Slide 1: Q1 2004 Results
Q1 2004 Results May 5, 2004 Michael J. Sabia President & CEO Siim Vanaselja Chief Financial Officer Patrick Pichette Executive Vice President
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: Executing on Our Priorities
Executing on Our Priorities Driving Growth Engines i Strong revenue and subscriber increases for Wireless, DSL and Video i Margin improvement across the board Simplifying services i Bundle sales above expectations i SMB sales force revectored i Continued shift to IP services in Enterprise Setting th
Slide 4: Once Again, Wireless Delivers Leading Performance
Once Again, Wireless Delivers Leading Performance Revenues and Subscribers 4 Strong Q1 net adds of 92k 4,504K 3,968K 13.5% i 31% more than Q1 03 $651M i Continued strategy to spread $551M 18.1% acquisitions evenly throughout the year 4 Further reduced churn to 1.3% Q1 03 Subscribers Q1 04 i 1.1% on
Slide 5: Continued Momentum for Winning the Broadband Home
Continued Momentum for Winning the Broadband Home ISP Revenues up 18% Video Revenues up 17% 115K 96K 16K DSL Net Adds Video Net Adds 19.8% 13K 23.1% Q1 03 Q1 04 Q1 03 Q1 04 4 Strongest quarterly net adds 4 Increased ARS by $4 to $48 since 2001 4 Over 80% of new customers 4 Sympatico value-added serv
Slide 6: Consumer Segment Showing Strong Growth
Consumer Segment Showing Strong Growth Revenues 4 Wireless, DSL and Video contribute to revenue growth of 5.6% ... $1,825M 4 ... offsetting pressures in traditional wireline $1,729M i Local access essentially flat 5.6% i LD under pressure - responding with new targeted competitive offers 4 Bundle re
Slide 7: Business Segment Strengthening
Business Segment Strengthening Revenues 4Enterprise initiatives gaining traction iContinued shift towards IP services 8 Over 30% of Data revenues now IP-based $1,419M $1,435M 8 IP Connectivity growth up over 35% 1.1% 8 IP network reach extended to over 50 countries through Infonet partnership iSigni
Slide 8: Bell Globemedia and BCE Emergis
Bell Globemedia and BCE Emergis Bell Globemedia BCE Emergis Revenues Operating Income Revenues Operating Income ↑ 2.1% ↑ 111% ↓ 11.4% ↑ 58.3% $335M $342M $79M $70M $40M $19M ($12M) ($5M) Q1 03 Q1 04 Q1 03 Q1 04 Q1 03 Q1 04 Q1 03 Q1 04 4 TV advertising grew 10% as CTV 4 Completed sale of US e-health
Slide 9: Financial Review
Financial Review BCE BELL $M Q1 '04 Y/Y Q1 '04 Y/Y Revenues $4,697 0.4% $4,106 0.6% EBITDA $1,845 4.1% $1,755 3.7% EBITDA Margin 39.3% 1.4 pts 42.7% 1.2 pts 4 Q1 revenues reflect return to y/y growth 4 Increased EBITDA margin due to continued productivity focus and exit from less profitable contract
Slide 10: Bell's New Segmented Reporting
Bell's New Segmented Reporting 4 Enhanced financial information systems provide better insight i Reporting both on a product and a segmented basis 4 Improves decision-making i Allocation of capital where returns are highest i Faster response to changes in market conditions Bell Canada Revenues $16M
Slide 11: Cost Savings – Driving Margin Improvement
Cost Savings – Driving Margin Improvement BCE Operating Expenses 4 Bell Canada drives overall reduction in $2,903M $2,852M operating expenses ... 1.8% i Improved salaries and benefits 8 Benefits of xwave restructuring 8 While investing in sales channel growth in SMB and Consumer i Reduced cost of re
Slide 12: Free Cash Flow is Strong
Free Cash Flow is Strong Free Cash Flow (1) 4 Improved recurring Free Cash Flow by $511M over $200M $468M i Driven by strong operating performance and working capital $468M management $231M i Contributed to improvement in net debt position Q1 03 Q1 04 Recurring Free Cash Flow 4 Capex spend rate on t
Slide 13: Outlook for Remainder of Year
Outlook for Remainder of Year 4 Deliver financial performance for 2004 i Expect revenue growth to accelerate through balance of year i Guidance unchanged 4 Push strategic priorities i Deliver simplicity in Consumer and Business i Achieve our new operating model through Galileo implementation i Conti
Slide 14: Galileo – Momentum Achieved
Galileo – Momentum Achieved n Significant Progress Be Be the the IPIP leader leader •• 100% 100% core core traffic traffic to to MPLS MPLS IP IP 4 Core network roll-out at 50% •• 90% 90% customers customers withwith access access 4 DSL coverage at 80%, speed upgrade completed to IP to IP 4 Continued
Slide 15: Business Blueprint – Savings through Simplicity
Business Blueprint – Savings through Simplicity Principles Process Improvements of New 9 9 Collapse Collapse multiple multiple functions functions for: for: Model Sales •• Building complex quotes Building complex quotes 9 Data migration Sales and and •• Verifying Verifying network network availabili
Slide 16: Bell Canada Enterprises
ram > Bell Canada Enterprises