BRITEL         NR/BBB/BBB

Weak H125 revenue figures with weakness in the non-UK Business operations accelerating (-4.9% in H125 from -4.4% in H224) prompting a cut to FY revenue guidance though EBITDA and FCF guidance is unchanged.

• Q2 revenue -3% YoY (-2.7% vs. BBG consensus) for H124 -3%.

• Q2 adj-EBITDA +2% YoY (flat to cons) for H124 +1%

• H124 CFO +29% YoY to GBP 3bn, nFCF +57% YoY to GBP 715mn. CapEx was -2% with a tax refund and WC contributing to the FCF move.

• Headline leverage by our calculation looks to be 2.49x from 2.40x at FY24 and 2.42x at H124 though the pension deficit of GBP 4.3bn is down from GBP 4.8bn at FY24 which when included implies leverage flat to FY24 at 3x.

• FY revenue guidance changed to -1-2% from growth of 0-1% at FY24 reflecting weaker non-UK trading in the Business segment, along with a softer environment in Corporate and Public Sector. Note recent reports on the sale of the Global division.

• Nothing jumping out on KPIs; fibre build accelerated to fastest rate during the half.

• Call at 10am: https://www.investis-live.com/bt-group/66fd30d24132f400154ee352/dwwqy