Slide 1: Q2 2006 Results
Q2 2006 Results August 2, 2006
Slide 2: Safe Harbour Notice
Safe Harbour Notice Certain statements made in the attached presentations are forward-looking statements (“FLS”) and are subject to important risks, uncertainties and assumptions. Such statements address, among others: financial guidance relating to revenue, cost reductions, earnings per share, free
Slide 3: Michael Sabia, Chief Executive Officer
Michael Sabia Chief Executive Officer BCE & Bell Canada
Slide 4: Q2 2006 Steady Progress
Q2 2006 Steady Steady 9 Maintained Bell EBITDA margins above 43% financials financials 9 Capex efficiency helps drive FCF improvement 9 Greater marketing and pricing precision Improving Improving 9 Enhanced customer experience execution execution 9 Churn solid, ARPUs up across all products 9 Net add
Slide 5: Building the New Bell
Building the New Bell % Revenues from n Growth 9 Growth revenues to surpass traditional in 2H06 Growth Services 44% 48% Services 9 Slowing revenue erosion rates of traditional services Q2'05 Q2'06 FTTN Nodes o Bandwidth/ 9 FTTN and EVDO expansion 1,355 2,892 IP Platforms 9 Sympatico Optimax launched
Slide 6: George Cope, President & Chief Operating Officer
George Cope President & Chief Operating Officer Bell Canada
Slide 7: Bell Canada
Bell Canada Q2'06 Q2'06 Q1'06 4 Local and access stabilizing Revenues $M Y/Y% Y/Y% i NAS erosion 3.3% vs 3.2% in Q1 Local & Access 1,312 (4.1) (4.2) 4 Long distance decline mitigated by price increases Long Distance 456 (12.0) (15.2) 4 Wireless progress on postpaid Wireless 857 11.2 12.8 4 Data impa
Slide 8: Residential
Residential Residential Q2 Y/Y 4 Pace of erosion of traditional businesses improving Revenues 0.5% i NAS erosion increased modestly to 6.3% from EBITDA (1.3)% 5.9% in Q1 i Upselling improved SmartTouch performance Capex 12.7% L i LD erosion slowed through pricing actions EBITDA-CAPEX 8.2% 4 Focus on
Slide 9: Video & High Speed Internet
Video & High Speed Internet Video High Speed Internet $286M 21% Revenues Subscribers $236M ARPU 1,758K 14% 2,313 +$2 $44 $42 1,595K 2,028 10% Subscribers Q2'05 Q2'06 Q2'05 Q2'06 Q2'05 Q2'06 4 EBITDA $66M vs $6M in Q2'05 4 Subscriber growth picked up through the quarter to reach 14% y/y 4 ARPU up $4
Slide 10: Business
Business 4 Improved performance vs Q1 Business Q2 Y/Y i Revenue growth stable vs Q1 despite continued pricing pressures and contract timing Revenues 2.1% i EBITDA growth y/y vs 2.5% erosion in Q1 EBITDA 1.0% i Capex savings from efficiencies and completion of Alberta SuperNet Capex 21.1% L 4 EBITDA-
Slide 11: Operational Focus
Operational Focus 4 Improve EBITDA flow-through on growth products 4 Curtail NAS losses i Executional focus on winbacks and retention i Surgical Quebec response 4 Slow erosion of traditional services i Minimize reprice 4 Drive out costs 4 Efficient and targeted capex investment i Deliver improved FC
Slide 12: Siim Vanaselja, Chief Financial Officer
Siim Vanaselja Chief Financial Officer BCE & Bell Canada
Slide 13: Wireless
Wireless Wireless Revenues 4 Revenue growth 11.2% y/y on ARPU increase 9.4% 5,590 i Postpaid ARPU $63 up $2 y/y, blended $51 5,108 up $1 y/y 11.2% $857M $771M i Data growth fuelled by EVDO 4 Postpaid net adds 106k, total 90k i Focused on higher ARPU subscribers i Disciplined handset pricing Q2'05 Q2
Slide 14: Financial Review
Financial Review 4 BCE delivers revenue growth and solid EBITDA vs strong Q2'05 ($M) Q2'06 Y/Y 4 Bell Canada EBITDA margin stable at 43.2% i Profitability focus and cost savings offset market Revenues pressures Bell 4,296 0.9% i EBITDA-Capex growth of 9.9% Telesat 120 (12.4)% BGM 431 8.0% 4 Telesat
Slide 15: EBITDA & Cost Reductions
EBITDA & Cost Reductions Bell Canada EBITDA ($M) 4 Another quarter of solid EBITDA while 172 managing market transition i Product mix effects of $118M vs $93M in Q1 1,857 1,839 (118) i Legacy erosion offset by profitability focus (36) on all revenue lines as well as cost reductions 4 Cost reductions
Slide 16: Free Cash Flow & Capex
Free Cash Flow & Capex BCE FCF 4 BCE FCF improved $87M YTD vs last year i Capex reductions drive $161M YTD improvement $16M 4 Q2 FCF achieved $64M 4 Bell capex reduced by 13.7% y/y i Capital intensity of 15.2% YTD ($71M) i Spend rates to increase in line with full-year YTD'05 YTD'06 guidance 4 Capex
Slide 17: Q3 Priorities and 2006 Financial Outlook
Q3 Priorities 4 Ongoing focus on operational execution 4 Ramp-up of cost savings program 4 Disciplined response to competitive environment 4 On track with 2006 guidance i Expect high end of EPS range 2006 Financial Outlook Bell Canada Revenue growth 1% to 3% Cost savings $700M to $900M EBITDA margin
Slide 18: Bell Canada
ca Bell Canada Enterprises