Strategic and performance review


      Full year dividends per share
      (pence)
arrow    15.8p
full year proposed dividend
per share – up 5%
Dividend chart 
       
  Our strategy
Strategy
  Increased focus on providing global, real-time and open platforms and putting the customer at the heart of everything we do
 
Our aims     Our achievements    
           
Our ongoing commitment is to increase shareholder value by…   arrow  24 quarters of consecutive year on year growth in earnings per share before specific items and leavers   £7.6bn
paid out to
shareholders in
past 5 years
      arrow Full year proposed dividend of 15.8 pence per share, up 5%
      arrow £1.5 billion paid out as part of share buy back programme
         
           
… driving profitable growth in new wave products and services such as…   arrow Coverage and support in 172 countries from our flagship MPLS network service; 25% growth in MPLS revenue   9%
growth in new

wave revenue
in 2008
arrow  global networked IT services   arrow £8 billion BT Global Services order intake
arrow broadband   arrow 12.7 million broadband lines in the UK (DSL + LLU)
arrow convergent mobility solutions arrow 234 million Openzone minutes used in 2008
             
…maximising the potential of our traditional business through a combination of…        

£1.5bn
cost savings achieved in
past 3 years

arrow enhanced quality of service   arrow 54% improvement in consumer service provision lead times
arrow creative marketing   arrow On average, 75% of the public instantly recognise a BT consumer TV advert
arrow innovative pricing   arrow Free weekend calls to UK landlines for consumer customers
arrow cost efficiency   arrow £625 million costs savings achieved in 2008
             
…transforming our networks, systems and services for the twenty-first century…   arrow Roll out of next generation broadband services from April 2008   40%
of core 21CN
infrastructure built
  arrow 80% of new products already using common capabilities
    arrow New R&D centre in Shanghai; new customer service centre in Hungary
           
…and creating long-term partnerships with our customers.   arrow Around 80% of BT Global Services’ major contracts are for 5 or more years   £1.8bn
projected value of
wholesale managed network services contracts signed in 2008
  arrow 70% of consumer revenue under contract
       
   
   
       
           
 
New wave and traditional revenue BT’s retail broadband market share
(%)      
New Wave      Arrow    35%
   
   
   
new wave  New wave   31 March 2008 (DSL and LLU)
Traditional Traditional      
         
         
 
  How we performed        
         
 
  arrow   Revenue £20,704 million, up 2% arrow   Earnings per share before specific itemsb of 23.9 pence, up 5%  
               
  arrow   EBITDAa before specific itemsb of £5,784 million, up 3% arrow   Free cash flowb of £1,503 million, up 11%  
               
  arrow   Profit before taxation and specific itemsb of £2,506 million arrow   Full year proposed dividend of 15.8 pence per share, up 5%  
               
   Key performance indicators
 
  The key performance indicators against which we measured the success of our strategy in 2008 were: customer service, earnings per share before specific items, and free cash flow.
 
 

Customer service

    Earnings per share before specific itemsb     Free cash flowb
        (pence)      
               
  arrow 9%   Earnings per share   arrow £1,503
     
     
     
     
  increase in ‘right first time’     million, up 11%
             
  See here for further details.        
             
  Other targets we set for 2008      How we performed
 
  In addition to our stated KPIs, we also said in 2008 we would aim to: tick   Revenue up 2% EBITDAa before
  arrow continue to grow revenue and EBITDA before specific items   specific itemsb up 3%






  arrow accelerate the strategic transformation of our business tick   BT Operate and BT Design fully operational. Successful integration of networks, IT processes and technical product design
     






  arrow introduce two-year £2.5 billion share buy back programme tick   £1.5 billion returned in 2008






  arrow maintain our solid investment grade credit rating tick   Standard & Poor’s: BBB+; Moody’s: Baa1; Fitch: BBB+






  arrow invest in the growth of the business tick   £3.3 billion in capital expenditure; around £300 million cost savings reinvested; £480 million invested in acquisitions completed in 2008 
     
     
         
 
aEBITDA: Earnings before interest, taxation, depreciation and amortisation.
bEBITDA before specific items, profit before taxation and specific items, earnings per share before specific items, earnings per share before specific items and leaver costs, EBITDA before specific items, free cash flow and net debt are non-GAAP measures. The rationale for using non-GAAP measures, and reconciliations to the most directly comparable IFRS indicators, are provided in the Financial review.
cAmount presented in respect of year ended 31 March 2004 is presented in accordance with UK GAAP. UK GAAP is not directly comparable with IFRS.