BT Group plc
Annual General Meeting
19 July 2007
Sir Christopher Bland - Chairman
BT Group – Financial headlines
FY 2006/7
Group revenue
EBITDA
(1)
Earnings per share
Full year dividend
(1)
Before specific items
(1)
£20.2bn
4%
£5.6bn
2%
22.7p
16%
15.1p
27%
EPS – Five years of continuous growth
pence
EPS 22.7p up 16%
24
20
16
12
8
4
0
2001/2
2002/3
2003/4
2004/5
2005/6
UKGAAP, April 2001 – March 2004, before exceptional items and goodwill from continuing activities
IFRS, April 2004 – March 2007, before specific items
2006/7
Distribution policy
Dividends
•
Dividend 15.1p
up 27%
pence
Two thirds payout ratio reached one 16
year early
14
•
Expect to increase dividends, taking
into account our earnings growth, 12
cash generation and our ongoing
10
investment needs
8
Share buy back
•
New £2.5bn programme
- expected completion March 2009
6
4
2
0
2001/2
2002/3
2003/4
2004/5
2005/6
2006/7
Returned £4.8bn in dividends and share buyback over the last 5 years
Share price
BT
150
BT Share price
334.25p on 16/07/07
FTSE100
44%
140
BT Share price
231.75p on 14/07/06
130
120
17%
110
100
Jul-07
Jun-07
May-07
Apr-07
Mar-07
Feb-07
Jan-07
Dec-06
Nov-06
Oct-06
Sep-06
Aug-06
Jul-06
90
BT Group – 2001 headlines
Bloomin’ Terrible
BT turmoil as shares slump
66% in a year
BT fights to tame
£30bn debt
BT’s wrong numbers
20 Mar ‘01
23 Mar ‘01
22 Mar ’01
BT at the end of
the line
BT buried in debt
BT poised for
cash call dash
26 Mar ‘01
27 Mar ‘01
Company seeks to
refinance loans
23 Mar ‘01
My original checklist
BT Group strategy
Long term Partnership
with our customers
Defend traditional
– Improved service
– Price innovation
– Reduce costs /
improve margin
– Aggressive & creative
marketing
Grow new wave
–
21st Century Network
–
–
Networked
IT services
Broadband
Mobility
... Consistent delivery
Strategy in action
Delivering today
• Broadband – 11m
connections and over 99%
coverage
Delivering tomorrow
• BT Vision – multi-channel TV
with no compulsory subscription
• Networked IT services - £4.4
billion annual revenue
• 21st century network – leading
the world in building a
broadband IP network for all
• Global capability in over 170
countries
• Transformation into a leading
service provider
The way we work
BT made
Company of the
Year by Business
in the Community
Open,
constructive
relationship with
the regulator
Board changes
Board changes
Board changes
Board changes
Board changes
Board changes
Board changes
Board changes
Board changes
BT Group 2006/7 headlines
Magic £3 mark
A Perfect Day
BT Bonanza
17 Dec ‘06
21 Dec ‘06
18 May ‘07
Internet King BT
to return £2.5 billion
Bland leaves BT
set to reach for the sky
BT regains top spot
in broadband
18 May ‘07
18 May ‘07
18 May ‘07
Sir Christopher Bland - Chairman
Bringing it all together
Annual General Meeting
19 July 2007
Ben Verwaayen
Chief Executive
BT Group strategy
Long term Partnership
with our customers
Defend traditional
– Improved service
– Price innovation
– Reduce costs /
improve margin
– Aggressive & creative
marketing
Grow new wave
–
21st Century Network
–
–
Networked
IT services
Broadband
Mobility
... Consistent delivery
FY 2006/7 – Revenue UP 4%
£bn
+ 17%
6.3
7.4
- 3%
13.2
12.8
Revenue – New wave driving transformation
£bn
30% CAGR in 4 years
CAGR
+ 44%
Mobility & Other
+ 71%
+ 20%
Broadband
Networked IT Services
BT Global Services – 2006/7 order intake
£9.3bn
Signed 858 new customers
Broadband
Wholesale
Retail
> 10.7 million connections at 31/3/07
The UK’s number 1 broadband retailer
by market share
LLU
Other ISP’s
Mn
11
Retail *
10
ISP of the year
Mac Magazine 2006 Awards
9
8
7
Most trusted ISP 2007
Reader’s Digest
6
5
4
3
2
1
0
2004
Mar-04
2005
Mar-05
2006
Mar-06
2007
Mar-07
BT Total Broadband
Home IT advisor
- 40,000 users
VoIP
- 1.4m registered users
BT Digital Vault
- 125,000 users
Home hubs
- Over 1 million
BT Vision
- National marketing campaign
under way
Delivering Value for our customers
• Consumer
• Corporates
– Networked IT services
– Local service, global delivery
– Expanded portfolio of capabilities
– BT Together
– BT Total Broadband
– BT Fusion & BT Vision
• Other operators
• Business
- Managed Service
- Broadband
- Local access for telephony
and broadband
– BT Business One Plan
– BT IT Manager
– BT Office Anywhere
Higher
quality
Simpler
Faster
More
efficient
From traditional telco…
Keys to our
transformation
Real time
Global
Open
… to leading services provider with global capabilities
Transformation to Service Provider
• To enable
– Customer to focus on what
they do best
– Software solutions
– Global delivery and reach
• To reduce
– Complexity
– Cost base
– Time to market
• To deliver
– Right first time service
– Where our customers are
– A simplified organisation
• To improve
– Customer service
– Efficiency
– Free cash flow
Bringing it all together
•
Strategy built around convergence & innovation
– 17% growth in new wave revenues
•
Corporate transformation
– From traditional telco to leading services provider with global
capabilities
•
Strong momentum with track record of delivery
– Twenty quarters of EPS growth
– Thirteen quarters of revenue growth
– Five quarters of EBITDA growth
•
Continue to grow revenue, EBITDA*, EPS*
and dividends in 2007/8
* Before specific items and leavers
BT Group plc
Annual General Meeting
19 July 2007
Resolution 1
Reports and accounts
Proxy Votes
For
4,690,961,416
Against
7,879,073
Vote Withheld
1,540,670
Resolution 2
Directors’ remuneration report
Proxy Votes
For
Against
Vote Withheld
3,039,747,846
130,725,306
1,529,908,007
Resolution 3
Final Dividend
Proxy Votes
For
Against
Vote Withheld
4,698,432,613
678,005
1,270,541
Resolution 4
Re-elect Sir Christopher Bland
Proxy Votes
For
Against
Vote Withheld
4,665,303,524
32,179,017
2,898,618
Resolution 5
Re-elect Andy Green
Proxy Votes
For
Against
Vote Withheld
4,676,367,376
18,232,668
5,781,115
Resolution 6
Re-elect Ian Livingston
Proxy Votes
For
Against
Vote Withheld
4,678,250,916
19,041,422
3,088,821
Resolution 7
Re-elect John Nelson
Proxy Votes
For
Against
Vote Withheld
4,685,502,100
11,541,397
3,337,662
Resolution 8
Elect Deborah Lathen
Proxy Votes
For
Against
Vote Withheld
4,683,490,802
12,907,229
3,983,128
Resolution 9
Elect François Barrault
Proxy Votes
For
Against
Vote Withheld
4,684,502,467
11,963,701
3,914,991
Resolution 10
Reappointment of auditors
Proxy Votes
For
Against
Vote Withheld
4,679,050,873
7,394,391
13,935,895
Resolution 11
Remuneration of auditors
Proxy Votes
For
Against
Vote Withheld
4,678,136,507
7,977.341
14,267,311
Resolution 12
Authority to allot shares
Proxy Votes
For
Against
Vote Withheld
4,655,261,395
41,386,501
3,733,263
Resolution 13
Authority to allot shares for cash*
*Special resolution
Proxy Votes
For
4,686,626,092
Against
9,444,399
Vote Withheld
4,310,668
Resolution 14
Authority to purchase own shares*
*Special resolution
Proxy Votes
For
Against
Vote Withheld
4,609,658,522
6,594,827
84,127,810
Resolution 15
Authority to use electronic communications*
*Special resolution
Proxy Votes
For
Against
Vote Withheld
4,680,669,745
12,524,737
7,186,677
Resolution 16
Authority for political donations
Proxy Votes
For
4,579,323,754
Against
62,870,366
Vote Withheld
58,187,039
Poll on Resolution X
Using your Form of proxy/Admission card:
• If voting all shares “for”, place a tick () in “For” box
• If voting all shares “against”, place a tick () in “Against” box
• If voting all shares “vote withheld”, place a tick () in
“Vote withheld” box
• If splitting vote, indicate the number of shares voting “for” “against”
and “vote withheld”
• Please sign the card
• Place completed card in ballot box as you leave
• Please ask a marshal if you have any questions
Poll on Amendment to Resolution X
Using your voting paper:
• If voting all shares “for” amendment, tick “For” box in Column 2,
alongside appropriate resolution number
• If voting all shares “against” amendment, tick “Against” box in Column 3
• If splitting vote, enter the appropriate number of shares in Columns 2
and 3
• Write name, address and account number in Box 1
• Sign the voting paper in Box 2 and hand it to marshal at end of row
• Please ask a marshal if you have any questions
Poll on Procedural Resolution X
Using your voting paper:
• Delete Box A
• If voting “for” procedural resolution, place a tick () in Box 1
headed “For”
• If voting “against” procedural resolution, place a tick () in Box 2
headed “Against”
• If splitting vote, enter the appropriate number of shares in Boxes 1 and 2
• Write name, address and account number in Box 3
• Sign the voting paper in Box 4 and hand it to marshal at end of row
• Please ask a marshal if you have any questions`
BT Group plc
Annual General Meeting
19 July 2007