2005/6 | financial headlines
Group turnover
£19.5bn
Profit before tax (2)
Earnings per share (2)
Free cash flow
Full year dividend
Net debt
6% / 3% (1)
£2.2bn
5%
19.5p
8%
£1.6bn
8% (3)
11.9p
14%
£7.5bn
5%
(1) Underlying excluding cuts in mobile termination rates, Albacom and Infonet
(2) Before specific items
(3) Excluding receipts from disposals
Operational highlights of 2005/6
• 8million Broadband connections
• New wave revenues now one third of total business
• Investment in 21st century network
• Regulatory settlement – launch of Openreach
• Continued targeted acquisitions – Atlanet, Cara,
Total Network Solutions
Board changes
Corporate
Social Responsibility
Dividends
Total pence
15
Years ended 31 March
10
10.4
11.9
8.5
6.5
5
0
2.0
2002
2003
2004
2005
2006
BT’s vision
To be dedicated to helping
customers thrive
in a changing world
Consistent strategy
Helping our customers
thrive in a changing world
Defend traditional
Grow new wave
Improved service
Price innovation
Reduce costs/improve margin
Aggressive and creative marketing
Networked IT services
Broadband
Mobility
21st Century Network
Consistent delivery
Revenue | strong underlying* growth
% 5.0
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
4.0
3.0
2.0
1.0
0
(1.0)
(2.0)
2002/3
2003/4
2004/5
2005/6
* 2002/3 growth is adjusted to take account of Concert unwind
* 2004/05 and 2005/6 excludes impact of mobile termination and revenues from Albacom and Infonet
Consumers | a broadband centric service provider
What do consumers want?
Simple, high quality services; clear pricing; value for money
What is our strategy?
Broadband-centred convergent services; a service culture
Examples of new services:
High definition voice; BT Vision; BT Fusion;
WiFi cordless phones; 8Mb broadband
Broadband Britain
Coverage
2002
60%
BT Wholesale DSL Price £30.00
2006
99.7%
£8.40 per month
Take-up
200k
8 million
Speed
512kb
up to 8Mb
BT Retail Services
Internet
access and email
BT Yahoo!
Home Networking
Broadband Talk
Home Monitoring
Openzone
IT Manager
BT Fusion
Broadband | our services
Communications
BT Fusion
High Definition
Voice
Entertainment
BT Vision
Music
Digital Vault
Home Monitoring
Manage Life
Centred on the Home Hub
Bringing it all together
Small and medium businesses | a partner for change
What do businesses want?
Personalised, localised service; reduced complexity;
improved productivity
What is our strategy?
Being an IT partner; BT Local Business
Examples of new services:
Networked IT services; OneBill; BT Fusion for enterprise
Mobility | convergence is here
42% growth in revenue year on year
to £292m
Converged products and services
Fusion, Onebill, Openzone
Wireless cities
Wireless
connectivity
Car park
monitoring
Personal
safety
Remote
working
Wholesale customers | convergent network solutions
What do Wholesale customers want?
High quality service, reliable delivery;
equality of service/price
What is our strategy?
Providing managed network solutions
for fixed and mobile operators
Examples of new services:
21CN based services; BT Movio
Corporates | growing around the world
What do corporates want?
Enterprise-wide solutions; a one-stop shop;
reliability and security
What is our strategy?
Providing global reach with local presence;
building long-term customer relationships
Examples of new services:
Converged wireless portfolio;
sector specific propositions
Networked IT services | enhancing our capabilities
Motor industry
Retail
Atlanet
NSB, BT Expedite & dabs.com
Reach
Infonet, Albacom, KDDI joint venture
Financial Services
Radianz
WAN & LANs
Cara, Skynet & TNS
Bringing it all together
Revenue | new wave growth accelerating
£Bn
7
CAGR
6
+ 49%
5
+ 83%
4
3
2
+ 24%
1
0
2002/3
2003/4
2004/5
2005/6
Mobility & Other Broadband Networked IT Services
Basic earnings per share*
Pence
20
Years ended 31 March
16.9
15
19.5
18.1
14.4
10
9.0
5
0
2002
2003
UK GAAP
2004
2005
2006
IFRS
* From continuing activities
Bringing it all together
Strategy built around convergence & innovation
Strong momentum with track record of delivery
SIXTEEN quarters of EPS growth
NINE quarters of revenue growth
FIVE quarters of improvement in EBITDA trend
Consistently successful in competitive & dynamic markets
New wave now accounts for a third of group revenue
Networked IT services provider of choice
Positive operational trends will continue
Growing revenues, profits & dividends