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Sir Christopher Bland Chairman BT Group plc Delivering today Investing for tomorrow.

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Presentation on theme: "Sir Christopher Bland Chairman BT Group plc Delivering today Investing for tomorrow."— Presentation transcript:

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2 Sir Christopher Bland Chairman BT Group plc

3 Delivering today Investing for tomorrow

4 2003/04 - another year of good progress Group turnover £18.5bn, maintained* Earnings per share 16.9p, up 19%** Free cash flow £2.1bn, up 21% Dividend 8.5p, up 31% Net debt £8.4bn, down 12% *Adjusted for the impact of mobile termination cut **Before exceptional items and goodwill Delivering today

5 FY 01/02 2,250 1,750 1, (250) (750) FY 02/03FY 03/04 Free cash flow**(£m) FY 01/02 18p 15p 12p 9p 6p 3p 0p FY 02/03FY 03/04 Earnings per share* (pence) Mar 01 0 (7) (14) (21) (28) Mar 02Mar 03 Net debt (£bn) FY 01/02 9p 6p 3p 0p FY 02/03FY 03/04 Dividend per share* (pence) 2003/04 - key financial indicators , 708 2, 071 Mar 04 *Before exceptional items, goodwill amortisation **Free cash flow for 2001/02 excludes the property transaction and includes pension payments, emerged and discontinued activities

6 2003/04 - dividends and buy backs To date: Purchased 1.1% of share capital (97m shares) Total cost of purchase £174m Authorisation for 10% of share capital Rolling share buy back programme commenced FY 01/02 0p FY 02/03FY 03/04 10p 8p 6p 4p 2p 2.0p 6.5p 8.5p +31% Dividend pay-out 50% of earnings Targeting a 60% pay-out ratio in 2005/06

7 Continuing the transformation Over the last three years and going forward: delivering on a clear strategy rigorous financial discipline − strong free cash flow − debt reduced by £20bn since March 2001 sustained reductions in customer dissatisfaction accelerating new wave innovations cultural change: BT’s people and brand values deepening our community engagement Delivering today Investing for tomorrow

8 Our contribution to the community Helping everyone benefit from improved communication communities first cymunedau yn gyntaf Supporting good causes £18 million Education support 2 million children, 10,000 schools 4,000 BT Volunteers Free teaching resources ChildLine £1.5 million cash, £2 million in kind, 19% more children helped Everybodyonline Helped 8 communities - digital inclusion - 3 in Wales

9 Ben Verwaayen Chief Executive BT Group plc Delivering today Investing for tomorrow

10 Our strategy Defend traditional Improved service Aggressive & creative marketing Price innovation Reduce costs / improve margin Long term partnership with our customers Grow new wave Broadband Mobility ICT Global Solutions Transformation 21 st Century Network

11 Transformation is underway Investing for tomorrow New wave now represents 18% of Group turnover *Excluding the impact of the mobile termination rate reduction FY 02/03 11 FY 03/ New wave 15.9* Traditional Total revenue £bn -5%* +30% 3.4 New wave 15.1* Traditional

12 Building for the future Lead on network centric ICT capability Deliver on broadband Create convergent mobility solutions Defend traditional business rigorously Drive for cost leadership Investing for tomorrow

13 Embracing technology - enabling change ICT - combines telecoms experience and IT innovation Major wins across UK, Europe and US − Unilever − NHS − Honeywell Leading the world in network-centric ICT solutions

14 Broadband - making Britain click Broadband at the heart of BT BT’s UK-wide broadband coverage more than 90%, and to rise to 99.6% by summer ’05 Cardiff: now 100% broadband enabled Pan-Wales coverage: 96% by summer '05 Mar 0.0m 2.5m 1.5m 1m 0.5m 2.0m JunSepDecMarJunSepDecMar End user connections now over 2.5m BT Wholesale Broadband 2004

15 Building a seamless converged service BT re-enters mobility by: Partnering with industry leaders Re-building the brand in the high street Acting as a virtual network operator Innovating through Wi-Fi – BT Openzone Launching converged services – e.g. Project Bluephone − enabling the mobile phone to “roam” onto the fixed network Create mobility services and solutions

16 Good value for money BT Together Option 1 customers on Standard migrated to Option 1 on 1st July Option 1 price reduced £1 to £10.50 per month BT Together Option 2 price reduced from 1st April by £1 to £6 per month (+ line rental) BT Together Option 3 price reduced from 1st April by £3 to £15 per month (+ line rental) BT Business Plan no UK or US call costs more than 10p for an hour calls to key European countries cost no more than 20p BT Local Business active in 73 locations billing over £1bn of revenue ConsumerBusiness Reinvent our traditional business

17 Financial discipline with cost leadership Competitive advantage through cost leadership 01/0202/0303/0404/0505/0606/0707/0808/09 Future savings programmes across the business £1.7bn£1bn Savings to date across the business 21st Century Network savings much more to come... Good progress to date

18 What? A single intelligent network to replace many legacy platforms Why? Driving efficiency Better range and quality of services for customers Speed to market When? Trials in 2004 Starting mass migration to new IP network Broadband available as “dialtone” to most customers st Century Network

19 BT’s values Trustworthy Helpful Inspiring Straightforward Heart BT people providing a customer-centric organisation On 4 May 2004 over 1,300 senior managers went back to the floor ‘my customer’ challenge cup Hundreds of teams across BT competing to help improve customer satisfaction

20 Our customer promises When you make an appointment with us our engineers will do whatever they can to keep it When you call BT you can choose to opt out of the machine and talk to a real person If the first person you call at BT can’t help they’ll make it their top priority to find the person who can Improving customer satisfaction

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