Slide 1: Q1 2019 Results Conference Call
Q1 2019 Results Conference Call May 2, 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: Q1 overview
Q1 overview • Continued revenue momentum with 2.6% growth and IFRS 16 impact drove 6.9% higher adjusted EBITDA and 1.7 percentage point margin increase to 42.0% • Positive adjusted EBITDA growth for all Bell operating segments excluding IFRS 16 • Strong wireless financial results with 4.5% revenue g
Slide 5: Wireless operating metrics
Wireless operating metrics Subscriber metrics Q1’19 Y/Y • 50k postpaid net subscribers added in Q1 – Fewer y/y federal government contract customer Total gross additions 410k 1.4% additions as migration process near completion Postpaid net additions 50k (26.7%) – Best Q1 postpaid churn performance i
Slide 6: Wireless network leadership
Wireless network leadership LTE Advanced (LTE-A) coverage • LTE-A service available to ~91% of Canadians and expanding to ~94% by YE2019 % of Canadian population – Average data speeds up to 260 Mbps(1) ~94% 91% 87% • Quad-band LTE-A footprint now covers ~25% of the population with speeds up to 750 M
Slide 7: Wireline subscriber metrics
Wireline subscriber metrics Retail Internet and IPTV net additions • 23k retail Internet net additions, up 24.9%, in seasonally slower quarter IPTV Internet – 51k new FTTH customers added in Q1, up 17.8% y/y 44k – Speeds of 1.5 Gbps offered to all direct fibre customers 32k +37.4% 23k • Combined FTT
Slide 8: Bell Media
Bell Media • Leading TV viewership and ratings maintained – 11 of top 20 programs for CTV in winter season – Viewership for English entertainment specialty TV properties up 27% in winter season • Game of Thrones premiere was most-watched broadcast in Canadian entertainment specialty and pay TV histo
Slide 9: Glen LeBlanc, EVP & Chief Financial Officer
Glen LeBlanc EVP & Chief Financial Officer
Slide 10: Q1 financial review
Q1 financial review ($M) except per share data Q1’19 Y/Y • New IFRS 16 accounting standard for operating leases effective January 1, 2019 Revenue 5,734 2.6% – Prior periods not restated Service 5,045 1.6% Product 689 10.1% • Revenue up 2.6% on continued strong organic Adjusted EBITDA 2,409 6.9% wire
Slide 11: Wireless financials
Wireless financials ($M) Q1’19 Y/Y • Revenue up 4.5%, driven by subscriber base growth and higher y/y product revenue Revenue – Sequential improvement in service revenue 2,112 4.5% trajectory Service 1,566 3.4% – 7.7% increase in product revenue reflects greater Product 546 7.7% sales mix of higher-
Slide 12: Wireline financials
Wireline financials ($M) Q1’19 Y/Y • 1.8% revenue increase reflects positive y/y growth across Bell’s residential, business and Revenue 3,064 1.8% wholesale units Service 2,920 1.1% Product 144 20.0% • Broadband Internet and TV revenue up ~4% y/y Operating costs 1,725 (1.7%) • 3rd consecutive quarte
Slide 13: Media financials
Media financials ($M) Q1’19 Y/Y • Total revenue down 0.5% y/y Revenue 745 (0.5%) • Overall advertising revenue declined 1.3% – TV advertising up ~1% driven by strong entertainment and news specialty performance Operating costs 580 6.3% – Conventional TV relatively stable y/y – Radio down y/y, reflec
Slide 14: Adjusted EPS
Adjusted EPS Adjusted EPS(1) • Adjusted EBITDA growth, including IFRS 16, contributed 12¢ increase to adjusted EPS $0.80 $0.77 • Higher y/y depreciation and amortization expense reflects adoption of IFRS 16 accounting and higher capital asset base Q1'18 Q1'19 • Net interest expense higher y/y, due m
Slide 15: Free cash flow
Free cash flow FCF • Adjusted EBITDA growth and lower planned capex generated $232M of incremental FCF y/y ($M) +19.6% $642 • Higher interest paid due to imputed interest $537 component on IFRS 16-designated leases • Cash pension funding and cash taxes relatively stable y/y in line with plan Q1'18 Q
Slide 16: Outlook
Outlook 2019 guidance(1) February 7 May 2 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 payout p