Slide 1: George A. Cope, President and Chief Executive Officer
Bel \ A George A. Cope President and Chief Executive Officer
Slide 2: Safe harbour notice
Safe harbour notice Certain statements made in this presentation, including, but not limited to, our financial guidance, plans and strategies, capital structure model, and other statements that are not historical facts, are forward-looking statements. Several assumptions were made by BCE in preparin
Slide 3: Welcome
Welcome 5 Strategic Imperatives Capital structure model Q1 results
Slide 4: 5 Strategic Imperatives
5 Strategic Imperatives Our Goal Strategic Imperatives “ To be recognized 1 Achieve a competitive cost structure by customers as 2 Accelerate wireless Canada’s leading communications 3 Leverage wireline momentum company ” 4 Invest in broadband network and services 5 Improve customer service Focused
Slide 5: Bell executive team
Bell executive team Service delivery People & support Market facing Mary Ann Turcke Martine Turcotte Stéphane Boisvert Charles Brown Executive Vice-President – Executive Vice-President and President – Enterprise President – Small & Medium Field Services Chief Legal & Regulatory Officer Business and
Slide 6: Strategic Imperative: Achieve a competitive cost structure
Strategic Imperative 1 : Achieve a competitive cost structure
Slide 7: Streamlined organization
Streamlined organization Bell wireline labour force Streamlined organizational structure Executive team from 17 to 12 3,500 30% reduction in SVP and VP positions Removed 3 layers of management Reduced 8% of workforce and 15% of management Pay for performance culture 36,000 32,500 – Managem
Slide 8: Driving productivity
Driving productivity Productivity and contracts Insourcing, outsourcing and offshoring • Field force productivity • Non-customer affecting 2,000 new Bell trucks • Call centre/IT/back office GPS-equipped for better efficiency • Call centres consolidate from 33 to 27 with • Renegotiated contracts with
Slide 9: Disciplined capital management
Disciplined capital management Capital intensity • Rigorous new capital governance – single company priorities list • Q1 Capital Intensity on track at 13.3% 20%-20.4% 19.3% 17.7% 17.7% 16.5 16.4% % 15%-16% 13.5%-14.6% $2.5B 2008 2009E 2008 2009E* 2008 2009E* 2008 2009E* * Based on company guidance a
Slide 10: Strategic Imperative: Accelerate wireless
Strategic Imperative 2 : Accelerate wireless
Slide 11: Wireless performance
Wireless performance Gross adds Postpaid net adds Q1 2009 highlights 366K 35K 351K 28K Gross additions up 4.3% • Postpaid gross additions up 6.1% Postpaid net additions up 25% • Improved postpaid churn Q1-08 Q1-09 Q1-08 Q1-09 ARPU declines $0.80 EBITDA margin margin*** EBITDA • Impacted by economy 4
Slide 12: Accelerating wireless data
Accelerating wireless data • First NHL mobile experience of its kind in North America • Live audio and video highlights • More than a billion messages a month • 1 text for every phone call • 1st location aware mobile portal in North America • Live content on Bell home page by location • 2 million TV
Slide 13: Acquisition of The Source
Acquisition of The Source Distribution game-changer 1,479 The asset • • • * Announced March 2009 756 national stores and ~3,000 employees $643M in revenues/$27M EBITDA 7-year track record of profitability ~1,100 The • To close by early Q3 723 Source ~800 Benefits to Bell • Quickly increases points o
Slide 14: Acquisition of Virgin's remaining 50% stake
Acquisition of Virgin’s remaining 50% stake Rationale Leverage Virgin brand • • • • Significant brand awareness Continued global marketing support from Virgin Group Long-term extension of brand licensing agreement Maximizes Bell’s flanker brand flexibility * Announced TODAY • Incremental traffic for
Slide 15: Next generation wireless network
Next generation wireless network • Global standard • Path to next generation data services Customer • More choice in handsets benefits • Improved rural coverage • International roaming • Bell/TELUS agreement lowers capital requirement • Network operating cost savings Financial • Lower handset costs
Slide 16: Strategic Imperative: Leverage wireline momentum
Strategic Imperative 3 : Leverage wireline momentum
Slide 17: Slowing telephone line losses
Slowing telephone line losses Lower line losses Significant improvement Erosion rate • Line losses improve for six Consumer 6.6% straight quarters Business 5.3% • Economy softens small-medium business results • Winbacks remain strong • Continual service improvements 106k 78k 26k 13k Q1-08 Q1-09
Slide 18: Strong Bell TV growth
Strong Bell TV growth Revenue per sub EBITDA Solid revenue and EBITDA growth $68.84 $92M • Revenue up 8.7% $64.65 $77M • EBITDA up 19.5% • Industry-leading churn of 1.1% • Over 1.8 million TV subscribers Q1-08 Q1-09 Q1-08 Q1-09 Maintaining HD leadership • Most HD channels in Canada • HD penetration
Slide 19: New TV distribution channel
New TV distribution channel • TV in BC and AB – – * Announced TODAY Agreement with TELUS to distribute satellite Confirms success and quality of Bell TV Supports industry-leading offering, including the most HD channels of any television provider in Canada • Takes advantage of TELUS’ distribution ne
Slide 20: Accelerated Fibre broadband investment
Accelerated Fibre broadband investment * Announced Feb. 2009 By 2012: 5.0M homes By 2013: 4.6M homes 2.5M homes today $1 Billion+ invested 2009 2010 2011 2012 2013
Slide 21: Canada runs on Bell
Canada runs on Bell Positive enterprise EBITDA growth despite economic slowdown
Slide 22: Strategic Imperative: Invest in broadband network & services
Strategic Imperative 4 : Invest in broadband network & services
Slide 23: Bell powers explosive Internet growth
Bell powers explosive Internet growth Consumer Business Wireless • 21 million Canadians watched 3.1 • Annual IP growth 35% • Canadian smartphone sales triple in billion videos online in February • Increased video conferencing past year • Video 90% of Internet traffic by 2012 • Canadians lead the wor
Slide 24: Building platforms for the future
Building platforms for the future Rolling out HSPA Investing in FTTN Ready by early 2010 Accelerating FTTN deployment • Accelerated time to market • Advanced by one year • Reduced capital required by 50% • ~$700M cumulative investment • Global standard and path to next over next 3 years generation d
Slide 25: Strategic Imperative: Improve customer service
Strategic Imperative 5 : Improve customer service
Slide 26: New service model
New service model Full in-home Better in-store service experience Quality focus Self-serve convenience
Slide 27: Service just got better
Service just got better Service enhancements Better results • 95% success rate Same Day Next Day • Great improvement over 2008 • Customers prepared to pay for premium service Express Install • Solid momentum with new orders increasing monthly • Offered to all new DSL subscribers Full Install • Targe
Slide 28: Measurable call centre improvement
Measurable call centre improvement Same Day / Next Day Fewer repair calls Repair call satisfaction Call volumes drop • 14% fewer repair calls 95% per year (14%) 87% 86% Customer satisfaction 82% increases • Internet satisfaction up 33% Key service desks move onshore • One million calls moved from In
Slide 29: More to come
More to come SPA (Service & Product Move Concierge Assistance) Service Full wireless service, warranty and repair in store One Bell agent dedicated to 3-Product customers
Slide 30: New brand
New brand Four new brand elements 1. New logo 2. New tag lines in French and English 3. New look 4. Theme of “On Bell” Aligned business unit names Sympatico Bell Internet ExpressVu Bell TV Residential Bell Home phone Mobile Bell Mobility Successful and effective new brand
Slide 31: 281 days to go
2O10 Olympic countdown 281 days to go Bell
Slide 32: Capital structure model
Capital structure model • Solid investment grade metrics – Confirmed by Maintain strong 1 credit profile rating agencies • Ample access to short- and long-term capital Ensure ample • Strong, reliable cash flow generation 2 liquidity • Ability to self fund debt maturities for the next 18 years Return
Slide 33: Executing on our capital structure model
Executing on our capital structure model 1 5% dividend increase › February 11, 2009 2 5% share buyback completed › May 5, 2009 3 $1.4B 3-year credit facility renewed › May 7, 2009 (today) 4 Repay $1.5B debt maturities from cash on hand › Balance of 2009 Returning cash to shareholders through
Slide 34: Q1 financial results consistent with strategy
Q1 financial results consistent with strategy Bell Q1 ’09 YoY • Revenues essentially flat year over year Revenue $3,623M (0.5%) • Managing through economic EBITDA $1,426M 0.3% downturn EBITDA Margin 39.4% 0.3 pts • Stable EBITDA year over year Capital Intensity 13.3% (0.8 pts) • Higher capital spend
Slide 35: What's changed at Bell since July 2008
What’s changed at Bell since July 2008 Focus on cost… … balanced with investments in strategic imperatives New organizational structure Changed culture to pay for performance Removed 3 layers of management New HSPA wireless network build Reduced workforce by ~3,500 Launched new satellite
Slide 36: Stock price performance vs telecom index
Stock price performance vs telecom index 115% 110% 105% BCE: 3.7% 100% 95% TSX Telecom: (8.0%) 90% 85% 80% 31-Dec-08 1-Apr-09 8-Apr-09 15-Apr-09 22-Apr-09 29-Apr-09 7-Jan-09 14-Jan-09 21-Jan-09 28-Jan-09 4-Mar-09 11-Mar-09 18-Mar-09 25-Mar-09 4-Feb-09 11-Feb-09 18-Feb-09 25-Feb-09 6-May-09 Total sha
Slide 37: Today just got better
today just got better Bell