TIDMBT.A
RNS Number : 3302H
BT Group PLC
27 July 2023
Trading update for the three months to 30 June 2023
BT Group plc - 27 July 2023
Philip Jansen, Chief Executive, commenting on the results, said
"We've made a strong start to the year, in what remains a very competitive
market, with improved customer satisfaction, pro forma revenue growth
in all of our business units and pro forma group EBITDA up by 5%.
Openreach is now 44% of the way through its full fibre build, and
customer demand has continued to grow with a total network take-up
rate of 32%. Consumer is seeing solid pro forma growth driven by
pricing and mix, as customers choose higher performance connections;
and Business grew its order book, driving revenue growth for the
combined unit. We continue to drive transformation across the group,
and while there remains much to do it's clear that our strategy is
working and BT Group is set up for success."
Strong start to the year:
-- FTTP footprint expanded to 11m premises, 44% completion of
25m target, with a further c.6.2m where initial build is underway;
718k premises passed in the quarter at an average build rate of 55k
per week
-- Customer demand in Openreach for FTTP increased with Q1
orders up 34% year-on-year and net adds of 383k, bringing network
take-up rate to 32%; total FTTP connections grew to 3.5m
-- Openreach broadband ARPU grew by 10.2% year-on-year due to
price rises and increased volumes of FTTP; Openreach broadband base
down 126k in Q1 due to competitor losses combined with a weak
broadband market and communications providers ceasing copper lines;
we continue to expect the Openreach broadband base to decline by
around 400k in FY24
-- Consumer broadband ARPU increased 5% year-on-year to GBP42.0
and Consumer postpaid mobile ARPU increased 9% year-on-year to
GBP19.7, both driven by CPI-linked pricing; churn remains stable
for broadband and postpaid mobile at 1.1% and 1.0% respectively
-- Retail FTTP base grew year-on-year by 50% to 2.0m of which
Consumer 1.9m and Business 0.1m; 5G base 9.2m, up 53%
year-on-year
-- Business performance reflects positive momentum in SMB but
declines in CPS, Global and Wholesale due to higher input costs and
legacy high-margin managed contract declines
-- Continued focus on customer satisfaction and delivery of
excellent value for money with BT Group NPS of 23.7 up 1.8pts
year-on-year
Continued pro forma revenue and EBITDA growth:
-- Pro forma adjusted(1) revenue GBP5.2bn, up 4% on Q1 FY23 due
to increased fibre-enabled product sales and price increases in
Openreach, increased service revenue in Consumer with 2023 annual
contractual price rises being aided by higher FTTP base and higher
roaming, and improved equipment trading in Business, offset
partially by legacy product declines; reported revenue was up
1%
-- Pro forma adjusted(1) EBITDA GBP2.0bn, up 5% with revenue
flow through and cost control more than offsetting cost inflation;
Business EBITDA decline due to increased input costs and legacy
high-margin managed contract declines
-- Reported profit before tax of GBP536m, up 11% primarily due
to EBITDA growth partially offset by specific items
-- Reconfirming all FY24 outlook metrics
Adjusted(1) revenue Adjusted(1) EBITDA
-------------- ------------------------------ ------------------------------
2022 Pro 2022 Pro
First quarter forma(1) forma(1)
to 30 June 2023 restated(1) Change 2023 restated(1) Change
--------------
GBPm GBPm % GBPm GBPm%
-------------- ----- ------------ --------- ----- ------------ --------
Consumer 2,423 2,348 3 673 632 6
Business 2,027 1,967 3 386 434 (11)
Openreach 1,526 1,417 8 965 863 12
Other 5 7 (29) 9 16 (44)
Intra-group
items (817) (760) (8) - - -
-------------- ----- ------------ --------- ----- ------------ ---------
Total 5,164 4,979 4 2,033 1,945 5
-------------- ----- ------------ --------- ----- ------------ ---------
(1) See Glossary on page 2
Glossary
Our commentary focuses on the trading results on an adjusted pro
forma basis. Reported revenue and reported profit before tax are
the equivalent unadjusted or statutory measures and are reconciled
in pages 233 to 235 of the Annual Report 2023.
Adjusted 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.
Pro forma Pro forma results estimate the impact on the group as
if trading in relation to BT Sport had been equity accounted
for in Q1 FY23, akin to the BT Sport joint venture being
in place historically.
Please refer to the press release of 3 November 2022
for a bridge between financial information on a reported
basis and a Sports JV pro forma basis at the half year
to 30 September 2022.
Restated Results were restated in June 2023 to reflect:
i) the merger of our Global and Enterprise units to form
Business; and
ii) the change in our methodology used to allocate shared
Network, Digital and support function costs across our
units, reported within operating costs and capex (to
more closely align the recharges received by each unit
to their actual consumption).
Please refer to disclosures published for the formation
of Business and adjustments to central cost allocations
on 27 June 2023.
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.
--------------- -------------------------------------------------------------
Enquiries
Press office: Tom Engel Tel: 07947 711 959
Richard Farnsworth Tel: 07734 776 317
Investor relations: Mark Lidiard Tel: 0800 389 4909
We are scheduled to announce the second quarter and half year
results for FY24 on 2 November 2023.
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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