BT Group plc (BT.L) today announced its results for the full year to 31 March 2022.

Philip Jansen, Chief Executive, commenting on the results, said

“BT Group has again delivered a strong operational performance thanks to the efforts of our colleagues across the business. Openreach continues to build like fury, having now passed 7.2m premises with 1.8m connections; a strong and growing early take-up rate of 25%. Meanwhile, our 5G network now covers more than 50% of the UK population. We have the best networks in the UK and we’re continuing to invest at an unprecedented pace to provide unrivalled connectivity for our customers. At the same time we’re seeing record customer satisfaction scores across the business.

“We have finalised the sports joint venture with Warner Bros. Discovery to improve our content offering to customers, aligning our business with a new global content powerhouse. Separately, we have strengthened our strategic partnership and key customer relationship with Sky, having now extended our reciprocal channel supply deal into the next decade and agreed a MoU to extend our co-provisioning agreement.

“Our modernisation continues at pace and we are extending our cost savings target of £2bn by end FY24 to £2.5bn by end FY25. We delivered EBITDA growth of 2% this year as strong savings from our modernisation programme more than offset weaker revenues from our enterprise businesses due to well-known market challenges.

“While the economic outlook remains challenging, we’re continuing to invest for the future and I am confident that BT Group is on the right track. As a result, we are today reconfirming our FY23 outlook for revenue growth, EBITDA of at least £7.9bn and also the reinstatement of our full year FY22 dividend, as promised, at 7.7 pence per share.”

Strong progress in strategic priorities:

• Positive leading indicators: Highest ever BT Group NPS results; low Ofcom complaints; churn near record lows
• BT Group and Warner Bros. Discovery agreed to form a new premium sports joint venture bringing together BT Sport and Eurosport UK
• Agreed with Sky a new longer-term reciprocal channel supply deal beyond 2030
• Openreach signed a MoU on a framework with Sky on FTTP co-provisioning; Sky engineers to complete the majority of their FTTP in-premises provisioning activities on Openreach’s FTTP network
• FTTP footprint at 7.2m with annualised Q4 build rate of over 3m premises; take up of 1.8m driven by Equinox
• 5G network now covers over 50% of the UK population; our 5G ready customer base is over 7.2m and EE is once again named as having the best 5G and 4G network by RootMetrics
• Achieved gross annualised cost savings now totalling £1.5bn; increased target to £2.5bn by end FY25, within the previously communicated cost to achieve of £1.3bn

Adjusted EBITDA growth and return of full year dividend:

• Revenue £20.9bn, down 2%, reflecting revenue decline in Enterprise and Global offset by growth in Openreach, with Consumer flat for the year and returning to growth in Q4; adjusted¹ revenue down 2%
• Adjusted¹ EBITDA £7.6bn, up 2%, with revenue decline more than offset by lower costs from our modernisation programmes, tight cost management, and lower indirect commissions
• Reported profit before tax £2.0bn, up 9%, due to increased EBITDA offsetting higher finance expense
• Reported profit after tax £1.3bn, down 13%, due to remeasurement of our deferred tax balance
• Net cash inflow from operating activities £5.9bn; normalised free cash flow¹ £1.4bn, down 5%, due to higher cash capital expenditure, offset by higher EBITDA and lower tax and lease payments
• Capital expenditure £5.3bn, up 25%. Capital expenditure excluding spectrum £4.8bn, up 14% primarily due to continued higher spend on our fibre infrastructure and mobile networks
• IAS 19 gross pensions deficit £1.1bn, (31 March 2021: £5.1bn) due to an increase in real discount rate, deficit contributions paid, changes to demographic assumptions and positive asset returns
• FY22 final dividend declared at 5.39p per share, bringing the full year total, as promised, to 7.70p per share
• Outlook for FY23: adjusted¹ revenue to grow year on year; adjusted¹ EBITDA of at least £7.9bn; capital expenditure excluding spectrum of around £4.8bn; normalised free cash flow of £1.3bn to £1.5bn.