BCE Inc. Q4 FY2024 earnings call

• Achieved all non-revenue targets for 2024, within revised revenue guidance despite pricing and media challenges. Consolidated EBITDA margin increased 1.2 points to 43.4%.
• Wireless: Positive service revenue growth, new postpaid customers on Bell brand. Broadband: Grew market share, 3 million residential Internet customers on FTTH, 10% increase in 2024. Media: Digital revenue grew 19%, digital now 42% of media revenue.
• Transformation agenda: Focus on customer experience, fiber-first strategy with Ziply Fiber acquisition, wireless value accretion, enterprise technology solutions, Bell Media as digital content powerhouse, and business transformation for cost savings.

Bell CTS: Postpaid net adds of 56,550 in Q4, down from prior year. Mobile phone ARPU down 2.7% but improved from Q3. Internet delivered over 34,000 new net retail subscribers. TV lost 444 net IPTV subscribers in Q4. Financials: Total revenue decreased 1.1%, wireless service revenue down 1.5%, Internet revenue up 3.4%, business solutions revenue grew 14% (6% organically), EBITDA positive, growing 0.7% to 42.9% margin. Bell Media: Digital revenues up 6% driven by Crave DTC streaming growth. Total advertising revenue increased for fourth consecutive quarter. EBITDA grew 14.2% to 20.3% margin.

• 2025 consolidated revenue guidance: minus 3% to positive 1% for total revenue, minus 2% to positive 2% for adjusted EBITDA.
• EPS projected 8% to 13% lower than 2024.
• Free cash flow projected to increase 11% to 19% in 2025.
• CapEx budgeted at $3.4 billion for 2025, $500 million lower than last year.
• Leverage ratio focus to reduce towards target of three times adjusted EBITDA.

• Regulatory uncertainty, particularly CRTC decisions impacting fiber build and competition.
• Sustained aggressive wireless pricing and soft traditional media advertising market.
• Macro-economic pressures affecting enterprise customer spending and consumer behavior.

Q: On US fiber expansion and noncore assets including Bell Media, and dividend reassessment.

A: Bell Media's digital pivot is a growth vector. US fiber build priority is closing Ziply acquisition, with potential third-party capital for growth. Dividend reassessed based on competitive, macro, and regulatory conditions.

Q: On leverage and noncore asset sales.

A: Focus on maintaining investment-grade credit rating, reducing net leverage ratio. Noncore asset sales include MLSE and Northwestel, with $1.3 billion of additional assets to be sold.

Q: On revenue guidance and $7 billion noncore asset target.

A: Higher revenue end achievable if recent pricing changes sustain. $7 billion target includes $5.7 billion already announced, with $1.3 billion of additional non-core assets to be sold.

Q: On CapEx, CRTC decision, and towers.

A: CapEx guidance tied to regulatory decision. Towers are part of untapped telecom infrastructure value, with financial advisors retained to surface value.

Q: On DRIP program and wireless back book.

A: DRIP not intended long term, tied to balance sheet actions. Key priority is reducing churn in wireless back book.