Slide 1: Q1 2016 Results Conference Call
Q1 2016 Results Conference Call April 28, 2016
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 2016 financial guidance (including revenues, adjusted EBITDA, capital intensity, adjusted EPS and free cash flow), our business ou
Slide 3: George Cope, President & Chief Executive Officer
George Cope President & Chief Executive Officer
Slide 4: Q1 overview
Q1 overview Total service revenue growth of 1.3% and disciplined cost management delivered 3.3% increase in BCE EBITDA and 1.0 point expansion in margin to 41.0% Largest market share of broadband customer growth across all growth services in Q1 with 93k total combined wireless postpaid, IPTV and
Slide 5: Wireless operating metrics
Wireless operating metrics Q1’16 Y/Y • Postpaid net adds of 26k Postpaid gross additions 275k (1.3%) • Postpaid churn down on improved customer service metrics Postpaid net additions 26k (27.0%) • Sustained strong ARPU growth of 3.6% Postpaid churn rate 1.15% 0.03 pts – 73% of postpaid subscribers n
Slide 6: Wireline subscriber metrics
Wireline subscriber metrics Internet and IPTV subscribers (EOP) • Broadband leader in Canada with more than 4.6M total Internet and IPTV subscribers, up 8.2% y/y IPTV Internet 4,642k • 20k total Internet net adds 4,288k +8.2% – Wholesale net adds lower y/y 3,411k – Rich cable Internet and bundle off
Slide 7: Bell Media
Bell Media • Strong contribution to BCE’s overall consolidated financial results in Q1 • Continued leading TV audience levels and ratings – CTV claimed 14 of top 20 programs in winter season and 8 of top 10 spots in new spring season – 4 of top 10 entertainment specialty TV services in primetime, in
Slide 8: Continued service progress
Continued service progress CRTC Internet Performance Calls handled Report (Mar’16) Down 14% in Q1 FTTH provides best Internet service available in Canada Bell Self-Serve Residential churn 30M visits & transactions Fibe TV: down 14 bps in Q1 in Q1, up 11% Internet: down 8 bps in Q1 SELF-SERVE Custome
Slide 9: Glen LeBlanc, EVP & Chief Financial Officer
Glen LeBlanc EVP & Chief Financial Officer
Slide 10: Q1 financial review
Q1 financial review ($M) except per share data Q1’16 Y/Y • Service revenue up 1.3% on solid Wireless, Wireline Residential and Media growth Revenue 5,270 0.6% – $31M y/y decrease in product revenue reflected lower Service 4,908 1.3% average wireless handset prices and reduced wireline Product 362 (8
Slide 11: Wireless financials
Wireless financials ($M) Q1’16 Y/Y • 5.3% increase in service revenue driven by higher postpaid mix and strong ARPU growth Revenue 1,693 3.4% – 18.1% decline in product revenue driven by intense Service 1,579 5.3% promotional handset pricing and lower y/y volumes Product 104 (18.1%) • Operating cost
Slide 12: Wireline financials
Wireline financials ($M) Q1’16 Y/Y • Residential Services revenue up 1.0% – 10th consecutive quarter of y/y growth Revenue 2,983 (1.5%) – Combined Internet and TV revenue growth of 6.6% Service 2,723 (1.3%) – Overall growth moderated by competitors’ aggressive Product 260 (3.0%) promotional offers a
Slide 13: Media financials
Media financials ($M) Q1’16 Y/Y • Total revenue up 2.1% y/y Revenue 741 2.1% • Subscriber revenues up 7.0%, reflecting TMN expansion in west and CraveTV growth Operating costs 596 (1.9%) • 1.6% y/y decrease in advertising revenues in line with expectations Adjusted EBITDA 145 2.8% – Lower y/y spendi
Slide 14: Adjusted EPS
Adjusted EPS Adjusted EPS(1) • Positive adjusted EBITDA growth in Q1 for all segments drove 6¢ increase in adjusted EPS +1.2% $0.85 • Increased D&A expense due to a higher capital $0.84 asset base • Higher discount rate and $250M voluntary Q1'15 Q1'16 contribution at YE2015 driving lower net pension
Slide 15: Free cash flow
Free cash flow FCF • FCF of $418M up 81.0% y/y in seasonally low Q1 on higher adjusted EBITDA and positive change in working capital position +81.0% $418M $231M • Capex reflects higher planned spending in 2016 • Cash taxes down y/y, due to lower final payment for 2015 Q1'15 Q1'16 • Higher severance
Slide 16: Outlook
Outlook 2016 guidance February 4 April 28 Revenue growth 1% to 3% On track Adjusted EBITDA growth 2% to 4% On track Capital intensity approx. 17% On track Adjusted EPS(1) $3.45 to $3.55 On track Growth y/y approx. 3% to 6% Free cash flow(2) $3,125M to $3,350M On track Growth y/y approx. 4% to 12% (1