Presentation is loading. Please wait.

Presentation is loading. Please wait.

Q1 Results 2004/05 Welcome. Q1 Results 2004/05 BT Group plc Ben Verwaayen, CEO.

Similar presentations


Presentation on theme: "Q1 Results 2004/05 Welcome. Q1 Results 2004/05 BT Group plc Ben Verwaayen, CEO."— Presentation transcript:

1 Q1 Results 2004/05 Welcome

2 Q1 Results 2004/05 BT Group plc Ben Verwaayen, CEO

3 Forward-looking statements - caution 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 These statements include, without limitation, those concerning: capital expenditure, cash flow, earnings per share and cost savings; expectations regarding broadband, ICT and mobility solutions growth, broadband roll out, investment in new wave and new wave revenue growth; and the possible or assumed future results of operations of BT and/or its lines of business. 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 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, including broadband and other new wave initiatives, not being realised; and general financial market conditions affecting BT’s performance. BT undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

4 Key deliverables Build on network centric ICT capability Create convergent MOBILITY solutions Deliver on BROADBAND Defend TRADITIONAL business rigorously Drive for COST LEADERSHIP

5 Q1 - Turnover transformation + 32% - 5% * New wave Traditional Total Revenue £bn New wave : BT Retail and Wholesale new wave plus Syntegra and Solutions revenue * excluding the impact of the mobile termination rate reduction + 0.8% *

6 Strong New Wave growth 2003/ % + 25% + 31% + 38% + 20% + 32% 2004/05

7 ICT / Solutions / BT Syntegra Mobility Broadband Other Inc. Classifieds & Wholesale Managed Services New Wave turnover £m £710m £936m Q1 04/05Q1 03/04 + £82m + £94m + £27m + £23m + 102%+ 46%+ 169%+ 15% + 32%

8 Build ICT ICT growth - building for the future £m Rolling 12 month order intake* 2003/042002/032004/05 ICT order intake £1.3bn –HP £427m, 7 years –Suffolk Council £324m, 10 years –35 Solutions contracts worth between £1m & £5m, one third of which are non-uk * Sales Order Value of contracts won by Solutions and Syntegra quarterly

9 Broadband Wholesale DSL end user base Wholesale end user connections as at m 472k net additions in the quarter is the highest ever Deliver on Broadband

10 Retail Broadband Retail market share of DSL 41% as at end Jun ‘04 –Highly competitive market –29% of net additions in Q1 Our response New prices launched on 01/07/04, cuts of up to 25% BT Communicator with Yahoo! Messenger launched 15/07/04 –Phone calls, texts, webcam and instant messaging over your PC –Free calls PC to PC, or off-net at your BT Together package rate Retail DSL end user base now > 1.1m

11 Create Mobility Convergence Mobility Driving growth Net additions (post-pay) up 70k vs Q4, consumer more than doubled Orange 38k / Vodafone 53k / mm k Apr-Jun UK net post-pay additions Project Bluephone - world leading Class 1 handset in development BT championing global standards Target launch Spring 2005 Post-pay subscriber growth

12 Defend Traditional Reduced Traditional turnover decline* 2003/ % - 4.5% - 6.5% - 5.8% - 1.0% * excluding the impact of the mobile termination rate reduction - 4.9% 2004/05

13 Defend Traditional Traditional turnover £m £3,876m £3,631m Q1 04/05Q1 03/04 - £57m - £26m - £118m Mobile Termination Private Circuits CallsLinesOther - £31m - £4m No effect on profit Substitution by New Wave + WLR + Interconnect - Forex - Payphones Adj’d Q1 03/04 £3,819m - £9m DQ Market decline DSL & WLR substitution - 8%- 3%- 7%- 15%- 29%0% - 5% * * excluding the impact of the mobile termination rate reduction

14 Calls decline - 5 main factors Dial IP - Market declines, driven by Broadband Price - Market trend and timing of price cuts on BT Together Options 2 & 3 Calls to mobile - Market now in decline, greater price awareness? Voice market*- 2-3% decline continues Market share*- Consumer, down 1.5% Business, down 0.3%* Defend Traditional * BT estimates based on latest Ofcom data : Local, national, international and non-geographic voice minutes

15 Calls - consumer Fixed voice* quarter on quarter market share loss 2003/ /03 Q1 market share 66% 2004/05 Average monthly customer loss to CPS** * BT estimates based on latest Ofcom data : Local, national, international and non-geographic voice minutes ** BT estimates Defend Traditional

16 BT Together Expanding the higher value customer base 2003/ /05 Option 3 customer base grew 34% in the quarter Option 2 customer base up 32k in three months 9.2m customers migrated onto Option 1 on the * no longer available for new supply

17 Defend Traditional Calls - business Fixed voice* quarter on quarter market share loss 2003/ /03 Q1 market share 43% 2004/05 Quarterly LNI voice minute loss to CPS** * BT estimates based on latest Ofcom data : Local, national, international and non-geographic voice minutes ** BT estimates : Local, national and International calls only

18 Cost Leadership Group operating margin* * before leaver costs

19 Underlying earnings per share* * before leaver costs

20 Q1 - continuing the trends from Q4 Group turnover growth* Strong New Wave growth Reduced decline in Traditional* Gross margin lower SG&A % of turnover reduced EBITDA lower** Operating margin increased** Interest cost reduced Tax rate reduced to +1.4% +38% -6% -1.2pp -0.7pp -1% +0.3pp -17% 26.8% +0.8% +32% -5% -0.9pp -0.5pp -2% +0.2pp -9% 26.5% Q1 04/05 Q4 03/04 *adjusted for the impact of mobile termination cut ** before leaver costs, exceptional items and goodwill

21 Q1 Results 2004/05 BT Group plc Ian Livingston, Group Finance Director

22 Q1 – headlines 1 pre goodwill and exceptional items *adjusted for the impact of mobile termination cut **before leaver costs, exceptional items and goodwill Group turnover - 0.4% / + 0.8%* Total costs - 1%** Earnings per share 1 Free cashflow £157m - post leavers - 10% - pre leavers + 10% Net debt £8.3bn Operating profit + 1%**

23 BT Retail Q1 turnover declined by 1%* year on year –Traditional down 6%* – driven by calls / lines / private circuits – New Wave up 31% – driven by ICT, Broadband and Mobility Gross margin down 0.5 percentage points –reflecting the changing revenue mix –Traditional and New Wave gross margin have both improved SG&A £7m** higher –£13m reduction in Traditional more than offset by increased investment in New Wave Operating Profit down 8%** *adjusted for the impact of mobile termination rate cut **before leaver costs, exceptional items and goodwill

24 BT Wholesale Q1 External turnover up 10%* year on year –Traditional +4%* - driven by higher volumes –New wave +81% - driven by broadband and managed services Internal turnover down 5% year on year Network and SG&A costs reduced by £28m** EBITDA maintained** Operating profit down 1%** *adjusted for the impact of mobile termination rate cut **before leaver costs, exceptional items and goodwill

25 BT Global Services Turnover up 5% at £1,411m –despite £20m negative impact of exchange rates EBITDA up 12%** at £115m Operating loss reduced by 47%** –£20m improvement **before leaver costs, exceptional items and goodwill

26 Group P&L Turnover Cost of sales Gross margin Gross margin % SG&A Other operating income Total SG&A SG&A % EBITDA pre leavers Depreciation Total costs (pre leavers & oth. op. income) Operating Profit pre leavers Operating margin pre leavers %4,567(2,098)2, %(1,066)41(1,025)22.4%1,444(699)(3,863) %4,567(2,098)2, %(1,066)41(1,025)22.4%1,444(699)(3,863) % Q1 03/04 £m Q1 Q1 04/05 £m Q1 Better / (Worse) £m Better / (Worse) £m (19) (19)(34)(53)38(11)27(26)31355 (34)(53)38(11)27(26)31355 *all numbers are before exceptional items and goodwill 4,586(2,064)2, %(1,104)52(1,052)22.9%1,470(730)(3,898) %4,586(2,064)2, %(1,104)52(1,052)22.9%1,470(730)(3,898) %

27 Group operating costs Other Operating Costs Net Pay : CoS £m £3,898m £29m £51m £31m £75m £3,863m Q1 04/05Q1 03/04 Depreciation POLOs £35m reduction year on year* £57m Net Pay : SG&A *before leaver costs and other operating income

28 Other operating costs Cost of sales : mainly ICT & other New Wave R&D £m £1,226m £21m £32m £18m £88m £1,301m Q1 04/05Q1 03/04 Other SG&A £75m higher year on year Cost of sales : Network costs £16m Marketing

29 Group P&L Operating Profit pre leavers Leaver costs Operating profit post leavers Associates and other Interest Profit before tax Tax Minority interest Profit after tax Earnings per share (p) pre leavers Earnings per share (p) 745 (102) 643 (5) (204) 434 (115) p 3.7p Q1 03/04 £m Q1 04/05 £m 5 (91) (86) (2) 21 (67) 38 (6) (35) 0.4p (0.4p) * all numbers are before exceptional items and goodwill 740 (11) 729 (3) (225) 501 (153) p 4.1p Better / (Worse) £m Better / (Worse) £m

30 Capital expenditure £m BT Group Q1 Capex Q1 Group capex £694m, up £142m year on year UK network capex up £120m to £512m in the first quarter driven by –HOAN –Broadband More balanced phasing 2004/05 capex within £3bn envelope, but higher than 2003/04 +28% +35% +9% +43% - 32%

31 EBITDA post exceptional items Interest paid (net) Tax paid Working capital & other Capex and financial investments (net) Free cash flow Free cash flow generation Q1 04/05 £m 1,325 (302) (41) (119) (706) 157 Q1 03/04 £m 1,459 (290) (8) 50 (593) 618 Better / (Worse) £m (134) (12) (33) (169) (113) (461)

32 Delivering on our strategy... Continuing the trends from Q4 Further investment in New Wave Improvement in efficiency Growth in underlying turnover* and EPS** *adjusted for the impact of mobile termination rate cut ** before leaver costs, exceptional items and goodwill …transformation continues

33

34 Thank You


Download ppt "Q1 Results 2004/05 Welcome. Q1 Results 2004/05 BT Group plc Ben Verwaayen, CEO."

Similar presentations


Ads by Google