BT Group plc - 30 January 2025

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

 "Our ongoing modernisation continues at pace, delivering a further step-up in
 fibre build and take-up, customer satisfaction and EBITDA. Benefits from our
 cost transformation more than offset lower revenue outside the UK and weak
 handset sales.

 "Openreach again performed strongly with the highest ever full fibre build,
 passing more than 1 million premises for the fourth consecutive quarter, and
 connecting a new record of nearly half a million customers. Consumer returned
 to service revenue growth and continued to expand its full fibre and 5G
 customer bases. In Business, our core UK channels were stable. Cost
 transformation remains firmly on track, with excellent progress on both energy
 costs and productivity in the quarter.

 "We continue to make progress towards becoming fully focused on the UK, with
 the sale of our data centre business in Ireland. I am also very pleased to
 welcome Jon James to BT's Executive Committee as the new CEO of a UK-centric
 BT Business, effective early March. This appointment enables Bas Burger to
 dedicate his time to the optimisation of our international business segment,
 which is progressing to plan.

 "BT's continued delivery means 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."

Continued progress on strategic priorities:

•   Record FTTP build rate of over 1m premises passed in the quarter for a
fourth consecutive quarter; FTTP footprint reached 17m premises, more than
half of the UK; on track to pass 4.2m in FY25 and reach 25m by December 2026

•   Record customer demand for Openreach FTTP with net adds of 472k in the
quarter; total premises connected 6.0m with a growing take up rate of over
35%. Openreach total broadband lines fell by 208k, as we continue to see
moderately higher competitor losses with a weaker overall broadband and new
homes market; over 80% of our line losses occur where we have not built FTTP

•   Openreach broadband ARPU in the quarter grew year on year by 6% to
£16.1, ahead of the CPI price increases, driven by a greater FTTP take-up and
speed mix

•   Retail FTTP base grew by 33% year on year to 3.2m of which Consumer
3.0m and Business 0.2m

•   Consumer service revenue returned to growth, up 0.4% year on year
after a 1.3% decline in H1; service revenue growth was more than offset by a
12% decline in equipment revenue, mainly handset trading

•   Consumer customer base relatively stable with broadband base down 40k
quarter on quarter (0.5% decline); postpaid mobile base down 4k quarter on
quarter (<0.1% decline)

•   Consumer broadband ARPU down 1.2% year on year to £40.6; Consumer
postpaid mobile ARPU up 5.7% year on year to £20.3

•   Consumer fixed and mobile convergence grew in the quarter from 23.1%
to 23.4%; 5G standalone launched in a further 16 new locations, bringing 5G
standalone to over 30 major UK towns and cities; EE was named the winner of
the umlaut connect 2025 Mobile Network Test in the UK for a 10th consecutive
year

•   Business revenues were stable in our core UK channels; £1.3bn
contract signed with the Home Office to continue providing mobile services for
the Emergency Services Network over the next seven years

•   Cost transformation remains on track as we continue to create a
simpler BT Group, delivering efficiencies across all units; energy usage in
our networks was down 3% in the year-to-date and total labour resource down 3%
year-on-year to 117k; we achieved an 11% reduction in year-to-date Openreach
repair volumes

•   BT Group NPS of 29.6, up 4.0pts during Q3, reflecting ongoing
improvements in customer experience

 

Excellent cost control continues to deliver EBITDA growth:

•   Q3 Adjusted(1) revenue £5.2bn, down 3% year-on-year mainly due to
continued challenging non-UK trading conditions in our Global and Portfolio
channels and weaker handset trading in Consumer, offsetting the impact of FTTP
growth in Openreach and price increases. Reported revenue £5.2bn, down 3%

•   Q3 Adjusted(1) EBITDA £2.1bn, up 4% driven by strong cost
transformation and one-off other operating income in the low tens of millions
which more than offset adverse revenue

•   Q3 Reported profit before tax of £427m, up 1% primarily due to EBITDA
growth, offset partially by increased net finance costs and increased
depreciation and amortisation

•   Reconfirming our FY25 financial outlook and our mid-term guidance

 

(1) ( ) See Glossary on page 2

 

                                    Adjusted(1) revenue                                                                                     Adjusted(1) EBITDA
 Third quarter to 31 December 2024  2024                                  2023                                  Change                      2024                                2023                              Change
                                    £m                                    £m                                    %                           £m                                  £m                                %
 Consumer                                      2,498                                 2,560                                  (2)                          655                                 661                              (1)
 Business(2)                                   1,984                                 2,027                                  (2)                          409                                 403                     1
 Openreach                                     1,533                                 1,521                         1                                   1,028                                 967                     6
 Other                                               5                                     4                    n/m                                        11                                  (3)                n/m
 Intra-group items(2)                           (837)                                 (768)                                 (9)                             -                                   -                     -
 Total                                         5,183                                 5,344                                  (3)                        2,103                               2,028                     4

( )

                                  Adjusted(1) revenue                                                                               Adjusted(1) EBITDA
 Nine months to 31 December 2024  2024                               2023                               Change                      2024                                  2023                                  Change
                                  £m                                 £m                                 %                           £m                                    £m                                    %
 Consumer                                    7,334                              7,463                               (2)                        1,985                                 2,008                                  (1)
 Business(2)                                 5,849                              6,127                               (5)                        1,156                                 1,209                                  (4)
 Openreach                                   4,651                              4,574                      2                                   3,087                                 2,903                         6
 Other                                           10                                 12                  n/m                                          7                                     2                    n/m
 Intra-group items(2)                      (2,523)                            (2,418)                               (4)                             -                                     -                         -
 Total                                     15,321                             15,758                                (3)                        6,235                                 6,122                         2

(1)   See Glossary below

(2) As disclosed in the prior year, Q3 FY24 results included a correction of
H1 FY24 revenue across Openreach and Business, with no impact on total group
revenue. £38m external wholesale revenue was incorrectly recognised by
Business in H1 FY24. H1 FY24 results were not restated; the correction was
booked within Q3 FY24 to ensure the results for the nine months to 31 December
2023 were correctly stated. Excluding the adjustment, Q3 Business revenue
would have declined 4%, while intra-group items would have increased 4%.

 

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.
 Fixed and mobile convergence  Total households served by Consumer which have both a BT Group (any brand)
                               fixed broadband and PAYM mobile connection present, divided by total number of
                               Consumer households (excluding voice fixed line).
 Service revenue               Earned from services delivered using our fixed and mobile network
                               connectivity, including

                               but not limited to, broadband, calls, line rental, TV, residential sport
                               subscriptions, mobile

                               data connectivity, incoming & outgoing mobile calls and roaming by
                               customers of overseas

                               networks.
 Specific items                Items that in management's judgement need to be disclosed separately by virtue
                               of their size, nature or incidence. In the current quarter these relate to our
                               assessment of our provision for historic regulatory matters, out of period
                               balance sheet adjustments, restructuring charges, divestment-related items,
                               Sports JV-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 fourth quarter and full year results for FY25
on 22 May 2025.

 

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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