BT Group plc (BT.L) announced its trading update for the nine months to 31 December 2020.
Key strategic developments:
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Creation of a new technology unit - Digital - to lead our digital innovation agenda from 1 April 2021; Digital will lead the IT, process and business transformation of BT and develop and deliver new growth products, platforms and services
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Sale agreed of selected business units in Italy
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Continued progress on our wider modernisation programme including the creation of a standalone procurement company
Operational:
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Openreach’s FTTP network now reaches 4.1m premises, built at an average run rate of 42k premises passed per week in the quarter; remains on track to achieve 4.5m by March 2021
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Openreach's first copper stop-sell now live in Salisbury, extending to 2.2m premises by January 2022
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FTTP commercial offers extended; all of Openreach's major communications provider customers now selling FTTP with strong increase in sales in Q3; Openreach achieved record 17k FTTP orders per week
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5G in 125 locations and 5G ready customer base now over 2.1m; EE has taken top spot in Rootmetrics' latest national results for the 15th consecutive time with 5G in more places than any other network according to Rootmetrics
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Consumer fixed ARPC down 5.8% year on year due to commitments to meet our fairness agenda, investment in our long term strategic base and declining voice usage; postpaid mobile ARPC down 6.9% year on year due to increased SIM-only mix, decline in roaming and out of bundle revenue
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In Consumer, BT brand at its highest NPS1 ever, as evidenced by strong BT sales and churn performance
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Enterprise retail and wholesale order intakes up 8% to £3.2bn and 5% to £1.2bn respectively on a 12-month rolling basis
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Global order intake up 1% to £4.1bn on a 12-month rolling basis
Financial:
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Revenue £16,058m, down 7% due primarily to the impact of Covid-19 on Consumer and our enterprise units, ongoing legacy product declines and divestments of domestic businesses in Spain, Latin America and France
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Adjusted1 EBITDA £5,603m, down 5%, driven by the fall in revenue, partially offset by H1 sports rights rebates, savings from our modernisation programme and other cost initiatives including Covid-19 mitigating actions
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Reported profit before tax £1,591m, down 17%, due to reduced EBITDA
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Normalised free cash flow1 £830m, down 17%, due to reduced EBITDA and higher cash capital expenditure, offset by a cash receipt from the monetisation of a non-strategic revenue stream generated from our building infrastructure and timing of tax payments
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Capital expenditure up 5% to £3,030m, primarily driven by increased fixed and mobile network investment
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Outlook for 2020/21: Unchanged except for lower end of normalised free cash flow1 outlook range raised to £1.3bn; revised range £1.3bn-£1.5bn; the EBITDA outlook range remains at £7.3bn-£7.5bn
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Philip Jansen, Chief Executive, commenting on the results, said During the current Covid-19 pandemic, BT has continued to deliver for our customers and invest in our networks, our modernisation programme, and our products and services in recognition of the ever increasing need for improved and faster connectivity. We delivered results in line with our expectations for the third quarter and remain on track to deliver our 2020/21 outlook despite even greater Covid-19 restrictions than previously forecast. BT has shown again that it has the spirit and determination to step up and deliver for our customers, keeping them connected with a range of initiatives. I am particularly proud of the ongoing work and investments we are making to support school children, SMEs and the NHS during the pandemic. We continue to make significant investments in our industry leading networks; with FTTP having now passed over 4m premises and 5G available in 125 towns and cities, we're firmly on track to deliver our March 2021 targets. Openreach FTTP orders accelerated even further to reach another record level of 17k per week. We have demonstrated continued improvement in our operational performance, including acceleration of FTTP and 5G take-up, and customer satisfaction metrics. This reflects our progress in creating valued, reliable, stand out customer experiences and propositions; the next evolution of our flagship convergence proposition, Halo 3+, will drive even further progress. As the WFTMR2 consultation process draws to a close we're focused on ensuring the new regulation will create an environment to allow for fair returns across our industry including the additional significant network investment we are poised to undertake. The latest proposals from Ofcom are positive for investment in many areas, but there are key points of clarity still needed to unlock the fibre investment the country needs; and we still need to see concrete progress from Government on the things they can do to support the fibre roll out. With no material impact expected from the Brexit deal and our resilient results so far this year I remain confident in our EBITDA expectation of at least £7.9bn for 2022/23. Looking further ahead our new Digital unit will enable us to accelerate our digital and business transformation programmes and to deliver digital platforms that bring together best-in-class services for our customers, further securing a brighter and more sustainable future for the group. |
Source: https://newsroom.bt.com/trading-update-results-for-the-nine-months-to-31-december-2020/