BT Group plc Results For The Third Quarter And Nine Months To 31 December 2014

IRVING, Texas, Jan. 30, 2015 /PRNewswire/ -- BT Group plc (BT.L) today announced its results for the third quarter and nine months to 31 December 2014.

Gavin Patterson, Chief Executive, commenting on the results, said:

"This quarter we have delivered good growth in profit before tax and strong free cash flow.

"Openreach achieved the highest growth in the number of landlines on record.  It was also our best ever quarter for fibre broadband net additions.  All the major communications providers are responding to the strong market demand for fibre broadband, helping to drive take-up in what is already a very competitive market.

"Our superfast fibre broadband network now covers around three-quarters of the UK.  BT has been at the forefront of fibre innovation and investment, from which all communications providers benefit.  We aim to keep it that way.  So today we're announcing large-scale pilots this summer of ultrafast broadband with G.fast.  We now think we can deploy this technology at scale which will enable us to deliver ultrafast speeds of up to 500Mbps to most of the UK within a decade. 

"I am pleased that we have agreed the 2014 triennial funding valuation and recovery plan with the Trustee of the BT Pension Scheme.  The funding deficit is £7.0bn at 30 June 2014, an increase from 2011 reflecting the low interest rate environment.  Over the next three years we will pay £2.0bn into the scheme, which is less than we paid over the previous three years.  We have agreed a 16 year recovery plan reflecting the strength and sustainability of our future cash flow generation. 

"Mobility is a key growth area for us.  We are making good progress on our due diligence in relation to a possible acquisition of EE and will make further announcements in due course.  In the meantime, our Consumer mobile launch plans remain on track."

Financial highlights for the third quarter:

• Underlying revenue² excluding transit down 1%
• Underlying operating costs⁴ excluding transit down 3% reflecting the benefit of our cost transformation activities
• EBITDA¹ up 2% and earnings per share¹ up 10%
• Normalised free cash flow³ of £908m, up 64%
• Outlook reaffirmed

¹ Before specific items.  Specific items are defined on page 3
² Excludes specific items, foreign exchange movements and the effect of acquisitions and disposals
³ Before specific items, pension deficit payments and the cash tax benefit of pension deficit payments
⁴ Excludes specific items, foreign exchange movements and the effect of acquisitions and disposals, and is before depreciation and amortisation

GROUP RESULTS FOR THE THIRD QUARTER AND NINE MONTHS TO 31 DECEMBER 2014

Line of business results¹

¹ Before specific items 
² Before specific items, pension deficit payments and the cash tax benefit of pension deficit payments
³ Certain results have been restated.  See Note 1 to the condensed consolidated financial statements

Notes:

1.   The commentary focuses on the trading results on an adjusted basis, which is a non-GAAP measure, being before specific items.  Unless otherwise stated, revenue, operating costs, earnings before interest, tax, depreciation and amortisation (EBITDA), operating profit, profit before tax, net finance expense, earnings per share (EPS) and normalised free cash flow are measured before specific items.  This is consistent with the way that financial performance is measured by management and reported to the Board and the Operating Committee and assists in providing a meaningful analysis of the trading results of the group.  The directors believe that presentation of the group's results in this way is relevant to the understanding of the group's financial performance as specific items are those that in management's judgement need to be disclosed by virtue of their size, nature or incidence.  In determining whether an event or transaction is specific, management considers quantitative as well as qualitative factors such as the frequency or predictability of occurrence.  Specific items may not be comparable with similarly titled measures used by other companies.  Reported revenue, reported operating costs, reported EBITDA, reported operating profit, reported profit before tax, reported net finance expense, reported EPS and reported free cash flow are the equivalent unadjusted or statutory measures. 

2.  Trends in underlying revenue, trends in underlying operating costs, and underlying EBITDA are non-GAAP measures which seek to reflect the underlying performance of the group that will contribute to long-term profitable growth and as such exclude the impact of acquisitions and disposals, foreign exchange movements and any specific items.  We focus on the trends in underlying revenue and underlying operating costs excluding transit as transit traffic is low-margin and is significantly affected by reductions in mobile termination rates.

Full results can be found at www.btplc.com.

A conference call for analysts and investors was held at 9.00am UK today and a simultaneous webcast will be available at www.bt.com/results

We expect to announce the fourth quarter and full year results for 2014/15 on 7 May 2015.

About BT

BT is one of the world's leading providers of communications services and solutions, serving customers in more than 170 countries.  Its principal activities include the provision of networked IT services globally; local, national and international telecommunications services to its customers for use at home, at work and on the move; broadband and internet products and services and converged fixed/mobile products and services.  BT consists principally of five customer-facing lines of business: BT Global Services, BT Business, BT Consumer, BT Wholesale and Openreach.

For the year ended 31 March 2014, BT Group's reported revenue was £18,287m with reported profit before taxation of £2,312m.

British Telecommunications plc (BT) is a wholly-owned subsidiary of BT Group plc and encompasses virtually all businesses and assets of the BT Group.  BT Group plc is listed on stock exchanges in London and New York.

For more information, visit www.btplc.com

SOURCE BT

Related Links

http://www.btplc.com

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