Slide 1: Q2 2002 Results
Q2 2002 RESULTS July 24, 2002 Michael J. Sabia Siim Vanaselja President President & & CEO CEO Chief Chief Financial Financial Officer Officer 1
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements. There are risks that actual results will differ materially from those contemplated by such forward-looking statements. For additional information on such risks, please consult the Safe Harbor Notice Concerning Forward-Looking Statemen
Slide 3: Q2 Highlights
Q2 Highlights n Focused execution leads to EBITDA growth of 6.6% Ø Substantial productivity gains of $365M YTD Ø Capex efficiency of 18% YTD Ø Revenue growth of 3.6% exceeding peers n Balance sheet significantly updated Ø Positions BCE to move forward 3
Slide 4: Financial Results
Financial Results Consolidated Q2 02 Q2 02 / Q2 01 YTD 02 / YTD 01 Revenue Revenue $4,940M $4,940M 3.6% 3.6% 3.9% 3.9% EBITDA EBITDA $1,945M $1,945M 6.6% 6.6% 6.2% 6.2% EPS EPS $0.49 $0.49 6.5% 6.5% 5.7% 5.7% (before (before non non recurring recurring items) items) Increasing profitability and mode
Slide 5: Industry Comparison
Industry Comparison Revenue Growth EBITDA Growth 6.6% 5.7% 4.1% 3.6% (3.9%) (3.9%) (1.1%) (1.6%) (0.6%) (1.0%) (3.6%) (1.4%) (4.5%) (1.3%) BCE BCE BCE BCE Verizon Verizon Verizon Verizon SBC SBC Bell Bell South South SBC SBC Bell Bell South South Q1 Q1 Q2 Q2 Q1 Q1 Q2 Q2 Outperforming Outperforming U
Slide 6: Bell Canada – Revenue Snapshot
Bell Canada – Revenue Snapshot $M $M Q2 Q2 02 02 Q2 Q2 02/01 02/01 YTD YTD 02/01 02/01 Total Total 4,368 4,368 3% 3% 3% 3% Wireless Wireless 542 542 21% 21% 21% 21% Data Data 947 947 8% 8% 11% 11% DTH DTH 155 155 35% 35% 37% 37% Local Local and and LD LD 2,176 2,176 3% 3% 1% 1% New New services serv
Slide 7: Growth in Connections
Growth in Connections Growth Growth in in EOP EOP Subscribers Subscribers Satisfactory Satisfactory (% (% increase increase Q2 Q2 02 02 vs vs Q2 Q2 01) 01) performance Q2 Q2 performance given: given: Net Net Adds Adds DSL DSL 72% ++ 43K 72% 43K •• Seasonality Seasonality •• Price Price increase incr
Slide 8: Bell Globemedia
Bell Globemedia Digital Digital channels channels and and Expense Expense controls controls drive drive acquisitions acquisitions increase increase revenues revenues EBITDA EBITDA margin margin $326M $326M $297M $297M Production Production & & Sundry é 24% Sundry é 24% $58M $58M Subscriber é 11% Sub
Slide 9: BCE Emergis
BCE Emergis Q2 Q2 Revenue Revenue growth growth in in line line with with Return Return to to positive positive revised revised outlook outlook EBITDA EBITDA $11M $11M $142M $142M $132M $132M Q1 Q1 02 02 Q2 Q2 02 02 ($20M) ($20M) Q1 Q1 02 02 Q2 Q2 02 02 Completed restructuring allows focus on future
Slide 10: Productivity becomes a business discipline
Productivity becomes a business discipline Productivity Productivity gains gains Acquisition costs $365M •• Customer Customer self-serve self-serve $365M Servicing •• Web Web applications applications for for front front line line employees employees $140M $140M Support •• Corporate Corporate Center
Slide 11: Improving Cash Flows
Improving Cash Flows Capex Capex efficiency efficiency Free Free Cash Cash Flow Flow before before monetizations monetizations up up by by $1.5B $1.5B $2,769M $2,769M YTD YTD 2001 2001 YTD YTD 2002 2002 $1,793M $1,793M 29.4% 29.4% ($462M) ($462M) 18.3% 18.3% YTD YTD 2001 2001 YTD YTD 2002 2002 ($1,9
Slide 12: Derisking the Balance Sheet
Derisking the Balance Sheet Dec. Dec. 31 31 June June 30 30 2001 2001 2002 2002 Key Key Contributors: Contributors: •• Net Net debt debt $20.0B $20.0B $15.1B $15.1B •• Deconsolidation Deconsolidation of of Teleglobe Teleglobe and and BCI BCI •• Net Net debt debt to to 2.76x 2.76x 2.03x 2.03x trailin
Slide 13: Asset writedowns & other charges
Asset writedowns & other charges Goodwill Writedown Non-recurring items n Impacts retained earnings n n Impacts Q2 net earnings n Teleglobe $7.5B Discontinued Discontinued operations operations ($295M) ($295M) Bell Globemedia $0.6B Restructuring Restructuring & & ($216M) ($216M) Other Other charges
Slide 14: Looking Ahead
Looking Ahead Consolidated Q3 2002 Full Year 2002 Revenues Revenues $4.8B $4.8B -- $5.1B $5.1B $19.5B $19.5B -- $20.5B $20.5B EBITDA EBITDA $1.8B $1.8B -- $2.0B $2.0B $ 7.5B 7.5B -- $ 8.0B 8.0B EPS EPS $0.45 $0.45 -- $0.48 $0.48 $1.80 $1.80 -- $1.90 $1.90 (before (before non non recurring recurrin
Slide 15: Safe Harbour Notice
Safe Harbour Notice Certain statements made in this presentation constitute forward-looking statements and are subject to important risks and uncertainties which are difficult to predict and assumptions which may prove to be inaccurate. The results or events predicted in these statements may differ