BT Group plc Results For The Fourth Quarter And Year To 31 March 2012

LONDON, May 10, 2012 /PRNewswire/ -- BT Group plc (BT.L) today announces its results for the fourth quarter and year to 31 March 2012.

Fourth quarter and full year results:

Key points:

• Underlying revenue excluding transit down 1.9% for the year, within our target range
• EBITDA(1) target of above pounds 6bn delivered a year early
• Free cash flow(2) of 2.5bn pounds, up 13% and well above expectations
• Net debt up 266m pounds after 2.0bn pounds pension deficit payment
• Proposed final dividend of 5.7p, up 14%, giving a full year dividend of 8.3p, up 12%
• 10m homes and businesses passed with fibre, many months ahead of schedule

Outlook:

We expect

• Underlying revenue excluding transit to show an improving trend in 2013 and 2014
• Growth in EBITDA(1) in 2013 and 2014
• Normalised free cash flow (which excludes pension deficit payments and related tax credits) of 2,307m pounds in 2012 to be broadly level in 2013 and above 2.4bn pounds in 2014
• BT Global Services to deliver solid EBITDA growth in 2013
• BT Global Services operating cash flow to be lower in 2013 before returning to growth in 2014
• Dividends to grow by 10%–15% per year for the next three years
• Share buyback programme of around 300m pounds in 2013

[NOTE: Full announcement is available from BT]

Ian Livingston, Chief Executive, commenting on the results, said:
"In what remains a challenging environment we have delivered another year of growth in profits and free cash flow. Our financial strength has allowed us to invest in the business, make a 2bn pounds payment into the pension fund, reward employees and deliver double digit growth in shareholder returns.

(1) Before specific items

(2) Before specific items and pension deficit payments

"We have now passed 10m homes and businesses with our fibre roll-out. This is many months ahead of schedule and brings the benefits of super-fast broadband to families and businesses in cities, towns and rural areas across the UK. We remain the leading provider of broadband in the UK and over half a million customers are already taking our fibre-based BT Infinity product. At a time when many of our corporate customers are facing their own challenges, our investments internationally will help those seeking to expand in faster growing economies and this is reflected in 2bn pounds of new orders won by BT Global Services this quarter.

"While we will be impacted by economic and regulatory headwinds, we expect to continue to grow profits over the next two years, with normalised free cash flow growing to above 2.4bn pounds in 2014. We will continue to pursue our prudent financial strategy, investing in the long-term future of the business, supporting the pension scheme, paying down debt and enhancing shareholder returns.

"We have made progress again this year delivering for all our stakeholders, but we know there is more to do."

Forward-looking statements – caution advised

Certain statements in this results release are forward-looking and are made in reliance on the safe harbour provisions of the US Private Securities Litigation Reform Act of 1995. These statements include, without limitation, those concerning: outlook, including revenue trends, EBITDA and free cash flow growth, BT Global Services' EBITDA, restructuring costs, operating cash flow and revenue growth in higher growth economies; net debt reduction and credit rating, shareholder returns including growing dividends and share buyback; the pension scheme recovery plan, operating charge, regular contributions and interest; capital expenditure; effective tax rate; our fibre roll-out programme reach and innovations, increased speeds and speed availability; and the impact of regulation.

Although BT believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements.

Factors that could cause differences between actual results and those implied by the forward-looking statements include, but are not limited to: material adverse changes in economic conditions in the markets served by BT; future regulatory actions and conditions in BT's operating areas, including competition from others; selection by BT and its lines of business of the appropriate trading and marketing models for its products and services; fluctuations in foreign currency exchange rates and interest rates; technological innovations, including the cost of developing new products, networks and solutions and the need to increase expenditures for improving the quality of service; prolonged adverse weather conditions resulting in a material increase in overtime, staff or other costs; developments in the convergence of technologies; the anticipated benefits and advantages of new technologies, products and services not being realised; the underlying assumptions and estimates made in respect of major customer contracts proving unreliable; the aims of the BT Global Services restructuring programme not being achieved; and general financial market conditions affecting BT's performance and ability to raise finance. BT undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

SOURCE BT Group plc

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