TIDMBT.A
RNS Number : 9434V
BT Group PLC
27 July 2018
BT Group plc
Trading update for the first quarter to 30 June 2018
27 July 2018
BT Group plc (BT.L) today announced its trading update for the
first quarter to 30 June 2018.
Key developments for the quarter
Strategic:
-- Successfully launched new converged products including BT Plus and 4G Assure
-- EE to launch the UK's first live 5G trial network in East London in October
-- Future Telecoms Infrastructure Review conclusion and Ofcom's
approach to future regulation provide positive progress towards
enabling fair returns for infrastructure investment
-- Openreach announced new wholesale pricing discounts to
accelerate superfast and ultrafast uptake
-- Continued improvement in customer experience metrics; Group
NPS(1) up 1.9 points and Right First Time(2) up 3.1%
-- Initiatives to transform our operating model on track; new
Enterprise senior leadership team announced
Operational:
-- Over 1.7m total ultrafast premises passed; currently building
FTTP to c.10,000 premises per week
-- Monthly fixed ARPU up 1% to GBP37.9, with increased mix of
SIM only reducing postpaid mobile ARPU by 1% to GBP21.7; churn
remains low at 1.2%
-- Mobile customers up 4% in Business and Public Sector.
External broadband lines down 6% in Wholesale and Ventures and 3%
in Business and Public Sector
Financial:
-- Reported revenue of GBP5,715m. Underlying(3) revenue down
2%(4) as regulated price reductions in Openreach and declines in
our enterprise businesses offset growth in our consumer
business
-- Adjusted(3) EBITDA up 1%(4) to GBP1,800m mainly driven by
stronger handset margins in our consumer business and restructuring
related cost savings
-- Reported profit before tax of GBP704m. Adjusted(3) profit before tax up 3%(4) at GBP816m
-- Normalised free cash flow(3) of GBP507m down 9% mainly driven
by increased cash capital expenditure partly offset by timing of
working capital movements
-- Reported capital expenditure broadly flat at GBP839m
Gavin Patterson, Chief Executive, commenting on the trading update,
said
"We've made a good start to the year. We are making positive progress
against our strategy. Our customer experience metrics continue
to improve and we have seen the successful launch of new converged
products including BT Plus, our first Consumer converged offering
and 4G Assure, for business customers. Initiatives to transform
our operating model have seen a gross reduction in c.900 roles
across the Group and improved cost performance.
"EE continues to maintain its network leadership and will switch
on the UK's first live 5G network trial in October. Openreach
continues its FTTP network deployment and is currently building
to c.10,000 premises per week. New Openreach wholesale pricing
will incentivise communications providers to encourage more of
their customers onto better services and ultimately move the vast
majority of Britain's homes and businesses onto superfast and
ultrafast platforms. We welcome the initial outcome of DCMS' Future
Telecoms Infrastructure Review and Ofcom's approach to future
regulation and look forward to further engagement with all our
key stakeholders to ensure greater clarity, certainty and support
as we look to realise our broader investment ambitions.
"Our outlook for the year remains unchanged."
===========
2018 2017 2017
First quarter to 30 June (IFRS 15) (IFRS 15 pro forma unaudited) (IAS 18) Change(4)
=============================== ==== =========== =============================== ========== ===========
GBPm GBPm GBPm %
=============================== ==== =========== =============================== ========== ===========
Reported measures
Revenue 5,715 5,837 n/m
Profit before tax 704 418 n/m
Profit after tax 549 285 n/m
Adjusted measures
Adjusted revenue 5,716 5,835 5,849 (2)
Change in underlying(3) revenue (2)
Adjusted(3) EBITDA 1,800 1,785 1,785 1
Adjusted(3) profit before tax 816 791 791 3
Capital expenditure 839 835 835 -
Normalised free cash flow(3) 507 556 556 GBP(49)m
Net debt(3) 11,227 8,810 8,810 GBP2,417m
===================================== =========== =============================== ========== ===========
(1) Group NPS measures Net Promoter Score in our retail business
and Net Satisfaction in our wholesale business
(2) Measured against Group-wide 'Right First Time' (RFT)
index
(3) See Glossary on page 2
(4) Measured against unaudited IFRS 15 pro forma comparative
period in the prior year
n/m = IFRS 15 to IAS 18 comparison not meaningful
Customer facing unit results for the first quarter to 30 June
2018
Adjusted(1) revenue Adjusted(1) EBITDA
=========================== ==========================
First quarter to 30 June 2018 2017(2) Change 2018 2017(2) Change
GBPm GBPm % GBPm GBPm %
============================ ======= ========= ======= ======= ======== =======
Consumer 2,591 2,540 2 610 556 10
Business and Public Sector 1,085 1,132 (4) 350 342 2
Wholesale and Ventures 459 497 (8) 154 174 (11)
Global Services 1,147 1,246 (8) 95 73 30
Openreach 1,217 1,248 (2) 567 621 (9)
Other 1 2 n/m 24 19 26
Intra-group eliminations (784) (830) 6 - - -
============================ ======= ========= ======= ======= ======== =======
Total 5,716 5,835 (2) 1,800 1,785 1
============================ ======= ========= ======= ======= ======== =======
(1) See Glossary
(2) Unaudited IFRS 15 pro forma used for comparative period in
the prior year
n/m = not meaningful
SUMMARY AND OUTLOOK
There is no change to our financial outlook for 2018/19 from
that published on 25 June which reflected the adoption of the IFRS
15 accounting standard.
2018/19
Change in underlying(1) revenue Down c.2%
(IFRS 15 basis)
Adjusted(1) EBITDA (IFRS 15 basis) GBP7.3bn
- GBP7.4bn
Normalised free cash flow(1) GBP2.3bn
- GBP2.5bn
Capital expenditure(2) c.GBP3.7bn
=================================== ============
(1) See Glossary
(2) Excluding BDUK clawback
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 second quarter and half year
results for 2018/19 on 1 November 2018.
Glossary of alternative performance measures
Adjusted Before specific items
Net debt Loans and other borrowings (both current and non-current),
less current asset investments and cash and cash
equivalents. Currency denominated balances within
net debt are translated to Sterling at swapped rates
where hedged
Normalised free Free cash flow before specific items and the cash
cash flow tax benefit of pension deficit payments
Specific items Items that in management's judgement need to be disclosed
separately by virtue of their size, nature or incidence.
Further information is provided in note 1 on page
9
Underlying Excludes specific items, foreign exchange movements
and the effect of acquisitions and disposals. Further
information is provided in note 2 on page 9
================ ===========================================================
Our commentary focuses on the trading results on an adjusted
basis. Unless otherwise stated, revenue, earnings before interest,
tax, depreciation and amortisation (EBITDA), profit before tax, and
normalised free cash flow are measured before specific items.
Further information is provided in note 1 on page 9.
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END
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