Slide 1: Q4 2004 Results
Q4 2004 Results February 2, 2005 Michael J. Sabia President & CEO Siim Vanaselja Chief Financial Officer
Slide 2: Safe Harbor Notice
Safe Harbor Notice Certain statements made in the attached presentation are forward-looking statements and are subject to important risks, uncertainties and assumptions. The results or events predicted in these statements may differ materially from actual results or events. The forward-looking state
Slide 3: Q4: delivered the year
Q4: delivered the year Q4 2004 Key milestones achieved... Significant strategic progress 3 Revenue growth rate improving 3 Customer experience 3 5,000 employees leave the company – Galileo implementation underway 3 Solid subscriber growth in wireless, 3 Bandwidth you can count on DSL and video – Pio
Slide 4: Consumer: sustained growth; enhancing customer loyalty
Consumer: sustained growth; enhancing customer loyalty Revenues 4 Revenue growth of 4.2% for 2004, achieving 2.3% in Q4 $7,203M $7,502M i Q4 growth impacted by holiday 4.2% promotions and billing migration i Line losses relatively stable with modest improvement in y/y trend $1,868M 2.3% $1,911M i LD
Slide 5: Wireless: growth, despite billing migration issues
Wireless: growth, despite billing migration issues Revenues $2,818M 4 Activations increased in Q4... $2,461M i Attractive "Grab & Go" offer 14.5% i EOP subscriber growth of 12% $658M 12.8% $742M 4 ...while maintaining a focus on profitability... i ARPU stable at $50 2003 2004 i EBITDA margin of 36.2
Slide 6: DSL & Video: continued progress in the broadband home
DSL & Video: continued progress in the broadband home ISP Revenues Up 20% Video Revenues Up 12% 358K Video Net Adds 350K 116K DSL Net Adds (2.2)% 83K 39.8% 86K 5.8% 91K 35K 22.9% 43K 2003 2004 2003 2004 Q4 Total Year Q4 Total Year 4 Subscribers reached 1.8M, a 24% 4 Continued momentum, reaching 1.5M
Slide 7: Business: moving to a new model for growth
Business: moving to a new model for growth Revenues 4 Focus on new services delivers improved revenues for 3rd consecutive quarter $5,827M $5,851M i 1.3% in Q4 0.4% 4 Sustained profitability drive delivers significant improvement for the year despite Q4 impacts: i Completion of Hydro Quebec contract
Slide 8: BGM and Telesat: a very strong year
BGM and Telesat: a very strong year Bell Globemedia Telesat Revenues Operating Income Revenues Operating Income ↑ 4.2% ↑ 43.7% ↑ 4.9% ↑ 13.7% $1,420M $1,363M $362M $345M $240M $167M $141M $124M 2003 2004 2003 2004 2003 2004 2003 2004 4 Revenues grew 8% in Q4 4 Revenues grew 3% in Q4 4 Advertising gr
Slide 9: Financial Review: Solid 2004 Performance
Financial Review: Solid 2004 Performance BCE Q4'04 Q4'04/Q4'03 2004 2004/2003 Revenues $4,989M 3.5% $19,193M 2.4% EBITDA $1,831M (0.9)% $7,564M 2.1% EPS(1) $0.45 7.1% $2.02 6.3% 4 Ongoing revenue growth performance for 4th quarter in a row 4 Delivered $1.1B of FCF in 2004, with Bell Capital Intensit
Slide 10: Bell Canada: steady contribution from Operations
Bell Canada: steady contribution from Operations Bell Revenue Growth (%) Bell Q4 EBITDA Impacts ($M) 1.2 1.3 1,782 45 1.0 0.6 1,731 13 20 Billing 25 Q4 2003 Conversion Aliant Strike COA 1,679 Q1 Q2 Q3 Q4 Business Q4'03 Operations Q4'04 (1.8)* EBITDA Contribution EBITDA 4 Increasing revenue growth ra
Slide 11: Sustained earnings, despite challenges
Sustained earnings, despite challenges 4 Q4 EPS(1) growth of 7% 4 Achieves EPS(1) of $2.02 for 2004, and increase of 6.3% over 2003 i Primarily driven by growth in EBITDA and reduced interest expense Earnings per Share $0.04 $0.01 $0.07 ($0.02) ($0.07) $0.42 $0.45 $0.45 Q4'03 EBITDA Ontario Tax Othe
Slide 12: Free Cash Flow – Target achieved
Free Cash Flow – Target achieved Free Cash Flow before restructuring payments (1) 4 FCF exceeds 2004 target of $1B $1,589M • Tax refund i Achieved mostly from recurring • DRP savings $1,092M sources • Swap unwind • Insurance • Insurance • MTS i While increasing capital spending for growth businesses
Slide 13: Outlook for 2005
Outlook for 2005 4 Groundwork in Q4 2004 to provide strong start to 2005 i Revenue growth rates will benefit from announced price increases i Customer billing issues largely resolved i Earnings to benefit from restructuring program 4 Drive key initiatives i Implement Galileo to enhance customer expe
Slide 14: rae >
rae > Bell Canada Enterprises