Slide 1: Q2 2015 Results Conference Call
Q2 2015 Results Conference Call August 6, 2015
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 2015 financial guidance (including revenues, Adjusted EBITDA, capital intensity, Adjusted EPS and free cash flow), our business ou
Slide 3: George Cope, President & Chief Executive Officer
George Cope President & Chief Executive Officer
Slide 4: Q2 overview
Q2 overview Consolidated Adjusted EBITDA up 2.5% y/y on solid organic growth across all segments Strong wireless execution drives 10.0% revenue growth with 5.3% higher Adjusted EBITDA 4 consecutive quarter of positive Wireline Adjusted EBITDA growth th Solid total Internet and IPTV net adds
Slide 5: Wireless operating metrics
Wireless operating metrics Q2’15 Y/Y • Postpaid gross adds 6.9% higher y/y driven by increased market activity due to double cohort Postpaid gross additions 318k 6.9% • Postpaid net adds of 61k Postpaid net additions 61k (10.2%) – Higher postpaid churn reflects heightened level of promotional activi
Slide 6: Wireline subscriber metrics
Wireline subscriber metrics IPTV and Internet net additions • 19k total Internet net adds, up 1k y/y – Ontario and Québec customer activations up y/y IPTV Internet 170k 170k – Reduced promotional offer intensity in Atlantic 44k 59k – Higher y/y student deactivations in Q2’15 given strong back-to-sch
Slide 7: Toronto high-speed fibre infrastructure project
Toronto high-speed fibre infrastructure project • $1.14B capital investment in City of Toronto – Part of broader commitment to invest $20B in total capital expenditures by the end of 2020 • Largest fibre build in any North American city • Gigabit Fibe to enable fastest Internet service to 1.1M Toron
Slide 8: Bell Gigabit Fibe
Bell Gigabit Fibe Gigabit Fibe residential availability in 2015 • Gigabit Fibe service will be available to 2.2M homes by YE2015 # of homes – ~1.3M homes in Ontario and Québec on August 10 – Atlantic region launch by end of Q3’15 • Fibre footprint to cover more than 7.9M homes and businesses by end
Slide 9: Bell Media
Bell Media • Delivered positive EBITDA growth in Q2 • CTV completes one of it best seasons ever – 15 of top 20 programs in September-to-May 2014/2015 broadcast season, including 4 new series in the top 10 – Only network to achieve core primetime audience growth over last year: 5% (A25-54); 9% (A18-3
Slide 10: Focus on Strategic Imperatives paying off with consistent and steady growth over past 8 years
Focus on 6 Strategic Imperatives paying off with consistent and steady growth over past 8 years BCE revenue mix • BCE growth services driving healthy organic growth in revenue and Adjusted EBITDA – Total revenue from growth services up $165M, or 4.0%, in Q2’15 $17.7B • Over 80% of revenues in 2015 f
Slide 11: Glen LeBlanc, EVP & Chief Financial Officer
Glen LeBlanc EVP & Chief Financial Officer
Slide 12: Q2 financial review
Q2 financial review BCE Q2’15 Y/Y YTD’15 Y/Y Revenue $5,326M 2.0% $10,566M 2.4% Service $4,925M 2.0% $9,772M 2.3% Product $401M 2.3% $794M 3.9% Adjusted EBITDA $2,197M 2.5% $4,291M 3.0% Margin 41.3% 0.2 pts 40.6% 0.2 pts Statutory EPS $0.90 15.4% $1.53 (2.5%) Adjusted EPS(1) $0.87 6.1% $1.71 4.9% Ca
Slide 13: Wireless financials
Wireless financials ($M) Q2’15 Y/Y YTD’15 Y/Y Revenue 1,697 10.0% 3,334 9.9% Service 1,539 7.7% 3,039 7.9% Product 149 41.9% 276 38.7% Operating costs 980 (13.7%) 1,905 (11.3%) Adjusted EBITDA 717 5.3% 1,429 7.9% Margin (service revenue) 46.6% (1.1 pts) 47.0% 0.0 pts Capex 188 (11.9%) 339 (18.1%) Ca
Slide 14: Wireline financials
Wireline financials ($M) Q2’15 Y/Y YTD’15 Y/Y Revenues 3,042 (0.2%) 6,069 0.0% Service 2,789 1.1% 5,547 0.9% Product 253 (12.1%) 522 (8.2%) Operating costs 1,777 1.1% 3,563 0.6% Adjusted EBITDA 1,265 1.0% 2,506 1.0% Margin 41.6% 0.5 pts 41.3% 0.4 pts Capex 696 5.6% 1,352 (1.4%) Capital intensity 22.
Slide 15: Media financials
Media financials ($M) Q2’15 Y/Y YTD’15 Y/Y Revenues 740 (2.8%) 1,466 (1.1%) Operating costs 525 4.7% 1,110 1.2% Adjusted EBITDA 215 2.4% 356 (1.1%) Margin 29.1% 1.5 pts 24.3% 0.0 pts Capex 30 6.3% 50 (8.7%) Capital intensity 4.1% 0.1 pts 3.4% (0.3 pts) Adjusted EBITDA-Capex 185 3.9% 306 (2.5%) • Tot
Slide 16: Adjusted EPS
Adjusted EPS Adjusted EPS(1) • Healthy organic Adjusted EBITDA growth across all segments drove 5¢ increase in Adjusted EPS +6.1% $0.87 • Lower D&A expense due to increase in useful $0.82 lives of certain software assets in Q3’14 Q2'14 Q2'15 • Lower y/y tax adjustments (1) – Tax recoveries of 1¢ per
Slide 17: Free cash flow
Free cash flow FCF • All FCF components in Q2’15 include 100% of Bell Aliant FCF – No Bell Aliant dividend received in Q2’15 due to +14.2% $931M privatization that was completed on October 31, 2014 $815M • FCF up 14.2% y/y reflecting growth in Adjusted EBITDA(1) and a positive change in working capi
Slide 18: Outlook
Outlook 2015 guidance February 5 August 6 • Ongoing strong wireless contribution to overall revenue growth and profitability – Sustained high level of retention spending Revenue growth 1% to 3% On track expected in 2H’15 • Positive wireline Adjusted EBITDA growth Adjusted EBITDA projected for 2H’15
Slide 19: Key financial assumptions for 2015
Appendix Key financial assumptions for 2015 BCE February 5 April 30 August 6 Employee benefit plans service cost approx. $260M No change No change (above Adjusted EBITDA) Net employee benefit plans financing cost approx. $110M No change No change (below Adjusted EBITDA) Depreciation & amortization a