Creating & Delivering Value · Delivering Value Creating & Sustainably. 2 ShareShare...
Transcript of Creating & Delivering Value · Delivering Value Creating & Sustainably. 2 ShareShare...
1
This presentation contains certain forward-looking statements and there are risks that actual results may
differ materially from those contemplated by these forward-looking statements. Additional information on these risks can be found in the Company’s filings
with the Canadian securities commissions.
The Company disclaims any intention or obligation to update or revise any
forward looking statements, whether as a result of new information, future events or otherwise.
This presentation contains certain forward-looking statements and there are risks that actual results may
differ materially from those contemplated by these forward-looking statements. Additional information on these risks can be found in the Company’s filings
with the Canadian securities commissions.
The Company disclaims any intention or obligation to update or revise any
forward looking statements, whether as a result of new information, future events or otherwise.
Delivering ValueDelivering ValueCreating &Creating &
SustainablySustainably
2
Share Performance*Share Performance*
* Assumes $100 invested Jan 7/97. Includes price appreciation and dividends reinvested.**Compound Annual Growth Rate — Jan 7/1997 to Dec. 31/2004.* Assumes $100 invested Jan 7/97. Includes price appreciation and dividends reinvested.**Compound Annual Growth Rate — Jan 7/1997 to Dec. 31/2004.
CAGR 22%**
CAGR 22%**
100140180220260300340380420460500
100140180220260300340380420460500
January1997 1997 1998 1999 2000 2001 2002 2003 2004
January1997 1997 1998 1999 2000 2001 2002 2003 2004
MTSMTS S&P/TSX Comp.S&P/TSX Comp.
One CompanyOne Company
Many StrengthsMany Strengths
3
One Company Many StrengthsOne Company Many Strengths
Range of OpportunitiesRange of Opportunities
Depth of StrategyDepth of Strategy
Flexible CapabilitiesFlexible Capabilities
Solid PerformanceSolid Performance
DeliveringDelivering
Results Results
4
Transition ProgressTransition Progress
Integration on trackTraction increasing in market2004 results in line with guidance Stabilizing national division revenues
Integration on trackTraction increasing in market2004 results in line with guidance Stabilizing national division revenues
Who We AreWho We Are3RD LARGEST NATIONAL PROVIDER3RD LARGEST NATIONAL PROVIDER
Growing & profitableMarket leader
Growing & profitableMarket leader
Great innovatorStrong competitor
Great innovatorStrong competitor
MANITOBAOperationsMANITOBAOperations
NATIONALOperationsNATIONALOperations
Strong Cash Flows & Balance SheetStrong Cash Flows & Balance Sheet
5
Investment ProfileInvestment Profile
Strong, stable cash flowsStrong, stable cash flows
Attractive yieldAttractive yield
Increased growth potentialIncreased growth potential
Our VisionOur Vision
National scale and scopeNational scale and scope
Delivering profitable resultsDelivering profitable results
Next generation companyNext generation company
6
IP FoundationIP Foundation
Internet/Data
Internet/Data Digital TVDigital TV VoiceVoice Managed
ServicesManaged Services
IT Solutions
IT Solutions
Canadian Industry OverviewCanadian Industry Overview
Progress in past fostering competitionCDNA Decision — Feb. 4/05
Missed opportunity to enhance competition and discourage pricing controlCost-based pricing not extended to NexGen services
More regulatory work needed
Progress in past fostering competitionCDNA Decision — Feb. 4/05
Missed opportunity to enhance competition and discourage pricing controlCost-based pricing not extended to NexGen services
More regulatory work needed
REGULATIONREGULATION
7
Canadian Industry OverviewCanadian Industry Overview
New competitors: Cableco’s
Investment requirements?Quality of service?Customer care?
New competitors: Cableco’s
Investment requirements?Quality of service?Customer care?
LOCAL RESIDENTIAL TELEPHONYLOCAL RESIDENTIAL TELEPHONY
Manitoba DivisionManitoba DivisionWell PositionedWell Positioned
Canadian Industry OverviewCanadian Industry Overview
Opportunity to profitably grow shareIP solutions for business success
Large customersMid-market customers
Opportunity to profitably grow shareIP solutions for business success
Large customersMid-market customers
NATIONAL BUSINESS / WHOLESALE MARKETSNATIONAL BUSINESS / WHOLESALE MARKETS
Innovative Allstream SolutionsInnovative Allstream Solutions
8
Canadian Industry OverviewCanadian Industry Overview
InnovationNew services to meet customer needs
ResourcesManagement strengthFinancial strength
Brand / mind share
InnovationNew services to meet customer needs
ResourcesManagement strengthFinancial strength
Brand / mind share
SUCCESS FACTORSSUCCESS FACTORS
Nimble & AgileNimble & AgileSimple & Complex
SolutionsSimple & Complex
Solutions
National DivisionNational DivisionCOMMUNICATIONS SOLUTIONS PROVIDERCOMMUNICATIONS SOLUTIONS PROVIDER
Customers’ BusinessesCustomers’ BusinessesDelivering Value toDelivering Value to
9
ConnectivityConnectivity
Core of portfolioIncludes legacy & new servicesQuality-of-Service IP infrastructure
Core of portfolioIncludes legacy & new servicesQuality-of-Service IP infrastructure
CONNECTIVITYCONNECTIVITY
Data Network
Data Network
Internet Access
Internet Access
Voice ServicesVoice
Services
Infrastructure ManagementInfrastructure Management
Managed network solutionsEnable customers to focus on their core business
Managed network solutionsEnable customers to focus on their core business
INFRASTRUCTUREMANAGEMENT
INFRASTRUCTUREMANAGEMENT
NetworkManagement
NetworkManagement Hosting
ConvergedServices
PerimeterSecurity
10
Professional ServicesProfessional Services
Only provider with integrated Professional Services division
700 professionals
Deploy solutions for maximum customer benefit
Only provider with integrated Professional Services division
700 professionals
Deploy solutions for maximum customer benefit
PROFESSIONAL SERVICES
PROFESSIONAL SERVICES
InformationManagement
ApplicationOutsourcing
IT Consulting
InfrastructureServices
ApplicationSolutions &Integration
ProjectManagement
ApplicationSecurity
EnterpriseResourcePlanning
Customer WinsCustomer Wins
IP-MPLS Network SolutionsIP-MPLS Network Solutions
11
Customer WinsCustomer WinsWHOLESALE OPPORTUNITIESWHOLESALE OPPORTUNITIES
Strategic AllianceStrategic Alliance
Preferred service providersExtends global reachJoint customer relationships Product development
Global IP MPLS Service
Preferred service providersExtends global reachJoint customer relationships Product development
Global IP MPLS Service
Expanded CapabilitiesExpanded Capabilities
12
AT&T – Voice Services AgreementsAT&T – Voice Services Agreements
Extension to 2011Extension to 2011from 2006from 2006
National Division ProgressNational Division Progress
Sales funnel tracking well vs. planRevenues beginning to stabilize
Q4/04 sequential revenue growthAdditional customer wins
Sales funnel tracking well vs. planRevenues beginning to stabilize
Q4/04 sequential revenue growthAdditional customer wins
13
National Division StrengthsNational Division Strengths
National focus & scale National focus & scale
#2 in every major market#2 in every major market
Focus on profitable growthFocus on profitable growth
Superior wholesale strategySuperior wholesale strategy
Collaborative approachCollaborative approach
Manitoba DivisionManitoba Division
Strong profitability & cash flowsStrong profitability & cash flows
Relentless control of costsRelentless control of costs
Moving forward with AllstreamMoving forward with Allstream
Leading market positionLeading market position
14
Manitoba Division Progress ReportManitoba Division Progress Report
Consumer SpendingConsumer Spending
20022002 20032003 20042004
6% 6%
$100$100
WirelessWireless High-speedInternet
High-speedInternet
Digital TVDigital TV
Leveraging Growth OperationsLeveraging Growth Operations
15
WirelessWireless
Customer BaseCustomer Base
169,140169,140206,447206,447
234,062234,062255,657255,657
285,796285,796
20002000 20012001 20022002 20032003 20042004
Double Digit Growth In 2005Double Digit Growth In 2005
High Speed InternetHigh Speed Internet
Customer BaseCustomer Base
11,96211,962
35,94035,940
65,19365,19382,67882,678
103,613103,613
20002000 20012001 20022002 20032003 20042004
16
MTS TVMTS TV
Customer BaseCustomer Base
Jan 2003Jan 2003 Dec 2003Dec 2003 Dec 2004Dec 2004
8,6938,693
32,57832,578
200200
Surpassed 2004 TargetSurpassed 2004 Target
MTS TVMTS TV
Customer BaseCustomer Base
Jan 2003Jan 2003 Dec 2003Dec 2003 Dec 2004Dec 2004 2005E2005E
8,6938,693
32,57832,578
58,000 58,000
200200
17
Traditional OperationsTraditional Operations
LocalLocal Long Distance
Long Distance DataData
LOCAL, LD, DATA & DIRECTORYLOCAL, LD, DATA & DIRECTORY
DirectoryDirectory
Large Cash Flows & Great MarginsLarge Cash Flows & Great Margins
Local CompetitionLocal Competition
Well-positioned forCable Telephony
Well-positioned forCable Telephony
18
Manitoba Division PrioritiesManitoba Division Priorities
Win the broadband home Win the broadband home
Create/deliver repeatable packaged IP & wireless solutions to SMECreate/deliver repeatable packaged IP & wireless solutions to SME
Drive value added benefits to enterprise customersDrive value added benefits to enterprise customers
Manitoba Division StrengthsManitoba Division Strengths
Leading market positionLeading market position
Strong brand recognitionStrong brand recognition
Receptive customer baseReceptive customer base
Leading operating efficiencyLeading operating efficiency
Solid competitive positionSolid competitive position
19
2005 Financial Outlook2005 Financial Outlook
RevenuesRevenues
EBITDAEBITDA
$2.04 B - $2.08 B$2.04 B - $2.08 B
$705 M - $720 M$705 M - $720 M
EPSEPS $2.95 - $3.05$2.95 - $3.05
Free Cash FlowFree Cash Flow $280 M - $300 M$280 M - $300 M
Cash EPSCash EPS $4.80 - $4.90$4.80 - $4.90
Focus on cost leadershipFocus on cost leadership
Compete aggressivelyCompete aggressively
Invest prudentlyInvest prudently
Business Approach:Business Approach:
Today & TomorrowToday & TomorrowDelivering for the CustomerDelivering for the Customer