Slide 1: Annual General Shareholder Meeting 2014
ANNUAL GENERAL SHAREHOLDER MEETING 2014
Slide 2: Cautionary statement concerning forward-looking statements
Cautionary statement concerning forward-looking statements Certain statements made in the attached presentation, including, but not limited to, our 2014 financial guidance (including revenues, EBITDA, capital intensity, Adjusted EPS and free cash flow), our business outlook, objectives, plans and st
Slide 3: Siim Vanaselja, EVP and Chief Financial Officer
SIIM VANASELJA Executive Vice-President and Chief Financial Officer
Slide 4: 2013 financial summary
2013 financial summary Actual Target Result Revenue growth 2.6% 2% - 4% EBITDA growth 3.4% 3% - 5% Capital Intensity 16.6% 16% - 17% Adjusted EPS $2.99 $2.97 - $3.03 Free Cash Flow growth 5.9% 5% - 9% Achieved all 2013 financial guidance targets
Slide 5: Financial targets for 2014
Financial targets for 2014 2014 Guidance Target Revenue growth 2% - 4% EBITDA growth 3% - 5% Capital Intensity 16% - 17% Adjusted EPS $3.10 - $3.20 Growth 4% - 7% Free Cash Flow $2.65B - $2.75B Growth 3% - 7%
Slide 6: Q1 2014 financial performance
Q1 2014 financial performance ($ Millions) Q1 2014 Y/Y Revenue $4,538 4.4% Service $4,188 5.0% Product $350 (3.1%) EBITDA $1,708 4.1% EBITDA margin 37.6% (0.1 pts) Adjusted net earnings $626 4.5% Adjusted EPS $0.81 5.2% Free Cash Flow $262 6.1% Reconfirming 2014 targets with a solid start to the yea
Slide 7: BCE's capital markets model
BCE’s capital markets model Annual dividend yield: ~5% Annual dividend growth: Optimizing Payout policy 65% - 75% of Free Cash Flow BCE Total Shareholder Capital investment in our business: ~$3.5 B in 2014 Return Deployment of FCF after dividends: ~$800 M for 2014
Slide 8: Strong capital structure
Strong capital structure Attractive long-term Strong liquidity Strong credit ratings debt maturity profile position with stable outlook • $3B of new issues in • $3B+ liquidity • Capital structure aligned 2013 to investment-grade • Easy access to capital • Average debt term: ratings • $800M+ annual f
Slide 9: Strong track record of delivering dividend growth
Strong track record of delivering dividend growth Annualized Common Dividend per Share • Raised common dividend 6% for 69% $2.47 $2.33 2014 to $2.47 per $2.27 share $2.07 $1.83 $1.62 • Maintaining FCF $1.46 payout at mid-point of 65% - 75% policy range Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013
Slide 10: Comparative Total Shareholder Returns
Comparative Total Shareholder Returns 1-Year Total Return (2013) 5-Year Total Return (2009-2013) 141% 13.6% 96% 13.0% 76% 11.4% S&P/TSX S&P/TSX S&P/TSX S&P/TSX Composite Index Telecom Index Composite Index Telecom Index Market-leading and above industry Total Shareholder Returns for BCE
Slide 11: George Cope, President and CEO
GEORGE COPE President and Chief Executive Officer
Slide 12: We're the same company...
We're the same companu...
Slide 13: just totally different
just totally different Bell
Slide 14: Same company ... just totally different
Same company ... just totally different 33% 25% 15% 12% 8% 7% Home Business TV Media Internet/Wireline Wireless Phone Voice Data Home Phone will generate just 7% of revenue in 2014
Slide 15: Canada's largest communications company
Canada’s largest communications company Customer connections: 21+ Million Revenues: $20+ Billion Enterprise value: $61 Billion Nationwide team: 55,500 One of the most widely held stocks in Canada
Slide 16: Canada's most recognized brands
Canada’s most recognized brands Bell Bell Bell Media Sports Wireless Wireline Conventional Specialty Radio Out of TV and Pay TV Home
Slide 17: Ranked in the top 5 most valuable brands
Ranked in the top 5 most valuable brands Bell is the #1 telecom brand in Canada Source: Brand Finance, February 2014
Slide 18: Strong history and commitment to Ottawa
Strong history and commitment to Ottawa $750 M 86% #1 $150 M Fibe TV TV and Radio Invested in Revenue capable homes audience share Fibe network $1.4 M+ 12 year 42 Invested in Sens broadcast Retail mental health agreement locations Bell is Ottawa’s largest private sector employer
Slide 19: Our goal: Strategic Imperatives
6 Strategic Imperatives Our goal 1 Improve Customer Service To be 2 Achieve a Competitive Cost Structure recognized by 3 Invest in Broadband Networks & Services customers as Canada’s 4 Leverage Wireline Momentum leading 5 Expand Media Leadership communications company 6 Accelerate Wireless
Slide 20: Improve Customer Service
1 Improve Customer Service
Slide 21: Bell in 2008
Bell in 2008 8 days to repair Multiple brands Closed Sundays, evenings and holidays Fewer stores Limited handsets Last in wireless market share Poor customer satisfaction
Slide 22: $600 Million invested in service just got better
$600 Million invested in service just got better
Slide 23: Bell today
Bell today 3 new Canadian call centres in the last year Redesigned stores In-home installation Mobile self-serve
Slide 24: Bell service investments are paying off
Bell service investments are paying off 98% 92% 41% On time for Rate Bell technicians Improvement in service appointments as excellent Customer Experience Index (2013) (2013) (2010-2013 Forrester Research, Inc.) 40% 31 M 25% Increase in mobility Mobile self-serve Reduction in customer satisfaction c
Slide 25: Achieve a Competitive Cost Structure
2 Achieve a Competitive Cost Structure
Slide 26: Business challenge: Declining use of Home Phone
Business challenge: Declining use of Home Phone ... Voice Revenue -$1.6 B 2007 2013
Slide 27: Requires disciplined focus on operational efficiency
Requires disciplined focus on operational efficiency Wireline EBITDA Margin – 2013 Cost savings 37.6% Productivity 29.2% Working capital improvement 22.2% $1.7 B
Slide 28: Invest in Broadband Networks & Services
3 Invest in Broadband Networks & Services
Slide 29: BCE leads in next-generation technologies
BCE leads in next-generation technologies Fibe TV and Fibe Internet expansion Nimiq 6 Satellite Data hosting centres Integrated Broadcast Management System LTE and HSPA+ Invested more than $16 Billion in new technology in past 5 years
Slide 30: Canada's largest 4G LTE and Wi-Fi network
Canada’s largest 4G LTE and Wi-Fi network • 98+% of Canadians have 4G • Most LTE coverage ̶ 81% • 4,000+ Wi-Fi locations
Slide 31: 700 MHz spectrum takes LTE further
700 MHz spectrum takes LTE further Wider network reach Rural and northern expansion Strong in-building connections
Slide 32: Ample spectrum to meet speed & capacity demands
Ample spectrum to meet speed & capacity demands 700 MHz 850 MHz 1900 MHz 480M 2100 MHz MHz/POPs 700 MHz 2500 MHz 3,791M MHz/POPs 2.3 GHz 2.5 GHz AWS PCS Cellular Total Spectrum
Slide 33: Leverage Wireline Momentum
4 Leverage Wireline Momentum
Slide 34: Ottawa was Bell's largest Fibe launch in 2013
New Fibe TV markets coming in 2014 Ontario Québec Kingston Joliette, Gatineau Kitchener / Waterloo Sherbrooke London Vaudreuil / Valleyfield St. Catharines / Niagara Ottawa was Bell’s largest Fibe launch in 2013
Slide 35: Fibe TV reaches 70% of homes in 2014
Fibe TV reaches 70% of homes in 2014 Fibe TV-ready locations 5M 4.3M 3.3M 2M 0.5 2011 2012 2013 2014 Fibe TV subscribers surpass 500,000 in Q1 2014
Slide 36: Fibe TV innovation driving growth
Fibe TV innovation driving growth Best On Demand experience Rated 4.5 out of 5 ★★★★★ Wireless receiver Fibe Remote app
Slide 37: IPTV is driving subscriber growth
Voice Revenue IPTV is driving subscriber growth BCE TV Subscribers Cable TV Subscribers* IPTV 2,529K Non IPTV 724K -282K +373K 2,156K 62K 2010 Q1 2014 2010 Q1 2014 * Cogeco, Eastlink (est.), Rogers and Videotron (est.) BCE total TV subscribers have grown to more than 2.5 M in Q1 2014
Slide 38: 95 of Canada's top 100 companies powered by Bell
95 of Canada’s top 100 companies powered by Bell Industry Retail Banks Government
Slide 39: Canada's data hosting leader
Canada’s data hosting leader 25 data centres coast to coast Data centre and cloud computing services are driving growth in Bell Business Markets 39
Slide 40: Expand Media Leadership
Expand Media Leadership Bell Medic Bell Media = Bell Media BellMedia| Bel] Media Bell media Bell Media Bell Media Belli | te eee ™» - Bellies Bell media
Slide 41: In the average week, we reach …
In the average week, we reach … 22.8 million 7.6 million 14.5 million 24.3 million 17.4 million 13.4 million 11.6 million General News Sports Entertainment Radio Online UV People viewers viewers viewers viewers (per month) Unmatched choice for audiences across the country
Slide 42: A leader in original Canadian programming
A leader in original Canadian programming The Amazing Race Canada is the most-watched Canadian TV show on record
Slide 43: The leader in news
ORE INFORMATION ABOUT THE BNN NEW LOOK GO TO BN 0.17 CANADIAN PACIFIC RAILWAY (CP) 59.03 'W BNN INC (CVE) 34.01 W 0.98 ENRON (ER) 45.19 A 0.14
Slide 44: More choice
Taking TSN to the next level More choice 1 2 3 5 4
Slide 45: Accelerate Wireless
6 Accelerate Wireless
Slide 46: Wireless market share
Wireless market share Postpaid net adds share 2007 Q4 2013 Bell 12% 36% Bell 45% 42% 52% 13% Dramatic wireless growth
Slide 47: Best devices and coverage
Best devices and coverage Samsung Galaxy S5 HTC One M8 Apple iPad Mini Samsung Galaxy Note 3 Google Nexus 5 Sony Xperia Z2 74% of Bell postpaid customers have smartphones Apple iPhone 5S
Slide 48: Undisputed Mobile TV leadership
Undisputed Mobile TV leadership Superphones and tablets with 30 live TV channels. Amazing Race MasterChef Orphan Black Canada Canada 1.33 Million Bell Mobile TV subscribers
Slide 49: RBC mobile payments with Bell
RBC mobile payments with Bell • Smartphone is the new wallet • Tap and pay quickly, easily and securely • Same security as plastic cards All major banks expected to adopt technology in the next year
Slide 50: Canadian wireless leads the world
Canadian wireless leads the world
Slide 51: A leader in wireless capital investment
A leader in wireless capital investment Capex per Wireless Subscriber 2012-2013 Average $137 $94 $92 $65 $47 $44 $41 $38 $31 Canadian incumbent carriers have invested $11 Billion of capital in wireless over last 5 years Source: Bank of America Merrill Lynch, Global Wireless Matrix April 2014.
Slide 52: Canada is a global leader in mobile speeds
Canada is a global leader in mobile speeds Average Mobile Download Speeds (Mb/s) 60 55 44 30 29 28 25 23 22 21 17 16 15 13 9 8 8 7 6 Source: OECD Communications 2013.
Slide 53: Bell's average monthly bills are lower than Verizon's
Bell’s average monthly bills are lower than Verizon’s Monthly Wireless Bills: Customer Average ($Cdn/month) $61.63 $57.90 Q1 2014 average revenue per user
Slide 54: Affordable roaming rates
Affordable roaming rates • Reduced US roaming costs by Just announced Japan! 50% in September • Sign up when you arrive using mobile self-serve app • Rates also reduced in the Caribbean, Mexico, Europe, China, Australia and more Introduced Travel Passes for voice, text and data
Slide 55: An unmatched commitment to wireless growth
An unmatched commitment to wireless growth • Billions invested every year • World-leading wireless networks • Competitive consumer pricing • Fastest speeds • National coverage • Affordable roaming worldwide Canada’s wireless industry rivals the best in the world
Slide 56: Bell Let's Talk
| at Bell Let's Talk
Slide 57: Bell Let's Talk mental health initiative
Bell Let’s Talk mental health initiative 1 2 3 4 Anti-Stigma Care & Access Workplace Health Research A $67 Million program built on 4 action pillars
Slide 58: Investment Canada-wide
Investment Canada-wide vHEALng CANADIAN MENTA\ » é on HEALTH ASSOCIATION a % ASSOCIATION CANADIENNE POUR LA SANTE MENTALE KidsHelpPhoneca a Mental Illness 1800 668 6868 Awareness Week Kids Help Phone iene GR courcilforFamilies VA Tortivationtic Laing Houne McCreary y Centre Society / Sketch Bell Let
Slide 59: Bell Let's Talk Day keeps growing
Bell Let’s Talk Day keeps growing 2014 2013 2012 110 million 2011 96 million calls, texts, calls, texts, 79 million tweets 66 million calls, texts tweets and shares calls and texts and tweets and shares $5.5 million $3.3 million $3.9 million $4.8 million for mental health for mental for mental for m
Slide 60: Bell Let's Talk Clara's Big Ride route map
Inuvik May 6 5,116 kms Fort McPherson Eagle Plains Engineer Creek Tombstone Iqaluit Mountain Dawson City Grand Falls-Windsor Clarenville Rankin Inlet Whitehorse Les Escoumins Kuujjuaq Nain Hopedale Gander Yellowknife Les Bergeronnes Rimouski Bay Blind River Happy Valley-Goose Bay Roberts Matane Spri
Slide 61: Annual General Shareholder Meeting 2014
ANNUAL GENERAL SHAREHOLDER MEETING 2014