Slide 1: Annual General Shareholder Meeting 2013
ANNUAL GENERAL SHAREHOLDER MEETING 2013
Slide 2: Siim Vanaselja, Chief Financial Officer
SIIM VANASELJA Chief Financial Officer
Slide 3: 2012 financial summary
2012 financial summary ACTUAL TARGET RESULT Revenue growth 3.0% 3% - 5% EBITDA growth 4.4% 2% - 4% Capital Intensity 16.6% ~16% Adjusted EPS $3.18 $3.15 - $3.20 Adjusted EPS – restated1 $2.96 $2.93 - $2.98 Free Cash Flow $2.42 B $2.35 B - $2.50 B Achieved all 2012 financial guidance targ
Slide 4: Achievable financial targets for 2013
Achievable financial targets for 2013 2013 GUIDANCE TARGET Revenue growth 0% - 2% EBITDA growth 1% - 3% Capital Intensity 16% - 17% Adjusted EPS $2.97 - $3.03 Free Cash Flow growth 5% - 9%
Slide 5: Q1 2013 financial performance
Q1 2013 financial performance ($MILLIONS) Q1 2013 Y/Y Revenue $4,348 0.3% Service $3,987 1.3% Product $361 (9.0%) EBITDA $1,641 2.1% EBITDA margin 37.7% 0.6 pts Adjusted net earnings $566 6.6% Adjusted EPS $0.77 11.6% Free Cash Flow $247 (25.4%) A solid start to the year, tracking to guidance target
Slide 6: Prudent capital structure foundation
Prudent capital structure foundation Favourable Attractive debt Strong liquidity credit profile maturity schedule position • Investment grade • Weighted average • Cash balance of ratings with stable term of debt ~10 years $1.2 Billion outlook • Reduced average • Over $3 Billion in cost of debt by ov
Slide 7: Optimizing returns to shareholders
Optimizing returns to shareholders Annual dividend yield: ~5% Annual dividend growth: Payout policy 65% - 75% of Free Cash Flow Total Shareholder Capital investment in our business: Return ~$3.5 B in 2013 Annual surplus cash deployment: ~$800 M for 2013
Slide 8: Executing on dividend growth model
Executing on dividend growth model FREE CASH FLOW (FCF) COMMON SHARE DIVIDEND $2.33 ~$2,600 M 60% $1,689 M 54% $1.46 2008 2013 2008 2013 • FCF CAGR of ~9% since 2008 • 9 dividend increases totalling 60% since Q4 2008 • 2013 target payout: ~69% of FCF • Dividend for 2013 up 16¢ to $2.33 per share Str
Slide 9: Attractive cash returns to shareholders
Attractive cash returns to shareholders 4-YEAR PERFORMANCE Capital Cumulative dividends Total return $47 appreciation (reinvested) to shareholders $25 $22 $13 $35 May 2009 May 2013 Total shareholder return of ~140% since May 2009
Slide 10: George Cope, President and Chief Executive Officer
GEORGE COPE President and Chief Executive Officer
Slide 11: Canada's largest communications company
Canada’s largest communications company Customer connections: 21 million Bell Fibe and Satellite TV Revenues: $20 billion Bell Mobility and Virgin Mobile Enterprise value: $56 billion Bell Internet Employees nationwide: 55,500 Bell Home Phone One of the most widely held Bell Business Markets stocks
Slide 12: Transformation of Bell's operating mix
Transformation of Bell’s operating mix OPERATING REVENUES $17.6B $14.9B In 2013, over 80% 32% Wireless of revenues will be 30% generated from 10% 12% Media Wireless, TV, 11% TV 29% Internet and Media 25% Internet/Wireline Data 31% Business 10% Consumer Wireline Voice 10% 2008 2012 Strategy reflects
Slide 13: Our goal: six strategic imperatives
6 Strategic Imperatives 1 Invest in Broadband Networks and Services Our goal 2 Accelerate Wireless To be recognized 3 Leverage Wireline Momentum by customers as Canada’s 4 Expand Media Leadership leading communications 5 Improve Customer Service company 6 Achieve a Competitive Cost Structure
Slide 14: Invest in Broadband Networks and Services
1 Invest in Broadband Networks and Services
Slide 15: BCE leads in next-generation technologies
BCE leads in next-generation technologies Fibe TV and Fibe Internet expansion Nimiq 6 launch Data hosting centres Integrated Broadcast Management LTE and HSPA+ System Investing more than $3.5 Billion each year
Slide 16: Canada's largest 4G LTE network
Canada’s largest 4G LTE network 4G LTE • Maintaining global wireless Up to 150 Mbps leadership 4G • Access in all major LTE 4G metropolitan centres 4G Up to 3G 75 Mbps Up to • Blazing fast speeds for Up to Up to 21 Mbps 42 Mbps more than 22 million 3 Mbps Canadians Launched 2005 Launched Launched 20
Slide 17: Investing in next-generation TV
Investing in next-generation TV New Fibe TV markets for 2013 Ontario Ottawa, Hamilton, Markham, Vaughan, Richmond Hill, Barrie, Milton, Newmarket, Stoney Creek, Aurora Québec South Shore Montréal, North Shore Montréal, Laval Growing Fibe TV footprint by 1 million homes in 2013
Slide 18: Accelerate Wireless
2 Accelerate Wireless 19
Slide 19: Broadest choice of mobile devices
Broadest choice of mobile devices BlackBerry Q10 Samsung Galaxy S4 Sony Xperia iPhone 5 HTC One 68% of Bell postpaid customers have smartphones
Slide 20: Undisputed Mobile TV leadership
Undisputed Mobile TV leadership Superphones and tablets with 30 live TV channels. More than 800,000 Bell Mobile TV subscribers
Slide 21: Market share leadership
Market share leadership Postpaid net adds share 2007 2012 18% 32% Bell 36% 40% 50% 24% Dramatic growth for Bell Mobility over past 5 years
Slide 22: RBC and Bell partner on mobile commerce
RBC and Bell partner on mobile commerce • Canada’s largest bank and Canada’s Just announced largest communications company working together to deliver smartphone payment capabilities • Fast, easy and secure transactions by RBC customers over Bell network with both credit and debit payments • Pilot p
Slide 23: Fact: Canada leads in LTE coverage
Fact: Canada leads in LTE coverage COUNTRY AND # OF CARRIERS OFFERING LTE POPULATION >60% OF POPULATION 33 Million 3 305 Million 2 “Canada has higher 61 Million 0 cumulative 4G LTE 82 Million 1 coverage than the U.S.” 64 Million 0 ~ Scotiabank, March 2013 60 Million 0 128 Million 3 142 Million 0
Slide 24: Fact: Canada is a leader in wireless capital investment
Fact: Canada is a leader in wireless capital investment CAPEX PER WIRELESS SUBSCRIBER 2012 $125 $100 $91 $41 $36 $29 $33 $24 Canadian incumbent carriers have invested $11 Billion of capital in wireless over last 5 years
Slide 25: Fact: Canadian wireless industry is highly competitive
Fact: Canadian wireless industry is highly competitive CUMULATIVE WIRELESS PRICE DECLINES (INCUMBENTS) – Q4 2012 # of Price Declines 120 80 Devices 40 Rate Plans Activation fees 0 Oct Nov Dec 100+ price declines among Canada’s top 3 wireless carriers
Slide 26: Fact: Canadian pricing less expensive than U.S.
Fact: Canadian pricing less expensive than U.S. Smartphone monthly plans 24% - 27% lower across all usage categories Scotiabank, March 2013. Canadian leadership in wireless technology, investment and affordability is a win for all consumers
Slide 27: Leverage Wireline Momentum
3 Leverage Wireline Momentum
Slide 28: Canada runs on Bell
Canada runs on Bell 96 of the top 100 Canadian companies leverage Bell’s leading-edge networks and technology
Slide 29: Data hosting and cloud computing leader
Data hosting and cloud computing leader Kamloops QC: 3 region ON: 8 AB: 6 Montréal Calgary BC: 3 region region Ottawa Total: 20 region Vancouver region Toronto region With 20 data centres, Bell now has the largest data hosting footprint in Canada
Slide 30: Better TV with Fibe
Better TV with Fibe • The best On Demand experience including the most HD content • Apps like Facebook, Twitter and TSN Xtra on your TV • Faster channel changes • Record 4 shows at once with just one PVR • Coming soon: Wireless TV! BCE surpassed 2.3 million TV customers in Q1 2013
Slide 31: Just $10 a month more with a Bell triple bundle
New unlimited Internet Just $10 a month more with a Bell triple bundle • 4 out of 5 Fibe TV customers take 3 Bell products
Slide 32: Expand Media Leadership
INVESTIGATIO DISCOVERY BOB |] NERC NETH cHar (CU Ng { has ial _™ fF NEWS @ vores ™re™ "i
Slide 33: CTV/Bell Media acquisition
CTV/Bell Media acquisition STRATEGIC RATIONALE A growth opportunity Accelerates 4-screen distribution platform Extends leadership in mobile video Hedge against increased program costs Levels playing field with integrated cablecos Shareholder value accretive Bell Media has dramatically ou
Slide 34: Uniting Astral and Bell Media
Uniting Astral and Bell Media • Astral is a leader in Québec content • Levels playing field with Québecor / Vidéotron • Adds ~$800M of revenue • Improves growth revenue mix for Bell Anticipated close Summer 2013 pending CRTC approval
Slide 35: Improve Customer Service
5 Improve Customer Service
Slide 36: Great progress on installation and repair
Great progress on installation and repair BEFORE... ... AND NOW Same Day/Next Day repair service <70% >94% On time 80% >98% Internet provisioning offering 8 days 2 days Inside support wait time up to 45 minutes 2 minutes Branded trucks Branding Limited and clothing Customer satisfaction with technic
Slide 37: Self-serve options on mobile
Self-serve options on mobile Check rate plan Add features Track usage Make payments Get help 6.1 Million mobile self-serve transactions since launch
Slide 38: Significant customer satisfaction improvement
Significant customer satisfaction improvement • Bell has improved on all major industry customer service surveys • 48% gain on Forrester1 survey score since 2010 Investments increasing customer satisfaction and lowering churn 1 North American Technographics® Telecom and Devices Online Survey, Q4 201
Slide 39: Achieve a Competitive Cost Structure
6 Achieve a Competitive Cost Structure
Slide 40: $1.5 Billion in cost reductions
Cost savings reinvested in strategic growth $1.5 Billion in $ cost reductions
Slide 41: Significant cost reductions
Significant cost reductions More than $170 Million in additional savings in 2013 • Streamlined dispatch and install processes • Minimized warehouse costs • Reduced payments to other carriers • Trimmed vendor fees • Energy, print and postage
Slide 42: Strategic Imperatives driving shareholder returns
Bell’s 6 Strategic Imperatives are driving significant shareholder returns
Slide 43: Strategy is rewarding shareholders
Strategy is rewarding shareholders TOTAL SHAREHOLDER RETURNS May 7, 2009 – May 8, 2013 140%
Slide 44: Bell Let's Talk
Bell Let's Talk
Slide 45: Bell Let's Talk mental health initiative
Bell Let’s Talk mental health initiative 1 2 3 4 Anti-stigma Care and Access Workplace Health Research Bell has committed more than $62 Million to mental health
Slide 46: Millions invested in every region of Canada
Millions invested in every region of Canada
Slide 47: Bell Let's Talk Day 2013 a great success
Bell Let’s Talk Day 2013 a great success Biggest day ever for mental health 96,266,266 LD calls, texts, tweets and Facebook shares $4,813,313.30 more donated to mental health programs
Slide 48: Clara's Big Ride
Clara's Big Ride Clara Hughes is calling on you to support Pel alk mental health in your community.
Slide 49: Clara's Big Ride
Clara’s Big Ride • An inspiring journey that expands the conversation on mental health • Unites Canadians coast to coast to coast • Follow Clara starting March 2014
Slide 50: Annual General Shareholder Meeting 2013
ANNUAL GENERAL SHAREHOLDER MEETING 2013