BT Regulatory News (BT.A)

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

"Our third quarter financial results are broadly in line with our expectations and we remain confident in our outlook for the full year. We continue to improve our customer experience metrics across the Group, with our sixth successive quarter of improved customer perception.

"We continue to work closely with the UK Government, Ofcom and our customers to expand the deployment of fibre and Openreach recently announced plans to accelerate our FTTP deployment to three million premises by the end of 2020.

"We agreed a reciprocal wholesale deal with Sky that will deliver market leading sports and entertainment channels to our BT TV platform by early 2019, reinforcing our strategic goal of being the best provider in the UK of converged network services.

"The triennial valuation of the BT Pension Scheme is proceeding and constructive discussions continue with the BTPS Trustee. We still expect to complete the valuation in the first half of the 2018 calendar year. Our aim remains to deliver fair, flexible and affordable pensions to all of our employees.

"We are delivering against our strategy, capitalising on opportunities and responding to market challenges with a robust set of actions. Looking ahead, we're confident in the steps we are taking to improve the performance of BT for all our stakeholders."

Third quarter to

31 December 2017

Nine months to

31 December 2017

£m

Change3

£m

Change3

Reported measures

Revenue

5,970

(3)%

17,756

(1)%

Profit before tax

660

25%

1,744

(9)%

Basic earnings per share

5.0

p

32%

13.2

p

(14)%

Net cash inflow from operating activities

1,596

£81m

4,181

£(402)m

Adjusted measures

Change in underlying2 revenue excluding transit

(1.5)%

(0.9)%

Adjusted2 EBITDA

1,826

(2)%

5,422

(3)%

Adjusted2 profit before tax

818

(1)%

2,398

(4)%

Adjusted2 basic earnings per share

6.4

p

(3)%

19.1

p

(6)%

Normalised free cash flow2

702

£96m

1,947

£(1)m

Net debt2

8,923

£(58)m

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

2 See Glossary on page 2

3 Measured against the comparative period in the prior year

Group results for the third quarter to 31 December 2017 

Third quarter

to 31 December

Nine months

to 31 December

2017

2016

Change

2017

2016

Change

£m

£m

%

£m

£m

%

Revenue

- reported

5,970

6,128

(3

)

17,756

17,940

(1

)

- adjusted1

5,979

6,126

(2

)

17,779

17,954

(1

)

- change in underlying1 revenue excluding transit

(1.5

)

(0.9

)

EBITDA

- reported

1,722

1,624

6

4,931

5,148

(4

)

- adjusted1

1,826

1,870

(2

)

5,422

5,576

(3

)

Operating profit

- reported

854

729

17

2,306

2,529

(9

)

- adjusted1

958

975

(2

)

2,797

2,957

(5

)

Profit before tax

- reported

660

526

25

1,744

1,914

(9

)

- adjusted1

818

826

(1

)

2,398

2,501

(4

)

Basic earnings per share

- reported

5.0

p

3.8

p

32

13.2

p

15.4

p

(14

)

- adjusted1

6.4

p

6.6

p

(3

)

19.1

p

20.4

p

(6

)

Capital expenditure

878

852

3

2,571

2,432

6

Normalised free cash flow1

702

606

16

1,947

1,948

-

Net debt1

8,923

8,981

£(58

) m

Customer-facing unit results

Adjusted1 revenue

Adjusted1 EBITDA

Normalised free cash flow1

Third quarter to

2017

2016

Change

2017

2016

Change

2017

2016

Change

31 December

£m

£m

%

£m

£m

%

£m

£m

%

BT Consumer

1,261

1,262

-

250

260

(4

)

114

162

(30

)

EE

1,357

1,311

4

259

277

(6

)

128

141

(9

)

Business and Public Sector

1,125

1,190

(5

)

362

393

(8

)

317

302

5

Global Services

1,266

1,398

(9

)

143

40

258

30

(115

)

126

Wholesale and Ventures

506

528

(4

)

189

211

(10

)

138

151

(9

)

Openreach

1,286

1,284

-

641

676

(5

)

332

362

(8

)

Other

1

2

(50

)

(18

)

13

(238

)

(357

)

(397

)

10

Intra-group items

(823

)

(849

)

3

-

-

-

-

-

-

Total

5,979

6,126

(2

)

1,826

1,870

(2

)

702

606

16

1 See Glossary

n/m = not meaningful

Glossary of alternative performance measures

Adjusted

Before specific items

Free cash flow

Cash generated from operations (after capital expenditure) excluding pension deficit payments and after interest, tax and non-current asset investments

Net debt

Loans and other borrowings (both current and non-current), less current asset investments and cash and cash equivalents. Currency denominated balances within net debt are translated to Sterling at swapped rates where hedged

Normalised free cash flow

Free cash flow before specific items and the cash tax benefit of pension deficit payments

Specific items

Items that in management's judgement need to be disclosed separately by virtue of their size, nature or incidence. Further information is provided in note 1 on page 23

Underlying

Excludes specific items, foreign exchange movements and the effect of acquisitions and disposals. Further information is provided in note 2 on page 23