Slide 1: Q3 2017 Results Conference Call
Q3 2017 Results Conference Call November 2, 2017
Slide 2: Safe harbour notice
Safe harbour notice Certain statements made in this presentation are forward-looking statements. These statements include, without limitation, statements relating to our 2017 financial guidance (including revenues, adjusted EBITDA, capital intensity, adjusted EPS and free cash flow), BCE’s annualize
Slide 3: George Cope, President & Chief Executive Officer
George Cope President & Chief Executive Officer
Slide 4: Q3 overview
Q3 overview 5.9% service revenue growth drove 5.8% higher adjusted EBITDA and margin increase to 41.7% Continued excellent wireless operational execution drives industry-leading adjusted EBITDA and cash flow growth 81k Internet and IPTV net adds, up 6.9% — first quarter of y/y growth since Q1’
Slide 5: Wireless operating metrics
Wireless operating metrics Postpaid net additions • 117k postpaid net additions – best Q3 performance since 2012 +9.2% 117k – Network speed and distribution leadership drove record Q3 postpaid gross additions of 391k, up 2.5% y/y 107k • Lower postpaid churn reflects network quality Q3'16 Q3'17 and f
Slide 6: Wireless network technology and speed leadership
Wireless network technology and speed leadership LTE Advanced (LTE-A) coverage • LTE service available in both urban and rural areas covering 99% of Canadians with % of Canadian population theoretical speeds of up to 150 Mbps ~87% – First time a wireless technology in Canada provides 82% near-ubiqui
Slide 7: Wireline subscriber metrics
Wireline subscriber metrics Internet and IPTV net additions • 44.4k total Internet net additions, up 12.8% y/y – Strong back-to-school execution IPTV Internet – Lower churn reflects expanding direct fibre footprint and 80.8k more competitive speeds in non-FTTP areas 75.6k +6.9% 44.4k • Positive tota
Slide 8: Bell Media
Bell Media • Leading TV viewership and ratings maintained – 7 of top 10 programs for CTV in Premiere Week – Game of Thrones Season 7 most-watched series ever on Canadian specialty/pay TV, and #1 summer show overall – Star Trek: Discovery has delivered the three highest-rated episodes of a series in
Slide 9: Glen LeBlanc, EVP & Chief Financial Officer
Glen LeBlanc EVP & Chief Financial Officer
Slide 10: Q3 financial review
Q3 financial review ($M) except per share data Q3’17 Y/Y YTD’17 Y/Y Revenue 5,678 5.0% 16,761 4.6% Service 5,322 5.9% 15,708 5.3% Product 356 (6.8%) 1,053 (3.9%) Adjusted EBITDA 2,366 5.8% 6,961 4.4% Margin 41.7% 0.3 pts 41.5% (0.1 pts) Net earnings 817 2.1% 2,353 (1.5%) Statutory EPS 0.86 (1.1%) 2.
Slide 11: Wireless financials
Wireless financials ($M) Q3’17 Y/Y YTD’17 Y/Y Revenue 2,040 10.4% 5,813 10.2% Service 1,913 11.2% 5,456 10.7% Product 127 0.0% 357 2.9% Operating costs 1,169 (11.1%) 3,273 (11.1%) Adjusted EBITDA 871 9.4% 2,540 9.1% Margin (service revenue) 45.5% (0.8 pts) 46.6% (0.7 pts) Capex 186 4.6% 513 5.0% Cap
Slide 12: Wireline financials
Wireline financials ($M) Q3’17 Y/Y YTD’17 Y/Y Revenue 3,092 2.9% 9,193 2.5% Service 2,860 4.1% 8,486 3.4% Product 232 (9.7%) 707 (6.6%) Operating costs 1,784 (1.8%) 5,317 (2.6%) Adjusted EBITDA 1,308 4.4% 3,876 2.5% Margin 42.3% 0.6 pts 42.2% 0.0 pts Capex 820 (8.5%) 2,329 (7.9%) Capital intensity 2
Slide 13: Media financials
Media financials ($M) Q3’17 Y/Y YTD’17 Y/Y Revenue 723 1.0% 2,270 1.5% Operating costs 536 (1.3%) 1,725 (2.6%) Adjusted EBITDA 187 0.0% 545 (1.8%) Margin 25.9% (0.2 pts) 24.0% (0.8 pts) Capex 34 (36.0%) 92 (15.0%) Capital intensity 4.7% (1.2 pts) 4.1% (0.5 pts) Adjusted EBITDA-capex 153 (5.6%) 453 (
Slide 14: Adjusted EPS
Adjusted EPS Adjusted EPS(1) • Adjusted EBITDA growth contributed 11¢ increase to adjusted EPS in Q3 – (1¢) non-cash impact from purchase price amortization $2.70 $2.63 related to MTS acquisition • Depreciation and amortization expense up y/y due to higher capital asset base including MTS YTD'16 YTD
Slide 15: Free cash flow
Free cash flow FCF • Q3 FCF up $232M, or 24.4%, y/y on higher adjusted EBITDA and positive change in working capital ($M) $2,766 +20.1% • Increased capex reflects higher planned spending on $2,303 broadband fibre, wireless carrier aggregation and Bell MTS • Higher interest paid due to MTS debenture
Slide 16: Outlook
Outlook 2017 guidance April 26 November 2 Revenue growth 4% to 6% On track Adjusted EBITDA growth 4% to 6% On track Capital intensity ~17% On track Adjusted EPS(1) $3.30 to $3.40 On track Growth y/y ~(5%) to (2%) Free cash flow(2) $3,375M to $3,550M On track Growth y/y ~5% to 10% 65% to 75% Dividend