BT 2014 Annual Report Download - page 61

58 The Strategic Report
Group performance
Our Ƭnancial performance
We have made strong progress this year. Our results were in line with
orahead of the outlook that we announced at the start of the year.
Underlying revenue excluding transit was up 0.5% compared with the
3.1% decline in the prior year. Our investments are delivering and more
than oset the regulatory pressures on our business.
This year all of our lines of business made good progress in transforming
their costs. In BT Global Services, we are rolling out learnings from our
UK cost transformation programmes to our operations worldwide. The
progress it has made on costs underpinned its strong cash ow growth
for the year. Across the group we have focused on improving end-to-end
processes which span our lines of business to increase eciency and
reduce the cost of failure. Over the past ve years we have reduced our
operating costs and capital expenditure, in aggregate, by around £5bn
and this has created the oxygen for us to invest.
Adjusted EBITDA of £6.1bn was at as our strong cost control oset
ourinvestment of around £450m in BT Sport.
Adjusted prot before tax was £2.8bn, up 6%, and adjusted EPS of
28.2p was up 7%. These reect the benet of our focus in recent years
on capital expenditure eciencies and debt reduction.
We invested £2.4bn in capital programmes our eciencies have
enabled us to do more for less. Our bre rollout has passed more than
19m premises, around two thirds of the UK, bringing benets to homes,
businesses and communities across the nation.
Group Finance Directors introduction
Tony Chanmugam
Group Finance Director
Future outlook
Our investments are delivering for the business and we expect them to
support our goal of sustainable, protable revenue growth. We are also
condent there are signicant opportunities across the group for further
cost transformation.
Together, these will drive long-term cash ow growth for the business.
We will continue with our prudent nancial policy of investing in our
business, reducing net debt, supporting the pension fund and paying
progressive dividends.
Outlook Result
Underlying revenue
excluding transitaImproved trend Up 0.5%
Adjusted EBITDAb£6.0£6.1bn £6.1bn
Capital expenditurecBroadly level with
201213 Down 4%
Normalised free cash{Ʈowbc.£2.3bn £2.45bn
Dividend per share Up 10%15% Up 15%
Share buyback programme c.£300m £302m
a 8nderlying revenue excluding transit is deƬned on page 184.
b Adjusted EBITDA and normalised free cash Ʈow are deƬned on page 185.
c Before purchases of telecommunications licences.
2013/14 performance against our outlook
Weove delivered strong Ƭnancial
results, ahead of market expectations.
Continuing to deliver on our investments
whilst transforming our cost base will
enable us to generate sustainable,
proƬtable revenue growth.
2014/15 2015/16
Underlying revenue
excluding transitaBroadly level Growth
Adjusted EBITDAb£6.2bn£6.3bn Growth
Normalised free cash ƮowbAbove £2.6bn Growth
Dividend per share Up 10%15% Up 10%15%
Share buyback programme c.£300m c.£300m
a 8nderlying revenue excluding transit is deƬned on page 184.
b Adjusted EBITDA and normalised free cash Ʈow are deƬned on page 185.
Future outlook
Normalised free cash ow was up £150m at £2,450m, ahead of the
outlook of around £2.3bn we gave at the start of the year. Strong cash
generation across the group has enabled us to invest for the future at the
same time as growing our free cash ow.
We have reduced our net debt by £769m whilst funding the pension
scheme, buying back shares and paying progressive dividends to our
shareholders.
Tony Chanmugam
Group Finance Director
7 May 2014