Slide 1: Q3 2020 Results Conference Call
Q3 2020 Results Conference Call November 5, 2020
Slide 2: Safe harbour notice
Safe harbour notice Certain statements made in this presentation are forward-looking statements. These forward-looking statements include, but are not limited to, statements relating to the potential impacts on our business, financial condition, liquidity and financial results of the COVID-19 pandem
Slide 3: Q3 highlights
Q3 highlights • Sequential quarterly improvement across all Bell operating segments • Grew broadband market share with 210K combined wireless, retail Internet and IPTV net additions – Focus on profitable, high-quality smartphone subscribers delivered 128K total net wireless postpaid and prepaid addi
Slide 4: Progress on Strategic Imperatives
Progress on Strategic Imperatives • FTTP program 56% complete with approximately 5.5M customer locations now passed – 10% Internet revenue growth in Q3 • Further acceleration of Wireless Home Internet rollout in rural locations with faster speeds – Buildout approaching ~50% of target footprint with
Slide 5: Q3 operating metrics
Q3 operating metrics Bell Wireless Bell Wireline Bell Media • 133K new net smartphone • Industry-best retail Internet net • Stronger TV advertising demand customers added(1) additions of 63K in Q3, up 8.1% y/y with return of live sports – Q3 postpaid smartphone net additions – TV advertising down 12
Slide 6: Financial Results
Financial Results Bell
Slide 7: Q3 financial review
Q3 financial review ($M) except per share data Q3’20 Y/Y • Sequential quarterly improvement in y/y revenue and adjusted EBITDA declines for all Revenue 5,787 (2.6%) Bell segments with start of COVID recovery Service 4,924 (4.2%) – ~$40M of COVID-related costs incurred in Q3, down Product 863 8.0% fr
Slide 8: Wireless financials
Wireless financials Revenue ($M) • Return to positive revenue growth in Q3 • Improved service revenue decline vs. Q2 +0.3% 2,310 2,318 – 4.3% decrease in Q3 due mainly to ongoing COVID- related roaming pressure and reduced data overage • Product revenue up 11.9% on higher mix of premium smartphones,
Slide 9: Wireline financials
Wireline financials Revenue ($M) • Q3 revenue decline stable vs. Q2’20 • Positive residential revenue growth in Q3 -0.8% 3,057 3,032 • Internet revenue up 10% • Improved y/y voice revenue decline of 4.7% driven by fewer home phone customer Q3'19 Q3'20 deactivations and long distance strength • Busin
Slide 10: Media financials
Media financials Revenue ($M) • Sequential quarterly improvement in financial results reflects stronger advertiser demand across all media platforms 751 -16.4% 628 • Advertising revenue decline 22% vs. 51% in Q2’20 Q3'19 Q3'20 • Adjusted EBITDA down 21.2% on flow-through impact of 16.4% y/y decrease
Slide 11: Adjusted EPS
Adjusted EPS Adjusted EPS(1) • Lower y/y adjusted EBITDA contributed a 9¢ ($) decrease in adjusted EPS in Q3 -13.2% 0.91 • Higher depreciation and amortization reflects 0.79 growth in capital assets • Lower y/y tax adjustments Q3'19 Q3'20 • Other expense reflects typical pick-up of equity losses fro
Slide 12: Free cash flow
Free cash flow Free cash flow(1) • Adjusted EBITDA decline in Q3 contributed ($M) $109M less FCF y/y, representing a sequential -11.5% quarterly improvement over Q2 1,169 1,034 • Higher y/y capex spending reflects investments in advanced wireless and wireline networks • Interest paid higher y/y due
Slide 13: Healthy balance sheet and liquidity position
Healthy balance sheet and liquidity position Available liquidity • $5.2B of available liquidity at end of Q3’20 – Excludes ~$940M in net cash proceeds received from sale of Bell data centres $5.2B • Manageable net debt leverage ratio *At September 30, 2020 – Low after-tax cost of public debt of 3.0%