Bce Inc. · TSX:BCE
Bce — Goldman Sachs Communacopia XVIII Conference 2009
31 slides from Bce's conference presentation, Sep 17, 2009
Slide 1: Goldman Sachs Communacopia XVIII Conference
Goldman Sachs Communacopia XVIII Conference September 17, 2009 George Cope President & Chief Executive Officer
Slide 2: Safe harbour notice
Safe harbour notice This presentation contains forward-looking statements with respect to items such as revenue, EBITDA, earnings per share, adjusted earnings per share, average revenue per user, free cash flow, capital intensity, dividends and other statements that are not historical facts. Several
Slide 3: Company overview
Company overview Canada’s largest communications company 22 million customers coast to coast Revenues of ~$18 billion Enterprise value ~$34 billion 50,000 employees nationwide Service and product portfolio HD leader Bell TV Bell Mobility and Virgin Mobile High speed Bell Internet Bel
Slide 4: Focused on key drivers of value
Focused on key drivers of value Our Goal 5 Strategic Imperatives 1 Achieve a competitive cost structure To be recognized by customers as 2 Improve customer service Canada’s leading communications 3 Leverage wireline momentum company 4 Accelerate wireless 5 Invest in broadband network & services 4
Slide 5: Achieve a competitive cost structure
Strategic imperative 1 : Achieve a competitive cost structure
Slide 6: Streamlined organizational structure
Streamlined organizational structure Bell wireline labour force Streamlined organization at Bell Executive team from 17 to 12 3,500 30% reduction in SVP and VP positions Removed 3 layers of management Reduced 8% of workforce and 15% of 32,500 management Implemented Pay-for-performance cult
Slide 7: Driving productivity
Driving productivity Efficiency and contracts Insourcing, outsourcing and offshoring Field force productivity Non-customer affecting − 2,000 new Bell trucks Call centre/IT/back office − GPS-equipped for better efficiency Call centres consolidated from 33 to 27 with Renegotiated contracts w
Slide 8: Disciplined capital management
Disciplined capital management Capital intensity Rigorous capital governance in place -- single company priorities list YTD’09 Capital Intensity on track at 16.0% ~21% 19.3% 16.5 16.2% 16.4% % 15%-16% 15.3% 13.5%-14.6% $2.5B 2008 2009E 2008 2009E* 2008 2009E* 2008 2009E* Source: Company guidance
Slide 9: Improve customer service
Strategic imperative 2 : Improve customer service
Slide 10: New service model
New service model Full in-home service Better in-store experience Quality focus Online self-serve 10
Slide 11: Service just got better
Service just got better Service enhancements Better results Same Day Next Day 94% completion rate Customers paying for premium install service Express Install Solid momentum with new orders increasing monthly Offered to all new broadband subscribers Full Install Targetting more than 300k i
Slide 12: Measurable call centre improvement
Measurable call centre improvement Same Day / Next Day Fewer repair calls Call volumes drop 94% -17% 17% fewer repair calls per year 86% Customer satisfaction increases Internet satisfaction up ~20% y/y Key service desks 2007 YTD'09 YTD'08 YTD'09 move onshore Repair call satisfaction ~1 millio
Slide 13: Leverage wireline momentum
Strategic imperative 3 : Leverage wireline momentum
Slide 14: Slowing telephone line losses
Slowing telephone line losses Fewer local line losses Significant improvement Erosion rate 20% fewer residential NAS losses y/y 6.2% Residential Bundles contributing to improved Business 5.4% trend in residential NAS erosion Ongoing service improvement and winbacks High business line losses
Slide 15: Bell TV continues to outperform
Bell TV continues to outperform Retail ARPU EBITDA Strong revenue and EBITDA growth +7.0% $91M Revenue up 9.3% y/y $68.98 $64.47 +93.6% EBITDA up 93.6% y/y $47M Industry-leading churn of 1.1% Net adds of 20k in Q2’09 – best result Q2'08 Q2'09 Q2'08 Q2'09 since Q4’06 Approx. 1.9M TV subscri
Slide 16: Accelerated fibre broadband investment
Accelerated fibre broadband investment 2.7M homes passed at end of Q2’09 FTTN architecture provides sufficient By 2012: bandwidth to meet application needs 5.0M homes With bonding, FTTN will deliver 40 Mbps of continuous speed to customer homes By 2013: 4.6M homes $1B+ invested 2009 2010 2011
Slide 17: Best-in-class wireline EBITDA performance
Best-in-class wireline EBITDA performance Wireline EBITDA growth Telco peer performance benchmark: Q2’09 1.7% -1.8% * -14.9% -18.0% * TELUS EBITDA has been adjusted to exclude restructuring costs for comparability. Leading our North American peers 17
Slide 18: Accelerate wireless
Strategic imperative 4 : Accelerate wireless
Slide 19: Wireless performance
Wireless performance Gross adds Postpaid net adds • Net adds and ARPU reflect impact of weak economy and competitive pressures 770k 139k – ARPU decline due to lower usage and roaming 742k 99k – Higher postpaid churn contributed to lower net adds • However, Q2’09 ended on strong trajectory – June ’09
Slide 20: Wireless EBITDA growth in difficult environment
Wireless EBITDA growth in difficult environment Wireless EBITDA growth Four consecutive quarters of leading EBITDA growth versus peers Reflects disciplined customer acquisition and retention spending 15.8% 13.6% 10.8% 6.8% 6.0% 5.9% 5.9% 1.9% 1.0% 0.7% 0.6% 0.2% Q2’08 Q3’08 Q4’08 Q1’09 Q2’09 Q2’
Slide 21: Distribution game changer
Distribution game changer Exclusive carrier The Source points of distribution 747 retail stores nationally 7-year track record of profitability 1,500 Access to desirable traffic: more than 80M shoppers annually 747 Bell wireless at The Source Jan. 2010 ~1100 ~800 750 TELUS / Koodo Rogers / F
Slide 22: Acquisition of Virgin Mobile's 50% stake
Acquisition of Virgin Mobile’s 50% stake Acquisition completed July 1st Leverage Virgin’s significant brand awareness – Continued global marketing support from Virgin Group – Long-term extension of brand licensing agreement Maximizes Bell’s flanker brand flexibility Leverage distribution – S
Slide 23: Next generation wireless network
Next generation wireless network Global HSPA standard Path to next generation data services Maximum choice in handsets International roaming More ubiquitous rural coverage Bell/TELUS agreement lowers capital requirement and accelerates time-to-market Launching network by early 2010 23
Slide 24: Invest in broadband networks & services
Strategic imperative 5 : Invest in broadband networks & services
Slide 25: Building platforms for the future
Building platforms for the future Wireless Broadband HSPA ready by early 2010 Accelerating FTTN deployment Accelerated time to market Advanced by one year Joint build reduces capital ~$700M cumulative investment requirement by 50% over next 3 years Global standard and path to next 175 co
Slide 26: Capital structure
Capital structure
Slide 27: Capital structure model
Capital structure model Key Financial Principles Maintain strong Solid investment grade metrics 1 credit profile Ample access to short- and long-term capital Ensure ample Strong, reliable cash flow generation 2 liquidity Attractive debt maturity profile Maximize total Target dividend payou
Slide 28: Capital structure model Execution
Capital structure model 209 Execution Maintain strong Ratings confirmed (June 23) 1 credit profile Credit ratios maintained comfortably within policy ranges Repaid $1.35B of 2009 debt maturities – Further $150M to be repaid in Dec’09 with cash on hand Ensure ample 2 liquidity Issued $1B of d
Slide 29: Delivering on dividend growth model
Delivering on dividend growth model Returning cash to shareholders Dividend increase (Annualized common dividend per share) • 5% dividend increase effective with October 15th payment +5% • 2nd increase in 2009 $1.62 • Reflects favourable YTD earnings +5% and cash flow performance $1.54 $1.46 Dividen
Slide 30: Looking forward
Looking forward Continue to drive 5 strategic imperatives Maintain strong focus on operational execution – Step-up in revenues – Continue driving out costs – Keep HSPA rollout and FTTN deployment on track Execute on wireless strategic initiatives – Launch of HSPA network in early 2010 – Introd
Slide 31: today
today just got better Bell
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