annual general shareholder meeting 2014 · 2016-05-04 · bell media . conventional tv specialty...
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2014 ANNUAL GENERAL SHAREHOLDER MEETING
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 strategic priorities, BCE’s 2014 annualized common share dividend and common share dividend policy, our networks deployment plans, and other statements that are not historical facts, are forward-looking.
Forward-looking statements, by their very nature, are subject to inherent risks and uncertainties and are based on several assumptions, both general and specific, which give rise to the possibility that actual results or events could differ materially from our expectations expressed in or implied by such forward-looking statements. As a result, we cannot guarantee that any forward-looking statement will materialize and we caution you against relying on any of these forward-looking statements. For a description of such assumptions and risks, please consult BCE’s 2013 Annual MD&A, dated March 6, 2014, as updated in BCE’s 2014 First Quarter MD&A dated May 5, 2014, and BCE’s news release dated May 6, 2014 announcing its financial results for the first quarter of 2014, all filed with the Canadian provincial securities regulatory authorities (available at sedar.com) and with the U.S. Securities and Exchange Commission (available at sec.gov), and which are also available on BCE's website at BCE.ca.
The forward-looking statements contained in the attached presentation describe our expectations at May 6, 2014 and, accordingly, are subject to change after such date. Except as may be required by Canadian securities laws, we do not undertake any obligation to update or revise any forward-looking statements contained in the attached presentation, whether as a result of new information, future events or otherwise.
The terms “EBITDA”, “EBITDA margin”, “free cash flow”, “Adjusted net earnings” and “Adjusted EPS” are non-GAAP financial measures and do not have any standardized meaning under IFRS. Therefore, they are unlikely to be comparable to similar measures presented by other issuers. Refer to the section “Non-GAAP Financial Measures” in BCE’s 2014 First Quarter MD&A for more details.
SIIM VANASELJA Executive Vice-President and Chief Financial Officer
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
Financial targets for 2014 2014 Guidance Target
Revenue growth 2% - 4%
EBITDA growth 3% - 5%
Capital Intensity 16% - 17%
Adjusted EPS Growth
$3.10 - $3.20 4% - 7%
Free Cash Flow Growth
$2.65B - $2.75B 3% - 7%
Q1 2014 financial performance ($ Millions) Q1 2014 Y/Y Revenue Service Product
$4,538 $4,188
$350
4.4% 5.0%
(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 year in Q1
BCE’s capital markets model
Annual dividend yield: ~5%
Annual dividend growth: Payout policy 65% - 75% of Free Cash Flow
Capital investment in our business: ~$3.5 B in 2014
Deployment of FCF after dividends: ~$800 M for 2014
Optimizing BCE Total
Shareholder Return
Strong capital structure
• $3B of new issues in 2013
• Average debt term: 9.5 years
• Average after-tax cost of debt lowered to 3.5%
• $3B+ liquidity
• Easy access to capital
• $800M+ annual free cash flow after dividends
• Capital structure aligned to investment-grade ratings
• Significant debt capacity within current ratings
Attractive long-term debt maturity profile
Strong liquidity position
Strong credit ratings with stable outlook
Healthy balance sheet underpins execution of business plan, driving profitable growth and dividend growth
Strong track record of delivering dividend growth
• Raised common dividend 6% for 2014 to $2.47 per share
• Maintaining FCF payout at mid-point of 65% - 75% policy range
$1.46 $1.62
Q4 2008 Q4 2010
$1.83
Q4 2009
$2.07
Q4 2011
$2.27
Q4 2012 Q4 2013
$2.33
2014
$2.47
Annualized Common Dividend per Share
69%
Stable, consistent common share dividend increases
Comparative Total Shareholder Returns
13.6%
S&P/TSX Composite Index
S&P/TSX Telecom Index
13.0% 11.4%
141%
S&P/TSX Composite Index
S&P/TSX Telecom Index
76% 96%
1-Year Total Return (2013) 5-Year Total Return (2009-2013)
Market-leading and above industry Total Shareholder Returns for BCE
GEORGE COPE President and Chief Executive Officer
12
13
just totally different
Same company ... just totally different
Home Phone
Business Voice
TV Media Internet/Wireline Data
Wireless
7% 8% 12%
15% 25%
33%
Home Phone will generate just 7% of revenue in 2014
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
Canada’s most recognized brands Bell Media
Conventional TV
Specialty and Pay TV
Radio Out of Home
Sports Bell Wireless
Bell Wireline
Ranked in the top 5 most valuable brands
Bell is the #1 telecom brand in Canada
Source: Brand Finance, February 2014
Strong history and commitment to Ottawa
$750 M Revenue
86% Fibe TV
capable homes
#1 TV and Radio
audience share
$150 M Invested in
Fibe network
$1.4 M+ Invested in
mental health
12 year Sens broadcast
agreement
Bell is Ottawa’s largest private sector employer
42 Retail
locations
6 Strategic Imperatives
6 Accelerate Wireless
2 Achieve a Competitive Cost Structure
3 Invest in Broadband Networks & Services
1 Improve Customer Service
4 Leverage Wireline Momentum
Our goal To be
recognized by customers
as Canada’s leading
communications company
5 Expand Media Leadership
Improve Customer Service
1
Bell in 2008 8 days to repair
Limited handsets
Closed Sundays, evenings and holidays
Fewer stores
Last in wireless market share
Poor customer satisfaction
Multiple brands
$600 Million invested in service
just got better
Bell today
Redesigned stores
3 new Canadian call centres in the last year
In-home installation Mobile self-serve
Bell service investments are paying off
98% On time for
service appointments (2013)
31 M Mobile self-serve customer visits
(2013)
41% Improvement in
Customer Experience Index (2010-2013 Forrester Research, Inc.)
40% Increase in mobility
customer satisfaction (2011-2013)
25% Reduction in
call centre volumes (2011-2013)
92% Rate Bell technicians
as excellent (2013)
Ongoing execution of our customer service imperative
Achieve a Competitive Cost Structure
2
Business challenge: Declining use of Home Phone ...
-$1.6 B
2007 2013
Voice Revenue
Requires disciplined focus on operational efficiency
Wireline EBITDA Margin – 2013
37.6%
29.2%
22.2%
$1.7 B
Cost savings
Productivity
Working capital improvement
Invest in Broadband Networks & Services
3
BCE leads in next-generation technologies
Data hosting centres
Fibe TV and Fibe Internet expansion
Nimiq 6 Satellite
LTE and HSPA+ Integrated Broadcast Management System
Invested more than $16 Billion in new technology in past 5 years
Canada’s largest 4G LTE and Wi-Fi network
• 98+% of Canadians have 4G
• Most LTE coverage ̶ 81%
• 4,000+ Wi-Fi locations
700 MHz spectrum takes LTE further
Wider network reach
Rural and northern
expansion
Strong in-building
connections
Ample spectrum to meet speed & capacity demands
Total Spectrum
3,791M MHz/POPs
700 MHz 480M MHz/POPs
2.3 GHz 2.5 GHz AWS PCS Cellular
2500 MHz 2100 MHz
1900 MHz 850 MHz
700 MHz
Leverage Wireline Momentum
4
New Fibe TV markets coming in 2014
Ottawa was Bell’s largest Fibe launch in 2013
Ontario Kingston Kitchener / Waterloo London St. Catharines / Niagara
Québec Joliette, Gatineau Sherbrooke Vaudreuil / Valleyfield
Fibe TV reaches 70% of homes in 2014 Fibe TV-ready locations
2011 2012 2014 2013
5 M
0.5
4.3M 3.3M
2 M
Fibe TV subscribers surpass 500,000 in Q1 2014
Fibe TV innovation driving growth
Fibe Remote app
Rated 4.5 out of 5
★★★★★
Wireless receiver
Best On Demand experience
IPTV is driving subscriber growth
2010 Q1 2014
2,156K
2,529K 724K
62K
* Cogeco, Eastlink (est.), Rogers and Videotron (est.)
Cable TV Subscribers*
Voice Revenue
BCE TV Subscribers IPTV
Non IPTV
+373K
2010 Q1 2014
-282K
BCE total TV subscribers have grown to more than 2.5 M in Q1 2014
95 of Canada’s top 100 companies powered by Bell
Retail
Government
Banks
Industry
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
Expand Media Leadership
5
In the average week, we reach …
Unmatched choice for audiences across the country
22.8 million General viewers
14.5 million Sports viewers
11.6 million People
24.3 million Entertainment
viewers
17.4 million Radio
7.6 million News
viewers
13.4 million Online UV
(per month)
A leader in original Canadian programming
The Amazing Race Canada is the most-watched Canadian TV show on record
The leader in news
Taking TSN to the next level
More choice 1 2
3 4 5
Accelerate Wireless
6
Wireless market share Postpaid net adds share
13%
Bell 45% 42%
Bell 12%
52%
36%
2007 Q4 2013
Dramatic wireless growth
Apple iPhone 5S
Best devices and coverage Samsung Galaxy S5 HTC One M8 Apple iPad Mini
Google Nexus 5
Samsung Galaxy Note 3
Sony Xperia Z2
74% of Bell postpaid customers have smartphones
Undisputed Mobile TV leadership Superphones and tablets with 30 live TV channels.
Amazing Race Canada
MasterChef Canada
Orphan Black
1.33 Million Bell Mobile TV subscribers
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
Canadian wireless leads the world
A leader in wireless capital investment
$92 $94
$41 $47 $38 $31
$65
$137
$44
Canadian incumbent carriers have invested $11 Billion of capital in wireless over last 5 years
Capex per Wireless Subscriber 2012-2013 Average
Source: Bank of America Merrill Lynch, Global Wireless Matrix April 2014.
Canada is a global leader in mobile speeds
60 55
44
30 29 28 25 23 22 21 17 16 15 13
9 8 8 7 6
Source: OECD Communications 2013.
Average Mobile Download Speeds (Mb/s)
Bell’s average monthly bills are lower than Verizon’s
$61.63 $57.90
Monthly Wireless Bills: Customer Average ($Cdn/month)
Q1 2014 average revenue per user
Affordable roaming rates • Reduced US roaming costs by
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
Just announced Japan!
Introduced Travel Passes for voice, text and data
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
Bell Let’s Talk mental health initiative
A $67 Million program built on 4 action pillars
2 Care & Access
3 Workplace Health
4 Research
1 Anti-Stigma
Investment Canada-wide
Bell Let’s Talk Day keeps growing
2011 66 million
calls and texts
$3.3 million for mental
health
2012 79 million calls, texts and tweets
$3.9 million for mental
health
2013 96 million calls, texts,
tweets and shares
$4.8 million for mental
health
2014 110 million calls, texts,
tweets and shares
$5.5 million for mental health
START March 14 Toronto
Inuvik May 6 5,116 kms
St. Thomas Chatham
Windsor Sarnia
Kitchener Whitby
Gananoque
Sherbrooke
Saint John
Moncton
Halifax
Hamilton London
Peterborough
Cornwall
Montréal Québec City
Les Escoumins
Rimouski
Edmundston
Fredericton
Summerside
Charlottetown
New Glasgow Port Hawkesbury
Channel-Port aux Basques
Stephenville
Trois- Rivières
Saguenay
Matane
Truro
Corner Brook
Woodstock
Springdale
Grand Falls-Windsor
Gander
Clarenville
Bay Roberts
St. John’s
Hopedale Nain
Happy Valley-Goose Bay
Kuujjuaq
Iqaluit
Yellowknife
Oshawa Kingston
Les Bergeronnes
Baie -Comeau
Rankin Inlet
Victoria
Nanaimo
Vancouver
Hope
Merritt
Kelowna
Grand Forks
Nelson Creston
Cranbrook
Crowsnest Pass
Claresholm
Calgary
Edmonton
Vegreville
Lloydminster
Saskatchewan
Regina Osoyoos
Red Deer North
Battleford
Moose Jaw Weyburn
Brandon Winnipeg Dryden
Carlyle
Kenora
Upsala
Terrace Bay
Sault Ste. Marie
Blind River
Marathon
Wawa
Sudbury
Deep River
Arnprior
Thunder Bay
North Bay
Fort McPherson
Eagle Plains Engineer Creek Tombstone Mountain
Dawson City
Whitehorse
END July 1 Ottawa 12,000 kms
2014 ANNUAL GENERAL SHAREHOLDER MEETING