Trading update for the three months to 30 June 2022
BT Group plc
28 July 2022
|
Philip Jansen, Chief Executive, commenting on the results, said “BT Group has made a good start to the year; we're accelerating our network investments and performing well operationally. Despite ongoing challenges in our enterprise businesses, we returned to revenue and EBITDA growth in the quarter. “We continued to grow the number of BT and EE customers connected to our next generation networks. We're building our full fibre broadband network faster than ever and we're seeing record customer connections – both ahead of our own expectations. Openreach's full fibre network now reaches over 8 million homes and businesses across the UK and we anticipate increasing our annual build from 2.6 million premises last year to around 3.5 million this year. EE's 5G network covers more than 55% of the country's population. We're achieving continued high customer satisfaction scores thanks to our much improved customer service and the value for money that our products and services represent. “The modernisation of BT Group remains on track. We are delivering and notwithstanding the current economic uncertainty we remain confident in our outlook for this financial year.” |
Key strategic developments:
• Fibre build and connection continues at pace, beyond our expectations, with record quarterly FTTP build of 763k and net adds of 302k
• Finalised our FTTP co-provisioning agreement with Sky
• EE was voted best network by RootMetrics for the ninth year running and came top in every category measured; our 5G ready base is now at 7.7m
• Price rises to support investment in the network and offset cost inflation; we have continued to raise awareness of our Home Essentials social tariff with prices frozen this year
• Consumer churn and complaints remain low with high levels of service
• BT Sport remains home of UEFA club competitions, including the UEFA Champions League, until 2027
• The CMA1 approved the BT Group plc agreement with Warner Bros. Discovery, Inc. to form a 50:50 sports broadcasting joint venture
• Contingency plans in place to minimise disruption and keep customers connected during CWU2 strike action
Revenue and EBITDA growth, no change to full year outlook:
• Revenue £5.1bn, up 1% due to improved pricing and trading in Consumer and Openreach, offset by the migration of a wholesale MVNO customer which concluded in FY22 and by continued legacy product declines and challenging market conditions impacting large corporate customers in Enterprise and Global.
• Adjusted3 EBITDA £1.9bn, up 2% primarily due to flow through from revenue and continued strong cost control
• Reported profit before tax £0.5bn, down 10% due to increased depreciation offsetting EBITDA growth
• Reported capital expenditure down 17% to £1.3bn, due to prior year investment in spectrum; capital expenditure excluding spectrum payments up 24% to £1.3bn, primarily due to increased investments on FTTP build and provision, and cost inflation
• Normalised free cash flow3 £(0.2)bn, down £162m primarily reflecting increased cash capital expenditure
• Net financial debt (which excludes lease liabilities) was £13.2bn and net debt3 was £18.9bn at 30 June 2022, both £0.9bn higher than at 31 March 2022 driven by pensions contributions and lower cash flows
• No change to FY23 outlook: Revenue growth, at least £7.9bn EBITDA, around £4.8bn capital expenditure and between £1.3bn-£1.5bn normalised free cash flow
|
Three months to 30 June |
2022 |
2021 |
Change |
|
Reported measures |
£m |
£m |
% |
|
Revenue |
5,130 |
5,071 |
1 |
|
Profit before tax |
482 |
536 |
(10) |
|
Profit after tax |
422 |
2 |
n/m |
|
Capital expenditure |
1,251 |
1,507 |
(17) |
|
|
|
|
|
|
Adjusted measures |
|
|
|
|
Adjusted3 Revenue |
5,133 |
5,070 |
1 |
|
Adjusted3 EBITDA |
1,903 |
1,866 |
2 |
|
Capital expenditure excluding spectrum |
1,251 |
1,011 |
24 |
|
Normalised free cash flow3 |
(205) |
(43) |
(377) |
|
Net debt3,4 |
18,891 |
18,566 |
£325m |
n/m = not meaningful
1 Competition and Markets Authority
2 Communications Workers Union
3 See Glossary on page 3
4 Net debt was £18,009m at 31 March 2022