BT Group plc (BT.L) today announced its results for the third quarter to 31 December 2017.
Key developments for the quarter
- Openreach to deliver FTTP to 3m premises by the end of 2020; sets course to reach 10m homes and businesses by mid-2020s with the right conditions
- Continued improvement in customer experience metrics; Group NPS1 up 5.5 points and Right First Time up 3.6%
- BT TV customers to access premium sport and entertainment content under TV deal with Sky
- Triennial valuation of the BT Pension Scheme is proceeding and constructive discussions continue with the Trustee. We are appealing the court decision against changing the index used for pension increases from RPI for Section C members
- Transformation programme and restructuring initiatives on track
- Openreach fibre connections at record high of 600,000, with superfast fibre broadband now passing 27.4m UK premises
- BT Consumer revenue generating units per customer increased 3% to 2.02, with ARPU up 5% to £41.3
- Mobile postpaid net additions of 235,000, with low churn of 1.2%; monthly mobile postpaid ARPU down 2% to £26.2
- Average BT Sport viewing increased 23% year on year; best quarterly performance since launch
- Order intake, on a rolling 12-month basis, up 12% to £3,591m for Business and Public Sector, down 38% to £1,257m for Wholesale and Ventures and down 25% to £3,732m for Global Services, reflecting market conditions
- Reported revenue down 3% to £5,970m and underlying2 revenue down 1.5%
- Adjusted2 EBITDA decreased 2% to £1,826m, reflecting investment in mobile devices and customer experience, along with higher business rates and pension costs, partly offset by cost savings
- Net cash inflow from operating activities of £1,596m up £81m, and normalised free cash flow2 of £702m up £96m mainly due to working capital phasing
- Full year outlook maintained
Gavin Patterson, Chief Executive, commenting on the results, said
"Our third quarter financial results are broadly in line with our expectations and we remain confident in our outlook for the full year. We continue to improve our customer experience metrics across the Group, with our sixth successive quarter of improved customer perception.
“We continue to work closely with the UK Government, Ofcom and our customers to expand the deployment of fibre and Openreach recently announced plans to accelerate our FTTP deployment to three million premises by the end of 2020.
“We agreed a TV deal with Sky that will deliver market leading sports and entertainment channels to our BT TV platform by early 2019, reinforcing our strategic goal of being the best provider in the UK of converged network services.
“The triennial valuation of the BT Pension Scheme is proceeding and constructive discussions continue with the BTPS Trustee. We still expect to complete the valuation in the first half of the 2018 calendar year. Our aim remains to deliver fair, flexible and affordable pensions to all of our employees.
“We are delivering against our strategy, capitalising on opportunities and responding to market challenges with a robust set of actions. Looking ahead, we’re confident in the steps we are taking to improve the performance of BT for all our stakeholders.”
1 Group NPS measures Net Promoter Score in our retail businesses and Net Satisfaction in our wholesale businesses
2 See Glossary on page 2 of the full results announcement
3 Measured against the comparative period in the prior year
Forward-looking statements – caution advised
Certain statements in this results release are forward-looking and are made in reliance on the safe harbour provisions of the US Private Securities Litigation Reform Act of 1995. These statements include, without limitation, those concerning: our outlook for 2017/18 including revenue, EBITDA, free cash flow and progressive dividends; Openreach’s acceleration of its FTTP programme; and our investment in the roll out of 4G.
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: material adverse changes in economic conditions in the markets served by BT whether as a result of the uncertainties arising from the UK’s exit from the EU or otherwise; future regulatory and legal actions, decisions, outcomes of appeal and conditions or requirements in BT’s operating areas, including the outcome of Ofcom’s strategic review of digital communications in the UK, and the implementation of the DCR commitments, as well as competition from others; consultations and market reviews including the outcome of Ofcom’s reviews of the Wholesale Local Access, Wholesale Broadband Access and Business Connectivity markets and forthcoming spectrum auctions; selection by BT and its customer facing units of the appropriate trading and marketing models for its products and services; fluctuations in foreign currency exchange rates and interest rates; technological innovations, including the cost of developing new products, networks and solutions and the need to increase expenditures for improving the quality of service; prolonged adverse weather conditions resulting in a material increase in overtime, staff or other costs, or impact on customer service; developments in the convergence of technologies; external threats to cyber security, data or resilience; political and geo-political risks; the anticipated benefits and advantages of new technologies, products and services not being realised, including the proposed investment in our FTTP broadband network; the timing of entry and profitability of BT in certain markets; significant changes in market shares for BT and its principal products and services; the underlying assumptions and estimates made in respect of major customer contracts proving unreliable; the anticipated benefits, synergies and cost savings of the EE integration not being delivered; the improvements to the control environment proposed following the investigations into BT’s Italian business not being implemented successfully, effectively or timeously across the Group; the outcome of the BTPS triennial valuation and discussions on the pensions review; and general financial market conditions affecting BT’s performance and ability to raise finance. BT undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.
BT’s purpose is to use the power of communications to make a better world. It is one of the world’s leading providers of communications services and solutions, serving customers in 180 countries. Its principal activities include the provision of networked IT services globally; local, national and international telecommunications services to its customers for use at home, at work and on the move; broadband, TV and internet products and services; and converged fixed-mobile products and services. BT consists of six customer-facing lines of business: Consumer, EE, Business and Public Sector, Global Services, Wholesale and Ventures, and Openreach.
For the year ended 31 March 2017, BT Group’s reported revenue was £24,062m with reported profit before taxation of £2,354m.
British Telecommunications plc (BT) 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 stock exchanges in London and New York.
For more information, visit the About BT section