Our investments are delivering for the business and we expect them to support our goal of sustainable, profitable revenue growth. Combined with a continued focus on cost transformation across the group, we aim to grow our EBITDA. This will drive long-term cash flow growth for the business. We will continue our prudent financial policy of investing in our business, reducing net debt, supporting the pension fund and paying progressive dividends.
EBITDA: Earnings before interest, taxation, depreciation and amortisation.
1 Before specific items.
2 Change in underlying revenue excluding transit.
3 Before purchases of telecommunications licences.
4 Before specific items, purchases of telecommunications licences, pension deficit payments and the cash tax benefit of pension deficit payments.
*FTTC and FTTP
Our key performance indicators
We hit our operational targets for the year, but we want to go further. Overall our financial results were in line with the guidance we gave in July 2020ª.
This year, we continued to refine the KPIs we use to track progress against our strategy. We use 11 KPIs – five operational and six financial.
This tracks changes in our customers’ perceptions of BT since we launched the measure in April 2016. It’s a combined measure of ‘promoters’ minus ‘detractors’ across our business units. Group NPS measures Net Promoter Score in our retail business and Net Satisfaction in our wholesale business.
This tracks how many premises are connected to Openreach’s full fibre network.
This is our revenue as reported in our income statement.
This measures our earnings before interest, tax, depreciation and amortisation, specific items, share of post tax profits/losses of associates and joint ventures and net non-interest related finance expenses.
This measures our margin, calculated using our adjustedb EBITDA and adjustede revenue.
This measures the number of EE customers connected to our 5G products.
This measures performance against our target to cut carbon emissions intensity by 87% by the end of March 2031 (compared to 2016/17 levels). It’s measured by reference to tonnes of CO2e (carbon dioxide equivalent) per £m value added (adjustedb EBITDA plus employee costs).
This measures the number of people we’ve reached with help to improve their digital skills through our Skills for Tomorrow programme.
This measures free cash flow (net cash inflow from operating activities after capital expenditure) after net interest paid and payment of lease liabilities, before pension deficit payments (including the cash tax benefit of pension deficit payments) and specific items.
This measures additions to property, plant and equipment and intangible assets during the year.
ROCE is adjusted earnings before interest and tax as a percentage of equity, debt and debtlike liabilities excluding balances associated with tax and management of financial risk. For a full definition and a reconciliation to the nearest IFRS measure see page 198.
a We gave our original outlook in July 2020 and updated it in September 2020 to raise the lower end of the adjustedb EBITDA range. We updated it again in February 2021 to raise the lower end of the normalised free cash flow outlook range. Our final outlook was adjustede revenue down 5%–6%, adjustedb EBITDA £7.3bn–£7.5bn, capital expenditure £4.0bn–£4.3bn and normalised free cash flowc £1.3bn–£1.5bn.
b Adjusted EBITDA as stated is before specific items, share of post tax profits/losses of associates and joint ventures and net non-interest related finance expense, as explained on page 198.
c Normalised free cash flow as defined on page 199.
d Restated from 42% as presented in the Annual Report 2020 following review of our carbon emissions.
e Adjusted measures exclude specific items, as explained on page 197.