Sir Michael Rake BT Group plc Chairman 2011 summary of the year - - PowerPoint PPT Presentation

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Sir Michael Rake BT Group plc Chairman 2011 summary of the year - - PowerPoint PPT Presentation

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Sir Michael Rake BT Group plc Chairman 2011 summary of the year Progress towards making BT a better business Improving profitability and free cash flow A responsible and sustainable business leader Investing in the business for a

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BT Group plc

Sir Michael Rake Chairman

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2011 summary of the year

Progress towards making BT a better business Improving profitability and free cash flow A responsible and sustainable business leader Investing in the business for a better future

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2011 group results

In line with or ahead of tl k 2011 R lt Ch

Revenue1 £20,076m 4%

  • utlook

2011 Results Change

Cost savings1 £1,087m

1

Profit before tax1 £2,083m 20% Free cash flow2 £2 223m 6% Free cash flow £2,223m 6% Net debt £8,816m £467m

1 before specific items 2 before specific items and pension deficit payments

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Dividends

Proposed final dividend 5.0p 9% Full year dividend 7.4p 7% Committed to progressive dividends at same time as:

– investing for the future – reducing net debt – supporting pension scheme

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Pensions

BT’s pension scheme is one of the largest private schemes in the UK schemes in the UK Accounting deficit has reduced from £5.7bn to £1.4bn, due to: due to:

– recovery in asset prices – BT has paid more than £2bn into the scheme over two years

The Pensions Regulator’s review of December 2008 funding valuation now on hold

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2011 and beyond

Incentivising management Board and senior management changes Regulatory environment

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2011 and beyond

Corporate responsibility

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2011 and beyond

London 2012 Olympic and Paralympic Games Paralympic Games

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Total Shareholder Return*

50% 60%

57%

30% 40% 10% 20%

7% 16%

0%

BT FTSE100 European Telco S t Sector

*TSR = Total Shareholder Return is the measure of the returns that a company has generated for its shareholders,

reflecting share price movement and dividends. Measured from 1 April 2010 to 31 March 2011

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Financial strategy to 2013

2011 2013

Invest in the business

2011 2013

Reduce net debt S t th i f d Support the pension fund Pay progressive dividends Pay progressive dividends

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BT Group plc

Ian Livingston Chief Executive

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The UK market The UK market

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UK has lowest landline prices amongst major t i countries

25 30

P

26 51 28.06 28.86 26 17

20 25

nth, PPP

22.08 26.51 26.17 25.85

10 15

£ per mo

5

UK USA S i G It l F

£

UK USA Spain Germany Italy France

International Communications Market, December 2010 Ofcom; weighted average of best-value tariff from each of the three largest operators by market share in each country, for 600 outbound minutes; July 2010 PPP adjusted. Based on a family of two parents and two children, who are cost conscious and favour using the fixed-line phone whenever possible, which gets fairly heavy use. Includes line rental and cost of purchasing enhanced tariffs that offer reduced prices.

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UK also has highest broadband availability

100 56k) bscribe 98.5 99.7 95 verage (25 could sub 95.0 95.7 96.0 96.1 98 5 85 90 dband cov holds that 80

G It l USA S i F UK

Broad % househ

Germany Italy USA Spain France UK

Source: OECD Broadband Portal August 2010

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How is BT doing? How is BT doing?

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Focusing on our strategic priorities to build a b tt f t better future

Driving broadband-based consumer services Being the ‘Brand for Business’ for UK SMEs BT Global Services – a global leader

A better future

The wholesaler of choice The best network provider

future

A responsible and sustainable business leader

Cost transformation Customer service delivery Investing for the future

A better business

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Customer service delivery

Challenges in the year Q4 service improvements

– Global Services customer faults c.10% – Wholesale broadband faults c.15% – Consumer complaints c.20% – Business complaints c.60%

More to do More to do

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Cost transformation

  • c. £2.8bn reduction in costs over 2 years, driven by

– improved service and processes – procurement savings – a more agile organisation – substantial investment

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Driving broadband-based consumer services

Super-fast fibre based broadband

B db d Broadband

New services

Award winning broadband for

Over 50% share of DSL net additions 5.7m customers

Differentiated service

WiFi

Home Hub 3 cost conscious consumers

service

Home Hub 3 with Smart Wireless

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Being the ‘Brand for Business’ for UK small and di i d t i (SME) medium sized enterprises (SME)

SME line loss at lowest level for more than 3 years

IT services and mobility revenue trend

level for more than 3 years New business broadband propositions launched

15% 20%

– Business broadband net adds up c.30%

O t it t i k t

0% 5% 10%

Opportunity to increase market share in IT services and mobility

– IT services revenue up 17%

  • 5%

2010 2011 p – Mobility revenue up 14%

IT services Mobility

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BT Global Services – a global leader

Order intake of £7.3bn, up 10% p Contract wins with major international companies and government departments

Banking & Commerce Consumer Packaged Gov’t &

government departments Investment in Asia Pacific region

– growing pipeline of orders Financial Markets Commerce Packaged Goods Health

UK

growing pipeline of orders

Strong growth in Latin America New structure to focus on key

EMEA & Latin America United States & Canada

New structure to focus on key global sectors

Asia Pacific

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The wholesaler of choice

Europe’s largest telecoms wholesaler Provides infrastructure for the UK telecoms industry

– Managed Network Services now 24% of revenue* – More than 700 communications providers – Supplies / supports all major mobile network operators

Increasing revenue from new technology

– IP based services / Ethernet – IP based services / Ethernet

* external revenue

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The best network provider

50

  • 50

nes

  • 100

50

‘000s lin

  • 150

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Copper line base grew for first time since 2006

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The best network provider - fibre

Fibre roll out progressing at pace

– now over 5m premises passed – passing c.80,000 new premises per week – Cornwall and Northern Ireland public/private partnerships progressing well

Future

– pass two thirds of premises by end of 2015 – potential to pass 90% of premises with government support – expect to roughly double our fibre to the cabinet (FTTC) speeds to up to 80Mbps in 2012 – Fibre to the premises (FTTP) trialling at 100Mbps and 1Gbps

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Free cash flow*

2,000 2,500

Tax benefit

£2,106m £2,223m 1,500 ,000

£m

Tax benefit & one-offs

500 1,000 £772m 2010 2011 2009

* before cash specific items and pension deficit payments

Free cash flow* nearly trebled over 2 years

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Outlook - 2012 & 2013

Revenue1 Growth in 2012/13 Profit2 Growth to above £6bn in 2012/13 Free cash flow3 Above 2010/11 level in 2011/12 and 2012/13

1 underlying revenue excluding transit

Dividends Progressive dividend

underlying revenue excluding transit

2 earnings before interest, tax, depreciation and amortisation, before specific items 3 before specific items and pension deficit payments

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Progress made More to do

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BT Group plc

Annual General Meeting 13 July 2011

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Resolution 1

Reports and accounts Reports and accounts

Resolution 3

Final Dividend Final Dividend

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www bt com/annualreport www.bt.com/annualreport

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Resolution 1

Reports and accounts Reports and accounts

Resolution 3

Final Dividend Final Dividend

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Resolution 2

Directors’ remuneration report Directors remuneration report

Resolutions 22-26

Employee share plans and executive portfolio Employee share plans and executive portfolio

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www bt com/annualreport www.bt.com/annualreport

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Resolution 2

Directors’ remuneration report Directors remuneration report

Resolutions 22-26

Employee share plans and executive portfolio Employee share plans and executive portfolio

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Resolutions 4 – 12

Re election of directors Re-election of directors

Resolutions 13-14

El ti f di t Election of directors

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Resolution 17 Resolution 17 Authority to allot shares Resolution 18 Authority to allot shares for cash* Authority to allot shares for cash

*Special resolution

Resolution 19 Authority to purchase own shares* y p

*Special resolution

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Resolution 15 Reappointment of auditors Reappointment of auditors Resolution 16 Resolution 16 Remuneration of auditors Resolution 20 Notice of general meetings*

*S i l l i *Special resolution

Resolution 21 Resolution 21 Authority for political donations

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Poll on all Resolutions

Using your Admission Card/Proxy Card:

  • If voting all shares “for”, place a cross (X) in “For” box
  • If voting all shares “against”, place a cross (X) in “Against” box
  • If withholding vote, place (X) in “Vote withheld” box
  • If splitting vote, indicate the number of shares voting “for” “against” and

“Vote withheld”

  • Please sign the card

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  • Place completed card in ballot box as you leave
  • Please ask a marshal if you have any questions
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For & Discretion Against

Overall Total

Res No. Description

Total % Total %

For & Discretion Against Overall Total

Res No. Description

Total % Total %

01 Reports and accounts

4,649,815,530 99.07% 43,718,567 0.93% 4,693,534,097

02 Remuneration report

4,399,658,611 94.74% 244,422,176 5.26% 4,644,080,787

03 Final dividend

4,691,979,848 99.97% 1,256,668 0.03% 4,693,236,516

04 Re-elect Sir Michael Rake

4,613,566,569 99.14% 39,904,138 0.86% 4,653,470,707

05 Re-elect Ian Livingston

4,684,154,290 99.84% 7,712,409 0.16% 4,691,866,699

14 Elect Jasmine Whitbread

4,678,089,368 99.73% 12,437,230 0.27% 4,690,526,598

15 Reappointment of auditors

4,632,595,661 99.52% 22,119,840 0.48% 4,654,715,501

16 Remuneration of auditors

4,682,489,246 99.83% 8,019,548 0.17% 4,690,508,794

17 Authority to allot shares

4,541,405,551 97.99% 92,929,159 2.01% 4,634,334,710

18 Authority to allot shares for cash

4,659,634,336 99.34% 31,086,673 0.66% 4,690,721,009

g 06 Re-elect Tony Chanmugam

4,683,139,413 99.83% 8,171,524 0.17% 4,691,310,937

07 Re-elect Gavin Patterson

4,683,867,357 99.84% 7,498,491 0.16% 4,691,365,848

08 Re-elect Tony Ball

4,650,491,598 99.13% 40,580,443 0.87% 4,691,072,041

09 Re-elect J Eric Daniels

4,650,663,077 99.14% 40,252,367 0.86% 4,690,915,444

10 Re-elect Rt Hon Patricia Hewitt

4 638 102 917 98 86% 53 395 337 1 14% 4 691 498 254

19 Authority to purchase own shares

4,664,833,724 99.43% 26,898,036 0.57% 4,691,731,760

20 14 days' notice of meetings

4,326,715,479 92.21% 365,392,215 7.79% 4,692,107,694

21 Authority for political donations

4,582,914,404 97.76% 104,970,415 2.24% 4,687,884,819

22 Renewal of sharesave scheme

4,666,466,687 99.49% 23,795,307 0.51% 4,690,261,994

10 Re elect Rt Hon Patricia Hewitt

4,638,102,917 98.86% 53,395,337 1.14% 4,691,498,254

11 Re-elect Phil Hodkinson

4,678,229,059 99.73% 12,700,825 0.27% 4,690,929,884

12 Re-elect Carl Symon

4,641,713,408 98.95% 49,050,572 1.05% 4,690,763,980

13 Elect Nick Rose

4,678,816,547 99.75% 11,636,502 0.25% 4,690,453,049

23 Renewal of intl sharesave scheme

4,664,670,229 99.48% 24,449,047 0.52% 4,689,119,276

24 Renewal of share investment plan

4,669,025,930 99.55% 21,203,765 0.45% 4,690,229,695

25 Renewal of stock purchase plan

4,666,641,859 99.51% 23,067,218 0.49% 4,689,709,077

26 Renewal of executive portfolio

3,361,679,539 73.59% 1,206,149,801 26.41% 4,567,829,340

p

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For & Discretion Against

Overall Total

Res No. Description

Total % Total %

For & Discretion Against Overall Total

Res No. Description

Total % Total %

For & Discretion Against Vote Withheld Overall

Res No. Description

Total % Total % Total % Total %

01 Reports and accounts 4,649,815,530 98.93% 43,718,567 0.93% 6,714,224 0.14% 4,700,248,321 100.00%

For & Discretion Against Vote Withheld Overall

Res No. Description

Total % Total % Total % Total %

01 Reports and accounts 4,649,815,530 98.93% 43,718,567 0.93% 6,714,224 0.14% 4,700,248,321 100.00%

01 Reports and accounts

4,649,815,530 99.07% 43,718,567 0.93% 4,693,534,097

02 Remuneration report

4,399,658,611 94.74% 244,422,176 5.26% 4,644,080,787

03 Final dividend

4,691,979,848 99.97% 1,256,668 0.03% 4,693,236,516

04 Re-elect Sir Michael Rake

4,613,566,569 99.14% 39,904,138 0.86% 4,653,470,707

05 Re-elect Ian Livingston

4,684,154,290 99.84% 7,712,409 0.16% 4,691,866,699

14 Elect Jasmine Whitbread

4,678,089,368 99.73% 12,437,230 0.27% 4,690,526,598

15 Reappointment of auditors

4,632,595,661 99.52% 22,119,840 0.48% 4,654,715,501

16 Remuneration of auditors

4,682,489,246 99.83% 8,019,548 0.17% 4,690,508,794

17 Authority to allot shares

4,541,405,551 97.99% 92,929,159 2.01% 4,634,334,710

18 Authority to allot shares for cash

4,659,634,336 99.34% 31,086,673 0.66% 4,690,721,009

02 Remuneration report 4,399,658,611 93.61% 244,422,176 5.20% 56,140,441 1.19% 4,700,221,228 100.00% 03 Final dividend 4,691,979,848 99.82% 1,256,668 0.03% 7,073,746 0.15% 4,700,310,262 100.00% 04 Re-elect Sir Michael Rake 4,613,566,569 98.16% 39,904,138 0.85% 46,753,784 0.99% 4,700,224,491 100.00% 05 Re-elect Ian Livingston 4,684,154,290 99.66% 7,712,409 0.16% 8,428,363 0.18% 4,700,295,062 100.00% 06 Re-elect Tony Chanmugam 4,683,139,413 99.64% 8,171,524 0.17% 8,932,325 0.19% 4,700,243,262 100.00% 02 Remuneration report 4,399,658,611 93.61% 244,422,176 5.20% 56,140,441 1.19% 4,700,221,228 100.00% 03 Final dividend 4,691,979,848 99.82% 1,256,668 0.03% 7,073,746 0.15% 4,700,310,262 100.00% 04 Re-elect Sir Michael Rake 4,613,566,569 98.16% 39,904,138 0.85% 46,753,784 0.99% 4,700,224,491 100.00% 05 Re-elect Ian Livingston 4,684,154,290 99.66% 7,712,409 0.16% 8,428,363 0.18% 4,700,295,062 100.00% 06 Re-elect Tony Chanmugam 4,683,139,413 99.64% 8,171,524 0.17% 8,932,325 0.19% 4,700,243,262 100.00%

g 06 Re-elect Tony Chanmugam

4,683,139,413 99.83% 8,171,524 0.17% 4,691,310,937

07 Re-elect Gavin Patterson

4,683,867,357 99.84% 7,498,491 0.16% 4,691,365,848

08 Re-elect Tony Ball

4,650,491,598 99.13% 40,580,443 0.87% 4,691,072,041

09 Re-elect J Eric Daniels

4,650,663,077 99.14% 40,252,367 0.86% 4,690,915,444

10 Re-elect Rt Hon Patricia Hewitt

4 638 102 917 98 86% 53 395 337 1 14% 4 691 498 254

19 Authority to purchase own shares

4,664,833,724 99.43% 26,898,036 0.57% 4,691,731,760

20 14 days' notice of meetings

4,326,715,479 92.21% 365,392,215 7.79% 4,692,107,694

21 Authority for political donations

4,582,914,404 97.76% 104,970,415 2.24% 4,687,884,819

22 Renewal of sharesave scheme

4,666,466,687 99.49% 23,795,307 0.51% 4,690,261,994

07 Re-elect Gavin Patterson 4,683,867,357 99.65% 7,498,491 0.16% 8,868,131 0.19% 4,700,233,979 100.00% 08 Re-elect Tony Ball 4,650,491,598 98.94% 40,580,443 0.86% 9,155,740 0.19% 4,700,227,781 100.00% 09 Re-elect J Eric Daniels 4,650,663,077 98.95% 40,252,367 0.86% 9,304,680 0.20% 4,700,220,124 100.00% 10 Re-elect Rt Hon Patricia Hewitt 4,638,102,917 98.68% 53,395,337 1.14% 8,768,917 0.19% 4,700,267,171 100.00% 11 Re-elect Phil Hodkinson 4,678,229,059 99.53% 12,700,825 0.27% 9,283,152 0.20% 4,700,213,036 100.00% 07 Re-elect Gavin Patterson 4,683,867,357 99.65% 7,498,491 0.16% 8,868,131 0.19% 4,700,233,979 100.00% 08 Re-elect Tony Ball 4,650,491,598 98.94% 40,580,443 0.86% 9,155,740 0.19% 4,700,227,781 100.00% 09 Re-elect J Eric Daniels 4,650,663,077 98.95% 40,252,367 0.86% 9,304,680 0.20% 4,700,220,124 100.00% 10 Re-elect Rt Hon Patricia Hewitt 4,638,102,917 98.68% 53,395,337 1.14% 8,768,917 0.19% 4,700,267,171 100.00% 11 Re-elect Phil Hodkinson 4,678,229,059 99.53% 12,700,825 0.27% 9,283,152 0.20% 4,700,213,036 100.00%

10 Re elect Rt Hon Patricia Hewitt

4,638,102,917 98.86% 53,395,337 1.14% 4,691,498,254

11 Re-elect Phil Hodkinson

4,678,229,059 99.73% 12,700,825 0.27% 4,690,929,884

12 Re-elect Carl Symon

4,641,713,408 98.95% 49,050,572 1.05% 4,690,763,980

13 Elect Nick Rose

4,678,816,547 99.75% 11,636,502 0.25% 4,690,453,049

23 Renewal of intl sharesave scheme

4,664,670,229 99.48% 24,449,047 0.52% 4,689,119,276

24 Renewal of share investment plan

4,669,025,930 99.55% 21,203,765 0.45% 4,690,229,695

25 Renewal of stock purchase plan

4,666,641,859 99.51% 23,067,218 0.49% 4,689,709,077

26 Renewal of executive portfolio

3,361,679,539 73.59% 1,206,149,801 26.41% 4,567,829,340

12 Re-elect Carl Symon 4,641,713,408 98.76% 49,050,572 1.04% 9,435,692 0.20% 4,700,199,672 100.00% 13 Elect Nick Rose 4,678,816,547 99.54% 11,636,502 0.25% 9,752,169 0.21% 4,700,205,218 100.00% 14 Elect Jasmine Whitbread 4,678,089,368 99.53% 12,437,230 0.26% 9,668,696 0.21% 4,700,195,294 100.00% 15 Reappointment of auditors 4,632,595,661 98.56% 22,119,840 0.47% 45,521,896 0.97% 4,700,237,397 100.00% 16 Remuneration of auditors 4,682,489,246 99.62% 8,019,548 0.17% 9,723,912 0.21% 4,700,232,706 100.00% 12 Re-elect Carl Symon 4,641,713,408 98.76% 49,050,572 1.04% 9,435,692 0.20% 4,700,199,672 100.00% 13 Elect Nick Rose 4,678,816,547 99.54% 11,636,502 0.25% 9,752,169 0.21% 4,700,205,218 100.00% 14 Elect Jasmine Whitbread 4,678,089,368 99.53% 12,437,230 0.26% 9,668,696 0.21% 4,700,195,294 100.00% 15 Reappointment of auditors 4,632,595,661 98.56% 22,119,840 0.47% 45,521,896 0.97% 4,700,237,397 100.00% 16 Remuneration of auditors 4,682,489,246 99.62% 8,019,548 0.17% 9,723,912 0.21% 4,700,232,706 100.00%

p

17 Authority to allot shares 4,541,405,551 96.62% 92,929,159 1.98% 65,895,756 1.40% 4,700,230,466 100.00% 18 Authority to allot shares for cash 4,659,634,336 99.14% 31,086,673 0.66% 9,519,074 0.20% 4,700,240,083 100.00% 19 Authority to purchase own shares 4,664,833,724 99.25% 26,898,036 0.57% 8,495,555 0.18% 4,700,227,315 100.00% 20 14 days' notice of meetings 4,326,715,479 92.05% 365,392,215 7.77% 8,112,956 0.17% 4,700,220,650 100.00% 21 Authority for political donations 4,582,914,404 97.50% 104,970,415 2.23% 12,361,584 0.26% 4,700,246,403 100.00% 22 Renewal of sharesave scheme 4 666 466 687 99 28% 23 795 307 0 51% 10 049 961 0 21% 4 700 311 955 100 00% 17 Authority to allot shares 4,541,405,551 96.62% 92,929,159 1.98% 65,895,756 1.40% 4,700,230,466 100.00% 18 Authority to allot shares for cash 4,659,634,336 99.14% 31,086,673 0.66% 9,519,074 0.20% 4,700,240,083 100.00% 19 Authority to purchase own shares 4,664,833,724 99.25% 26,898,036 0.57% 8,495,555 0.18% 4,700,227,315 100.00% 20 14 days' notice of meetings 4,326,715,479 92.05% 365,392,215 7.77% 8,112,956 0.17% 4,700,220,650 100.00% 21 Authority for political donations 4,582,914,404 97.50% 104,970,415 2.23% 12,361,584 0.26% 4,700,246,403 100.00% 22 Renewal of sharesave scheme 4 666 466 687 99 28% 23 795 307 0 51% 10 049 961 0 21% 4 700 311 955 100 00%

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Poll on Amendment to Resolution X

Using your voting paper:

  • If voting all shares “for” amendment, tick () “For” box in Column 2, alongside

appropriate resolution number

  • If voting all shares “against” amendment, tick () “Against” box in Column 3
  • If splitting vote enter the appropriate number of shares in Columns 2 and 3
  • If splitting vote, enter the appropriate number of shares in Columns 2 and 3
  • Write name, address and account number in Box 1
  • Sign the voting paper in Box 2 and hand it to marshal at end of row

g g p p

  • Please ask a marshal if you have any questions
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SLIDE 46

Poll on Procedural Resolution

Using your voting paper:

  • Delete Box A
  • If voting “for” procedural resolution, place a tick () in Box 1 headed “For”
  • If voting “against” procedural resolution, place a tick () in Box 2 headed

“Against” Against

  • If splitting vote, enter the appropriate number of shares in Boxes 1 and 2
  • Write name, address and account number in Box 3

,

  • Sign the voting paper in Box 4 and hand it to marshal at end of row
  • Please ask a marshal if you have any questions
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SLIDE 47

Poll on an adjournment

Using your voting paper:

  • Delete Box B
  • If voting “for” an adjournment, place a tick () in Box 1 headed “For”
  • If voting “against” an adjournment, place a tick () in Box 2 headed “Against”
  • If splitting vote, enter the appropriate number of shares in Boxes 1 and 2
  • Write name, address and account number in Box 3
  • Sign the voting paper in Box 4 and hand it to marshal at end of row
  • Sign the voting paper in Box 4 and hand it to marshal at end of row
  • Please ask a marshal if you have any questions
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