London, UK – Allison Kirkby, BT Chief Executive, commenting on the results, said: “BT Group delivered strong progress against its strategic priorities in FY25, as we stepped up the pace of build of the UK’s leading next generation networks. We set new record build and connect highs: our full fibre network now reaches more than 18m homes and businesses, with more than 6.5m already connected, and we were awarded the country’s best mobile network for the 11th year in a row recognising EE’s clear leadership in 5G. We also accelerated the pace of simplification and transformation, agreeing asset sales, improving customer satisfaction across all of our brands and business segments, and delivering over £900m of annualised cost savings.
“Although revenue declined year-on-year driven mainly by lower international sales and handsets, strong cost control and a step-up in focus and transformation resulted in growth in both EBITDA and normalised free cash flow, allowing us to increase our dividend for FY25 by 2% to 8.16p per share.
“The momentum in, and impact of, our full fibre programme is such that we are now raising our build target by 20% to up to 5m UK premises in FY26, keeping us comfortably on track to reach 25m by the end of 2026, while maintaining our cash flow guidance. We are now only one year away from our inflection to £2bn of normalised free cash flow, our target for FY27, and remain on track to deliver £3bn by the end of the decade.
“With the leadership team now in place to take our strategy forward, I am confident that as we build and connect at pace, our transformation will accelerate and deliver a better BT for all of us - our customers, our colleagues, the country and our owners.”
Strong delivery against our strategy
- Record FTTP build of 4.3m premises passed in the year; FTTP footprint reached more than 18m premises, of which 4.9m in rural locations
- Record demand for Openreach FTTP with quarterly net adds above 500k for the first time; total premises connected over 6.5m, increasing our market-leading take up rate to 36%; Openreach broadband ARPU in the year grew by 6% to £16.0, driven by higher FTTP take-up, speed mix and CPI
- Openreach broadband lines fell 243k in Q4, driven by losses to competitors and a weaker broadband market; expect the H2 run rate to continue through FY26
- New FTTP build target of up to 5m announced for FY26, to accelerate FTTP benefits including take-up and underpinning the December 2026 target of 25m
- UK's best mobile network for the eleventh consecutive year as awarded by RootMetrics; tenth year of best network with umlaut connect; best 5G availability with speedtest; 5G standalone rolled out across 50 major UK towns and cities, covering over 40% of the population
- Retail FTTP base grew by 33% year-on-year to 3.4m, of which Consumer was 3.2m and Business was 0.2m; 5G base reached 13.2m, up 15% year-on-year
- Consumer customer bases relatively stable in the year with a return to growth in the broadband base in Q4; Consumer broadband ARPU1 up 2.4% year-on-year to £42.2; Consumer postpaid mobile ARPU1 £19.4 in line year-on-year; Consumer fixed and mobile convergence grew to 24.6% from 22.9% last year
- Business continued to refocus on the UK with disposals of operations in Ireland and, after the period end, Italy; the Emergency Services Network contract was secured for another seven years
- Transformation delivering ahead of plan with £913m of gross annualised cost savings during FY25 at a cost to achieve in line with our plan of £448m; energy usage in our networks was down 4% and total labour resource was down 3% to 116k; we achieved a 10% reduction in Openreach repair volumes
- BT Group NPS improved to 29.5, up 4.7pts year-on-year, demonstrating further improving customer experience across all three customer facing units
Continued EBITDA growth in FY25 and normalised free cash flow2 ahead of guidance
- Reported and adjusted2 revenue £20.4bn, down 2%, mainly due to continued challenging trading conditions in our Global and non-UK Portfolio channels and weaker handset trading in Consumer, offsetting the benefit of FTTP growth in Openreach and price increases; Adjusted UK service revenue2 £15.6bn, down 1%, largely due to legacy voice declines
- Adjusted2 EBITDA £8.2bn, up 1%, driven by strong cost transformation
- Reported profit before tax £1.3bn, up 12%, primarily due to goodwill impairment in the prior year, offset by higher specific costs and net finance expense
- Capital expenditure2 ('capex') £4.9bn broadly in line with the prior year
- Net cash inflow from operating activities £7.0bn; normalised free cash flow2 £1.6bn, up 25% due to higher EBITDA and a lower working capital outflow
- Net debt £19.8bn (31 March 2024: £19.5bn), increased mainly due to our scheduled pension scheme contributions of £0.8bn partly offset by free cash flow
- Gross IAS 19 pension deficit of £4.1bn, a decrease from £4.8bn at 31 March 2024 mainly due to scheduled contributions
- Final dividend of 5.76 pence per share (pps) up from 5.69pps, bringing the full year dividend to 8.16pps, up 2%
- FY26 Outlook: Adjusted2 group revenue c£20bn and adjusted2 UK service revenue of £15.3-£15.6bn and EBITDA of £8.2-8.3bn; capital expenditure excluding spectrum c.£5.0bn; normalised free cash flow2 c.£1.5bn
- Mid-term guidance: Adjusted2 group revenue and adjusted2 UK service revenue sustained growth from FY27 and EBITDA growth ahead of revenue, enhanced by cost transformation; capital expenditure excluding spectrum reducing by more than £1bn from FY26 level; normalised free cash flow2 of c.£2.0bn in FY27 and c.£3.0bn by the end of the decade
Customer-facing unit updates
Performance against FY25 outlook
1 Consumer have reassessed the treatment of EE One and more specifically the standalone selling price of each good and service provided to the customer under the converged offering, and as such the allocation of the total transaction price to be received under the contract to each distinct product. This has resulted in a reclassification of revenues between product types.
2 See Glossary.
n/m: comparison not meaningful
Glossary
| Adjusted | Adjusted measures (including adjusted revenue, adjusted operating costs, adjusted operating profit, and adjusted basic earnings per share) are before specific items. Adjusted results are consistent with the way that financial performance is measured by management and assist in providing an additional analysis of the reporting trading results of the group. |
| Adjusted EBITDA | Earnings before interest, tax, depreciation and amortisation, before specific items, share of post tax profits/losses of associates and joint ventures and net finance expense. |
| Free cash flow | Net cash inflow from operating activities after net capital expenditure. |
| Capital expenditure | Additions to property, plant and equipment and intangible assets in the period. |
| Normalised free cash flow | Free cash flow (net cash inflow from operating activities after net capital expenditure) after net interest paid, payment of lease liabilities, net cash flows from the sale of cash flows related to contract assets, monies received as prepayment for the sale of redundant copper, dividends received from non-current assets investments, associates and joint ventures, and net purchase or disposal of non-current asset investments, before pension deficit payments (including their cash tax benefit), payments relating to spectrum, and specific items. It excludes cash flows that are determined at a corporate level independently of ongoing trading operations such as dividends paid, share buybacks, acquisitions and disposals, repayment and raising of debt, cash flows relating to loans with joint ventures, and cash flows relating to the Building Digital UK demand deposit account which have already been accounted for within normalised free cash flow. For non-tax related items the adjustments are made on a pre-tax basis. |
| Net debt | Loans and other borrowings and lease liabilities (both current and non-current), less current asset investments and cash and cash equivalents, including items which have been classified as held for sale on the balance sheet. Amounts due to joint ventures, loans and borrowings recognised in relation to monies received from the sale of cash flows of contract assets and as prepayment for the forward sale of redundant copper are excluded. Currency denominated balances within net debt are translated into sterling at swapped rates where hedged. Fair value adjustments and accrued interest applied to reflect the effective interest method are removed. |
| Adjusted UK Service revenue | Adjusted UK Service revenue comprises all UK revenue less UK equipment revenue. Some revenue from equipment is included within adjusted UK service revenue where this is sold as part of a managed services contract or where that equipment cannot be practicably separated from the underlying service. Adjusted UK service revenue excludes revenues from our Global channel and international elements of our Portfolio channel within our Business segment, as they are international in nature. |
| Specific items | Items that in management’s judgement need to be disclosed separately by virtue of their size, nature or incidence. In the current period these relate to our assessment of our provision for historic regulatory matters, impairment on remeasurement of the disposal groups to held for sale, impairment charges in our portfolio businesses, restructuring charges, divestment-related items, Sports JV-related items and net interest expense on pensions. In determining whether an event or transaction is specific, management considers quantitative as well as qualitative factors such as the frequency or predictability of occurrence. |
We assess the performance of the group using a variety of alternative performance measures. Reconciliations from the most directly comparable IFRS measures are in Additional Information on pages 27 to 29.
Forward-looking statements – caution advised
Certain information included in this announcement is forward looking and involves risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied by forward looking statements. Forward looking statements cover all matters which are not historical facts and include, without limitation, projections relating to results of operations and financial conditions and the Company’s plans and objectives for future operations. Forward looking statements can be identified by the use of forward looking terminology, including terms such as ‘believes’, ‘estimates’, ‘anticipates’, ‘expects’, ‘forecasts’, ‘intends’, ‘plans’, ‘projects’, ‘goal’, ‘target’, ‘aim’, ‘may’, ‘will’, ‘would’, ‘could’ or ‘should’ or, in each case, their negative or other variations or comparable terminology. Forward looking statements in this announcement are not guarantees of future performance. All forward looking statements in this announcement are based upon information known to the Company on the date of this announcement. Accordingly, no assurance can be given that any particular expectation will be met and readers are cautioned not to place undue reliance on forward looking statements, which speak only at their respective dates. Additionally, forward looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Other than in accordance with its legal or regulatory obligations (including under the UK Listing Rules and the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority), the Company undertakes no obligation to publicly update or revise any forward looking statement, whether as a result of new information, future events or otherwise. Nothing in this announcement shall exclude any liability under applicable laws that cannot be excluded in accordance with such laws.
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