BT Group plc. UEFA football rights November 2013

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1 BT Group plc UEFA football rights November 2013

2 Forward-looking statements caution Certain statements in this presentation are forward-looking and are made in reliance on the safe harbour provisions of the US Private Securities Litigation Reform Act of These statements include, without limitation, those concerning: current and future years outlook, including revenue trends, EBITDA, and free cash flow; and growth in BT Sport, growing volumes and the market for premium sport. Although BT believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements. Factors that could cause differences between actual results and those implied by the forward-looking statements include, but are not limited to: material adverse changes in economic conditions in the markets served by BT; future regulatory actions, decisions and conditions or requirements in BT s operating areas, including competition from others; selection by BT and its lines of business of the appropriate trading and marketing models for its products and services; fluctuations in foreign currency exchange rates and interest rates; technological innovations, including the cost of developing new products, networks and solutions and the need to increase expenditures for improving the quality of service; prolonged adverse weather conditions resulting in a material increase in overtime, staff or other costs, or impact on customer service; developments in the convergence of technologies; the anticipated benefits and advantages of new technologies, products and services, not being realised; the timing of entry and profitability of BT in certain communications markets; significant changes in market shares for BT and its principal products and services; the underlying assumptions and estimates made in respect of major customer contracts proving unreliable; the aims of the group-wide restructuring programme not being achieved; and general financial market conditions affecting BT s performance and ability to raise finance. BT undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise. 2

3 Award of UEFA football rights BT has been awarded exclusive live UK broadcast rights to UEFA Champions League and UEFA Europa League Rights cost c. 299m 1 per season over 3 years 2015/16 to 2017/18 seasons Access to 350 matches per season across both competitions 3 1 Exact amount is 1,076m for the rights over three seasons

4 UEFA club competitions UEFA Champions League & UEFA Europa League Europe s top 80 clubs competing across 350 matches per season 32 clubs competing in 145 matches on Tuesday & Wednesday nights, plus UEFA Super Cup Includes: Top 4 teams from Barclays Premier League and winner of the Scottish Premier League 2013 final achieved a global average audience of 170m 48 clubs competing in 205 matches on Thursday nights Includes: FA Cup & League Cup winners, 5 th place Barclays Premier League team and teams which drop out from UEFA Champions League group stage 2013 final, won by Chelsea, achieved a global average audience of 71m 4

5 Wholesale Strong weekday steady football progress schedule UEFA Champions League & UEFA Europa League will deliver a step change in our proposition Unrivalled ownership of weekday European football rights Potential BT Sport football schedule in 2015/16 season: Mon Tue Wed Thu Fri Sat Sun 5

6 Wholesale BT Sport rights steady progress UEFA competitions contribute to strong growth in BT Sport line-up over next two years Nov 2013 Mar 2014 Autumn 2014 Autumn 2015 Rugby Champions Cup 1 6 Adding around 1,000 hours a year of live sport to the BT Sport schedule 1 To be confirmed

7 Value creation Grow volumes Charging options Potential to win incremental broadband, telephony, channel and TV customers Additional broadband & fibre volumes in Openreach A compelling proposition for sports fans BT Sport a compelling Charging to be introduced for new UEFA rights Commercial Wholesale Now >13,000 commercial BT Sport customers Provides additional sought after matches for pubs & clubs Potential additional wholesale revenues Advertising >12m households follow football in the UK 7

8 Wholesale Grow volumes steady progress UEFA Champions League and UEFA Europa League will attract new customers first time in the UK the competitions are exclusive to a non-psb provider c.30m viewers in the UK watch UEFA Champions League action each year c.5m viewers each game on ITV the UEFA Champions League final is the world s most watched club sport event Football is the sport people are most interested in watching on TV 1 UEFA competitions are both in the top 5 of football events people want to watch 1 Football Formula 1 Men's Tennis Athletics Cricket Women's Tennis Rugby Union Cycling Premier League Champions League On BT Sport FA Cup Championship Europa League Not on BT Sport 8 1 Source: GfK July-September 2013

9 Wholesale Grow volumes steady progress Barclays Premier League and UEFA rights are worth more together than individually Opportunity to attract more football fans to BT Sport 1 Expected to drive incremental broadband sales 2 UK sports fans Incremental broadband sales Subscribed to or considering BT Sport Not currently considering BT Sport, but like football Not currently considering BT Sport, not a football fan Premier League football With UEFA Champions League 9 1 BT survey showing attitudes to BT Sport from households interested in sport 2 BT survey showing the likelihood of BT Sport driving incremental broadband sales over 3 years; excludes re-signs and benefits from churn reduction

10 Wholesale Building on BT steady Sport progress momentum >2m retail customers, reaching c.4m homes Pleased with viewing figures, which are growing Economies of scale established infrastructure existing studios, talent, expertise 10

11 Wholesale Financial impact steady progress Previous financial outlook for 2013/14 to 2015/16 is unchanged Financial year Football season 2013/ / / / / /19 Rights payments m c.60 Nov c.90 Jul c.150 Jan c.150 Jul c.150 Jan c.150 Jul c.150 Jan Outlook: EBITDA bn bn Growth Free cash flow 2 c. 2.3bn c. 2.6bn Growth 11 1 before specific items 2 before specific items, purchases of telecommunications licences, pension deficit payments & cash tax benefit of pension deficit payments

12 In summary BT Sport s performance gives us the confidence and platform to invest Will help BT Sport further expand the market for premium sport Financial outlook unchanged Driving additional top and bottom line growth in Consumer 12

13 BT Group plc Q&A

14 BT Group plc Back up

15 UEFA Champions League Exclusive access to 145 live matches, plus UEFA Super Cup typically >35 matches include British teams Packs A1&2 First Pick Tuesday & Wednesday 33 exclusively live matches, including final Pack B all remaining Tuesday & Wednesday matches 112 exclusively live matches Plus highlights and mobile rights 15

16 UEFA Europa League Exclusive access to 205 live matches typically >30 matches include British teams Packs A1&2 First Pick Thursday 29 exclusively live matches, including final Pack B all remaining Thursday matches 176 exclusively live matches Plus highlights and mobile rights 16