TIDMBT.A
RNS Number : 5549D
BT Group PLC
30 January 2015
30 January 2015
BT GROUP PLC
RESULTS FOR THE THIRD QUARTER AND NINE MONTHS TO 31 DECEMBER
2014
BT Group plc (BT.L) today announced its results for the third
quarter and nine months to 31 December 2014.
Third quarter to Nine months to
31 December 2014 31 December 2014
GBPm Change GBPm Change
------------- ---------------- ----------- ------------------
Revenue(1) 4,475 (3)% 13,212 (2)%
Underlying revenue(2) excluding
transit (1.0)% (0.1)%
EBITDA(1) 1,567 2% 4,452 1%
Profit before
tax - adjusted(1) 814 13% 2,142 11%
- reported 694 12% 1,803 15%
Earnings per
share - adjusted(1) 8.0p 10% 21.4p 12%
- reported 6.9p 10% 18.1p (2)%
Normalised free cash flow(3) 908 GBP354m 1,563 GBP459m
Net debt 6,202 GBP(1,438)m
Gavin Patterson, Chief Executive, commenting on the results,
said:
"This quarter we have delivered good growth in profit before tax
and strong free cash flow.
"Openreach achieved the highest growth in the number of
landlines on record. It was also our best ever quarter for fibre
broadband net additions. All the major communications providers are
responding to the strong market demand for fibre broadband, helping
to drive take-up in what is already a very competitive market.
"Our superfast fibre broadband network now covers around
three-quarters of the UK. BT has been at the forefront of fibre
innovation and investment, from which all communications providers
benefit. We aim to keep it that way. So today we're announcing
large-scale pilots this summer of ultrafast broadband with G.fast.
We now think we can deploy this technology at scale which will
enable us to deliver ultrafast speeds of up to 500Mbps to most of
the UK within a decade.
"I am pleased that we have agreed the 2014 triennial funding
valuation and recovery plan with the Trustee of the BT Pension
Scheme. The funding deficit is GBP7.0bn at 30 June 2014, an
increase from 2011 reflecting the low interest rate environment.
Over the next three years we will pay GBP2.0bn into the scheme,
which is less than we paid over the previous three years. We have
agreed a 16 year recovery plan reflecting the strength and
sustainability of our future cash flow generation.
"Mobility is a key growth area for us. We are making good
progress on our due diligence in relation to a possible acquisition
of EE and will make further announcements in due course. In the
meantime, our Consumer mobile launch plans remain on track."
Financial highlights for the third quarter:
-- Underlying revenue(2) excluding transit down 1%
-- Underlying operating costs(4) excluding transit down 3% reflecting the benefit of our cost transformation activities
-- EBITDA(1) up 2% and earnings per share(1) up 10%
-- Normalised free cash flow(3) of GBP908m, up 64%
-- Outlook reaffirmed
(1) Before specific items. Specific items are defined on page
3
(2) Excludes specific items, foreign exchange movements and the
effect of acquisitions and disposals
(3) Before specific items, pension deficit payments and the cash
tax benefit of pension deficit payments
(4) Excludes specific items, foreign exchange movements and the
effect of acquisitions and disposals, and is before depreciation
and amortisation
GROUP RESULTS FOR THE THIRD QUARTER AND NINE MONTHS TO 31
DECEMBER 2014
Third quarter to 31 December Nine months to 31 December
---------------------- --------------------------------------- ------------------------------------
2014 2013 Change 2014 2013 Change
GBPm GBPm % GBPm GBPm %
---------------------- -------- ------- -------------------- --------- --------- --------------
Revenue
- adjusted(1) 4,475 4,599 (3) 13,212 13,539 (2)
- reported 4,475 4,599 (3) 13,270 13,539 (2)
- underlying revenue
excluding transit (1.0) (0.1)
---------------------- -------- ------- -------------------- --------- --------- --------------
EBITDA
- adjusted(1) 1,567 1,537 2 4,452 4,411 1
- reported 1,519 1,491 2 4,306 4,229 2
---------------------- -------------------- --------- --------- --------------
Operating profit
- adjusted(1) 949 867 9 2,564 2,367 8
- reported 901 821 10 2,418 2,185 11
---------------------- -------- ------- -------------------- --------- --------- --------------
Profit before tax
- adjusted(1) 814 722 13 2,142 1,926 11
- reported 694 617 12 1,803 1,565 15
---------------------- -------- ------- -------------------- --------- --------- --------------
Earnings per share
- adjusted(1) 8.0p 7.3p 10 21.4p 19.1p 12
- reported 6.9p 6.3p 10 18.1p 18.5p (2)
---------------------- -------- ------- -------------------- --------- --------- --------------
Capital expenditure 599 581 3 1,648 1,772 (7)
---------------------- -------- ------- -------------------- --------- --------- --------------
Normalised free cash
flow(2) 908 554 64 1,563 1,104 42
Net debt 6,202 7,640 GBP(1,438)m
---------------------- -------- ------- -------------------- --------- --------- --------------
Line of business results(1)
Revenue EBITDA Free cash flow(2)
---------------------- ---------------------- ---------------------- -------------------------
Third quarter to 2014 2013(3) Change 2014 2013(3) Change 2014 2013(3) Change
31 December GBPm GBPm % GBPm GBPm % GBPm GBPm %
---------------------- ----- ------- ------ ----- ------- ------ ------ -------- -------
BT Global Services 1,694 1,847 (8) 261 290 (10) 52 111 (53)
BT Business 789 808 (2) 266 257 4 224 218 3
BT Consumer 1,083 1,014 7 251 175 43 274 99 177
BT Wholesale 532 589 (10) 136 146 (7) 114 30 280
Openreach 1,255 1,274 (1) 651 660 (1) 471 452 4
Other and intra-group
items (878) (933) 6 2 9 (78) (227) (356) 36
---------------------- ----- ------- ------ ----- ------- ------ ------ -------- -------
Total 4,475 4,599 (3) 1,567 1,537 2 908 554 64
---------------------- ----- ------- ------ ----- ------- ------ ------ -------- -------
(1) Before specific items
(2) Before specific items, pension deficit payments and the cash
tax benefit of pension deficit payments
(3) Certain results have been restated. See Note 1 to the
condensed consolidated financial statements
Notes:
1. The commentary focuses on the trading results on an adjusted
basis, which is a non-GAAP measure, being before specific items.
Unless otherwise stated, revenue, operating costs, earnings before
interest, tax, depreciation and amortisation (EBITDA), operating
profit, profit before tax, net finance expense, earnings per share
(EPS) and normalised free cash flow are measured before specific
items. This is consistent with the way that financial performance
is measured by management and reported to the Board and the
Operating Committee and assists in providing a meaningful analysis
of the trading results of the group. The directors believe that
presentation of the group's results in this way is relevant to the
understanding of the group's financial performance as specific
items are those that in management's judgement need to be disclosed
by virtue of their size, nature or incidence. 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. Specific items may not be
comparable with similarly titled measures used by other companies.
Reported revenue, reported operating costs, reported EBITDA,
reported operating profit, reported profit before tax, reported net
finance expense, reported EPS and reported free cash flow are the
equivalent
unadjusted or statutory measures.
2. Trends in underlying revenue, trends in underlying operating
costs, and underlying EBITDA are non-GAAP measures which seek to
reflect the underlying performance of the group that will
contribute to long-term profitable growth and as such exclude the
impact of acquisitions and disposals, foreign exchange movements
and any specific items. We focus on the trends in underlying
revenue and underlying operating costs excluding transit as transit
traffic is low-margin and is significantly affected by reductions
in mobile termination rates.
Enquiries
Press office:
Ross Cook Tel: 020 7356 5369
Investor relations:
Damien Maltarp Tel: 020 7356 4909
A conference call for analysts and investors will be held at
9.00am today and a simultaneous webcast will be available at
www.bt.com/results
We expect to announce the fourth quarter and full year results
for 2014/15 on 7 May 2015.
About BT
BT is one of the world's leading providers of communications
services and solutions, serving customers in more than 170
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 and internet products and services
and converged fixed/mobile products and services. BT consists
principally of five customer-facing lines of business: BT Global
Services, BT Business, BT Consumer, BT Wholesale and Openreach.
For the year ended 31 March 2014, BT Group's reported revenue
was GBP18,287m with reported profit before taxation of
GBP2,312m.
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 www.btplc.com
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