Annual Review & Summary Financial Statement 2002
Total Page：16
File Type：pdf, Size：1020Kb
Annual Review and summary financial statement 2002 BT Group plc was formed when the 2 Chairman’s message mmO2 business (comprising what 4 Chief Executive’s statement had been our mobile activities in 6 Review of operations – the UK, the Netherlands, Germany Our customers, Our people, and the Republic of Ireland) Meeting customers’ needs was demerged from British and Broadband Telecommunications plc on 14 Business review and 19 November 2001. Shareholders received one share in mmO2 plc and summary directors’ report one share in BT Group plc for each 16 Board of directors share they previously held in British 18 Summary group profit and Telecommunications plc. Trading in loss account BT Group plc and mmO2 plc shares 19 Summary group began on 19 November 2001. balance sheet 20 Auditors’ statement In this Annual Review, references 21 Online information to “BT Group”, “BT”, “the group”, Enquiries “the company”, “we” or “our” are to BT Group plc (which includes the continuing activities of British Telecommunications plc) and its subsidiaries, or any of them as the context may require. BT Group Annual Review 2002 Everything begins and ends with our more than 21 million customers. Serving them is both a privilege and a fantastic opportunity. Customer satisfaction is our number one priority . Every one of our people – our field engineers, our call centre advisers, our operators, our network specialists, members of our professional support functions, our research scientists, our software engineers, our account managers – needs to be absolutely focused on those customers. 2 Chairman’s message BT Group Annual Review 2002 Sir Christopher Bland, Chairman, reports on the successful delivery of the action plan outlined a year ago and the company’s return to the dividend list… The last year has been a significant one for BT Group. Our operating results were satisfactory and we are pleased to propose a final dividend of 2.0 pence per share. In May 2001, your Board developed an action plan to reduce debt, manage costs and enhance BT’s ability to serve its customers even more effectively. In the year since then, we have delivered on that plan. In a turbulent market characterised by rising debt levels – a consequence in large part of the high cost of acquiring 3G mobile licences—and cooling sentiment towards the telecommunications sector, we have taken the hard decisions early and are now in a position of relative strength. Debt was reduced from £27.9 billion as at 31 March 2001, to £13.7 billion as at 31 March 2002. I A significant part of this reduction was achieved through the successful completion of the largest rights issue in UK corporate history. Some 1.98 billion new shares were issued, raising £5.9 billion. 3 Chairman’s message BT Group Annual Review 2002 I We demerged mmO2, which Reynolds, Chief Executive of Key events comprises what used to be BT’s BT Wholesale and Andy Green, June 2001 wholly-owned mobile assets in the Chief Executive of BT Ignite. UK’s largest-ever rights issue closes UK and continental Europe. The appointment of Ian Sale of Yell for approximately I We unwound Concert, our Livingston, former group finance £2 billion international joint venture with AT&T, director of Dixons Group, as Group Sale of interest in Airtel in Spain for which had come under considerable Finance Director in April 2002 £1.1 billion pressure from the downturn in completes the top team. June and July 2001 the global communications sector. I would like to thank the Sale of interests in Japan Telecom Our destiny in this market is once non-executive directors, Lord and J-Phone for £3.7 billion again under our direct control. Marshall, Iain Anderson, Helen I We disposed of Yell, our Alexander, Neville Isdell, June de October 2001 international directories and Moller and Sir John Weston, who Court Meeting and Extraordinary e-commerce business. We sold retired during the year and welcome General Meeting win approval for our interests in Japan and Spain Baroness Jay, John Nelson and creation of a holding company and at a significant profit. Carl Symon to the Board. demerger of mmO2 I We achieved the sale and I would also like to thank Philip November 2001 leaseback of a large part of our Hampton and Colin Green, both of Demerger of mmO2 UK property portfolio. whom left the company recently, for I And we made significant the notable contributions they made February 2002 changes to your Board of directors, as Group Finance Director and Ben Verwaayen takes over as through a series of executive Secretary respectively. Chief Executive and non-executive appointments, As we progress, and while we on which shareholders will have the continue to concentrate on manag- April 2002 opportunity to vote at the AGM. ing the debt and further reducing Formal unwinding of Concert joint I would like to pay tribute to costs, we are also embarked on venture with AT&T Sir Peter Bonfield, who left the the pursuit of profitable growth and company at the end of January this customer service excellence. year. In Peter’s six years as Chief After a year of relative Executive, his energy and drive were introspection, we need to show the of enormous value and he played self-confidence that our assets and a key role in the restructuring of strategy justify. We will be entirely the company. We wish him well focused on finding profitable ways for the future. to meet what our customers need, The appointment of Ben particularly in the “new wave” Verwaayen, former vice chairman services arena, in order to enhance of the management board of Lucent shareholder value. Technologies, as your new Chief The last couple of years have Executive marks the next stage in been tough for our shareholders. your company’s evolution. Ben has I would like to thank you all for your significant telecommunications continued support. experience and a proven track They’ve also been tough for BT record in driving culture change. employees, who have consistently In November 2001, we risen to the challenge. strengthened the Board with the Looking ahead, I see every reason appointment of Pierre Danon, Chief for optimism. Executive of BT Retail, Paul Sir Christopher Bland Chairman 21 May 2002 4 Chief Executive’s statement BT Group Annual Review 2002 Ben Verwaayen, Chief Executive, says that outstanding customer service, profitable growth and the development of new broadband services are key to the creation of shareholder value . What customers can expect from BT is a high standard of service delivery, innovation and creativity, where it counts; and reliability where it matters most. It’s as simple and as rigorous as that. There are three principal parts to BT’s strategy. The first is a relentless and passionate concern for our customers, and a scrupulous focus on their requirements, now and in the future. BT’s core business is supplying more than 21 million customers with a range of communications services that meet their needs at home, at work, and anywhere in between. We are a service company and proud of it. We sell a customer experience. Delighted customers are our reason for existence, because delighted customers are key to the creation of shareholder value. 5 Chief Executive’s statement BT Group Annual Review 2002 Broadband is a critical growth opportunity and BT is already playing a major part. We have substantially reduced both the wholesale and retail costs of broadband and we have put significant marketing effort behind the services we offer. Broadband really can transform our customers’ lives and businesses, and it provides an Ben Verwaayen with Alison Ritchie, opportunity for us to build new and Chief Executive of BTopenworld. mutually beneficial relationships with Get that customer experience our customers. right, drive up customer satisfaction Finally, after a difficult time levels, and everything else follows. for the company, we now need to Get it right, and we can stimulate understand our strengths better and growth, generate cash, reduce play to those strengths. We have customer churn, promote innovation every reason for self-confidence, and deliver shareholder value. and confident, motivated, skilled We are determined that everyone employees, focused on their who works for BT – and I mean customers, are at the heart of everyone – will be committed to what BT has to offer. delighting his or her customers. We want to be the best Nothing is more important communications services and than that. solutions company for everyone in The second part of our strategy the UK and business customers is the pursuit of growth. in Europe. We deliver global The restructuring is done; stability connectivity and solutions where has been achieved. that meets customers’ needs. Now it’s time for your company Post-privatisation, BT was to start to grow again. And by that, the benchmark company in the we mean profitable growth. telecommunications industry, not We have no interest in growth for just in the UK but in Europe growth’s sake, just as we have no and globally. interest in cost cutting simply for its The bad news is that we’ve own sake. currently lost pole position. And we can achieve profitable But the good news is that there’s growth in all the sectors in which a vacancy. No single company we operate. We have set ourselves in this industry can confidently a number of rigorous financial lay claim to that position at targets relating to all our ongoing the moment. activities in the retail, wholesale and That’s the opportunity and solutions markets. challenge for us. We know that we will be judged We can become the benchmark by our ability to deliver.