Slide 1: Q1 2015 Results Conference Call
Q1 2015 Results Conference Call April 30, 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: Q1 overview
Q1 overview Positive revenue growth across all segments delivering 2.8% y/y increase in total revenue Adjusted EBITDA growth of 3.6% drives margin increase to 40.0% Exceptional wireless performance – 9.7% higher revenues with Adjusted EBITDA up 10.7% – Higher y/y postpaid net adds 3 consecut
Slide 5: Wireless operating metrics
Wireless operating metrics Q1’15 Y/Y • 35k postpaid net adds up 3.7% y/y – Continued strong sales of newest devices from Q4 Postpaid gross additions 279k (0.2%) • Postpaid churn improves to 1.18% reflecting Postpaid net additions 35k 3.7% benefit of investment in retention and service improvement Po
Slide 6: Wireline subscriber metrics
Wireline subscriber metrics • 40k total Internet net adds IPTV and Internet net additions – Higher Fibe speeds driving customer growth, lower IPTV residential churn and ~6% increase in residential ARPU Internet • 61k total IPTV net adds 101k – Less new footprint expansion compared to 2014 93k +8.1%
Slide 7: Bell Media
Bell Media • Positive revenue growth in Q1 • Programming driving strong audience levels – 14 of top 20 programs in winter season for CTV, including 8 of top 10 – Primetime audiences up 19% y/y – Non-sports specialty growth led by Space and Discovery • TSN ratings strength in Q1 driven by multiple sp
Slide 8: Service performance improvements continued in Q1
Service performance improvements continued in Q1 Calls Handled Bell Self-Serve Down 1.7M Up 29% (+1.2M) SELF-SERVE On Time Tech Arrival Fibe TV Churn >98% Down 12 bps 2-Hour Appointment Wed. Wireless Postpaid Churn 2-4 pm Window Now Offered Down 6 bps (Fibe TV customers) Residential Assurance Net Pr
Slide 9: Siim Vanaselja, EVP & Chief Financial Officer
Siim Vanaselja EVP & Chief Financial Officer
Slide 10: Q1 financial review
Q1 financial review BCE Q1’15 Y/Y • Revenue up 2.8% y/y with positive growth across all operating segments Revenue $5,240M 2.8% – 5.7% product revenue growth reflects higher y/y Service $4,846M 2.5% wireless customer upgrades Product $394M 5.7% • Adjusted EBITDA growth of 3.6% with Adjusted EBITDA $
Slide 11: Wireless financials
Wireless financials ($M) Q1’15 Y/Y Revenue 1,637 9.7% • Top-line strength driven by data revenue Service 1,500 8.1% growth of 24.4% and higher postpaid mix Product 127 35.1% • Adjusted EBITDA up 10.7% yielding strong Operating costs 925 (9.0%) 62% service revenue flow-through • Service margin up 1.2
Slide 12: Wireline financials
Wireline financials ($M) Q1’15 Y/Y • 2nd consecutive quarter of positive overall Revenues 3,027 0.3% revenue growth Service 2,758 0.7% • Residential Services revenue up 1.8% y/y Product 269 (4.2%) – Combined Internet and TV revenues up 6% Operating costs 1,786 0.2% – Fewer residential NAS losses con
Slide 13: Media financials
Media financials ($M) Q1’15 Y/Y • Media revenues up 0.6% Revenues 726 0.6% • Advertising revenues up 2.5% y/y – Growth in conventional TV from strength of live events (Super Bowl and Academy Awards) Operating costs 585 (2.3%) – Sports specialty TV and radio stable y/y – Recapture of advertising doll
Slide 14: Adjusted EPS
Adjusted EPS Adjusted EPS(1) • Strong organic growth in Adjusted EBITDA contributed $0.07 to y/y increase +3.7% $0.84 • Lower D&A expense due to increase in useful $0.81 lives of certain software assets • Lower interest expense due to higher capitalized Q1'14 Q1'15 interest and lower average cost of
Slide 15: Free cash flow
Free cash flow FCF • Seasonally low Q1 FCF of $231M, down $31M y/y – Q1’14 FCF included $32M in after-tax earnings from Astral remedy assets $262M $231M • Capex reflects higher planned spending in Q1’15 • Net interest paid up y/y on higher long-term debt outstanding y/y due to Bell Aliant privatizat
Slide 16: Outlook
Outlook 2015 guidance February 5 April 30 • Maintaining focus on wireless postpaid acquisition and profitability Revenue growth 1% to 3% On track • Expect continued y/y improvement in quarterly wireline financial performance Adjusted EBITDA growth 2% to 4% On track • Anticipate continued sluggish co
Slide 17: Key financial assumptions for 2015
Appendix Key financial assumptions for 2015 BCE February 5 April 30 Employee benefit plans service cost (above Adjusted EBITDA) approx. $260M No change Net employee benefit plans financing cost (below Adjusted EBITDA) approx. $110M No change Depreciation & amortization approx. $3,425M No change Inte