AGM Statement
BT Group PLC
17 July 2002
July 17, 2002
BT REVIEWS YEAR OF TRANSFORMATION
Sir Christopher Bland, chairman of BT Group, today welcomed shareholders to the
company's first annual general meeting. Speaking to shareholders at the
International Conference Centre in Edinburgh, Sir Christopher said: "That may
sound strange, but this is indeed the first AGM for BT Group. This company was
formed last year as a result of the demerger which created two new FTSE 100
companies, mmO2 and BT Group.
"The last time we were here, in 1997, was an era of expansion in telecoms, the
beginning of the internet and mobile boom. That boom was followed by a bust
which affected everyone and left many major European telcos with heavy debts and
serious strategic challenges.
"During the last year we have taken decisive action to stabilise the company.
That has been successfully accomplished. And we have embarked on a new course
for the future.
"It has been a year of transformation. Last March, we had debt approaching £28
billion. We had a major funding gap to address. We had no free cash flow. And we
had suspended dividend payments.
"We then announced an action plan - and we delivered it within 12 months. We
conducted a successful rights issue for £5.9 billion. We carried out a major, £8
billion, disposal programme, including our stakes in Japan and Spain - and Yell.
"We unwound the Concert joint venture. We raised £2.4 billion by the sale and
leaseback of the majority of our UK property. And we demerged the mmO2 wireless
business. The demerger gave you stakes in two substantial European businesses -
BT Group and mmO2.
"As a result of these measures, we more than halved our net debt, from £27.9
billion to £13.7 billion, going well beyond our debt reduction target of £15
billion."
Sir Christopher reminded shareholders that BT had already announced a return to
the dividend list as he had last year indicated would be the case. Sir
Christopher added: "We announced a final dividend for 2001/2 of two pence per
share. Future dividend policy will be to grow dividends progressively, with 40
to 50 per cent of earnings paid out as dividends. This rewards shareholders and
retains cash to grow the business and pay down debt."
Speaking of the new chief executive, Sir Christopher said: "Ben Verwaayen
joined us in February, bringing with him significant telecoms experience and a
proven track record in promoting cultural change. He has hit the ground running
- and running fast. He has unveiled a new strategic approach for BT, including a
bold new broadband strategy.
"Following the demerger, BT Group has performed relatively strongly,
particularly throughout this calendar year. We have continued to outperform our
European peers and have also outperformed the FTSE 100, including during the
current turbulence. As of last night, the European Telco Services index had
fallen by 43 per cent since the date of our demerger and the FTSE had fallen by
24 per cent. Over the same period, BT had fallen by 16 per cent, a comparatively
robust performance. However, any fall is unattractive to shareholders, but we
believe that if we continue to manage the company effectively and achieve our
goals the share price should eventually respond.
"Last year I thanked you for keeping faith with BT. This year, I believe
your faith will be vindicated. Thank you for staying with us through the
difficult times. We will take every opportunity to repay you for your loyalty in
the years ahead."
Following Sir Christopher's remarks, chief executive Ben Verwaayen made a
short presentation to the shareholders outlining BT's strategic priorities of
customer satisfaction, financial discipline, broadband, a new focus for BT
Ignite, a clear network strategy, a clear strategy for each customer group and a
focus on motivating BT people.
Ben Verwaayen said that since the end of June the number of BT exchanges
which were broadband enabled had increased to 1,115 compared with 890 at the
same time last year, and that the new number of exchanges now covered 73 per
cent of internet users. Ben also confirmed that orders per week for broadband
were now running at about 12,000 per week and that there were now 280,000 end
users connected.
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Caution - forward looking statements
Certain statements in these presentations 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: dividend policy; revenue, market share, working capital and capital
expenditure control, cost cutting, customer satisfaction, earnings per share,
cash-flow and debt reduction targets; growth opportunities by BT business,
including broadband growth in the UK; broadband customer targets, reductions in
costs, and prices for customers, and increased access to broadband.
Although BT Group 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 and its lines of
business; future regulatory actions and conditions in BT's operating areas,
including competition from others in communications markets; selection by BT and
its lines of business of the appropriate trading and marketing models for its
products and services; technological innovations, including the cost of
developing new products and the need to increase expenditures for improving the
quality of service; the anticipated benefits and advantages of new technologies
not being realised; developments in the convergence of technologies; prolonged
adverse weather conditions resulting in a material increase in overtime, staff
or other costs; the anticipated benefits and advantages of new technologies,
products and services, including broadband, not being realised; the timing of
entry and profitability of BT and its lines of business in certain communication
markets; significant changes in market shares for BT, its lines of business and
its principal products and services; fluctuations in foreign currency exchange
rates and interest rates; general financial market conditions affecting BT's
performance; factors not within BT's control which may affect the ability of
BT's lines of business to reduce costs, grow revenue, improve quality and
maximise return on capital employed; and the reintegration of Concert.
Inquiries about this news release should be made to the BT Group Newsroom on
its 24-hour number: 020 7356 5369. From outside the UK, dial + 44 20 7356 5369.
All BT Group news releases can be accessed at our web site:
www.btplc.com/mediacentre
This information is provided by RNS
The company news service from the London Stock Exchange
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