FY19 financial results & events

• Openreach passed c.2m premises with Gfast and c.1.2m with FTTP; now passing c.20,000 premises with FTTP per week
• BT Plus takeup remains encouraging with around 1 million subscribers since May 2018 launch
• Consumer fixed ARPC down 0.3% in the quarter to £38.8 reflecting retail market competition; postpaid mobile ARPC down 0.9% in the quarter to £20.9 due to increased mix of SIM only; RGUs per address stable at 2.37
• Mobile churn down to 1.1% reflecting improved retention and successful device launches; fixed churn flat at 1.4%

• Reported revenue of £23,428m and adjusted revenue of £23,459m both down 1%⁴ as growth in Consumer was offset by regulated price reductions in Openreach and declines in our enterprise businesses, in particular in fixed voice
• Reported profit before tax of £2,666m, up 2%; adjusted³ EBITDA of £7,392m, down 2%⁴
• Net cash inflow from operating activities of £4,256m, down 14% mainly due to pension deficit payments, increased capital expenditure and lower EBITDA; normalised free cash flow³ of £2,440m, down 18%
• Capital expenditure £3,963m, up £441m, of which £213m relates to BDUK grant funding deferral including the change in take-up assumption announced in Q2, and the remainder primarily to increased investment in FTTP
• Proposed final dividend of 10.78p pence per share, giving a full-year dividend of 15.4p; unchanged on last year
• Outlook for 2019/20: adjusted³ revenue down c.2%, adjusted³ EBITDA £7.2bn - £7.3bn, capital expenditure⁵ £3.7bn - £3.9bn and normalised free cash flow³ of £1.9bn - £2.1bn

¹ Group NPS measures Net Promoter Score in our retail business and Net Satisfaction in our wholesale business
² Measured against Group-wide ‘Right First Time’ (RFT) index
³ See Glossary on page 2
⁴ Measured against IFRS 15 pro forma comparative period in the prior year
⁵ Excluding BDUK clawback

• 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  

• 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 

¹ Group NPS measures Net Promoter Score in our retail business and Net Satisfaction in our wholesale business
² Measured against Group-wide ‘Right First Time’ (RFT) index
³ See Glossary on page 5
⁴ Measured against IFRS 15 pro forma comparative period in the prior year

• Nearly 2m total ultrafast premises passed; Openreach currently building FTTP to c.13,000 premises per week
• Consumer fixed ARPU up 1% to £38.3, with increased mix of SIM only reducing postpaid mobile ARPU by 0.5% to £22.0
• Mobile churn remains low at 1.2%; fixed churn increased to 1.6% reflecting the impact of recent price increases

• Reported revenue of £11,588m down 2% and adjusted3 revenue of £11,624m down 1%4 as growth in our consumer business was offset by regulated price reductions in Openreach and declines in our enterprise businesses
• Reported profit before tax of £1,340m and adjusted3 EBITDA of £3,675m, up 2%4, mainly driven by higher volume and mix of high-end smartphones in our consumer business and restructuring related cost savings
• Net cash inflow from operating activities of £754m down £1,831m mainly due to £2bn contribution to BTPS. Normalised free cash flow3 of £974m down 22% due to increased cash capital expenditure and timing of working capital movements
• Reported capital expenditure up £140m at £1,833m due primarily to the increase in BDUK grant funding deferral following take up of Openreach’s volume related discounts
• Interim dividend of 4.62 pence per share; 30% of last year’s full-year dividend of 15.4 pence per share
• Overall outlook maintained. Based on current trading, we expect EBITDA to be in the upper half of our £7.3-£7.4bn range

¹ Group NPS measures Net Promoter Score in our retail business and Net Satisfaction in our wholesale business
² Measured against Group-wide ‘Right First Time’ (RFT) index
³ See Glossary
⁴ Measured against IFRS 15 pro forma comparative period in the prior year

• Over 1.7m total ultrafast premises passed; currently building FTTP to c.10,000 premises per week
• Monthly fixed ARPU up 1% to £37.9, with increased mix of SIM only reducing postpaid mobile ARPU by 1% to £21.7; churn remains low at 1.2%
• Mobile customers up 4% in Business and Public Sector. External broadband lines down 6% in Wholesale and Ventures and 3% in Business and Public Sector

• Reported revenue of £5,715m. Underlying3 revenue down 2%4 as regulated price reductions in Openreach and declines in our enterprise businesses offset growth in our consumer business
• Adjusted3 EBITDA up 1%4 to £1,800m mainly driven by stronger handset margins in our consumer business and restructuring related cost savings
• Reported profit before tax of £704m. Adjusted3 profit before tax up 3%4 at £816m
• Normalised free cash flow3 of £507m down 9% mainly driven by increased cash capital expenditure partly offset by timing of working capital movements
• Reported capital expenditure broadly flat at £839m