Verizon Communications Inc. · NYSE:VZ
Verizon Communications — Q2 2019 Earnings Presentation
16 slides from Verizon Communications's earnings presentation, Aug 1, 2019
Slide 1: 2Q 2019 Earnings Results
2Q 2019 Earnings Results August 1, 2019
Slide 2: “Safe Harbor” Statement
“Safe Harbor” Statement NOTE: In this presentation we have made forward-looking statements. These statements are based on our estimates and assumptions and are subject to risks and uncertainties. Forward-looking statements include the information concerning our possible or assumed future results of
Slide 3: Consolidated: Earnings Summary
Consolidated: Earnings Summary 2Q 2019 2Q '18 1Q '19 2Q '19 Reported EPS $1.00 $1.22 $0.95 Special items: Early debt redemption costs – – $0.28 Pension remeasurement credit – ($0.02) – Product realignment charges $0.12 – – Severance charges $0.06 – – Acquisition and integration-related charges $0.02
Slide 4: Consolidated: Adjusted EPS
Consolidated: Adjusted EPS 2Q 2019 $0.07 ($0.03) ($0.01) $1.23 ($0.28) $1.20 $0.95 2.5% Y/Y growth 2Q '18 Operational Commission ASC 842 2Q '19 Early Debt 2Q '19 Adjusted EPS* Performance Expense Lease Adjusted EPS* Redemption Reported EPS Deferral** Standard*** Costs * Non-GAAP measure. ** ASC 606
Slide 5: 2Q 2019 Overview
2Q 2019 Overview • Strong 2Q results – wireless service revenue growth and solid EBITDA CORE • Growth in net adds and strong customer loyalty • Disciplined capital allocation – strong cash flow • VZ network continues to top 3rd party tests; strengthened mmWave position NETWORK • Nine cities launched
Slide 6: Consolidated: Financial Summary
Consolidated: Financial Summary 2Q 2019 Total Revenue ($B) Adjusted EBITDA ($B)* Adjusted EPS* 36.8% 37.2% 37.7% $32.2 $32.1 $32.1 $1.23 $11.9 $11.9 $12.1 $1.20 $1.20 2Q '18 1Q '19 2Q '19 2Q '18 1Q '19 2Q '19 2Q '18 1Q '19 2Q '19 Y/Y % Growth (0.4%) Y/Y % Growth 1.8% Y/Y % Growth 2.5% Adjusted EBI
Slide 7: Consumer: Financial
Consumer: Financial 2Q 2019 Total Revenue ($B) $22.0 $22.1 $22.0 Wireline $3.2 $3.1 $3.1 Total revenue of $22.0B Wireless $18.8 $19.0 $18.9 Wireless service revenue of $13.5B 2Q ’18 1Q ’19 2Q ’19 Y/Y % Growth 3.4% 2.4% — • Up 2.5% Y/Y • Up 0.7% Q/Q Segment EBITDA* ($B) Fios revenue grew 1.2% 20.0 45
Slide 8: Consumer: Key Metrics
Consumer: Key Metrics 2Q 2019 Wireless Retail Connections (M) 100.0 95 .0 93.8 93.8 94.5 94.1 93.9 Prepaid 90.0 85 .0 80.0 6.6M Postpaid device activations 75.0 89.9 Postpaid 70.0 89.0 89.1 89.6 89.6 65 .0 • Gross adds of 2.7M, up 4.1% 60.0 55.0 • 2Q’19 upgrade rate of 4.3% vs 5.1% in 2Q ’18 50.0 2Q
Slide 9: Business: Financial
Business: Financial 2Q 2019 Total Revenue ($B) $7.9 $7.7 $7.8 Wholesale $1.0 $0.8 $0.8 Public Sector and Other $1.4 $1.5 $1.5 Small and Medium Business $2.6 $2.7 $2.8 Total revenue of $7.8B Global Enterprise $2.8 $2.7 $2.7 Wireless service revenue of $2.8B, up 6.1% Y/Y 2Q ’18 1Q ’19 2Q ’19 Y/Y % Gro
Slide 10: Business: Key Metrics
Business: Key Metrics 2Q 2019 Wireless Retail Postpaid Net Adds (K) 45 0.0 384 364 400.0 334 325 350.0 300.0 262 250.0 2.2M Postpaid device activations 200.0 15 0.0 • Upgrade rate of 4.2% 100.0 50.0 0.0 24.2M Retail connections 2Q ’18 3Q ’18 4Q ’18 1Q ’19 2Q ’19 Y/Y % Growth (15.4%) 325K Wireless po
Slide 11: Verizon Media Group
Verizon Media Group 2Q 2019 Revenue of $1.8B • Down 2.9% Y/Y • Up 4.4% Q/Q Focus on Super Channels: • Launched Yahoo Finance Premium • Launched HuffPost Plus Improving trends in the business © 2019 Verizon VlpHU09DSUQyMDE5UTE= 11
Slide 12: VZ 2.0 to VZ 1.0 Reconciliation: 2Q ’19
VZ 2.0 to VZ 1.0 Reconciliation: 2Q ’19 Consumer Revenue ($B) VZ 2.0 VZ 1.0* $22.0 ($3.1) $3.8 NM $22.7 Total Consumer Consumer Wireline Business Wireless Eliminations Total Wireless EBITDA* $10.2 $10.9 Margin %* 46.5% 48.2% Business Revenue ($B) $7.8 ($3.8) $3.1 $0.2 $7.1 ($0.2) Total Business Busi
Slide 13: Verizon 1.0: Total Wireless
Verizon 1.0: Total Wireless Service Revenue* ($B) EBITDA* ($B) $15.8 $16.1 $16.2 47.8% 47.4% 48.2% $10.7 $10.8 $10.9 - 2Q ’18 1Q ’19 2Q ’19 2Q ’18 1Q ’19 2Q ’19 YoY % Growth 0.8% 4.4% 3.1% YoY % Growth 10.0% 2.7% 1.8% EBITDA Margin %* Net Adds (K) Churn 1.50% 1.3 0% 1,220 1.12% 1.04% 1.08% 1.02% 0
Slide 14: Consolidated: Cash Flow Summary
Consolidated: Cash Flow Summary ($ in billions) 1H '18 1H '19 Cash flow from operations $16.4 $15.8 Capital expenditures $7.8 $8.0 Free cash flow* $8.6 $7.9 Dividends paid $4.8 $5.0 Total debt $114.6 $113.4 Unsecured Debt $106.0 $102.1 Net unsecured debt to adjusted EBITDA* 2.3x 2.1x Note: Amounts m
Slide 15: 2Q 2019 Summary
2Q 2019 Summary • Delivered strong growth in wireless service revenue and EBITDA FINANCIALS • Strong cash flow generation driven by disciplined capital allocation 2.0 • Customer-driven go-to-market strategy supported by Verizon 2.0 realignment • Seamless transition to new structure • Capitalizing on
Slide 16: Slide 16
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