BT Group Delivers in a Challenging Environment; Announces Merger of Global and Enterprise Divisions

Narrow-moat BT Group’s revenue declined by 1% organically in the third fiscal quarter of 2023, as tailwinds in the Openreach and consumer divisions (the strongest businesses in our view) were offset by declines in the enterprise and global divisions and by other one-off effects. However, EBITDA managed to grow by 3% thanks to cost controls and the removal of costs from BT Sport, which has been transferred to a joint venture with Eurosport UK. We maintain our GBX 230 fair value estimate.