Full year results special - May 2011
The Big Picture Online is a quarterly presentation with highlights of BT’s financial performance and examples of the actions BT is taking to become a better business with a better future
This quarter we share the latest news from BT’s full year financial results to March 2011
Results summary
Revenue1 – down 4% to £20bn
Profit before tax1 – up 20% to £2bn
Operating cost savings3 of over £1bn
Free cash flow2 – up 6% to £2.2bn
Full year dividend of 7.4p (up 7%)
Key headlines
“We have delivered profits and free cash
flow ahead of expectations for the year, while making
significant investment in the business for the
future.”Ian Livingston BT Group CEO
12 May 2011
“We have delivered profits and free cash
flow ahead of expectations for the year, while making
significant investment in the business for the
future.”Ian Livingston BT Group CEO
12 May 2011
1 – before specific items2 – before specific items and pension deficit payments3 – operating costs before specific items and depreciation and amortisation
0
Global Services order intake up 10% at £7.3bn; cash flow positive a year early
Growth in Openreach copper lines as customers recognise advantages of fixed line broadband
Cash used to invest in the business; reduce net debt; pay progressive dividends; and support the pension fund. BT put £1.3bn into BT Pension Scheme (BTPS) during fiscal ending March 2011
Expect to grow profits and free cash flow while investing to return BT to growth in 2013
Customer service delivery
We experienced challenges this year especially in the UK
Service improvements: - Global Services customer faults c.10% - Wholesale broadband faults c.15% - Consumer complaints c.20% - Business complaints c.60%
Driving broadband-based consumer services
Being the ‘Brand for Business’ for UK SMEs
BT Global Services – a global leader
The wholesaler of choice
The best network provider
A responsible and sustainable business leader
A better future
A betterbusiness
Honesty Agility
A betterfuture
© British Telecommunications plc
5
BBC iPlayer HD Recommendation
engine
Broadband Newservices
Differentiatedservice WiFi
Home Hub 3 with Smart Wireless
Award winning broadband
OnLive gaming
Weekly net adds c.5,000
144,000 customers
5.7m customers
>2.8m hotspots Lowers churn Usage more
than doubled
© British Telecommunications plc
6
64% share of broadband net adds1
in Q4
– highest retail net adds for 8 years
– highest ever including cable
– c.90% of new broadband provides in Q4 were part of a bundle
Active customer loss in Q4 lowest for 4 years
Consumer ARPU up 5% to £326
Consumer ARPU
Broadband net adds
££
2009 20102008200720062005 2011
‘000
2009
BT Other DSL & LLU BT share of net adds
2010 2011
1 DSL and LLU
© British Telecommunications plc
7
BT Business line loss in Q4 at lowest level for more than 3 years
New business broadband propositions launched
– FY business broadband net adds up c.30% YoY
Focus on IT services and mobility
– IT services revenue up 17% FY
– Mobility revenue up 14% FY
– opportunity to increase market share
16%16%
4%4%
80%80%
Fixed voice & data
IT services
Mobility
IT services Mobility
2011 BT Business revenue c.£2.4bn
IT services and mobility revenue trend
© British Telecommunications plc
8
Order intake– £7.3bn in year, up 10%
Contract wins in Q4– Ecopetrol– BASF
AsiaPac– investment on track– growing pipeline
Strong growth in LatAm
New structure– focus on key global sectors
– industry specific solutions
– global account management and delivery model
Banking &
Financial Markets
Commerce (Manufacturing,
logistics & pharma)
Consumer Packaged
Goods
Gov’t & Health
UK
EMEA & Latin America
United States & Canada
Asia Pacific
© British Telecommunications plc
9
External revenue ex transit
MNS & IP Other
40% of FY external revenue under long-term contract
Executing on existing MNS contracts
Portfolio evolving from traditional to IP
– MNS & IP revenue up 14% FY
– IP Exchange minutes up more than 75% FY
– fixed Ethernet connections trebled
£m
© British Telecommunications plc
10
Copper line base grew for first time since 2006
– up 11,000 FY versus down 326,000 last year
ADSL2+ available to 80% of UK premises by December 2011
Ethernet - 1,000 fibre Ethernet nodes, largest network in the UK
Continued investment overseas
– Ethernet, MPLS & city fibre 2010 2011
QoQ change in total copper lines
‘000
© British Telecommunications plc
11
Fibre roll out progressing at a good pace– passing around 80,000 new premises per week– 5m homes to be passed in next few weeks– c.150,000 end users currently– c.45 CPs selling or trialling services– Cornwall and NI progressing well
Network capabilities– expect to roughly double our FTTC speeds to up to 80Mbps in 2012– potential for >100Mbps FTTC– FTTP roll out commencing, 1 Gbps trial underway
2/3 premises passed by end of 2015
2/3 premises passed by end of 2015
5m premises passed shortly
5m premises passed shortly
>4m premises passed currently
>4m premises passed currently
10m premises passed by 2012
10m premises passed by 2012
Fibre roll out
ADSL enabled for c.99% of all premises
ADSL enabled for c.99% of all premises
For more information about BT’s strategy go to:
Team BT 2012 Challenge intranet site (http://2012challenge.intra.bt.com/our-strategy/index.htm)
Investor centre of the BTplc internet site (BT Group annual report published 27 May)
(http://www.btplc.com/sharesandperformance/index.cfm)