Bce Inc. · TSX:BCE
Bce — Q2 2018 Earnings Presentation
15 slides from Bce's earnings presentation, Aug 2, 2018
Slide 1: Q2 2018 Results Conference Call
Q2 2018 Results Conference Call August 2, 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: Q2 overview
Q2 overview • Leading broadband mobile and fibre networks delivered 154k total wireless postpaid, Internet and IPTV net additions, up 44.3% y/y • 1.7% revenue growth drove 2.0% increase in adjusted EBITDA with higher y/y margin of 42.0% • Continued strong wireless postpaid subscriber and financial r
Slide 5: Wireless operating metrics
Wireless operating metrics Postpaid net additions • Strong postpaid net additions of 122k, up 37.8% y/y, on 16.1% higher gross additions +37.8% 122k – Best Q2 performance since 2000 89k – Higher postpaid churn reflects promotional pricing discipline and more off-contract subscribers Q2'17 Q2'18 • Pr
Slide 6: Wireline subscriber metrics
Wireline subscriber metrics Internet and IPTV net additions • 10.8k total Internet net additions in seasonally low quarter, up 9.4k y/y IPTV Internet – 13k retail net additions in Q2 as wholesale declined y/y 31.5k – Total Internet revenue up ~9% y/y 17.8k +76.5% 10.8k • Gigabit Fibe expansion conti
Slide 7: Bell Media
Bell Media • CTV most-watched network for 17th year in a row – 7 of top 10 programs in core 2017/2018 broadcast year, including top 4 new programs – CTV Evening News is #1 choice for news across Canada • Strong 2018/2019 programming line-up – More returning top 20 hits and live events than any other
Slide 8: Glen LeBlanc, EVP & Chief Financial Officer
Glen LeBlanc EVP & Chief Financial Officer
Slide 9: Q2 financial review
Q2 financial review ($M) except per share data Q2’18 Y/Y YTD’18 Y/Y Revenue 5,786 1.7% 11,376 3.2% Service 5,129 1.0% 10,093 2.1% Product 657 7.7% 1,283 13.0% Adjusted EBITDA 2,430 2.0% 4,684 3.0% Margin 42.0% 0.1 pts 41.2% (0.1 pts) Net earnings 755 (7.2%) 1,464 (2.5%) Statutory EPS 0.79 (7.1%) 1.5
Slide 10: Wireless financials
Wireless financials ($M) Q2’18 Y/Y YTD’18 Y/Y Revenue 2,046 5.0% 3,992 7.4% Service 1,574 3.6% 3,086 4.8% Product 472 9.8% 906 17.4% Operating costs 1,142 (4.0%) 2,266 (8.1%) Adjusted EBITDA 904 6.2% 1,726 6.5% Margin 44.2% 0.5 pts 43.2% (0.4 pts) Capex 179 6.3% 343 (4.9%) Capital intensity 8.7% 1.1
Slide 11: Wireline financials
Wireline financials ($M) Q2’18 Y/Y YTD’18 Y/Y Revenue 3,135 0.6% 6,219 2.1% Service 2,947 0.4% 5,839 1.9% Product 188 3.9% 380 4.1% Operating costs 1,814 (0.2%) 3,596 (2.0%) Adjusted EBITDA 1,321 1.1% 2,623 2.1% Margin 42.1% 0.2 pts 42.2% 0.0 pts Capex 845 (3.3%) 1,592 (5.5%) Capital intensity 27.0%
Slide 12: Media financials
Media financials ($M) Q2’18 Y/Y YTD’18 Y/Y Revenue 791 (0.6%) 1,540 (0.5%) Operating costs 586 (2.4%) 1,205 (1.3%) Adjusted EBITDA 205 (8.5%) 335 (6.4%) Margin 25.9% (2.2 pts) 21.8% (1.3 pts) Capex 32 3.0% 52 10.3% Capital intensity 4.0% 0.1 pts 3.4% 0.3 pts • 0.6% decline in total revenue • Subscri
Slide 13: Adjusted EPS
Adjusted EPS Adjusted EPS(1) • Higher y/y adjusted EBITDA contributed 4¢ incrementally to adjusted EPS in Q2 $0.89 $0.86 • Depreciation and amortization expense up y/y, due to higher capital asset base from ongoing expansion of broadband fibre and wireless LTE-A networks Q2'17 Q2'18 • Increased net
Slide 14: Free cash flow
Free cash flow FCF • Q2’18 FCF of $994M in line with plan ($M) – Adjusted EBITDA-Capex up 2.4% y/y $1,094 $994 • Adjusted EBITDA growth and lower cash pension payments offset by higher planned capex spending and timing of working capital Q2'17 Q2'18 • Cash taxes relatively stable y/y as higher insta
Slide 15: Outlook
Outlook 2018 guidance May 3 August 2 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 Divid