Our investments are delivering for the business and we expect them to support our goal of sustainable, profitable revenue growth. Combined with a continued focus on cost transformation across the group, we aim to grow our EBITDA. This will drive long-term cash flow growth for the business. We will continue our prudent financial policy of investing in our business, reducing net debt, supporting the pension fund and paying progressive dividends.
EBITDA: Earnings before interest, taxation, depreciation and amortisation.
1 Before specific items.
2 Change in underlying revenue excluding transit.
3 Before purchases of telecommunications licences.
4 Before specific items, purchases of telecommunications licences, pension deficit payments and the cash tax benefit of pension deficit payments.
*FTTC and FTTP
Our key performance indicators
Our customer experience performance improved for the year, but we want to go further. Our financial results were overall in line with the guidance we set in July 2019a.
We used five key performance indicators (KPIs) to measure progress against our strategy this year - two operational and three financial. Our operational KPIs were: improvement in customer service, measured using Group Net Promoter Score (NPS) and Keeping Our Promises. Our financial KPIs were: change in adjustedb revenue; adjustedb earnings per share; and normalised free cash flowc.
This tracks changes in our customers’ perception of BT since we launched the measure in April 2016. It’s a combined measure of ‘promoters’ minus ‘detractors’ across our business units. Group NPS measures Net Promoter Score in our retail business and Net Satisfaction in our wholesale business.
This customer service measure is focused on us meeting the commitments we make to customers and providing a more reliable service. That could be keeping to appointment times, completing orders in the promised timeframe or fixing faults when we say we will. As well as improving service and customer experience, improving our performance means less work required to fix mistakes and so helps us to cut costs.
Adjustedb revenue excludes the impact of specific items to reflect the underlying performance of the group.
This is the adjustedb profit after tax attributable to shareholders divided by the weighted average number of issued shares. Adjustedb earnings per share gives a comparable and consistent way of measuring our business performance over time.
This is free cash flow (net cash inflow from operating activities after capital expenditure) after net interest paid and payment of lease liabilities, before pension deficit payments (including the cash tax benefit of pension deficit payments) and specific items.
a Outlook originally provided in May 2019 was updated in July 2019 for the effect of IFRS 16. The range of group adjustedb EBITDA was updated from £7.2bn - £7.3bn to £7.9bn - £8.0bn.
b Adjusted measures exclude specific items.
c Free cash flow after net interest paid and payment of lease liabilities, before pension deficit payments (including the cash tax benefit of pension deficit payments) and specific items as explained