BT Group plcAnnual General Meeting

19 July 2007

Sir Christopher Bland - Chairman

Group revenue £20.2bnGroup revenue £20.2bn

Earnings per share (1) 22.7pEarnings per share (1) 22.7p

Full year dividend 15.1p Full year dividend 15.1p

EBITDA (1) £5.6bnEBITDA (1) £5.6bn

(1) Before specific items

FY 2006/7

16%

2%

4%

27%

BT Group – Financial headlines

UKGAAP, April 2001 – March 2004, before exceptional items and goodwill from continuing activitiesIFRS, April 2004 – March 2007, before specific items

0

4

8

12

16

20

24

2001/2 2002/3 2003/4 2004/5 2005/6 2006/7

EPS 22.7p up 16%pence

EPS – Five years of continuous growth

Dividends

• Two thirds payout ratio reached one year early

• Expect to increase dividends, taking into account our earnings growth, cash generation and our ongoing investment needs

Share buy back

• New £2.5bn programme

- expected completion March 2009

Distribution policy

Returned £4.8bn in dividends and share buyback over the last 5 yearsReturned £4.8bn in dividends and share buyback over the last 5 years

0

2

4

6

8

10

12

14

16

2001/2 2002/3 2003/4 2004/5 2005/6 2006/7

pence Dividend 15.1p up 27%

90

100

110

120

130

140

150

Jul-0

6

Aug

-06

Sep

-06

Oct

-06

Nov

-06

Dec

-06

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

BT FTSE100

BT Share price231.75p on 14/07/06

BT Share price334.25p on 16/07/07

44%

17%

Share price

22 Mar ’01

26 Mar ‘01 27 Mar ‘01 23 Mar ‘01

20 Mar ‘01 23 Mar ‘01

BT Group – 2001 headlines

BT fights to tame £30bn

debt

BT’s wrong numbersBloomin’ TerribleBT turmoil as

shares slump 66% in a year

BT at the end of the

line

BT buried in debt

Company seeks to refinance loans

BT poised for cash call

dash

My original checklist

– Improved service– Price innovation– Reduce costs /

improve margin– Aggressive & creative

marketing

– NetworkedIT services

– Broadband– Mobility

Long term Partnership

with our customers

... Consistent delivery

Defend traditional

Grow new wave

BT Group strategy

21st Century Network

• Broadband – 11m connections and over 99% coverage

• Networked IT services - £4.4 billion annual revenue

• Global capability in over 170 countries

• Broadband – 11m connections and over 99% coverage

• Networked IT services - £4.4 billion annual revenue

• Global capability in over 170 countries

Strategy in action

• BT Vision – multi-channel TV with no compulsory subscription

• 21st century network – leading the world in building a broadband IP network for all

• Transformation into a leading service provider

• BT Vision – multi-channel TV with no compulsory subscription

• 21st century network – leading the world in building a broadband IP network for all

• Transformation into a leading service provider

Delivering today Delivering tomorrow

The way we work

BT made Company of the Year by Business in

the Community

Open, constructive relationship

with the regulator

BT made Company of the Year by Business in

the Community

Open, constructive relationship

with the regulator

Board changes

Board changes

Board changes

Board changes

Board changes

Board changes

Board changes

Board changes

Board changes

18 May ‘07

18 May ‘07

17 Dec ‘06 21 Dec ‘06

Internet King BT to return £2.5 billion

18 May ‘07

BT Group 2006/7 headlines

18 May ‘07

Bland leaves BTset to reach for the sky

BT regains top spot in broadband

A Perfect Day BT BonanzaMagic £3 mark

Sir Christopher Bland - Chairman

Bringing it all togetherAnnual General Meeting

19 July 2007

Ben VerwaayenChief Executive

– Improved service– Price innovation– Reduce costs /

improve margin– Aggressive & creative

marketing

– NetworkedIT services

– Broadband– Mobility

Long term Partnership

with our customers

... Consistent delivery

Defend traditional

Grow new wave

BT Group strategy

21st Century Network

£bn

+ 17%

- 3%

FY 2006/7 – Revenue UP 4%

6.3 7.4

12.813.2

30% CAGR in 4 years30% CAGR in 4 years£bn

+ 20%+ 20%

+ 71%+ 71%

+ 44%+ 44%

CAGR

Revenue – New wave driving transformation

Mobility & Other

Networked IT Services

Broadband

Signed 858 new customers

BT Global Services – 2006/7 order intake

£9.3bn

WholesaleRetail

The UK’s number 1 broadband retailerby market share

ISP of the yearMac Magazine 2006 Awards

Most trusted ISP 2007Reader’s Digest

> 10.7 million connections at 31/3/07

0

1

2

3

4

5

6

7

8

9

10

11

2004 2005 2006 2007

LLU

Other ISP’s

Retail *

Mar-04 Mar-05 Mar-06 Mar-07

Mn

Broadband

Home IT advisor- 40,000 users

VoIP- 1.4m registered users

BT Digital Vault- 125,000 users

Home hubs- Over 1 million

BT Vision- National marketing campaign

under way

BT Total Broadband

• Corporates– Networked IT services– Local service, global delivery– Expanded portfolio of capabilities

• Consumer– BT Together– BT Total Broadband– BT Fusion & BT Vision

• Business– BT Business One Plan– BT IT Manager– BT Office Anywhere

• Other operators- Managed Service- Broadband- Local access for telephony and broadband

SimplerHigher quality

More efficientFaster

Delivering Value for our customers

From traditional telco…

… to leading services provider with global capabilities

Real time

Open

Global

Keys to ourtransformation

• To improve– Customer service– Efficiency– Free cash flow

• To deliver– Right first time service– Where our customers are– A simplified organisation

• To reduce– Complexity– Cost base– Time to market

• To enable

– Customer to focus on what they do best

– Software solutions– Global delivery and reach

Transformation to Service Provider

* Before specific items and leavers

Bringing it all together

• Strategy built around convergence & innovation

– 17% growth in new wave revenues

• Corporate transformation

– From traditional telco to leading services provider with global capabilities

• Strong momentum with track record of delivery

– Twenty quarters of EPS growth

– Thirteen quarters of revenue growth

– Five quarters of EBITDA growth

• Continue to grow revenue, EBITDA*, EPS*and dividends in 2007/8

BT Group plcAnnual General Meeting

19 July 2007

Against

Vote Withheld

For

Proxy Votes

Resolution 1

Reports and accounts

4,690,961,416

7,879,073

1,540,670

Against

Vote Withheld

For

Proxy Votes

Resolution 2

Directors’ remuneration report

3,039,747,846

130,725,306

1,529,908,007

Against

Vote Withheld

For

Proxy Votes

Resolution 3

Final Dividend

4,698,432,613

678,005

1,270,541

Against

Vote Withheld

For

Proxy Votes

Resolution 4

Re-elect Sir Christopher Bland

4,665,303,524

32,179,017

2,898,618

Against

Vote Withheld

For

Proxy Votes

Resolution 5

Re-elect Andy Green

4,676,367,376

18,232,668

5,781,115

Against

Vote Withheld

For

Proxy Votes

Resolution 6

Re-elect Ian Livingston

4,678,250,916

19,041,422

3,088,821

Against

Vote Withheld

For

Proxy Votes

Resolution 7

Re-elect John Nelson

4,685,502,100

11,541,397

3,337,662

Against

Vote Withheld

For

Proxy Votes

Resolution 8

Elect Deborah Lathen

4,683,490,802

12,907,229

3,983,128

Against

Vote Withheld

For

Proxy Votes

Resolution 9

Elect François Barrault

4,684,502,467

11,963,701

3,914,991

Against

Vote Withheld

For

Proxy Votes

Resolution 10

Reappointment of auditors

4,679,050,873

7,394,391

13,935,895

Against

Vote Withheld

For

Proxy Votes

Resolution 11

Remuneration of auditors

4,678,136,507

7,977.341

14,267,311

Against

Vote Withheld

For

Proxy Votes

Resolution 12

Authority to allot shares

4,655,261,395

41,386,501

3,733,263

Against

Vote Withheld

For

Proxy Votes

Resolution 13

Authority to allot shares for cash**Special resolution

4,686,626,092

9,444,399

4,310,668

Against

Vote Withheld

For

Proxy Votes

Resolution 14

Authority to purchase own shares**Special resolution

4,609,658,522

6,594,827

84,127,810

Against

Vote Withheld

For

Proxy Votes

Resolution 15

Authority to use electronic communications**Special resolution

4,680,669,745

12,524,737

7,186,677

Against

Vote Withheld

For

Proxy Votes

Resolution 16

Authority for political donations

4,579,323,754

62,870,366

58,187,039

Poll on Resolution X

Using your Form of proxy/Admission card:• If voting all shares “for”, place a tick () in “For” box• If voting all shares “against”, place a tick () in “Against”

box• If voting all shares “vote withheld”, place a tick () in

“Vote withheld” box• If splitting vote, indicate the number of shares voting “for”

“against”and “vote withheld”

• Please sign the card• Place completed card in ballot box as you leave • Please ask a marshal if you have any questions

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 2and 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

• Please ask a marshal if you have any questions

Poll on Procedural Resolution X

Using your voting paper:

• Delete Box A

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

• If voting “against” procedural resolution, place a tick () in Box 2headed “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`

BT Group plcAnnual General Meeting

19 July 2007