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BT Group Management Discusses Q1 2013 Results - Earnings Call Transcript

Stocks in this article: BT

And in terms of order intake, order intake was GBP 1.1 billion. We had a good Q4. This was obviously a weaker Q1. Again, it's the same story we said in Q4, which is the absence of the very largest deals. We're doing lots of deals with lots of people. We had good deals, for instance, with Tesco, with Caixa Economica in Brazil, with Rolls-Royce, really good deals. But we didn't have -- for instance, this time last year, we had, last year, Camden Council, which is GBP 400 million. That being said, GBP 1.1 billion is lower and I think does reflect the fact that people are holding off and deals are more difficult, but that's very much something we raised at Q4.

Now turning to Slide 6. I thought it's useful just to put in context, because Global Services was been tough conditions just now. It's come a long way over the last few years, and you see that in the chart to the left in terms of EBITDA and free cash flow growth. And just if I look at the key things that we are focusing on in Global Services, I think we've seen a huge improvement in the risk profile of the contracts we do. We, the management, is substantially better in them, and the profile is really much less. This is not the business of a number of years ago.

We've also seen customer service improving in Global Services, and that's important. It's actually important for the overall contracts. We're providing customers want they want. It doesn't mean we never have any problems, but again, a huge improvement is recognized by external industry analysts as well. We've also spent time and effort and money in enhancing our product range, particularly globalizing it, making sure we have a consistent product range, well explained, and I think that's going to produce a good position going forward, as is our investment in faster-growing economies. We're still seeing a strong growth, for instance, in places like Asia, which we started in an investment this year, and it's going to be focused in Middle East and Africa. But we expect to grow -- to add about GBP 500 million of revenue in the medium term from these fast-growing economies, so that's good.

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