Slide 1: Q2 2019 Results Conference Call
Q2 2019 Results Conference Call August 1, 2019
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 BCE’s financial guidance (including revenues, adjusted EBITDA, capital intensity, adjusted EPS and free cash flow)
Slide 3: George Cope, President & Chief Executive Officer
George Cope President & Chief Executive Officer
Slide 4: Q2 highlights
Q2 highlights • Mirko Bibic to become President & CEO of BCE effective January 6, 2020 • 186k total wireless, Internet and IPTV net customer additions, up 25.5% y/y • Best Q2 wireless net subscriber additions since 2001, up 30.6% y/y • 52k new FTTH Internet customers added, up 10.4% y/y • FTTP cover
Slide 5: Mirko Bibic, Chief Operating Officer
Mirko Bibic Chief Operating Officer
Slide 6: Wireless operating metrics
Wireless operating metrics Subscriber metrics Q2’19 Y/Y • 149k total postpaid and prepaid net additions – Best Q2 performance since 2001 Total gross additions 518k 10.6% Postpaid net additions 103k (15.7%) • 103k postpaid net subscribers added in Q2 – Net additions higher y/y excluding GoC contract
Slide 7: Wireline operating metrics
Wireline operating metrics Retail Internet and IPTV net additions • 19.4k retail Internet net additions in seasonally low quarter, up 51.6% Internet IPTV – 52k new FTTH customer additions in Q2, up 10.4% y/y 36.2k 33.5k +8.2% • FTTP footprint now covers 4.9M locations, 19.4k growing to more than 5.1
Slide 8: Bell Media
Bell Media • CTV most-watched network for 18th year in a row – 7 of top 10 programs in core 2018/2019 broadcast year – Only Canadian media company with y/y audience growth in all key demos – CTV National News remains #1 national newscast – The Big Bang Theory finale was most-watched series broadcast
Slide 9: Glen LeBlanc, EVP & Chief Financial Officer
Glen LeBlanc EVP & Chief Financial Officer
Slide 10: Q2 financial review
Q2 financial review ($M) except per share data Q2’19 Y/Y YTD’19 Y/Y Revenue 5,930 2.5% 11,664 2.5% Service 5,231 2.0% 10,276 1.8% Product 699 6.4% 1,388 8.2% Adjusted EBITDA 2,595 6.8% 5,004 6.8% Margin 43.8% 1.8 pts 42.9% 1.7 pts Net earnings 817 8.2% 1,608 9.8% Statutory EPS 0.85 7.6% 1.67 9.9% Ad
Slide 11: Wireless financials
Wireless financials ($M) Q2’19 Y/Y YTD’19 Y/Y Revenue 2,189 3.2% 4,301 3.8% Service 1,618 2.5% 3,184 3.0% Product 571 5.2% 1,117 6.4% Operating costs 1,209 1.6% 2,416 0.9% Adjusted EBITDA 980 9.9% 1,885 10.7% Margin (total revenue) 44.8% 2.7 pts 43.8% 2.7 pts Capex 168 7.2% 319 8.3% Capital intensit
Slide 12: Wireline financials
Wireline financials ($M) Q2’19 Y/Y YTD’19 Y/Y Revenue 3,088 0.9% 6,152 1.4% Service 2,958 0.4% 5,878 0.8% Product 130 12.1% 274 16.1% Operating costs 1,727 0.1% 3,452 (0.8%) Adjusted EBITDA 1,361 2.1% 2,700 2.0% Margin 44.1% 0.6 pts 43.9% 0.3 pts Capex 780 7.5% 1,454 8.4% Capital intensity (CI) 25.3
Slide 13: Media financials
Media financials ($M) Q2’19 Y/Y YTD’19 Y/Y Revenue 842 6.4% 1,587 3.1% Operating costs 588 (0.3%) 1,168 3.1% Adjusted EBITDA 254 23.9% 419 25.1% Margin 30.2% 4.3 pts 26.4% 4.6 pts Capex 24 25.0% 49 5.8% Capital intensity (CI) 2.9% 1.1 pts 3.1% 0.3 pts 2019 operating results presented in accordance
Slide 14: Adjusted EPS
Adjusted EPS Adjusted EPS(1) • Higher adjusted EBITDA, including IFRS 16, contributed 13¢ increase to adjusted EPS in Q2 +9.3% $0.94 • Depreciation and amortization expense up y/y, $0.86 due to IFRS 16 and higher capital asset base • Increased net interest expense reflects impact Q2'18 Q2'19 of IFRS
Slide 15: Free cash flow
Free cash flow FCF • Q2 FCF up 10.0% y/y on strong adjusted EBITDA contribution and lower capex ($M) +13.3% • Higher interest paid mainly reflects imputed +10.0% $1,735 interest on IFRS 16-designated leases $1,531 • Cash pension funding and cash taxes $1,093 consistent with FY2019 guidance assumptio
Slide 16: Outlook
Outlook 2019 guidance(1) February 7 August 1 Revenue growth 1% to 3% On track Adjusted EBITDA growth 5% to 7% On track Capital intensity ~16.5% On track Adjusted EPS(2) $3.48 to $3.58 On track Free cash flow (FCF)(3) $3,800M to $4,000M On track Growth y/y 7% to 12% 65% to 75% On track Dividend payou