Slide 1: Q2 2004 Results
Q2 2004 Results August 4, 2004 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: Key Achievements
Key Achievements 4 Migrated to new Bell Mobility billing platform Simplification 4 Announced Voluntary Employee Retirement plan 4 Introduced $5/month LD Bundle Innovation 4 Launched Managed IP Telephony for Enterprise Focus on 4 Completed Emergis sale Telecom 4 Strengthened capabilities in the West
Slide 4: Wireless Retools for Simplicity; DSL Books Solid Growth
Wireless Retools for Simplicity; DSL Books Solid Growth Wireless Revenues and Subscribers ISP Revenues and DSL Subscribers 12.2% 4,599K 29.8% 1,670K 4,099K 1,287K $698M $607M 15.0% 21.0% Q2 03 Q2 04 Q2 03 Q2 04 Subscribers DSL Subscribers 4 Successfully implemented new billing platform 4 DSL EOP sub
Slide 5: Consumer Continues Strong Growth
Consumer Continues Strong Growth Revenues 4 Growth engines driving 5.1% revenue increase 4 Video regaining momentum $1,858M i Activations up 33% $1,768M i ARS increased by $2 5.1% 4 Offsetting pressures in traditional wireline i Local access slightly decreased i LD erosion as expected 4 Almost 200K
Slide 6: Business Stabilizing while Accelerating Strategic Shift
Business Stabilizing while Accelerating Strategic Shift Enterprise Revenues 4 Strategic initiatives gaining traction i Customers embracing IP solutions – over 40% of data $1,452M revenues now IP-based $1,441M i VAS revenues growing over 20% with well over 50% (0.8)% penetration of large customer bas
Slide 7: Bell Globemedia and Telesat
Bell Globemedia and Telesat Bell Globemedia Revenues Operating Income ↑ 3.9% ↑ 19.4% $357M $371M $74M $62M 4 Successfully launched satellite ANIK F2 on July 17th Q2 03 Q2 04 Q2 03 Q2 04 i Largest ever commercial communications satellite 4 TV advertising grew 8% as CTV continued to lead the ratings 4
Slide 8: Galileo – Continued Progress
Galileo – Continued Progress Setting the IP Standard Moving to New Operating Model TARGET 100% traffic to IP 90% customer access >$1B in cost savings Business Consumer 4 Core network evolution 4 VPNE product 4 Savings identified at 55% redesign and detailed plan 4 DSL coverage at 81% completed devel
Slide 9: Galileo - Consumer Sources of Savings
Galileo - Consumer Sources of Savings …enabling a simpler and …resulting in a much Three pillars of more cost effective improved customer Consumer Galileo… company… experience Designing our 4 Simplified factory: 4 Fewer and shorter products with common set of customer service calls simplicity in min
Slide 10: Financial Review
Financial Review BCE BELL $M Q2'04 Y/Y Q2 '04 Y/Y Revenues $4,782 2.3% $4,172 1.0% EBITDA $1,953 3.1% $1,821 3.5% EBITDA Margin 40.8% 0.2 pts 43.6% 1.0 pts 4 Steady improvement in revenue growth vs. Q1 04 4 Increased EBITDA margin due to continued productivity focus and exit from less profitable con
Slide 11: Earnings Show Strong Underlying Growth
Earnings Show Strong Underlying Growth 4 Underlying performance of business units add healthy 10% or $0.05 to EPS i Consumer and Business delivering strong bottom-line performance i Wholesale revenue trajectory improving i Bell Globemedia continues strong performance 4 Net gains, restructuring and o
Slide 12: Free Cash Flow – Timing Impact
Free Cash Flow – Timing Impact Free Cash Flow (1) 4 FCF from operations impacted by billing platform introduction $568M i Temporary increase in accounts $346M receivables i Back on track by the Fall 4 Capex spend rate continues as planned Q2 03 Q2 04 i Acceleration of investment in (1) After Capex,
Slide 13: Outlook for Remainder of Year
Outlook for Remainder of Year 4 Deliver financial performance for 2004 – guidance unchanged i Continue revenue growth rate improvement i Expect higher activation expenses in latter half of the year – full-year EPS as planned i Complete billing migration – deliver FCF target 4 Continue to drive strat
Slide 14: Bell Canada
ae > % Bell Canada Bell is a proud sponsor of the Canadian Olympic team. Enterprises