Slide 1: Q4 2003 Results
Q4 2003 RESULTS February 4, 2004 Michael Michael J. J. Sabia Sabia Siim Siim Vanaselja Vanaselja President President && CEO CEO Chief Chief Financial Financial Officer 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: Significant Operating Progress
Significant Operating Progress 2003 2004 Implementing IP Reorganized into ! Trials of Hosted VoIP and customer segments Consumer VoIP ! Redesign of internal systems and access technology ! Simplicity and Service ! Stop-sell on identified product ! Efficiency lines ! Creation and delivery of suite of
Slide 4: Continued Financial Discipline in 2003
Continued Financial Discipline in 2003 2003 Actuals Guidance met 2003 Highlights Revenues $19,056M " ! 2.3%(1) Revenue growth EBITDA $ 7,426M " ! 6.3%(1) EBITDA growth EPS $1.90 " ! 15.9%(2) increase in EPS Capex intensity 16.7% " ! 2.7% point improvement in capex intensity Free Cash Flow $1,626M "
Slide 5: Strong Year for Consumer Segment
Strong Year for Consumer Segment Wireless Revenues up 15% Consumer ISP Revenues up 21% ExpressVu Revenues up 19% ExpressVu Net Adds 514K Wireless Net Adds 452K DSL Net Adds 353K 372K 215K 235K 189K 108K 91K 83K 83K Q4 Q4 Q4 Q4 Q4 35K Q4 2002 2003 2002 1 2003 2 2002 1 2003 2 ! Significant consumer re
Slide 6: Wireless EBITDA Increases 52% in Q4
Wireless EBITDA Increases 52% in Q4 Revenues and Subscribers 4,412K ! 189K net adds in Q4 … 514K for full year 3,898K expected to result in market share increase 13% $674M ! Decision to acquire subscribers more $581M evenly through the year will contribute to 16% increased revenues in 2004 ! ARPU up
Slide 7: SMB Segment Turnaround Continues
SMB Segment Turnaround Continues Turnaround started … ! Improved revenue growth in the second half of the year ! Strengthened sales force coverage ! Strong demand for DSL data products ! More effective cross-selling skills resulting in 14% higher revenue per call in Q4 ! On-going toll pricing initia
Slide 8: Enterprise and Wholesale Revenues Declined in Q4
Enterprise and Wholesale Revenues Declined in Q4 Q4 Pressure from market … further impacted by decisions to conditions … exit certain product lines ! Emerging data and value-added ! Exit electrical cabling business and services continued to grow curtail other low-margin Gateways ! Legacy voice and d
Slide 9: Bell Globemedia and BCE Emergis
Bell Globemedia and BCE Emergis Bell Globemedia BCE Emergis Revenues ↑ 6% EBITDA ↑ 29% Revenues ↓ 9% EBITDA ↑ 152% $1,363M $1,290M $346M $316M $233M $180M $15M ($29M) 2002 2003 2002 2003 2002 2003 2002 2003 ! Q4 revenue decline of 1% reflects slow ! Sale of US e-Health activities announced print adv
Slide 10: Financial Review: Solid EBITDA Growth
Financial Review: Solid EBITDA Growth Q4 03/(1) 2003/ (1) Consolidated Q4 03 Q4 02 2003 2002 Revenue $4,910M (0.9%) $19,056M 2.3% EBITDA $1,854M 6.1% $7,426M 6.3% ! Q4 revenue performance reflects Consumer segment strength … offset by anticipated Enterprise and Wholesale softness and decision to exi
Slide 11: Productivity Contributes to EBITDA Improvement
Productivity Contributes to EBITDA Improvement ! $636M of total productivity savings with $604M at Bell … year-end target achieved Bell Canada EBITDA Margin 2002 2003 Increase Bell Q4 EBITDA margin up 2.4 Q4 38.0% 40.4% 2.4 pts percentage points FY 41.4% 41.9% 0.5 pts year over year due to financial
Slide 12: Solid EPS Performance
Solid EPS Performance $0.06 ($0.17) $0.13 ($0.03) $0.42 $0.41 Q4 03 EPS before YPG Stratos US e-health Restructuring Q4 03 net investment net gain net gain net loss on & other EPS gains/losses, or on disposal disposal charges impairment or restructuring charges All amounts are after tax 12
Slide 13: Free Cash Flow Improves $2.5B in 2003
Free Cash Flow Improves $2.5B in 2003 ! Q4 03 reflects: Free Cash Flow (after capex) $451M • Improvement in operating performance, working $192M capital, cash tax savings and elimination of dividends paid ($89M) to SBC ! For the full year: ($360M) Q4 02 Q4 03 • Free Cash Flow of $1.6B After Dividend
Slide 14: Outlook for 2004
Outlook for 2004 ! Consumer focus: The Bell Bundle, growing 3+ product homes, integrated customer service ! SMB continuing to improve service and expanding on technology skill sets ! Enterprise migrating customers to IP-based services and expanding value-added service offerings 2004 Financial Outloo