Slide 1: Q3 2015 Results Conference Call
Q3 2015 Results Conference Call November 5, 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: Q3 overview
Q3 overview Healthy organic consolidated Adjusted EBITDA growth of 3.4% drove 12.0% higher Adjusted EPS and 10.4% y/y increase in free cash flow Strong Wireless financial results with revenue up 9.3% and EBITDA up 8.3% y/y 5th consecutive quarter of positive Wireline EBITDA growth with increas
Slide 5: Wireless operating metrics
Wireless operating metrics Q3’15 Y/Y • Postpaid gross adds up 6.6% y/y on increased market activity due to double cohort Postpaid gross additions 354k 6.6% • Postpaid net adds of 78k Postpaid net additions 78k (15.4%) – Higher postpaid churn reflects increased number of off-contract subscribers in t
Slide 6: Wireless network speed leadership
Wireless network speed leadership Mobile network deployments • 4G LTE deployment at 94% currently – on track to cover 98% of population by YE2015 % of Canadian population at end of Q3 2015 98% • LTE Advanced (LTE-A) network coverage now 94% at ~44% of population or 15M Canadians – Enables data speed
Slide 7: Wireline subscriber metrics
Wireline subscriber metrics IPTV and Internet net additions • 68k total IPTV net adds – Ontario and Québec activations up y/y, despite IPTV exceptionally strong TV results in Q3’14 Internet 308k 295k – Less new footprint expansion compared to last year 108k 116k • 58k total Internet net adds 138k 12
Slide 8: IPTV leadership and innovation
IPTV leadership and innovation IPTV innovation and development • First in Canada to launch wireless HD receiver and installation • First in Canada to offer Restart, an exclusive-to-Bell Fibe TV feature • Fibe TV app with “automatic” authentication recreates Fibe TV experience on any screen New and e
Slide 9: Broadband Internet leadership
Broadband Internet leadership BCE high-speed fibre deployment • Greater cumulative share of Internet net additions than all cable competitors combined now for 6 Residential and business locations consecutive quarters FTTN • Largest Gigabit Internet service availability in FTTP Canada today enabled b
Slide 10: Bell Media
Bell Media • Delivered positive revenue and Adjusted EBITDA growth in Q3 • Highest average audiences across conventional and specialty TV in Q3 – CTV led the Summer season with 9 of top 20 programs, more than any other network – Discovery and Space were the top 2 entertainment specialty TV services
Slide 11: Glen LeBlanc, EVP & Chief Financial Officer
Glen LeBlanc EVP & Chief Financial Officer
Slide 12: Q3 financial review
Q3 financial review ($M) except per share data Q3’15 Y/Y YTD’15 Y/Y Revenue 5,345 2.9% 15,911 2.6% Service 4,934 2.6% 14,705 2.4% Product 411 6.2% 1,206 4.7% Adjusted EBITDA 2,187 3.4% 6,478 3.1% Margin 40.9% 0.2 pts 40.7% 0.2 pts Statutory EPS 0.87 13.0% 2.40 2.6% Adjusted EPS(1) 0.93 12.0% 2.64 7.
Slide 13: Wireless financials
Wireless financials ($M) Q3’15 Y/Y YTD’15 Y/Y Revenue 1,772 9.3% 5,106 9.7% Service 1,619 8.3% 4,658 8.0% Product 143 22.2% 419 32.6% Operating costs 1,014 (10.1%) 2,919 (10.9%) Adjusted EBITDA 758 8.3% 2,187 8.1% Margin (service revenue) 46.8% 0.0 pts 47.0% 0.1 pts Capex 184 (1.1%) 523 (11.5%) Capi
Slide 14: Wireline financials
Wireline financials ($M) Q3’15 Y/Y YTD’15 Y/Y Revenues 3,028 (0.6%) 9,097 (0.2%) Service 2,756 (0.6%) 8,303 0.4% Product 272 (0.7%) 794 (5.8%) Operating costs 1,782 1.7% 5,345 1.0% Adjusted EBITDA 1,246 1.1% 3,752 1.0% Margin 41.1% 0.6 pts 41.2% 0.4 pts Capex 716 5.3% 2,068 1.0% Capital intensity 23
Slide 15: Media financials
Media financials ($M) Q3’15 Y/Y YTD’15 Y/Y Revenues 692 4.1% 2,158 0.5% Operating costs 509 (5.4%) 1,619 (0.8%) Adjusted EBITDA 183 0.5% 539 (0.6%) Margin 26.4% (1.0 pts) 25.0% (0.2 pts) Capex 27 27.0% 77 7.2% Capital intensity 3.9% 1.7 pts 3.6% 0.3 pts Adjusted EBITDA-Capex 156 7.6% 462 0.7% • Bell
Slide 16: Adjusted EPS
Adjusted EPS Adjusted EPS(1) • Strong organic Adjusted EBITDA growth contributed 7¢ per share to y/y increase +12.0% $0.93 • Lower y/y tax adjustments $0.83 – Tax recoveries of 1¢ per share in Q3’15 vs. 2¢ in Q3’14 – YTD’15 tax adjustments of 5¢ per share vs. 5¢ in 2014 – No further material tax adj
Slide 17: Free cash flow
Free cash flow FCF • All FCF components in Q3’15 include 100% of Bell Aliant FCF – No Bell Aliant dividend received in Q3’15 due to +10.4% $921M privatization that was completed on October 31, 2014 $834M • FCF up 10.4% y/y on higher Adjusted EBITDA(1) • Decreased working capital reflects timing of Q
Slide 18: Outlook
Outlook • No fundamental changes in overall outlook as we enter Q4 • Competitively well positioned across all services and in all markets 2015 guidance February 5 November 5 Revenue growth 1% to 3% On track Adjusted EBITDA growth 2% to 4% On track Capital intensity approx. 17% On track Adjusted EPS(
Slide 19: Key financial assumptions for 2015
Appendix Key financial assumptions for 2015 BCE Feb.5 Apr. 30 Aug. 6 Nov. 5 Employee benefit plans service cost approx. $260M No change No change approx. $280M (above Adjusted EBITDA) Net employee benefit plans financing cost approx. $110M No change No change No change (below Adjusted EBITDA) Deprec