Slide 1: Q1 2006 Results
Q1 2006 Results May 3, 2006 Bell Canada Enterprises
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, President & CEO
Michael Sabia President & CEO BCE
Slide 4: Q1 2006: Performance on track with further strategic progress
Q1 2006 Performance on track… …with further strategic progress 9 Maintained Bell EBITDA margins 9 . above 42% 9 Capex efficiency helps drive FCF improvement 9 Wireless continues to improve 9 CGI disposition quality of the customer base 9 Residential absorbing expected 9 BGM recapitalization increase
Slide 5: Building the New Bell
Building the New Bell Growth Services n Growth 9 Growth services continue to expand EOP Subscribers 8,430K 13% 9,505K Services base of new subscribers Q1'05 Q1'06 FTTN Nodes o Bandwidth/ 9 FTTN roll-out on track 2,327 9 Expansion of EVDO coverage 762 IP Platforms 9 Sympatico Unplugged launched Q1'05
Slide 6: George Cope, President & Chief Operating Officer
George Cope President & Chief Operating Officer Bell Canada
Slide 7: Bell Canada
Bell Canada ($M) Q1'06 Y/Y 4 Growth services add $230M of new revenues Revenues 4,270 1.4% EBITDA 1,818 0.2% 4 Legacy services pressured by NAS erosion and reprice EBITDA margin 42.6% (0.5) pts Capex 538 19.2% L 4 Customer service improved across the board Capex Intensity 12.6% 3.2 pts L 4 Focused o
Slide 8: Residential
Residential Revenues 4 Meeting competition in the market $1,856M 0.7% $1,869M i Secure multi-product households and high value customers i New promotional offers, winbacks and saves i Strong surgical response to Quebec environment Q1'05 Q1'06 4 Delivered significant customer service improvements i I
Slide 9: Video & High Speed Internet
Video & High Speed Internet Video High Speed Internet $277M Subscribers $221M 25% Revenues 2,266K 17% 1,936K 13.5% 1,739K 1,532K Subscribers Q1'05 Q1'06 Q1'05 Q1'06 4 EBITDA delivered $47M vs $4M in Q1'05 4 Continued subscriber growth of 17% y/y i Revenue growth 25% i Net adds 71K i ARPU up $5 y/y f
Slide 10: Business
Business Revenues 4 Mixed performance i Revenue growth tempered by pricing pressures $1,478M 2.1% $1,509M i Expense increase from pension, timing of migration costs and increased sales expenses i Capex savings from efficiencies and completion of Q1'05 Q1'06 Alberta SuperNet 4 EBITDA-CAPEX grew 15.6%
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 Complete integration of recent acquisitions in Business 4 Eff
Slide 12: Robert Odendaal, President, Bell Mobility & BDI
Robert Odendaal President, Bell Mobility & BDI
Slide 13: Wireless
Wireless 4 ARPU increase drives revenue growth of 12.8% y/y Wireless Revenues i Postpaid ARPU $61 up $4 y/y, blended $48 5,500 4,962 10.8% up $2 y/y i Data growth fuelled by EVDO, 10-4, Solo 12.8% $804M $713M 4 Gross adds up 17% y/y shows ongoing market traction i Strength from new handset line-up a
Slide 14: Siim Vanaselja, Chief Financial Officer
Siim Vanaselja Chief Financial Officer
Slide 15: Financial Review
Financial Review ($M) Q1'06 Y/Y 4 Bell Canada delivers EBITDA margin at 42.6% i Growth revenues and cost savings offset Revenues legacy erosion Bell 4,270 1.4% 4 BGM drives strong top line growth BGM 394 10.7% i Strong ratings and return of hockey drive Telesat 118 9.3% increased advertising BCE 4,7
Slide 16: EBITDA & Cost Reductions
EBITDA & Cost Reductions Bell Canada EBITDA ($M) 4 Stable EBITDA contribution 125 i Contribution of $70M from growth services and $125M cost savings 1,815 1,818 (93) i Offsetting $163M of legacy erosion and $29M of (29) other cost pressures 4 Q1 cost savings on track at $125M i $55M from procurement
Slide 17: Free Cash Flow & Capex
Free Cash Flow & Capex BCE FCF 4 FCF improved $124M y/y i Capex reductions drive $131M improvement Q1'05 Q1'06 i Q1 FCF typically low due to timing of payments 4 Bell capex reduced by 19.2% y/y ($48M) i Capital intensity of 12.6% in Q1 i Investments will ramp up in line with guidance ($172M) 4 Capex
Slide 18: Q2 Priorities and 2006 Financial Outlook
Q2 Priorities 4 Continue delivery of cost savings program 4 Respond to competitive environment in all markets in a disciplined manner 4 Continue progress on announced transactions from asset review program 2006 Financial Outlook Bell Canada Revenue growth 1% to 3% Cost savings $700M to $900M EBITDA
Slide 19: Bell Canada Enterprises
ca Bell Canada Enterprises