Slide 1: Q3 2006 Results
Q3 2006 Results November 1, 2006
Slide 2: Safe Harbour Notice
Safe Harbour Notice Certain statements made in the attached presentations are forward-looking statements (“FLS”) and are subject to important risks, uncertainties and assumptions. Such statements address, among others: financial guidance relating to revenue, cost reductions, earnings per share, free
Slide 3: Michael Sabia
Michael Sabia President & CEO BCE & Bell Canada
Slide 4: Q3 2006 Execution Focus
Q3 2006 9 Focus on profitable revenues 9 Continued progress in wireless Execution 9 Cost savings ramp up further 9 EBITDA growth rates continue to improve 9 Wind-down of BCE Focus 9 Bell Aliant consolidation of Bell Nordiq minority 9 Telesat monetization underway Strong base for 2007 4
Slide 5: Building the New Bell
Building the New Bell % Revenues from n Growth 9 ARPU increases across all growth businesses Growth Services 44% 48% Services 9 Legacy erosion stabilizing Q3'05 Q3'06 FTTN Nodes o Bandwidth/ 9 FTTN to 400 more neighbourhoods 1,854 3,310 IP Platforms 9 EVDO coverage over 50% of population Q3'05 Q3'06
Slide 6: George Cope
George Cope President & Chief Operating Officer Bell Canada
Slide 7: Bell Canada Revenues
Bell Canada Revenues 4 Local and access subscriber erosion Q3'06 Q3'06 lower q/q Revenues $M Y/Y i NAS losses 71k vs 134k in Q2 Local & Access 1,292 (5.8)% i Winback ARPU about $10 higher than ARPU of lost customer Long Distance 458 (10.7)% i Revenues impacted $20M y/y by deferral account decision W
Slide 8: Wireless
Wireless Metrics Improving ARPU COA $53 $432 $51 $415 4 Revenue growth 14.3% 3 4 ARPU up $2 – postpaid up $3 to $66 3 4 COA down $17 3 4 Postpaid churn 1.1% down 0.4pts 3 Q3'05 Q3'06 Q3'05 Q3'06 Postpaid Postpaid 4 Postpaid net adds up 44k 3 Churn Net Adds 1.5% 94k 4 EBITDA flow-through 42% 2 1.1% 5
Slide 9: Video & High Speed Internet
Video & High Speed Internet Video High Speed Internet Subscribers Subscribers 2,403K 1,788K 13% 7% 2,134K 1,677K Q3'05 Q3'06 Q3'05 Q3'06 4 EBITDA $42M Q3’06 4 Solid quarter, improved performance i $155M YTD 4 Subscriber growth increasing i EBITDA flow-through 79% i Net adds 90K for the quarter 4 ARP
Slide 10: Business
Business Q3 y/y 4 SMB books another strong quarter i Growth in wireline voice Revenues 1.5% i VAS/VCIO revenues up 23% y/y i Investment in distribution EBITDA 7.7% 4 Enterprise continues to drive shift in revenue mix Capex 17.6% L i Signed $670M Desjardins contract i Reduced focus on equipment sales
Slide 11: Operational Focus
Operational Focus 4 Profitable revenue growth 4 Improve EBITDA flow-through on growth products 4 Curtail NAS losses i Executional focus on winbacks and retention i Focused regional marketing strategies 4 Slow erosion of traditional services i Minimize reprice 4 Drive out costs 4 Efficient and target
Slide 12: Siim Vanaselja
Siim Vanaselja Chief Financial Officer
Slide 13: Financial Review
Financial Review 4 Bell Canada EBITDA margin 42.3% ($M) Q3'06 Y/Y i Up 0.6pts y/y Revenues i Continued focus on profitability Bell 4,339 0.4% Telesat 113 0.9% 4 Telesat continues strong underlying BCE 4,422 0.3% performance EBITDA i Q3'05 boosted by equipment sales Bell 1,835 1.8% associated with th
Slide 14: EBITDA & Cost Reductions
EBITDA & Cost Reductions Bell Canada EBITDA ($M) 4 Solid EBITDA growth 1,835 i Increased cost savings to achieve y/y 1.8% 1,802 absolute expense reductions i Offsetting product mix and regulatory pressures 4 Cost reductions of $204M up 19% vs Q2 Q3'05 Q3'06 i $108M in Procurement savings in contact
Slide 15: Free Cash Flow & Capex
Free Cash Flow & Capex BCE FCF 4 BCE FCF $502M YTD up $382M vs last year i Q3 FCF achieved $449M $502M 4 Bell capital intensity of 15.7% YTD i Spend rates increasing to meet full-year $120M guidance Q3 YTD'05 Q3 YTD'06 4 Capex savings in Q3 vs last year largely through: i Large billing and efficienc
Slide 16: Q4 Priorities and 2006 Financial Outlook
Q4 Priorities 4 Deliver the year - with foundations set for improved 2007 performance 4 Execute towards wind-down of BCE 2006 Financial Outlook Bell Canada Revenue growth 1% to 3% Cost savings $700M to $900M EBITDA margin Stable Capital intensity 16% to 17% BCE EPS1 $1.80 to $1.90 FCF $700M to $900M
Slide 17: Bell Canada
ca Bell Canada Enterprises