Slide 1: Q2 2017 Results Conference Call
Q2 2017 Results Conference Call August 3, 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), our expected pe
Slide 3: George Cope, President & Chief Executive Officer
George Cope President & Chief Executive Officer
Slide 4: Q2 overview
Q2 overview 7.0% service revenue growth and 5.0% higher adjusted EBITDA, driven by MTS financial contribution and strong wireless growth 106k total postpaid wireless, Internet and IPTV net customer additions in seasonally soft Q2 Continued strong wireless postpaid momentum and financial result
Slide 5: Wireless operating metrics
Wireless operating metrics Operating metrics Q2’17 Y/Y • Strong postpaid net gain of 89k, up 26.9% y/y, on 7.1% higher gross additions and lower churn Postpaid gross additions 339k 7.1% • Record service revenue dollar growth driven by Postpaid net additions 89k 26.9% healthy ARPU and postpaid subscr
Slide 6: Wireline subscriber metrics
Wireline subscriber metrics Internet and IPTV subscribers (EOP) • 16.4k IPTV net adds – Minimal new footprint, increasing maturity of established IPTV 5,200k Fibe TV markets and accelerating OTT substitution Internet – Growth impacted by higher volume of customers with 4,685k +11.0% expired promotio
Slide 7: IPTV product leadership and innovation
IPTV product leadership and innovation • New feature (July 10): watch TV recordings on laptops, smartphones and tablets anywhere with the Fibe TV app • Coming in August: integrating YouTube app into 4K PVR • New features do not require set-top box upgrade • New app-based live TV streaming service la
Slide 8: Bell Media
Bell Media • CTV most-watched network for 16th year in a row – 11 of top 20 programs in core 2016/2017 broadcast season, including 6 series in the top 10 – Top 2 new programs: This Is Us & Designated Survivor • Strong 2017/2018 programming line-up – 17 new primetime series and 11 returning top 20 hi
Slide 9: Glen LeBlanc, EVP & Chief Financial Officer
Glen LeBlanc EVP & Chief Financial Officer
Slide 10: Q2 financial review
Q2 financial review ($M) except per share data Q2’17 Y/Y YTD’17 Y/Y Revenue 5,699 6.7% 11,083 4.5% Service 5,335 7.0% 10,386 5.0% Product 364 3.4% 697 (2.4%) Adjusted EBITDA 2,381 5.0% 4,595 3.7% Margin 41.8% (0.7 pts) 41.5% (0.3 pts) Net earnings 811 (2.3%) 1,536 (3.3%) Statutory EPS 0.84 (5.6%) 1.
Slide 11: Wireless financials
Wireless financials ($M) Q2’17 Y/Y YTD’17 Y/Y Revenue 1,959 12.9% 3,773 10.1% Service 1,828 12.8% 3,543 10.4% Product 131 13.9% 230 4.5% Operating costs 1,108 (15.1%) 2,104 (11.0%) Adjusted EBITDA 851 10.2% 1,669 8.9% Margin (service revenue) 46.6% (1.1pts) 47.1% (0.7 pts) Capex 191 (4.4%) 327 5.2%
Slide 12: Wireline financials
Wireline financials ($M) Q2’17 Y/Y YTD’17 Y/Y Revenue 3,121 4.8% 6,101 2.3% Service 2,883 5.3% 5,626 3.0% Product 238 (0.8%) 475 (5.0%) Operating costs 1,815 (6.4%) 3,533 (2.9%) Adjusted EBITDA 1,306 2.6% 2,568 1.5% Margin 41.8% (0.9 pts) 42.1% (0.3 pts) Capex 818 (11.6%) 1,509 (7.6%) Capital intens
Slide 13: Media financials
Media financials ($M) Q2’17 Y/Y YTD’17 Y/Y Revenue 796 2.2% 1,547 1.8% Operating costs 572 (2.9%) 1,189 (3.2%) Adjusted EBITDA 224 0.4% 358 (2.7%) Margin 28.1% (0.5 pts) 23.1% (1.1 pts) Capex 33 2.9% 58 (5.5%) Capital intensity 4.1% 0.3 pts 3.7% (0.1 pts) Adjusted EBITDA-capex 191 1.1% 300 (4.2%) •
Slide 14: Adjusted EPS
Adjusted EPS Adjusted EPS(1) • Higher y/y adjusted EBITDA drove 10¢ of adjusted EPS growth in Q2 – 1¢ non-cash impact from purchase price amortization $1.79 $1.75 related to MTS acquisition • Increased y/y depreciation and amortization expense reflects full quarter of MTS contribution YTD'16 YTD'17
Slide 15: Free cash flow
Free cash flow FCF • Q2 FCF of $1,094M up 17.1% y/y on higher adjusted EBITDA and positive change in working capital ($M) +17.1% $1,583 • Higher severance paid in Q2’16 due to workforce $1,352 restructuring initiatives undertaken at end of 2015 • Capex up y/y due to higher planned spending on broadb
Slide 16: Outlook
Outlook 2017 guidance April 26 August 3 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 p