BT 2011 Annual Report Download - page 12

INTRODUCTION FROM THE CHIEF EXECUTIVE
9BT GROUP PLC ANNUAL REPORT & FORM 20-F 2011
BUSINESS REVIEW
BUSINESS REVIEW
A better business
BT has become a better business in the last year – by staying
focused on improving customer service and transforming costs,
and by investing in the areas that we believe will deliver future
growth. However, we still have much more to do in all these areas.
Our annual report will give you a good summary of the progress
we’re making – and I’d like to share my thoughts on how we’re
doing in creating a better future for BT.
Financially, we now have a much stronger base. We’ve nearly
trebled adjusted free cash flow in the last two years – to over
£2.2bn. We intend to build on this in the year ahead as we pursue
our goal of growing the business whilst continuing to grow our
profits and cash flow.
Delivering excellent customer service, ‘right first time’, is important
for our customers and is a critical factor in helping to transform
costs. We’ve made improvements in many areas, though this was
masked by problems when a huge upsurge in demand for our
engineers – and very poor winter weather – meant we didn’t always
deliver on our promises. While we are largely on top of things now,
lessons have been learnt in making sure that we get better forecasts
from our communications provider customers and by having a
greater flexibility in our resourcing.
Improvements in our processes have helped drive efficiency with
total operating costs reducing by over £1bn in the year. This has
freed up financial and other resources which will allow us to invest
in potential growth areas. While it’s early days, there are positive
signs that these investments are starting to pay off.
For example, Openreach’s fibre broadband network roll-out is on
track to pass 5m UK premises by spring 2011 – well on our way to
10m premises by 2012. Thousands of customers are taking up
super-fast fibre-based broadband every week and really like the
service. The overall growth in the broadband market has also been
the driver of customers seeking to be connected to fixed lines, with
the number of copper lines increasing for the first time for many
years.
Our BT Retail business grew its share of the broadband market. Our
retail market share excluding cable was 36% in the year. This is
important as broadband is increasingly the means of accessing a
range of services including TV, education and entertainment. After
a tough 18 months, BT Business is back on track, signing up small
and medium-sized businesses to IT and mobility services.
BT Global Services reached a significant milestone becoming
operating cash flow positive a year ahead of schedule. Our
investment in the Asia Pacific region – where we are extending our
presence to better serve multinational corporations based in Asia
and expanding into Asia – is going well. And our sales teams are
signing important deals with new and existing customers – building
on our position as a global leader in managed networked IT
services.
Our BT Wholesale business is successfully moving from being a
traditional UK wholesale provider to one that’s providing long-term
managed network services and network outsourcing to the UK
industry.
Communication is ever more at the centre of our customers’ lives
and businesses. The more they rely on it, the more they expect from
BT and we are happy to step up to that challenge. BT is delivering
better service and much improved financial results allowing us to
invest in the UK and across the globe. We still have much to do, but
we are making progress in building a better business with a better
future for all our stakeholders.
Thank you for your support.
Ian Livingston
Chief Executive
11 May 2011
£2.2bn
Adjusted free cash flow
Ian Livingston
Chief Executive
5m
UK premises passed by super-fast
broadband by spring 2011
36%
BT’s retail share of DSL and LLU
broadband market
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