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BT Group Plc

BT Group plc Delivered consistently against strategic objectives in a tough market

BT Group plc (BT.A) today announced its trading update for the third quarter and nine months to 31 December 2018.

Key strategic developments:

· Ten successive quarters of improvement in Group NPS1, up 5.3 points. Right First Time2 up 3.2%

· Consumer launched the next version of its converged product BT Plus, guaranteeing wi-fi in every room

· EE demonstrated its 5G capability in London and will roll out to the busiest parts of 16 UK cities in 2019

· Openreach is currently deploying FTTP in 14 locations under its ‘Fibre First’ programme and has recently announced a further 11 locations, bringing the total to 25

· Initiatives to transform our operating model are on track; restructuring programme removed c.800 roles in the quarter

· Philip Jansen taking over as new Chief Executive from 1 February 2019


· Openreach passed c.1.7m premises with Gfast and c.900,000 with FTTP meaning over 2.6m total ultrafast premises passed

· Consumer fixed ARPU up 5% to £39.6, with increased mix of SIM only reducing postpaid mobile ARPU by 0.9% to £21.4

· Fixed churn at 1.4% returning to lower levels. Mobile churn was 1.3%

· Revenue generating unit (RGU) KPI introduced at 2.37 products per household

Financial results for nine months to 31 December 2018:

· Reported revenue of £17,558m down 1%. Underlying3 revenue down 0.9%4 as growth in our Consumer business was offset by regulated price reductions in Openreach and declines in our enterprise businesses

· Adjusted3 EBITDA broadly flat4 at £5,553m mainly driven by revenue growth in our Consumer business and restructuring related cost savings, offset by the revenue decline in Openreach and Enterprise

· Reported profit before tax of £2,094m up 20%. Adjusted3 profit before tax down 1%4 at £2,487m

· Normalised free cash flow3 of £1,737m down 11% mainly driven by increased cash capital expenditure

· Reported capital expenditure up £239m at £2,810m primarily due to increased investment in FTTP and the increase in BDUK grant funding deferral announced last quarter

· Overall outlook reiterated notwithstanding significant market and regulatory pressures. We expect EBITDA to be around the top end of our guidance for FY 2018/19

Gavin Patterson, BT Chief Executive, commenting on the trading update, said

“We have continued to deliver consistently against our strategic objectives in a tough market, resulting in another sound quarter of operational and financial performance.

“In Consumer we launched the next version of our converged consumer offering, BT Plus with Complete Wi-Fi. Following successful trials in London we announced our plan to launch 5G in 16 UK cities in 2019. Openreach accelerated its FTTP commissioning and has now passed 890,000 premises. We are ready to expand our FTTP programme up to and beyond 10 million premises if the conditions are right.

“Our overall outlook for the full year remains unchanged, with EBITDA around the top end of our guidance for FY 2018/19. We continue to expect regulation, market dynamics, cost inflation and legacy product declines to impact in the short term before being more than offset by improved trading and cost transformation by our 2020/21 financial year.

“I am handing over the business with good momentum behind its ongoing transformation programme and wish my colleagues all the best for the future.”

Nine months to 31 December 2018





(IFRS 15)

(IFRS 15 pro forma)

(IAS 18)





Reported measures





Profit before tax




Profit after tax




Capital Expenditure




Adjusted measures

Adjusted3 Revenue





Change in underlying3 revenue


Adjusted3 EBITDA





Normalised free cash flow3





Net debt3





Group NPS measures Net Promoter Score in our retail business and Net Satisfaction in our wholesale business

Measured against Group-wide ‘Right First Time’ (RFT) index

See Glossary on page 5

4 Measured against IFRS 15 pro forma comparative period in the prior year