BT 2016 Annual Report Download - page 90

94 BT Group plc
Annual Report 2016
Group Finance Director’s introduction
Tony Chanmugam
Group Finance Director
4 May 2016
“The investments we’ve been
making have driven our strong
financial performance this year.
EE has made a significant
contribution to our results in the
two months since we acquired the
business at the end of January.”
I’m pleased to say our key measure of the
group’s revenue trend, underlying revenue
excluding transit (which by definition excludes
EE), was up 2%. That’s our best performance
in more than seven years, and at the top end
of our outlook range of 1% to 2% growth.
And we’ve again delivered EBITDA and free cash
ow growth, in line with the outlook we set
at the start of the year.
BT Consumer revenue was up 7% reecting
17% growth in broadband and TV revenue,
benefiting from our investments in BT Sport
and BT Mobile. Openreach revenue was up
2% with fibre broadband growth more than
osetting regulatory headwinds. And we met
the milestone of bringing fibre broadband to
25m premises; this means, including other
service providers, 90% of the UK can now
access the speeds that it oers.
We’ve continued to make further cost
savings, helped by major end-to-end
programmes across our lines of business.
We’re confident there’s plenty more we can
do and we see the opportunity to take well
over £1bn out of our gross costs over the next
two years.
We grew adjusted EBITDA to £6.6bn, including
£0.3bn from EE. Adjusted profit before tax
was £3.5bn, up 9%, and adjusted EPS of
33.2p was up 5%.
Normalised free cash ow was £3.1bn, up
9%, helped by EE. Our ability to generate
strong cash ow from the business has
supported our growth and investment
ambitions.
And finally, we’re already making good
progress on integrating EE. We now see the
opportunity to deliver synergies of around
£400m a year from the EE integration, 10%
more than before and at a lower cost than
we originally expected. We’re refreshing our
organisation to make sure we can deliver the
best possible outcome for our customers and
have made these changes with eect from
1 April 2016 (see page 58).
Performance against our outlook
At the start of the year we published our outlook, which was for BT excluding EE. We refined
this at our third quarter results to reect our expectations for revenue growth. We’ve met
our commitments.
These measures also impact directors’ remuneration. So we have assessed our financial performance
for the year against the targets that we set, excluding the impact of the EE transaction and its
subsequent contribution to our group results.
Outlook Result
Change in underlying revenue
excluding transitaUp 1%–2% Up 2%
Adjusted EBITDAbModest growth Up 1%
Normalised free cash owbc£2.8bn £2.84bn
Dividend per share Up 10%–15% Up 13%
Share buyback c£300m £315m
2016/17 2017/18
Change in underlying revenue
excluding transitaGrowth Growth
Adjusted EBITDAbc£7.9bn Growth
Normalised free cash owb£3.1bn–£3.2bn >£3.6bn
Dividend per share ≥10% growth ≥10% growth
Share buyback c£200m
2015/16 performance against our outlook, excluding the impact of EE Outlook for 2016/17 and 2017/18
a Defined on page 240.
b Defined on page 241.