1 / 12

Change to presentation of financial results

Change to presentation of financial results Phil Moses – Group Controller & Director of Investor Relations 23 January 2008 Forward looking statements - caution

ivanbritt
Download Presentation

Change to presentation of financial results

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Change to presentation of financial results Phil Moses – Group Controller & Director of Investor Relations 23 January 2008

  2. Forward looking statements - caution Certain statements in this presentation are forward-looking and are made in reliance on the safe harbour provisions of the US Private Securities Litigation Reform Act of 1995. These statements include, without limitation, those concerning margins, restructuring charges and financial targets. Although BT believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements. Factors that could cause differences between actual results and those implied by the forward-looking statements include, but are not limited to: material adverse changes in economic conditions in the markets served by BT; future regulatory actions and conditions in BT’s operating areas, including competition from others; selection by BT of the appropriate trading and marketing models for its products and services; technological innovations, including the cost of developing new products, networks and solutions and the need to increase expenditures to improve the quality of service; the anticipated benefits and advantages of new technologies, products and services including other new wave initiatives, not being realised; developments in the convergence of technologies; fluctuations in foreign currency exchange rates and interest rates; prolonged adverse weather conditions resulting in a material increase in overtime, staff or other costs; and the timing of entry and profitability of BT in certain communications markets. BT undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise. 2

  3. Background Apr 2007 - New organisational structure announced Oct 2007 - New organisational structure effectiveNew organisational structure benefits customers – faster, better, more efficient servicesBT Design is responsible for service design and developmentBT Operate is responsible for service deployment and network operationLines of business retain responsibility for sales and customer serviceBT continues to comply with regulatory Undertakings and obligations Results for Q3 onwards to be reported under new structure 3

  4. Key points Significant amount of intra-group trading removed (excluding Openreach)No material change to OpenreachGreater visibility on end-to-end profitability of lines of businessBT Design and BT Operate are cost recovery centres Some minor reallocation of customer accounts between Global Services, Retail and WholesalePreviously announced expected restructuring charge of £450m and 2-3 year payback period remain unchanged Previously reported group level results and financial targets are unaffected 4

  5. Group New FY2006/07 £m Adjustment £m Old FY2006/07 £m 0 (4,014) 4,014 0 0 0 0 20,2236,061 (6,061) 20,223 5,780 2,920 2,860 20,223 10,075 (10,075) 20,223 5,780 2,920 2,860 External revenue Internal revenue Eliminations Total revenue EBITDA* Depreciation & amortisation Operating profit* • Significant amount of intra-group trading removed • No change to total group EBITDA or EBIT • No change to other group P&L items * Pre specific items and leaver costs 5

  6. Global Services New FY2006/07 £m Adjustment £m Old FY2006/07 £m 7,467 1,639 9,106 1,020 11.2% 675 345 7,312 0 7,312 776 10.6% 665 111 (155) (1,639) (1,794) (244) (10) (234) External revenue Internal revenue Total revenue EBITDA* EBITDA* margin Depreciation & amortisation Operating profit* • All internal revenue and related EBITDA removed as UK IP network has been transferred to BT Operate • A few small ‘major corporate’ accounts transferred to Retail • Reduction in EBITDA partially offset by benefits of end-to-end profitability on external trading • EBITDA margin target of 15% remains * Pre leaver costs 6

  7. Wholesale New FY2006/07 £m Adjustment £m Old FY2006/07 £m 4,057 3,527 7,584 1,961 25.9% 1,198 763 External revenue Internal revenue Total revenue EBITDA* EBITDA* margin Depreciation & amortisation Operating profit* 52 (2,250) (2,198) (450) (290) (160) 4,109 1,277 5,386 1,511 28.1% 908 603 • Small increase in external revenue due to transfer of some customer accounts from Retail • Removal of substantial amount of internal revenue and related EBITDA as Wholesale no longer charges other lines of business for network • Internal revenue only relates to line cards and electronics charged to Openreach • Reduction in depreciation as no longer running network * Pre leaver costs 7

  8. Retail New FY2006/07 £m Adjustment £m Old FY2006/07 £m External revenue Internal revenue Total revenue EBITDA* EBITDA* margin Depreciation & amortisation Operating profit* 103 (171) (68) 512 274 238 7,997 417 8,414 869 10.3% 171 698 8,100 246 8,346 1,381 16.5% 445 936 • Small net decrease in revenue due to transfer of customer accounts between Retail and other lines of business and reduction in intra-group trading • Increase in EBITDA reflects full end-to-end profitability of products (downstream of Openreach) • Increase in depreciation due to allocation of network costs * Pre leaver costs 8

  9. Openreach New FY2006/07 £m Adjustment £m Old FY2006/07 £m 685 4,492 5,177 1,888 36.5% 707 1,181 External revenue Internal revenue Total revenue EBITDA* EBITDA* margin Depreciation & amortisation Operating profit* 0 46 46 43 0 43 685 4,538 5,223 1,931 37.0% 707 1,224 • Small increase in internal revenue to realign with regulatory accounts • Now sells LLU and partial private circuit tails to BT Operate rather than Wholesale • Regulatory accounts unchanged * Pre leaver costs 9

  10. Other New FY2006/07 £m Adjustment £m Old FY 2006/07 £m 0 139 26 113 17 181 195 (14) 17 42 169 (127) Revenue EBITDA* Depreciation & amortisation Operating profit* • Increase in EBITDA primarily due to regulated return on line cards • EBITDA will include BT Design and BT Operate under/over recoveries • Increase in depreciation relates to IT assets that support group overhead activity * Pre leaver costs 10

  11. Summary Significant amount of intra-group trading removedGreater visibility on end-to-end profitabilityBT Design and BT Operate are cost recovery centresNo change to compliance with regulatory Undertakings and obligationsMinor changes to published performance indicatorsQ3 onwards reported under new structure Previously reported group level results and financial targets are unaffected 11

  12. Q&A

More Related