BT 2002 Annual Report Download - page 33

Capital expenditure on plant and equipment at
£1,974 million in the 2002 ®nancial year was 13% lower
than the prior year, re¯ecting continued tight control of
investment.
BT Ignite 2002
£m
2001
£m
Group turnover 4,476 3,468
EBITDA 146 50
Group operating loss (353) (309)
Share of losses of associates and
joint ventures (38) (121)
Capital expenditure 609 935
Operating free cash ¯ow (463) (885)
Note ± before goodwill amortisation and exceptional items
BT Ignite's group turnover was £4,476 million for the 2002
®nancial year, an increase of 29%. Excluding the effect of
acquisitions and disposals, the growth in turnover was 18%.
This underlying increase was mainly driven by the growth of
Solutions, European Connectivity and UK IP revenues.
Ignite Solutions turnover grew by 17% to £1,828 million
in the 2002 ®nancial year. Against a backdrop of dif®cult
market conditions, Syntegra, BT Ignite's systems integration
business, grew turnover by 8% to £609 million.
Turnover from European Connectivity grew by
£527 million to £998 million in the 2002 ®nancial year,
re¯ecting the acquisition of BT Ignite GmbH in Germany in
February 2001. Turnover from UK IP and other operations
increased by 29% to £1,024 million.
EBITDA improved by £96 million to £146 million for the
2002 ®nancial year. Included in these results were early
leaver costs of £55 million compared to £8 million in the
2001 ®nancial year. Headcount was reduced by 2,400 from
18,800 at 31 March 2001 to 16,400 at 31 March 2002.
The share of losses in BT Ignite's associates and joint
ventures improved by £83 million to £38 million in the 2002
®nancial year, mainly due to the change in status of
BT Ignite's associates in Germany and the Netherlands to
wholly-owned subsidiaries following the purchase of the
remaining shares in the 2001 ®nancial year. There were also
lower losses in Albacom, BT Ignite's Italian joint venture.
BT Ignite's group operating loss before goodwill
amortisation and exceptional items increased by £44 million
to £353 million in the 2002 ®nancial year.
BT Ignite's capital expenditure for the year was
£609 million in the 2002 ®nancial year, a reduction of
£326 million on the prior year, re¯ecting the focus on cash
control.
BTopenworld 2002
£m
2001
£m
Group turnover 222 140
EBITDA (102) (198)
Group operating loss (118) (233)
Share of losses of associates and
joint ventures (7) (59)
Capital expenditure 10 10
Operating free cash ¯ow (112) (208)
Note ± before goodwill amortisation and exceptional items
BTopenworld's group turnover is derived principally from its
UK broadband and narrowband internet access services.
Turnover for the 2002 ®nancial year was £222 million, an
increase of 59% on the prior year. This turnover growth is
due to the new broadband product range introduced in
2001 as well as growth in the existing narrowband product
range.
The total number of UK internet service provider
customers of BTopenworld (excluding those served via
virtual ISPs) at 31 March 2002 was approximately
1.75 million, representing annual growth of 40%. With over
one million customers on unmetered packages
at 31 March 2002, BTopenworld is one of the leading
unmetered internet access providers in the UK.
EBITDA loss for the 2002 ®nancial year was
£102 million, a 48% improvement on the prior year.
Comparison of the 2002 ®nancial year's results with
those of the 2001 and 2000 ®nancial years
Group turnover
Group turnover from continuing activities, excluding BT's
share of the ventures' turnover, grew by 8% to
£18,447 million in the 2002 ®nancial year compared to
growth of 6% in the 2001 ®nancial year.
Turnover from discontinued activities includes the
results of mmO2, demerged on 19 November 2001,
Japan Telecom and J-Phone Communications, sold in June
and July 2001, and Yell, sold on 22 June 2001.
Total group turnover, excluding BT's share of the
ventures' turnover, increased marginally by 0.6% in the
2002 ®nancial year to £20,559 million after growth of 9% in
the 2001 ®nancial year. The increase in turnover from
continuing activities was offset by the decline in turnover
from discontinued activities. The group's turnover by
product is analysed as follows:
Group turnover 2002
£m
2001
£m
2000
£m
Fixed-network calls 5,266 5,655 5,908
Exchange lines 3,926 3,674 3,526
Receipts from other
operators 3,113 2,814 1,974
Private services 1,039 1,091 1,135
Solutions 1,661 1,074 915
Customer premises
equipment supply 688 726 847
Other sales and services 2,754 2,107 1,820
Continuing activities 18,447 17,141 16,125
Discontinued activities
and intra-group 2,112 3,286 2,590
Group turnover 20,559 20,427 18,715
Turnover from ®xed-network calls declined by 7% to £5,266
million in the 2002 ®nancial year compared to a decline of
4% to £5,655 million in the 2001 ®nancial year. Fixed-
network calls comprise all calls by customers made from
®xed lines in the UK, including outbound international calls.
In the 2002 and 2001 ®nancial years, call volume growth
Financial review
32 BT Group Annual Report and Form 20-F 2002