Slide 1: Q1 2018 Results Conference Call
Q1 2018 Results Conference Call May 3, 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: Q1 overview
Q1 overview • 102k total broadband wireless postpaid, Internet and IPTV net additions, up 29k or 39.0% y/y • 4.8% revenue growth drove 4.1% higher adjusted EBITDA with healthy 40.3% margin • Continued strong wireless operating momentum – Double-digit revenue growth of 10.1% – Adjusted EBITDA up 8.7%
Slide 5: Wireless operating metrics
Wireless operating metrics Postpaid net additions • Postpaid subscriber momentum maintained in Q1 with net additions of 68k +91.4% 68k – Best Q1 performance since 2011 – 4th consecutive quarter of lower y/y postpaid churn 36k • Lucky Mobile driving improved prepaid Q1'17 Q1'18 subscriber trajectory
Slide 6: Wireline subscriber metrics
Wireline subscriber metrics Internet and IPTV subscribers (EOP) • 20k total Internet net additions, up 31.1% y/y, in seasonally slower quarter IPTV Internet 5,424k – Broadband fibre driving new customer growth, lower churn and higher residential ARPU 5,182k +4.7% – 44k new FTTH customers added in Q1
Slide 7: Bell Media
Bell Media • Stable contribution by Bell Media to overall BCE consolidated FCF in Q1 despite content cost pressures and Winter Olympics on CBC • Leading TV viewership and ratings maintained – 9 of top 20 programs for CTV in winter season • TSN and RDS remained Canada’s leading English and French-lan
Slide 8: Glen LeBlanc, EVP & Chief Financial Officer
Glen LeBlanc EVP & Chief Financial Officer
Slide 9: Q1 financial review
Q1 financial review ($M) except per share data Q1’18 Y/Y • IFRS 15 changeover on January 1, 2018 – No impact on underlying operating fundamentals Revenue 5,590 4.8% – No material change in y/y growth rates compared to Service 4,964 3.2% prior accounting basis Product 626 19.2% – For comparability, 2
Slide 10: Wireless financials
Wireless financials ($M) Q1’18 Y/Y • 10.1% revenue growth driven by a larger customer base, higher y/y postpaid Revenue 1,946 10.1% subscriber mix and Bell MTS financial Service 1,512 6.1% contribution Product 434 26.9% – Service revenue up 7.1% excluding retroactive regulatory impact Operating cost
Slide 11: Wireline financials
Wireline financials ($M) Q1’18 Y/Y • Revenue up 3.6% y/y on steady broadband subscriber growth and Bell MTS contribution Revenue 3,084 3.6% – Internet and TV revenue up ~7% y/y Service 2,892 3.5% – No material contribution from AlarmForce Product 192 4.3% • Improved business markets performance Oper
Slide 12: Media financials
Media financials ($M) Q1’18 Y/Y • Q1 revenue stable y/y Revenue 749 (0.3%) • Advertising revenue down 0.4% – TV advertising impacted by ongoing market softness and Winter Olympics on CBC Operating costs 619 (0.3%) – Partly offset by outdoor advertising and digital growth • Subscriber revenue up 0.4%
Slide 13: Adjusted EPS
Adjusted EPS Adjusted EPS(1) • Adjusted EBITDA growth contributed 7¢ increase to adjusted EPS in Q1 $0.80 $0.80 • Increased depreciation and amortization expense reflects higher capital asset base including MTS Q1'17 Q1'18 • 2¢ per share dilution in Q1’18 from shares issued for MTS acquisition in Ma
Slide 14: Free cash flow
Free cash flow FCF • Higher y/y FCF driven by strong adjusted EBITDA growth, including MTS contribution, ($M) and positive change in working capital +9.8% $537 $489 • Capex reflects higher planned spending in 2018 • Higher interest paid due to MTS public debt assumed and timing of debt service payme
Slide 15: Updated financial targets for 2018
Updated financial targets for 2018 BCE February 8(1) May 3(2) • No change to 2018 guidance growth rates due to IFRS 15 transition Revenue growth 2% to 4% 2% to 4% Adjusted EBITDA • Adjusted EPS dollar guidance for 2% to 4% 2% to 4% growth 2018 increased to reflect favourable impact on adjusted EBITD