Slide 1: Q3 2018 Results Conference Call
Q3 2018 Results Conference Call November 1, 2018
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: Q3 overview
Q3 overview • 266k total wireless, Internet and IPTV net additions, up 78k or 41.5% y/y • Stronger revenue growth trajectory of 3.2% drove 2.2% higher adjusted EBITDA • 178k total wireless postpaid and prepaid net additions — best-ever Q3 performance – 5.9% revenue growth generated 4.5% higher adjus
Slide 5: Wireless operating metrics
Wireless operating metrics Total net additions • Continued strong postpaid subscriber momentum in Q3 delivered 135k net additions Postpaid – 9.1% higher y/y gross additions reflects network speed Prepaid 178k and distribution leadership +66.2% 135k – Postpaid churn down 2 bps y/y to 1.14% 107k – Bes
Slide 6: Wireline subscriber metrics
Wireline subscriber metrics Retail Internet and IPTV net additions • 53k retail Internet net additions, up 27.4% y/y – 48k total Internet net additions including wholesale IPTV Internet 93.2k • 77k new FTTH customers added in Q3 78.1k +19.3% – 1.5 Gigabit service launched August in Ontario; 53.1k Se
Slide 7: Bell Media
Bell Media • All-new Crave branded TV streaming service launching November 1st – Merging all existing CraveTV and TMN programming, including HBO and SHOWTIME – TMN and HBO content available direct to consumers for the first time ever • Leading TV viewership and ratings maintained – 12 of top 20 show
Slide 8: Looking ahead to 2019: cash flow growth considerations
Looking ahead to 2019: cash flow growth considerations • 4% management workforce reduction across BCE completed in past 120 days – Annualized cash savings of $75M from elimination of ~700 positions – Next phase of integration with Bell MTS and Bell Aliant – Productivity improvements and cost efficie
Slide 9: Glen LeBlanc, EVP & Chief Financial Officer
Glen LeBlanc EVP & Chief Financial Officer
Slide 10: Q3 financial review
Q3 financial review ($M) except per share data Q3’18 Y/Y YTD’18 Y/Y Revenue 5,877 3.2% 17,253 3.2% Service 5,117 1.2% 15,210 1.8% Product 760 18.2% 2,043 14.9% Adjusted EBITDA 2,457 2.2% 7,141 2.7% Margin 41.8% (0.4 pts) 41.4% (0.2 pts) Net earnings 867 2.0% 2,331 (0.9%) Statutory EPS 0.90 0.0% 2.42
Slide 11: Wireless financials
Wireless financials ($M) Q3’18 Y/Y YTD’18 Y/Y Revenue 2,182 5.9% 6,174 6.9% Service 1,630 2.5% 4,716 4.0% Product 552 17.2% 1,458 17.3% Operating costs 1,231 (7.0%) 3,497 (7.7%) Adjusted EBITDA 951 4.5% 2,677 5.8% Margin 43.6% (0.6 pts) 43.4% (0.4 pts) Capex 181 2.7% 524 (2.1%) Capital intensity (CI
Slide 12: Wireline financials
Wireline financials ($M) Q3’18 Y/Y YTD’18 Y/Y Revenue 3,147 1.9% 9,366 2.0% Service 2,938 0.8% 8,777 1.6% Product 209 20.1% 589 9.3% Operating costs 1,823 (2.4%) 5,419 (2.2%) Adjusted EBITDA 1,324 1.2% 3,947 1.8% Margin 42.1% (0.3 pts) 42.1% (0.1 pts) Capex 799 2.6% 2,391 (2.7%) Capital intensity (C
Slide 13: Media financials
Media financials ($M) Q3’18 Y/Y YTD’18 Y/Y Revenue 731 1.1% 2,271 0.0% Operating costs 549 (2.4%) 1,754 (1.7%) Adjusted EBITDA 182 (2.7%) 517 (5.1%) Margin 24.9% (1.0 pts) 22.8% (1.2 pts) Capex 30 11.8% 82 10.9% Capital intensity (CI) 4.1% 0.6 pts 3.6% 0.5 pts • Revenue grew 1.1% y/y in seasonally •
Slide 14: Adjusted EPS
Adjusted EPS Adjusted EPS(1) • Adjusted EBITDA growth generated 4¢ higher y/y contribution to adjusted EPS in Q3 +5.5% $0.96 $0.91 • Higher depreciation and amortization expense driven by capital asset growth from ongoing fibre and wireless network investments Q3'17 Q3'18 • Net interest expense up y
Slide 15: Free cash flow
Free cash flow FCF • Adjusted EBITDA(1) growth and lower capital spending drove $83M of incremental y/y FCF ($M) in Q3 $1,183 $1,014 • Lower interest paid reflects timing of debt service payments on debenture debt • Cash taxes higher y/y due to timing of Q3'17 Q3'18 instalment payments FCF walk down
Slide 16: Outlook
Outlook 2018 guidance May 3 November 1 Revenue growth 2% to 4% On track Adjusted EBITDA growth 2% to 4% On track Capital intensity ~17% On track Adjusted EPS(1) $3.45 to $3.55 On track Growth y/y 1% to 4% Free cash flow (FCF)(2) $3,525M to $3,650M On track Growth y/y 3% to 7% 65% to 75% On track Div