BT Group plc (OTC:BTGOF) Q4 2026 Earnings Call Transcript

BT Group plc (OTC:BTGOF) Q4 2026 Earnings Call Transcript May 22, 2026

Nicholas Delfas: Good morning, and welcome, everyone, to BT Group’s Results Presentation for the Full Year ended 31st of March 2026. Presenting today are Allison Kirkby, BT Group’s Chief Executive; and Simon Lowth, BT Group’s CFO. Following the presentation, there will be a question-and-answer session. I would like to make everyone aware that this event is being recorded for replay purposes. And before we start, I’d like to draw your attention to the forward-looking statements caution in the presentation and press release for examples of the factors that could cause actual results to differ from any forward-looking statements we may make. Both the press release and the presentation can be found on our website. With that, I’ll now hand over to Allison.

Allison Kirkby: Thank you for that AI generation from Nick Delfas. Good morning, everyone, and welcome to our full year results presentation. Thank you to all of you who have managed to join us in the room and also to those of you online. I’m going to start with an update on our strategic progress over the past year, then Simon will take you through our financials. And after that, we’ll share our plans and our outlook for the year ahead. We’ll, of course, take all of your many questions, no doubt, at the end. I’m also delighted that members of our Executive Committee are here with us today. They’re over there, and you might not recognize them, but Tom is actually wearing a suit today. But please do take the opportunity to say hello at the end of the meeting.

But now let’s start with the full year highlights on Slide 4. It has been another busy year of strong progress amidst all the noise in our sector and yes, the turbulence of the world, we stayed very much focused on what matters most, and that’s the delivery of our strategy, and there is a lot to be proud of. Openreach set 2 new records, achieving the accelerated full fiber build that I set out last year as well as delivering record connections. We strengthened our mobile leadership with EE winning 3 major awards by a wide margin. And our brands all performed well with customer satisfaction improving across BT, EE and Plusnet, setting a new group record and helping us grow our retail customer base. We continue to transform our operations at pace, more than offsetting headwinds, which included higher national insurance, cost inflation and voice declines.

And building on this momentum, we’re now extending our transformation program, as Simon will explain to you in a bit. This will ultimately leave us with a simpler business in the future with further upside to come from AI. At the same time, we also continue to sharpen our focus on the U.K. We successfully exited 5 noncore businesses and are now driving a more radical transformation of our International division. Financially, we met our guidance and we grew our EBITDA. And reflecting that performance and our confidence in the future, we’re increasing the total dividend to 8.32p per share. That’s a 2% growth and giving clarity on our dividend growth in the years ahead. Finally, we are again confirming our outlook, including reconfirming the GBP 2 billion of normalized free cash flow for now this current fiscal year and the GBP 3 billion by fiscal year ’30.

So let me now take you through each of our customer-facing units. I think we can all agree that Openreach executed brilliantly this past year, building to a record 4.8 million homes and businesses, including 1.5 million in the final quarter alone. A huge credit to Clive, to Katie and the whole Openreach team for delivering at such scale safely, on time and on budget. We have now passed 23 million premises, around 2/3 of the U.K., and we remain on track to reach the 25 million target by the end of the calendar year. This is the fastest fiber build in Europe with 9 million premises passed in the last 2 years alone. But building is only good if you also connect, and we did that, too. We connected a record 2.2 million customers, driven by strong demand for next-generation services.

Q&A Session

And today, I can tell you we’re now up at over 9 million customers with a 39% take-up rate. As I’ve said before, building and connecting is our best defense, and we’re starting to see that translate now into lower line losses. We beat the improved target we set in January with lower losses to retail competitors, partly offsetting higher losses to wholesale altnets during the course of the year in what has been a very relatively flat broadband market overall. Looking ahead, we expect line losses to reduce again this year to around 800,000, encouraged by both the last quarter’s exceptionally strong build and our belief that retail alt-net competition is reducing. We continue to grow our broadband ARPUs, which increased with CPI and also with our upsell to full fiber and to higher speeds.

This has led to flat broadband revenue, but with a much higher full fiber mix. And in our GBP 1 billion Ethernet business, revenues grew a further 4%. The transition to full fiber is also driving material efficiency benefits. Faults across fiber and copper reduced by a record 18%, and this helped us cut direct labor by more than 10% while also planning for the step down in build and also keeping service quality high. All of this drove a record year for Openreach with growth in EBITDA well ahead of revenue. Moving to Consumer. This is the first year in 8, yes, 8 years that we have grown our customers across all 3 core Consumer products. That helped us return to service revenue growth in the second half of the year, in line with what we said in November, despite around a 1 percentage point drag from voice as we head towards the PSTN closure in January.

Our performance reflects the strength of our 3 leading and loved brands, which together serve the full breadth of the connectivity market in a very complementary way. Our brands are driving continued strong upsell to fiber, which now accounts for over half of our Consumer broadband base. And because fiber customers are happier customers, our broadband churn fell in the year despite a continued competitive retail market. More homes are also taking at least 2 services from us with our EE One proposition driving convergence to 27%, which is up 2 percentage points over the year, which also helped keep mobile churn at record lows. And we keep winning mobile quality awards with top placings from RootMetrics, umlaut and OpenSignal. All of this drove increased customer satisfaction with improvements seen across all 3 of our brands.

ARPUs were slightly down overall, but improved through the year despite pricing competition and underlying broadband ARPU, if you exclude the voice impact, actually increased. Finally, we achieved better customer outcomes whilst also transforming our operations, nearly offsetting additional costs, which included higher national insurance and higher national living wage and the investment that we proactively put in service that allowed us to complete nearly 2 million migrations off of the PSTN in the year. Moving to business. Service revenue grew 1%, excluding the impact of voice and down 2% at total revenue. Customer satisfaction improved, thanks to our investment in customer experience and our now accelerated move to modern digital and AI-supported platforms and to our streamlined product set.

And we also stepped up our commitment to innovation with strategic launches in cyber, in sovereign and in AI capabilities. If you look into each segment, within the SMB segment, the service revenue trajectory was pretty similar to Consumer with a better second half and growth in both mobile and IP voice customers. In corporate and public sector, we won landmark connectivity and security deals, including BAE Systems, which we announced earlier this week, Northern Ireland Electricity Networks and easyJet. And wholesale is a very well diversified across products and grew its EBITDA throughout the year. Overall, the business division’s transformation is now accelerating with momentum in customer wins, real progress in delivering simpler, better customer experiences and in market-leading innovation, all powered by our relaunched and refreshed BT brand.

Finally, moving on to International. As you know, we successfully carved it out as its own division back in July. And since then, we’ve divested 5 businesses that didn’t fit with our focus on serving the connectivity needs of major multinational customers. Revenues, however, did remain under pressure on a pro forma basis from legacy and managed contract declines, but the team worked hard to offset this with GBP 70 million of cost transformation initiatives in the year, driven by structural reductions that will benefit us going forward in footprint, in products, in overseas networks and in our IT estate. And now under the leadership of the Maestro Clive Selley, we are continuing to simplify the division and to upgrade customers to Global Fabric, our Network as a Service platform to drive pro forma EBITDA growth already in this coming financial year.

Now let me hand over to Simon to take you through our progress on transformation and the numbers that I know you all love in a bit more detail.

Simon Lowth: Thank you, Allison, and good morning to everybody. So starting with our transformation on Slide 10. We are delivering ahead of plan on the GBP 3 billion transformation program that we announced 2 years ago. Our transformation not only reduces cost, it also improves experience for our customers. By the end of the financial year, we achieved GBP 580 million in annualized cost savings, bringing total savings to GBP 1.5 billion over the first 2 years at a cost to achieve of GBP 0.8 billion. Our overall workforce, including subcontractors, reduced by 7% despite the fast pace of our fiber build. Direct labor fell 10% with reductions in all our units with the highest in Openreach and the corporate functions. We cut our energy use by 6% following the closure of 3G and the optimization of our 2G network ahead of its decommissioning later in the decade.

While the conflict in the Gulf has pushed up energy prices, we entered FY ’27 well protected, around 90% hedged at pre-conflict prices and approximately half hedged into the medium term. As a reminder, total energy cost is around GBP 500 million, which about half is noncommodity levies. We continue to reduce units on legacy networks, driven largely by the PSTN. We also reduced business IT applications in billing, security and network management systems as we upgrade to strategic technology. Moving on to our financial results by division, and let me start with Openreach. Revenue grew 1% in the year, driven by CPI-linked price increases and an improved FTTP mix in broadband. This was partially offset by declines in the broadband and voice-only customer bases.

Adjusted EBITDA grew by 5%, reflecting revenue flow-through and continued cost transformation, including lower fault rates, lower labor and energy costs, all partly offset by pay inflation. In Q4, EBITDA grew by 9%, reflecting the impact of commercial and storm-related costs in the prior year. Moving to Consumer. Revenue declined 2% in the year, primarily driven by lower handset volumes. Adjusted service revenue was flat as higher average customer bases were offset by modestly lower ARPU with a return to growth as previously guided in Q4 and H2. Consumer EBITDA declined by 2%, driven by the flow-through of service revenue and higher input costs, including higher taxes, partly offset by significant cost reduction. Excluding the effect of some prior year one-offs in the mid-tens of millions, EBITDA for this year would have been broadly flat.

In the first half of FY ’27, we expect brand refresh costs and the voice transmission — transition will be a headwind in the mid-tens of millions in H1, but sports content costs will be a tailwind in H2, also in the mid-tens of millions. Business revenue was down 2% due to softer equipment sales and U.K. service revenue was down 1%, driven entirely by voice declines. Business EBITDA declined by 5% for the year, reflecting the flow-through of revenue from high-margin legacy products, partly offset by tight cost management and ongoing modernization activity. And similar to Consumer, there will be higher marketing spend in the first half of FY ’27, balanced by cost improvements in the second half. Finally, International was affected by legacy and managed contract declines as well as divestments, which amounted to 7 percentage points of revenue and 11 percentage points of EBITDA.

Moving to look now at our group results on Slide 12. Adjusted revenue for the year was GBP 19.6 billion. That’s down 4%, principally due to lower equipment sales and lower revenues in international, including that impact of divestments. Adjusted U.K. service revenue was down 1% with growth in Openreach offset by slightly lower business revenues and higher group eliminations. In the fourth quarter, we returned to growth, up 1%. Adjusted operating costs before depreciation were down 6%, reflecting the benefits of cost transformation and tight expenditure control. As a result, adjusted EBITDA for the year was GBP 8.23 billion and excluding the 5 divestments we made during the year, up just under 1%. CapEx was GBP 5.1 billion for the year. It’s about GBP 100 million above our guidance for the year, reflecting strong connection activity.

Normalized free cash flow hit our guidance of GBP 1.5 billion. This was down from GBP 1.6 billion in FY ’25. But as you know, we invested more in CapEx. And of course, last year’s tax receipt of GBP 95 million did not repeat. As planned, we successfully realized value from forward selling redundant copper, locking in the price and covering part of our accelerated fiber build. We also continue to meet our customers’ needs for longer 36-month handset repayment contracts, and we sell receivables to neutralize the cash impact of these larger contracts. We normalized payment terms to handset vendors, also helping us to manage working capital between years, where FY ’25 had an unexpectedly strong receivables and inventory inflow late in the year.

The IAS 19 pension deficit increased by GBP 100 million, reflecting updated views on mortality and inflation and lower asset returns than expected, partly offset by scheduled contributions. Although the geopolitical landscape has driven financial market volatility, the BTPS remains well hedged against movements in interest rates and inflation and around 50% of longevity risk is hedged. Our funding plan remains on track, and the next triennial review will take place as at the 30th of June. And as Allison just announced, we’re proposing a final dividend of 5.87p per share, making the full FY ’26 dividend 2% higher at 8.32p per share. With that, let me hand back to Allison to look at our strategic priorities.

Allison Kirkby: Thank you, Simon. So 2 years into this chapter for BT, I must say time flies when you’re having fun and making a difference. I’m super proud of the progress that we’ve made and convinced there’s much more to come. So if we look at the next slide, let’s remind ourselves that our ambition is clear to become the U.K.’s most trusted connector of people, business and society. And trust, as you can all agree, could not be a more important mission and differentiator in today’s world as we look to ensure everyone is connected to our great networks with the best security embedded within them and with excellent service around them. Our growth strategy has 3 core pillars: building the best and most trusted digital networks, connecting customers across all our brands and in all segments with multiple services.

And accelerating our modernization to restore leadership in everything we do, and this includes building a tighter and more delivery-focused culture, one that is centered especially on our customers. As we realize this strategy, we will create significant value for all our stakeholders. And through a financial lens, this includes the delivery of our financial commitments of sustained U.K. service revenue growth, EBITDA growth ahead of service revenue and the doubling of this year’s normalized free cash flow. So why do we believe we have a winning strategy? Well, we have unrivaled network scale, customer reach and trust, a powerful set of competitive advantages, all focused on delivering for the U.K. We have unmatched nationwide network infrastructure, the largest full fiber network, offering unbeatable scale for both our wholesale and retail customers and the highest quality multi-award-winning mobile network with 5G plus now reaching over 70% of the population.

These networks are underpinned by our industry-leading technology and engineering capabilities, enabling us to build and operate with exceptional efficiency, quality, resilience and thought leadership from innovation on the most efficient fiber trenching to quantum cryptography and network APIs that protect your credit card transactions. We have the largest retail market share with upside as we cross-sell into the 45% of U.K. homes that already take at least one of our services, supported by our deep presence in local communities through our 400 retail stores, 18 U.K.-based call centers, 20,000 field engineers and 3,000 cyber engineers. No one has the national scale BT has in the communities where our customers live and work. We bring all this to market through a complementary portfolio of leading and loved brands spanning the whole market from value to premium and from retail to wholesale, allowing us to win across all segments while strengthening loyalty and reducing churn.

And lastly, we have long-standing trusted relationships with customers, partners and government built on our heritage of delivering mission-critical national infrastructure for the past 180 years. Let me now take you through the outlook for Openreach, Consumer and Business, where we’ll bring these competitive advantages and the growth levers to life. Standing back for a moment, it’s worth recognizing the scale of what Openreach has achieved. By the end of this calendar year, we’ll have passed 25 million homes and businesses, the majority built in just over 5 years. That is the largest wholly owned fiber asset in Europe built at the fastest pace. This means we have no complex, expensive and disruptive sale and leaseback nor joint venture arrangements.

And I really want to recognize Simon and the finance team for avoiding that. And by the end of the year, Openreach’s wholly owned network will pass the highest proportion of premises within its home market among all major operators in Europe at 74% with more to come as we head towards 30 million. Moving to how we measure our success. Our strategy remains the same: build and connect faster than anyone else at a lower cost and with the highest quality, delivering the best product for all our CPs and their end customers. We are on track to complete the 25 million rollout at around GBP 300 per home passed, close to half the altnet average, supporting sustainable pricing for both our customers and our shareholders. And we will build to 30 million, aligned with the government’s reprofiled BDUK rural subsidies, which now runs to fiscal year ’32.

Our powerful provisioning engine protects our base, drives ARPU through indexation and upsell and achieves best-in-class costs while enabling new technologies such as XGS-PON. Fiber has 60% fewer faults than copper, and this will continue to improve both our customer experience and our cost base over time. And finally, we remain ruthlessly focused on customer experience, particularly connecting on time and to the highest quality as we compete for every customer. Now let me illustrate how our fast build and our strong connection momentum are improving our competitive position. On the left-hand side, the chart shows the percent of Openreach broadband lines across 4 segments. First, the green area. This is where Openreach is the only fiber provider.

Here, we grow our base, and therefore, we grow the broadband market. And clearly, as we keep building, the areas where we can do that keep increasing, too. Next, the gray area represents the large and expanding competitive market, which we expect Ofcom will progressively deregulate in the years ahead. Third, the amber area, where neither we nor others have built fiber or co-ax. That’s where customers may be likely to choose mobile or satellite alternatives. While this area is shrinking as we build, enabling us to move customers on to higher quality fixed broadband. Finally, at the top of the chart is the red area where competitors have fiber and we do not. That red area has reduced by around half over the last 2 years alone. This is where we saw around half of our losses last year, and so continuing to build here at pace is critical alongside working closely with our CPs to win customers back.

This means that overall, our riskiest exposures are shrinking fast. Then on the right-hand side, to reduce the line losses, we also need to connect. And as I’ve said, that’s exactly what we are and have been doing. We expect more than 50% of Openreach broadband customers to be on full fiber already during this fiscal year, an important milestone towards its fiber-first vision. And we’ll continue to design commercial offers to incentivize that migration to fiber. This is the right strategy to compete and win, and we’re making excellent progress. Moving on to Consumer. For those of you here in One Braham or if you’ve been at the cinema or you’ve been watching the football, I hope you have saw some of our brilliant advertising campaigns that we are running, including for the BT brand, which we refreshed and relaunched 2 weeks ago.

I strongly believe that our portfolio of brands is the most powerful way to reach and serve all segments of the U.K. market today and to maximize the returns on all of our network investments. And as we enter into what is likely to be another period of pressure on cost of living, these brands as well as our convergent offers will allow us to deliver exceptional value to all depending on their needs. And our brands have very distinct and complementary identities and heritage. BT is the trusted British leader, reliable, high quality and secure with high levels of support across all service channels and serving Consumer and businesses. EE is innovative, personal, dynamic, powering life through converged experiences and always leading the way, first with 5G, first with 5G plus, first with Wi-Fi 7 and first with Safer SIM plans for under 18s.

And Plusnet is positioned around simplicity and value, winning best customer service from USwitch for the 11th time this year. And we are now moving ahead at a good cadence with new products such as new BT-branded smart hub with threat protection for all connected devices. And just yesterday, we launched BT Mobile to our most loyal BT broadband customers with built-in call screening and inclusive roaming. All of this will build towards UEFA Euros 2028, where we’re really looking forward to being the official telecoms partner, bringing it to life with dedicated 5G plus network slicing, another example of BT being behind a brilliant thing for its customers and the country. In the weeks and months ahead, you can expect more from us, whether that’s enriching our EE One convergence proposition or launching satellite broadband with Starlink for the hardest to reach homes.

So how do we get to sustainable growth? Well, we will grow in Consumer by using all of our brands and our leading products and services to drive customer growth and convergence, delivering improved revenue and improved customer lifetime value. We have the best mobile network now boosted by fast-growing 5G plus and our coverage target is to be at 99% of the population by fiscal year ’30. And we will continue to connect customers at pace to full fiber with the best products and the best in-home experience with WiFi 7 a standard for all our EE fiber customers. We will increasingly bring our products together, giving our customers more convenience, value and ease while also reducing churn and increasing cross-sell. For example, mobile on EE One has churn 35% below the average, even though it’s mainly sold on 30-day contracts, and our TV attach rate on EE One is 25% higher.

And of course, we’ll continue to keep improving customer experience through simpler journeys powered by personalized data, AI and more digital capabilities, but also working alongside our brilliant human guides in our stores and in our contact centers. On AI, early results are encouraging and the benefits go beyond just saving time and cost. In our call centers, AI is already helping us serve our customers, equipping our guides with much better information to help them cross-sell more, all while also building our own guides work satisfaction and ensuring our vulnerable customers particularly get the care they need. And there’s much more to come. Moving on to business, which accounts for just over 15% of our group EBITDA. Here, we’re now accelerating the transformation of this division, end-to-end from customer journeys to products, services and in the capabilities of our people.

Our 3 segments allow us to serve the full breadth of the U.K. enterprise market and each contributes broadly equally to profit. For SMB, we provide high-quality connectivity and security solutions now with a refreshed BT brand and with access to business expertise in all 400 of our stores. We’re investing in improved customer experiences and products to grow our leadership in the small business market. For example, just yesterday, we launched a market-leading cyber campaign, bringing industrial-grade cybersecurity from CrowdStrike to small businesses, supported by cyber assessments and advice from our BT advisers. In corporate and public sector, we are the strategic partner for the country, including support for much of the U.K.’s critical national infrastructure.

We’ve launched the U.K.’s first sovereign platform. We’re investing in AI to support our critical managed services portfolio, and we offer the U.K.’s best network capability, including 5G plus mobile network slicing. And we have excellent momentum in the public sector and especially in defense too, where we are uniquely well positioned due to our sovereign and unique security capabilities. In wholesale, we provide open access to BT’s exceptional network assets, commercializing our scale and resilience for all parts of the market, making sure we apply strict return on capital hurdles, which includes not allowing others to market the EE network brand. Looking forward, we are engaged in an exciting and rapid transformation of our business division.

Our goal is for business to lead in all of its segments by combining great customer experiences with our market-leading product portfolio anchored in security and sovereignty fueled by the innovation that only BT scale can deliver. We will return to growth in our customer base, powered by the BT brand by improved customer experiences and by the U.K.’s best portfolio of business products. We will simplify our business, including leaving legacy IT and platforms behind, create a lean AI-powered operation capable of moving at the speed of smaller businesses, but with the unbeatable advantage of BT’s scale and expertise. We have made a material investment to upskill all our BT business employees, including the creation of nearly 1,000 data and AI apprenticeships.

And just on Monday, we signed a strategic partnership to deliver AI-Ops with Accenture. We will upgrade our customers with a product and service portfolio that helps their businesses and organizations to succeed, built on network resilience and innovation, defended by market-leading cyber and sovereignty and powered by innovative solutions tailored to each industry. And finally, we’ll deliver the best customer experiences in the market, whether investing in cyber advice for SMBs, AI-powered support for our customer advisers or our investment in AI-Ops for our managed services business for larger enterprises and organizations. Now let me hand back to Simon to take us through our cash flow profile, our extended and upgraded transformation plan and also our capital allocation priorities and revised dividend policy.

Simon Lowth: Thanks, Allison. So moving to Slide 24. We will double normalized free cash flow from GBP 1.5 billion in FY ’26 to GBP 3 billion in FY ’30. Starting with CapEx. We are now past peak investment as the full fiber build ramps down from nearly 5 million homes a year to around 1 million homes and as we also complete the replacement of our legacy IT systems. As a result, both accrued and cash CapEx will reduce by well over GBP 1 billion from FY ’26 to FY ’30 with an initial ramp down in FY ’27. We expect sustained EBITDA growth. Cost transformation will enhance EBITDA margins, building on sustained U.K. service revenue from our multi-brand strategy, convergence, network leadership and differentiated service. Below EBITDA, lease costs will remain broadly stable.

Net working capital will be broadly neutral. For FY ’27 specifically, as we said in March, there will be a GBP 100 million working capital drag as a result of the telecom access review impacting the broadband anchor product. We’ll offset this through several measures, including efficiencies and some further forward sale of redundant copper. Interest costs will rise modestly with debt well termed out, leverage reducing and rates hedged. Cash taxes will increase to the low to mid-hundreds of millions by FY ’30 as the benefit of full expensing reduces. Taken together, this provides a clear and deliverable path from GBP 1.5 billion today to GBP 2 billion in FY ’27 and GBP 3 billion in FY ’30. So on to transformation, which plays a critical role in delivering this.

Our transformation of BT Group continues to progress, delivering improved customer experience alongside materially lower headcount and costs, spanning both operating and capital efficiency. Today, we’re announcing the extension of our transformation program by 1 year. Our updated program from FY ’25 to FY ’30 will deliver GBP 3.7 billion of gross cost savings at a GBP 1.4 billion cost to achieve. Of the remaining gross cost savings of GBP 2.2 billion, about 3/4 will be delivered in FY ’27 and FY ’28 with the rest evenly in the remaining 2 years. Now the program consists of 4 broad areas: first, Openreach workforce reshaping post the fiber build ramp down; second, network engineering efficiencies and the shutdown of networks such as the PSTN, 2G and 3G also leads to material energy savings; third, simpler products and processes, leading to savings in the IT spend; fourth, continued organizational simplification and restructuring right across BT.

We now expect our FY ’30 total labor resource, including subcontractors, to fall to the lower end of our previously announced 75,000 to 90,000 range, so 75,000 to 80,000. We expect restructuring costs to achieve of just over GBP 200 million in each of the next 2 years, dropping to around GBP 100 million in FY ’29 and FY ’30. So moving on to the next slide. Our transformation program is not just about cost. It’s also about improving how we operate with simpler processes, better ways of working, increasingly enabled by AI. We’ll significantly improve customer experience, creating seamless digital-enabled customer journeys with progress tracked closely through group and unit Net Promoter Scores. We’ll also continue to simplify BT, reducing the number of applications and unlocking efficiencies across all our processes.

And by FY ’30, we will have delivered cumulative gross cost savings of GBP 6.7 billion over the decade to FY ’30. These cost savings will have offset significant cumulative inflation and driven EBITDA growth from a smaller, more focused, more profitable BT. And finally, an update on our copper exchange exit program. We’re working closely with industry, with Ofcom and government to close legacy exchanges as we transition to full fiber network. This will improve energy efficiency and accelerate the U.K.’s transition to modern digital networks. Some exchanges will be vacated ahead of the Telereal lease expiry in 2031. And indeed, we recently closed the first exchange at Deddington. The exchange closure program will deliver further significant savings beyond FY ’30.

I’ll now turn to our capital allocation policy and the deployment of our expanding cash flow. We remain committed to our capital allocation policy, which we’ve had in place and communicated consistently since the start of our FTTP build back in FY ’19. First, we will continue to invest for growth in full fiber, 5G and our core networks and in transforming our IT. But the level of CapEx will drop by more than GBP 1 billion compared with FY ’26 as we ramp down the FTTP build and complete the IT modernization. We remain confident that these investment programs will deliver attractive long-term returns, including an FTTP, where the fair bet endorsed again by Ofcom in the March Telecom Access review allows a fair return even under future price regulation.

Second, we’ll continue to support our pension commitments. We’ll agree the next valuation as at the 30th of June this year. And as part of the funding plan, we started to contribute via the co-investment vehicle, which will refund to BT any funds not required for the BTPS from 2032. Third, we will maintain our strong balance sheet. We remain committed to a BBB floor and a BBB+ through-cycle credit rating target, which we firmly believe delivers the optimal cost of capital for the group. We will progressively reduce our leverage once we’ve completed the GBP 25 million full fiber build in December ’26. Finally, residual cash flow, so that’s our normalized cash flow less any specifics and spectrum costs will then be available to fund dividends to our shareholders.

And in that regard, we’re announcing today that the Board expects to increase our dividend per share in FY ’27 and onwards by low to mid-single digits per annum until metrics consistent with a BBB+ credit rating are achieved. Thereafter, residual cash flow will be available for enhanced distribution to shareholders. And on that note, I’ll hand back to Allison.

Allison Kirkby: Thank you, Simon. And Nick, we’re almost there. As I said earlier, amidst all the noise and turbulence, whether in our sector or in the world around us, we are laser-focused on what matters most, and that’s the delivery of our value-accretive strategy as we unlock BT’s full potential. So let’s move on to our outlook. Starting with fiscal year ’27, we expect total revenue of around GBP 19 billion to GBP 19.5 billion. U.K. service revenue is expected to be between GBP 15.1 billion and GBP 15.4 billion, broadly flat to slightly down on fiscal year ’26, reflecting a GBP 150 million to GBP 200 million drag from the voice revenues as we move to the closure of the PSTN in January. Adjusted EBITDA is expected to grow year-on-year to between GBP 8.2 billion and GBP 8.3 billion.

And turning to CapEx. Now that we have passed the peak, we expect this to be around GBP 4.3 billion on an accounting basis with some prior year spending falling into fiscal year ’27 in cash terms. And we continue to target normalized free cash flow for ’27 of GBP 2 billion, exactly what we promised this time 2 years ago. Looking further ahead, our medium-term guidance to the end of the decade remains sustainable revenue growth, EBITDA growing ahead of U.K. service revenue and normalized free cash flow reaching GBP 3 billion by fiscal year ’30 with an updated distribution policy, as Simon has just set out. So to close, it’s been another busy year of strong delivery. We delivered a record fiber build and take-up, reduced our line losses and returned to customer growth in Consumer, all whilst achieving record customer satisfaction and delivering again on our multiyear transformation and our financial commitments.

Of course, there’s always much more to do, but we’re firmly on the right path as we continue to build a better BT for all of us. So thanks for listening. We’ll now move to Q&A. Nick is going to manage the Q&A to ensure that we give time available to everyone. Please do keep it to one question per person, although I’m sure you won’t. First question, please. And Nick, [indiscernible] this time.

Nicholas Delfas: There may be questions online as well. So if you are listening online and like to ask a question, put your hand up, we’ll start in the room. And let’s start on the left-hand side, and we’ll move to the right. So David, thank you. If you could introduce yourselves, with name and company. Thank you.

David Wright: David Wright from Bank of America. I will ask you said one question per person, so I’m going to target both of you up there, if that’s okay. Forever focusing on the details. Well, let’s go for it. Let’s talk about cash returns. So you’ve talked about the residual shareholder for distribution following your BBB+. And I think if we look at the S&P definition, the deleverage profile, the CapEx return profile, the CapEx profile, et cetera, it looks like a sort of 2- to 3-year run rate gets you there. So we’re sort of talking fiscal full year ’29-ish. Now from that point forward, you’re happy with your leverage. You’re generating GBP 2.5 billion to GBP 3 billion of normalized cash, let’s say, less the GBP 300 million that always seems to appear as a specific item.

Allison Kirkby: I think he said it’s not going to be as much as GBP 300 million.

David Wright: Let’s go with that. So GBP 2.5 billion to GBP 3 billion, let’s say, GBP 200 million or so. That’s obviously a huge amount of money versus the current dividend outflow, which is, give or take, GBP 800 million, GBP 850 million, but it’s also sustainable according to your guidance. So what I’m trying to understand is why wouldn’t we consider a dividend doubling scenario? What would be the reason not to do that given it’s a sustainable cash flow profile thereafter, there’s no more deleverage and there’s no more obvious CapEx plans unless there are. So I guess my question is, you cut the dividend in half to build fiber, the fiber is built. Are we going to put the dividend back to where it was? And then I guess, let’s make that for Simon. And then my question for you, Allison, if that’s okay, is your…

Simon Lowth: Sorry, David. The specific question was?

David Wright: Why wouldn’t you doubling your dividend? I don’t…

Allison Kirkby: Why wouldn’t we be doubling our dividend.

David Wright: Yes, I’m sorry if I wasn’t clear. I guess the point is there’s GBP 2.5 billion of cash, today’s dividend is GBP 80 million. There’s no more deleverage. What are you going to do with?

Allison Kirkby: Well, he’s going to be a pensioner by then. So I’m sure he’s got a conflict of interest in his answer.

David Wright: Okay. You said that on me. So my question to you, Allison, if that’s okay, was, Consumer has done incredibly well the last few quarters in what is a very competitive marketplace. You’ve obviously got the multi-brand. We see the adverse for BT again, BT brand again. I just wondered what are you doing so right in such a competitive marketplace that means an incumbent is on customer growth.

Allison Kirkby: Why don’t you go first, Simon?

Simon Lowth: Sure. Look, David, thanks. I mean I think I’ve covered the main points. But just to reiterate, we’ve set out a very clear capital allocation policy, and we have stuck to it. As part of that, we’ve said that we will travel at a BBB rating while we go through this very significant build, but that our target through-cycle rating is BBB+. And I reiterated a moment ago, we firmly believe that is the right credit sort of rating for BT. To achieve metrics consistent with a BBB+, that would require leverage to reduce by about half a turn, that sort of order. And we will achieve this. Over the course of our plan, and we’ll do it through a combination of EBITDA and normalized cash flow expansion and residual cash flow, which remember is normalized less restructuring that grows somewhat faster than normalized cash flow.

And very clear, until we reach credit metrics that are consistent with a BBB+, we’re growing our dividend at low to mid-single digit and sort of broadly tracking EBITDA and EPS. But we’re very confident we’re going to deliver on this guidance. And as I said, residual cash flow, which is normalized less restructuring. And as Allison just said, restructuring is going to be dropping from sort of GBP 400 million down to perhaps GBP 100 million at the end of the period, that gives us additional capacity. So delivering that expansion in EBITDA and cash flow will reduce the leverage. It will create capacity for enhanced distributions over time once we’ve hit the metrics consistent with BBB+. And I think you’ve got all of the information you need to build your own view about what that will then look like towards the end of the decade.

Allison Kirkby: And the Board are very clear that those enhanced distributions could come in multiple forms. We will decide near the time, whether it be special dividends, buybacks or whatever, but they’re a few years away. So we’ll keep it for them. But that’s why we tried to give because we’re now at this inflection point, still staying true to our capital allocation priorities and principles. But as that cash flow inflects, as you recognize, there will be the opportunity for enhanced distributions. On the Consumer business, listen, the team have done an outstanding job of leveraging the brilliant networks that we’ve built. We’re far ahead of the more established players in rolling out fiber and 5G, now 5G plus. We have a fantastic mix of guides in our stores, in our contact centers.

And now that we’ve equipped them with the opportunity to promote all 3 brands that as you’re seeing, are very complementary to each other. It’s allowing us to win still in the premium end of the market, but also now starting to build momentum again in the value end of the market with us. And in this market that we live in, we are leveraging those brands in a way that we’re trying to stabilize the market even if not grow the market. And that’s why our ARPUs are relatively flat and only slightly down in a very competitive market. What has changed in the last 12 months, I would say, is, first, we started promoting the 3 brands again, but we’re only really starting to market them now. And we’re only really starting to put new products and services into particularly the BT brand now as well.

Because of that community presence we have, that is giving us brilliant hyperlocal capabilities, which is very important from a fiber point of view because we’re not just competing against national brands, we’re competing against very local brands. And that really smart using excellent data and the hyperlocal capabilities has even before we’ve relaunched the brand and brought new products to market, instilled that back to growth again. So it’s many levers that we’ve tried to explain. And convergence is working. And the U.K. was always coming from behind on convergence. There’s still much more for us to do from a convergence point of view, which will reduce churn even further and it’s going to be very attractive in this climate. So great job, but more to come.

Nicholas Delfas: Great. Andrew, if we could make the question shorter, if possible, that would be fantastic.

Allison Kirkby: And maybe the answers could be shorter as well.

Andrew Lee: It’s Andrew from Goldman Sachs. Can I just follow on from David’s question on Consumer and ask maybe a slightly different question on Consumer because you’re growing at Openreach. I think the financial trends have gone well. You’re not growing in Consumer at the top line. And there had been an ambition for that at the start of the year that didn’t come to fruition. And I don’t think you’re soft guiding to growth in FY ’27 either. Could you just talk through kind of the balance you’re making or if there is even a balance you’re making between Openreach and Consumer because there’s an investor concern that there’s a kind of robbing Peter to pay pool within Consumer, i.e., you discount heavily on Consumer, you get the good KPIs you’re getting, but it doesn’t translate into good top line growth and obviously boost the volumes on Openreach, which is a credit to Openreach.

Just any comments around Consumer top line growth and in that kind of. And then can I just ask one follow-up question, which is it looks like we’re past Openreach broadband line loss — past peak Openreach broadband line loss. Are we and why?

Allison Kirkby: Okay. So thank you, Andrew. Let’s be very clear, nobody gets any benefit to use the other to help them out. Clive, now Katie have very clear growth ambitions and Claire and John have the same, and there’s no borrowing to steal from anyone. That is not the case. What we are — what we had to do in Consumer was get back to customer base growth. We’ve been losing customers for 7 years. That was not sustainable. And what our Consumer business has done a brilliant job of is migrating faster than any of the major players on to fiber and really building on that EE momentum that we already had. We relaunched EE in late 2023. There was good momentum there. And then pushing fiber further, we’ve just led the market on both convergence and migration to fiber.

And we are not at all saying how we play one versus the other. Consumer has to get back to growth, Openreach has to get back to growth. Our hope is that by Consumer being the leader in the market, driving that migration to premium products, the rest of the market will have to follow as well, which will ultimately be good for Openreach and all the fiber players out there, but we run them very independently and very separately. And in terms of peak line losses, I — we were — we had a great year in Openreach. Our lines reduced year-on-year. You saw Q4 was down substantially year-on-year. We’re now guiding to lower line losses in this coming year. We’re taking each year as it comes. I’m not going to call peak line losses yet, but our intention is for them to keep reducing.

As I said, we’re seeing less losses to retail altnets. Their build is down something like 40% to 50% year-on-year. We’re seeing the market stabilize. If you remember about a year ago, there was nervousness that the fixed broadband market was migrating away to FWA satellite. We’re not seeing that. So despite housebuilding still being lower than pre-COVID times, the broadband market is relatively flat. And so all of the drivers, less losses to retail altnets, broadband base growing, some of our major CPs doing a very good job at defending and growing their market share. One of them is BT. There’s some other good CPs out there as well. That’s by the strong position we’re in, Andrew.

Nicholas Delfas: Fantastic. Polo?

Polo Tang: It’s Polo Tang at UBS. Can I maybe just ask a question about normalized free cash flow? Because I think there was a GBP 476 million working capital benefit in FY ’26 that you disclosed. Can you comment on what this relates to? And will it reverse and become a headwind going forward? But then specifically, in terms of revenues, can you maybe just touch on some of the revenue headwinds and tailwinds for the different units going forward medium term? And then just a clarification on the comment in terms of Openreach. You referenced that you wanted to have the right offers to incentivize take-up. So would you consider Equinox 3 or updating your current offers?

Allison Kirkby: Why don’t I start with revenue and then you do normalized free cash flow, Simon? Yes, I forgot to answer an earlier question. One of the headwinds we have is clearly the PSTN shutdown. So Consumer and business underlying revenue is actually around 1%. So we are growing the underlying revenue if you strip out voice. That is one of the headwinds coming into this year, Polo. And clearly, at total — that’s a service revenue impact. A total revenue level, we’re still being cautious on our International division. And we are relatively cautious on equipment revenues as well because of the climate we’re in and some of the supply chain risks that are out there at the moment as well. So that’s how we see the revenue guidance. And did that answer the revenue question? Do you want to take normalized free cash flow?

Simon Lowth: Yes, certainly. So it was a 2-parter, I think. The first was to explain the impact of working capital funding in ’26 and then impact in what’s happening in ’27. So start with ’26, we delivered EBITDA and cash flow guidance for ’26 on the nose. And we did that despite investing more than GBP 100 million actually in high levels of FTTP provisioning. So we’re able to cover that. Normalized cash flow benefited from a small net GBP 140 million or so working capital inflow. And as you say, that did include GBP 460 million of working capital funding. But let me describe — there are 3 components of that, describe each in turn. Firstly, as I mentioned in my remarks, we did approximately GBP 100 million forward copper sale, and we did that to help fund the accelerated FTTP build, and we were pretty clear about that at the beginning of the year.

Secondly, we did about the same quantum of handset securitization, and we’re doing that to fund the move from 2- to 3-year handset contracts. And then finally, we have a bills of exchange program to normalize payment terms between different handset manufacturers, which we use. And that was an inflow of about GBP 250 million in ’26. That took us back to our normal steady state bills of exchange balance. In the final quarter last year, so in ’25, we had earlier receipts and actually a drawdown on inventory. And so that sort of pulled cash forward from ’26, and we, therefore, paid down our bills of exchange last year rather than carrying the interest on it and then rebuilt it up in the first quarter. So that — and actually, if you look at the average working capital for ’25 and ’26, you’ll see that essentially it was neutral.

So what you saw in ’26 was essentially managing the ’25 position. In FY ’27, we will — as I mentioned again, we will do some further forward copper sales because we’re getting increasing confidence about the volume and the cost of delivery. We’re doing that explicitly to address the impact of the tar, which you remember was a working capital hit. We will do some further handset securitization, but at a lower level because we’re moving through to the sort of final phases of migrations to 3-year contracts and the bills of exchange balance will remain at its normal level. That’s the fascinating world of working capital. Sorry?

Polo Tang: There was a question on Openreach Offers.

Allison Kirkby: Equinox 3, we are, as you would expect, in discussions with Ofcom all the time about the potential to do new geographic or specific offers to drive migrations. There is nothing called or defined Equinox 3. But clearly, whilst the tar was being concluded, we were being discouraged to go in and discuss new offers with them. So now that we’ve built this brilliant platform and there was such an accelerated build in the final quarter, we clearly want to get our fiber into as many homes as possible, and there’s an active dialogue with Ofcom on that. And that’s all built into our plans as well.

Nicholas Delfas: Okay. So let’s speed up and keep to one question per head, if that’s all right. So we’ll do Andrew and then Nick, and then we’ll go online quickly.

Andrew Beale: Andrew Beale from Arete Research. You had an extra GBP 700 million of gross cost savings, but no change to the EUR 3 billion 2038 free cash flow. Is it right to think about you’re looking for additional volumes and offsetting the next bout of higher inflation plus a small tar impact and then trying to create some headroom for a higher longer-term target should inflation not be persistent?

Allison Kirkby: Yes. No, we are so ahead of plan. We wanted to extend the program by an additional year to get in line with our fiscal year ’30 targets. We think it’s too early to redefine or reset the fiscal year ’30 target at this point in time. But you’re absolutely right, by extending it by another year, this GBP 700 million gives us even more confidence in the delivery of that GBP 3 billion target in fiscal year ’30 and allows us to absorb any shocks that might come along the way. So it’s just — it builds confidence in the GBP 3 billion so that we can continue to commit to it.

Nicholas Lyall: Nick Lyall at Berenberg. Allison, on your slide on Openreach and deregulation, could you just tell us what you think constitutes deregulation when you’re chatting to Ofcom? What are you encouraging them to say is sort of the formula to constitute a deregulated area, please? And what do you think that would produce in terms of sort of regulated metrics for you?

Allison Kirkby: We are very clear that the U.K. is a very competitive market, perhaps not everywhere. But certainly, in 40% of the market now, there is at least 2 players. And in 25% to 30% of the market, there’s 3. So we keep having the dialogue with Ofcom that this is becoming a very competitive market. And since we have built one of the highest quality, most efficient fiber networks, we believe we should have the opportunity to compete with that lower cost, most efficient, highest quality fiber in those areas where there is very clear competition. They have said they will continue to review it. They believe it’s not yet sustained competition, sustainable competition as how they define it, but they’re very willing to continue that engagement with us, including willing to review specific either geographic or specific offers that allows us to compete and take our fantastic network to customers.

Nicholas Delfas: So we will come back into the room. I just want to see if there are any online questions. Charl, is there any online?

Operator: Yes, we have Karen Egan from Enders Analysis.

Karen Egan: Slightly away from the results. I’ve got question about the altnet sector. I’m interested in your views on the Netomnia fiber deal. Is it good for BT? Will you be actively supporting or opposing it? And given the various levels of financial distress we’re seeing in the altnet sector, are there any circumstances in which you will acquire altnet or I suppose, more likely the altnet assets?

Allison Kirkby: Thanks, Karen. It’s not — sorry, we’ve got a bit of — it’s not for us to comment on the Netomnia next Fiber deal, but the way we look at it is very clearly going to be allow VMO2 to upgrade its coax network, which clearly it will need to do to compete in a fiber-first market going forward. And therefore, I’m not going to comment on whether I support or oppose. In terms of the altnets in the market, listen, as I said, we are building at half to sometimes 2/3, 1/3 of the cost of some of those altnets. So in most instances, it would be cheaper for us to build than acquire. And that’s why we’ll be — we’re at 74%, 75% of all premises in the U.K. passed today, and we will continue to build all the way to 90%. So we will clearly look at assets that become available, but we’ll only acquire if it makes absolute financial sense relative to us just building ourselves.

And we shouldn’t underestimate when you acquire these assets, there’s a significant cost to integrate them as well.

Nicholas Delfas: Any more questions online, Charl? Or should we come back to the room?

Operator: There are no further questions online.

Nicholas Delfas: Great. Josh?

Karen Egan: It’s Josh Mills at BNP Paribas. I wanted to come back to the question on group service revenue growth and specifically around business. So how big a swing factor is business to getting back to the sustained growth you’re guiding for? Could you perhaps maybe give a bit more color on when you expect business to stabilize and inflect positively? And then within that, I know you’ve called out the PSTN headwinds, but are there any other big swing factors we should be thinking about that will determine whether that’s positive or negative in FY ’27 and FY ’28?

Allison Kirkby: Clearly, we’ve set a massive target for John and the business team this coming year, only joking, Josh. Listen, very similar expectations in business as in Consumer. in the foreseeable future because they also have the headwinds from the PSTN shutdown. They have headwinds from shutting down legacy platforms and legacy services that are not fit for purpose for the future. So — and if you look at it, their underlying service revenue development ex voice, plus 1%, very similar to Consumer. What we expect over the medium to long term, though, is because we have not been set up for convergence properly in business and the fact that we are innovating into a space that there’s high demand for, whether that be security, sovereign, 5G slice networks that there’s definitely going to be real growth potential in that division going forward.

But in the next couple of years, I wouldn’t expect the shape of business to be dramatically different than the shape of Consumer as it goes through its transformation and it gets away from both PSTN revenues and other legacy revenues.

Nicholas Delfas: Camille?

Camille Mendler: Camille Mendler with Omdia. Similar question around business. But what customer segment has the most potential? You’ve talked a lot about SMB. I’m wondering, is that the segment you see the most potential for growth in BT business? I’m not sure how many of them are going to be buying sovereign services, but could you talk a little bit more about your expectations there?

Allison Kirkby: We — despite being this fantastic incumbent telco compared to other incumbent telcos in Europe, BT business has relatively low market shares in the SMB segment, in the — particularly in the private sector as well and in aspects of the public sector, particularly more local public sector. So we actually see growth potential everywhere because we’ve not been investing in the brand. We’ve not been investing in modern days products and technologies, and we’re building now the capabilities of the organization. You’re also seeing that kind of high end of SMB and low end of private has been served by a lot of third parties. operators that don’t own their networks. And we think that will shake out over the coming years and will be an opportunity for us to grow our relative market share closer to where other incumbents are, but probably not all the way, but there’s real room for growth in almost everywhere, maybe apart from some aspects of the public sector where we’re very strong, but everywhere else and wholesale is strong, too.

But SMB, large parts of private and some aspects of public growth potential.

Nicholas Delfas: Carl?

Allison Kirkby: And we do believe the SMB space will increasingly need to invest in cyber. And they are the most under attack from scams and threats and fraud, and that’s why we are investing in that and just announced a new set of products just yesterday.

Unknown Analyst: I’m only going to ask one question, but I’m going to take 10 seconds just to do my cap to Simon. I think your 10-year anniversary is just over a month away, and I think this is our last presentation that we get to ask you questions. So just to say thank you for a great tenure, and I’m unable to think of MEI KPIs RAB multiples or the McKinsey pyramid principle without thinking of you. So all the best in the future. In terms of my question, it’s on goodwill impairment. So in Note 13, it shows you’ve decreased the discount rate for international by over 100 basis points, while the press release states that a 70 basis point delta would be required for the recoverable amount to equal the carrying value. So can you confirm that if you hadn’t reduced the discount rate used in that calculation, you would have had to do a goodwill impairment in international this year.

Simon Lowth: You’ve understood the arithmetic, but let’s be really clear. We go through a very rigorous process to set appropriate discount rates, and we also then demonstrate the sensitivities you picked up. So that would be correct, but it’s rather hypothetical because the discount rate is the discount rate.

Unknown Analyst: Can you talk a bit about the discussion and math that went around the discount rate being reduced. And it’s gone down overall divisions but why so much more on international than on the other divisions.

Simon Lowth: Yes. I mean the — we go through the normal process you would expect, Carl, to set the discount rates. We signed it off, our auditors signed it off. It just reflects the macro conditions and the cost of capital for the different components of the business. I don’t know that I can say more than that.

Allison Kirkby: And we — if you remember, we sold 5 unique businesses in the year. So it is a more focused concentrated set of services in a more focused set of geographies going forward as well.

Simon Lowth: You may — perhaps one other point to make, which may be timing, which may get what I think you’re trying to hint at, which is that we go through the process to objectively set the cost of capital for our units prior to completing our business plans upon which we then calculate future cash flows. And thank you for the questions. Every one of them has been a gem.

Allison Kirkby: And we will set up a specific induction program for Patricia to prepare for you, Carl.

Nicholas Delfas: So final two questions, Ulrich and then Terence. Thank you very much.

Ulrich Rathe: Ulrich Rathe, Bernstein. Your largest competitor in fixed line has rattled the table quite a lot about reaching scale for potential wholesale activities, which they have stayed away from so far. Now they have been rattling their table for at least half a decade.

Allison Kirkby: Yes, a few of us were there half a decade ago.

Ulrich Rathe: Exactly. So the question is, what are the reasons for confidence that this is not a major threat for BT? And also, what levers would you have to actually address this if it really comes to it, if a large customer approaches Openreach and sort of starts to negotiate or wants to negotiate?

Allison Kirkby: Clearly, they’ve been talking about this for a while. They haven’t done the deal yet. They haven’t built up a scaled wholesale capability yet, and integrations take time. Meanwhile, we’re getting on in building. We’ll be — we’re at 75% of the country already, on track to 90% of the country. We have a very well-established, highly efficient, high-quality wholesale provisioning machine and wholesaling machine. And we welcome all competition. But I think we are very well ahead and confident that we can continue to compete and win considering the scale that we’ve built.

Nicholas Delfas: And finally, Terence.

Terence Tsui: It’s Terence here from Morgan Stanley. A question about mobile CapEx. So do you see any risk of the fiber CapEx savings being redeployed into mobile CapEx? Some of your competitors have signed some new agreements with the mobile equipment vendors to transform their network. Is that a competitive threat? And then lastly, any early thoughts around 6G, please?

Allison Kirkby: Thanks. We have — despite still investing heavily in our mobile networks to transition it to 5G plus to take out the Huawei equipment and upgrade from 4G to 5G, we are sustaining that same level of investment into our mobile network all the way through until when we expect 6G. We don’t expect 6G to really be material until the early 2030s. There will be a bit of noise around it, particularly probably around the Olympics. But it’s very clear to us that, that particularly European telcos are not jumping up and down to embrace 6G at the moment. And when we look at, it’s not just about the number of sites and the amount of spectrum you have to run a network. We run a very smart, resilient and have built the best network that we’ve sustained over many, many years.

More sites becomes much more expensive, particularly in a world where energy is becoming more expensive. And so — and we have fantastic relationships with the vendors that build our networks, and they are particularly excited about UEFA 2028 because that will be an opportunity. And we will — we are planning to upgrade by at least 20% our capacity in all of the areas of the country where the euros are going to be played. So we’ve got — our capital allocation ensures that we can continue to invest in mobile in the right way.

Simon Lowth: I’d also add, Allison, that the continued success in driving cost transformation further and harder. And as we’ve announced an extension of that going back to an earlier question, that, of course, gives us even greater confidence in underpinning our normalized cash flow target of GBP 3 billion at the same time as potentially if we find value-creating opportunities to invest a bit more in the mobile network, we’re building that capacity for ourselves.

Nicholas Delfas: Fantastic. So that’s the last question. I’ll just hand back to Allison for some closing remarks.

Allison Kirkby: Yes. And Carl kind of stole a few of them from me, but I also want to say a thank you to Simon. But I’m not going to say too much. Otherwise, he might get emotional and you don’t want to see Simon emotional. But I want to say just a few special words. Yes, it’s his 10th full year results for BT, but your 88th set of results for a public company. He looks not bad for 88, doesn’t it? That’s quarterly, not. But — and he will still be here for our Q1 trading update, but this is the last chance to see him in our full year results. Listen, I also, on behalf of BT, the Board and his team and his colleagues want to recognize your amazing commitment to the company. Having been associated with BT since 2019, it’s not just the last couple of years where you’ve been a great partner, bringing great wisdom to me and advice to me.

Just it’s been so obvious from the 7 years that I’ve worked alongside you, your diligence, your attention to detail, there’s not many CFOs that have the mix of skills that Simon has and has had to cope with a major fraud, funding a generational fiber program without taking on any funky financing. Bringing BT through COVID and navigating the huge cost challenges that we’ve seen since 2022, and you also do it in a calm way and also with quite some humor that is not always on display in the public layer. So a massive thank you for so many of us, Simon. You leave the company in a much better shape. We now have a phenomenal asset base that you will be able to accrue a pension from in the years to come. You’ve left us with a much stronger balance sheet and a pension fund in much greater shape and you leave us with a very strong finance team as well that will support the transition to Patricia in a great way.

So thank you for the legacy you leave us, Simon. We will miss you very much, but we look forward to seeing even more humor from you when you’re no longer having to do this. So massive round of applause. Thank you all.