Slide 1: Q3 2003 Results
Q3 2003 RESULTS October 29, 2003 Michael Michael J. J. Sabia Sabia Siim Siim Vanaselja Vanaselja President President && CEO CEO Chief Chief Financial Financial Officer Officer 1
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. These statements address,
Slide 3: First Quarter for the New Organization
First Quarter for the New Organization ! Consumer Segment delivers strong performance … SMB showing improvement … Enterprise still facing challenges Pursuing Simplicity ! The Bundle from Bell combines wireless, Internet and ExpressVu … one point of contact, one bill … meeting customer needs ! Bell M
Slide 4: Strong Revenue and EBITDA in the Quarter
Strong Revenue and EBITDA in the Quarter Consolidated Q3 03 03/02 growth Revenue from continuing $4,883M $167M 3.5% businesses * EBITDA from continuing $1,943M $104M 5.7% businesses * ! Earnings growth results in EPS of 49¢ up 11% from 44¢ in Q3 02 ! Solid return on equity of 15.6% in the quarter !
Slide 5: Bell Revenue Growth Strengthens in Q3
Bell Revenue Growth Strengthens in Q3 $30M ($34M) $27M ↑ 5% ↓ 23% ($53M) $36M ↑ 21% ↓ 2% $91M ↑ 23% $4,306M ↑ 16% ↑ 2.3% $4,209M Q3 02 Wireless ExpressVu Consumer Retail Wholesale LD, Local, Q3 03 ISP Business Data Terminal & Data Other Bell revenues from continuing operations exclude in Q3 02 the r
Slide 6: Consumer Segment Shows Significant Growth
Consumer Segment Shows Significant Growth Wireless Revenues up 16% Consumer ISP Revenues up 21% ExpressVu Revenues up 23% 124K ExpressVu Net Adds Total DSL Net Adds 104K Wireless Net Adds Post-paid 93K 62K 45K 17K Pre-paid Q3 02 Q3 03 Q3 02 Q3 03 Q3 02 Q3 03 ! Contributing factors include … ! Simple
Slide 7: The Bundle from Bell responds to Customer Needs
The Bundle from Bell responds to Customer Needs % Households taking key services ! Bundle of 2 or 3 unregulated services ! Prices based on mid- range packages … meet 10.5% target group needs and 8.1% line up to competitors ! Significant opportunity to upsell 1% 1.7% ! Reduced churn and COA will offs
Slide 8: Strong Wireless Growth
Strong Wireless Growth Revenues and Subscribers 3,701K 15% 4,244K ! 124K net adds… 81% on $661M post-paid plans $570M 16% ! ARPU up 6% to $50 ! Minutes of use up 12% ! COA down 4% to $425 Q3 02 Q3 03 ! Churn maintained at Subscribers EBITDA 38.4% 38.0% industry-leading 1.4% ... $251M postpaid churn
Slide 9: SMB Segment Shows Improvement
SMB Segment Shows Improvement SMB revenue growth trajectory steadily improving … ! Strong DSL gains driving data growth … voice revenues steady ! Focus on cross-selling yielding 18% rise in revenue per call ! Improved sales coverage building funnel … attributable to continued focus on strategy ! Imp
Slide 10: Enterprise Segment Remains Challenging
Enterprise Segment Remains Challenging Enterprise Market softness continues … ! Growth in emerging data services, MNS and IPVPN offset by declines in legacy data services ! Access and toll services relatively stable … long distance pricing pressure partially offset by increasing minutes ! Several ma
Slide 11: Revenue Growth and Productivity Drive EBITDA
Revenue Growth and Productivity Drive EBITDA ! Launch of Infozone search ! $469M of productivity savings YTD … engine better equipping on track to meet year-end target call center reps with product info Bell Canada ! Emily continuing to reduce 42.9% misdirected calls and in 42.5% (1) EBITDA marg inc
Slide 12: Continued Strength at Bell Globemedia
Continued Strength at Bell Globemedia Revenues ! CTV maintains strong $296M ratings with 19 of top 20 $273M 8% shows this summer ! Canadian Idol is CTV’s most-watched Canadian produced series with an Q3 02 Q3 03 average audience of over 2M ! TV ad revenues up 22% … EBITDA 12.2% print advertising up
Slide 13: BCE Emergis Generating Profitability
BCE Emergis Generating Profitability Revenues $135M $124M $117M ! Revenue decline due to stronger Canadian dollar and lower revenues from Bell Canada distribution agreement Q3 02 Q2 03 Q3 03 e-Finance e-Health ! EBITDA increase of 50% over Q3 02 reflects cost EBITDA reduction program and $20M exitin
Slide 14: Solid EPS Performance
Solid EPS Performance $0.02 ($0.04) $0.10 ($0.04) $0.01 $0.49 $0.04 $0.40 Q3 02 2002 Growth Interest Amortization Pension Other Q3 03 Non- and expense expense expense recurring productivity Items (1) (1) Represents losses from discontinued operations and restructuring and other charges, net of gains
Slide 15: Reducing Full Year Capex Intensity
Reducing Full Year Capex Intensity ! Capex decline of $1,074M $104M in Q3 reflects $904M rigorous capital $800M management plan, $713M as well as reduced $601M demand ! Spending about 50% 18.6% 20.6% 16.4% of capital on growth 12.3% 14.4% sectors and productivity initiatives Q3 02 Q4 02 Q1 03 Q2 03
Slide 16: Improving Free Cash Flow and Net Debt
Improving Free Cash Flow and Net Debt Free Cash Flow (after capex) $1,206M ! Q3 03 reflects: $947M • Increased operating earnings and improvement $459M in working capital $216M • $104M reduction in capex Q3 02 Q3 03 • Cash proceeds of $180M from the dividend rate After Dividends Before Dividends swa
Slide 17: Outlook on Track
Outlook on Track BCE Guidance Full Year 2003 Revenues $19.3B - $20.0B EBITDA $7.4B - $7.8B EPS $1.85 - $1.95 The following items are likely to impact full year results: ! Stratos sale and treatment ! Consumer revenue growth as a discontinued and related COA expense operation ! Impact of ExpressVu !