BCE Inc.

Please stand by. Your meeting is about to begin. Good morning, ladies and gentlemen. Welcome to the BCE Q1 2021 results conference call. I would like to turn the meeting over to Mr. Thayne Fotopoulos. Please go ahead, Mr. Fotopoulos.

Thank you, Donna, and good morning to everyone. Also joining me on the call today are Mirko Bibic, BC's President and CEO, and our CFO, Glenn LeBlanc. Before we begin, as usual, I'll draw your attention to our safe harbor statement. reminding you that today's slide presentation and remarks made during the call will include forward-looking information and therefore is subject to risks and uncertainties. Results could differ materially. We disclaim any obligation to update forward-looking statements except as required by law. Please refer to the company's publicly filed documents for more details on assumptions and risks. With that, over to you, Mirko.

Thanks, Zane. Good morning, everyone. In every successive quarter since the onset of COVID-19, BCE has delivered sequential quarterly improvement in our operating results, and Q1 was no exception. Although the pandemic's effects are still present, we achieved both consolidated revenue and adjusted EBITDA growth for the first time since Q4 of 2019. This is an important milestone that speaks to the stability and resiliency of our operations, our ability to operate effectively under challenging conditions, the strength of our leading broadband networks and services, and our management team's focused executions. We continue to grow broadband market share, adding a leading 108,468 total mobile phone, mobile connected device, retail internet, and IPTV net subscribers this quarter, an increase of 51% over last year. And with $940 million of free cash flow generated this quarter, we have the financial flexibility with $6.5 billion of available liquidity to drive both our national investment strategy and BCE's higher common share dividend for 2021. Now for a quick update on the progress we're making in advancing our strategic priorities in 2021. Our broadband investment acceleration program is in full swing, with over $1 billion in new capital spent in Q1. We equipped another 148,000 locations with either direct fiber or wireless home internet technology this quarter, and another 370,000 are currently under construction, keeping us on track to reach 6.9 million total homes and businesses passed by the end of this year. And as part of our overarching goal to advance how Canadians connect with each other and the world, we've also made several announcements recently to expand broadband connectivity to more rural and remote areas of Canada. These include a partnership with the government of Quebec that will see direct fiber rolled out to 31,000 locations in 100 underserved communities, and an initiative enabled by the CRTC's Universal Broadband Fund to bring faster internet to more than 10,000 homes in Yukon and the Northwest Territories, including Inuvik, which just became the first all-fiber community in the Arctic Circle. I'll turn now to wireless. Bell's 5G network is on course to cover more than 50% of the population by year-end nationally. However, success in 5G and IoT leadership depends on multiple ingredients beyond coverage. It's about delivering the fastest speeds, the lowest latency, and flexibility that can only be achieved through extensive cell site fiberization and slicing of the network. and leveraging network points of presence, such as central offices for multi-axis edge computing that supports product development. Bell is also the largest B2B provider in Canada, benefiting from deep relationships with the biggest Canadian companies that we can service almost anywhere in the country. So those are the multiple ingredients ensuring that Bell will be the leader in 5G. Although the full benefits of 5G technology won't be realized until mid-band spectrum is available and the partnership ecosystem evolves, we're already launching new services that are taking full advantage of the unprecedented speed and capacity of 5G now. These include the industry's first mobile 5G hotspot and our innovative TSN and RDS 5G view apps that offer new interactive new ways to watch sports. We're also more generally delivering a better customer experience at every level, driving improved satisfaction, loyalty, and retention, and another leading performance among national carriers for a sixth consecutive year in the most recent report from the CCTS, which showed a 17% drop in the number of complaints by Bell customers. We made progress in diversifying our channel mix and expanding digital channel capabilities. Digital sales in Q1 were up more than 200% versus last year, and will grow further over time as we continue to improve online tools and functionality. This past quarter, we introduced some new self-serve features online and via the MyBell and Virgin Mobile My Account apps, which included dynamic call routing, the ability to change a rate plan or upgrade a device, as well as in-app chat features for Bell, Virgin, and Lucky Wireless customers. Let me turn now to slide four of our presentation. Corporate responsibility is an integral part of our six strategic imperatives that informs all of Bell's policies, decisions, and actions. Bell's ESG commitment supports this purpose, driving our unparalleled investments in broadband network infrastructure and service innovation, unmatched environmental leadership, investments in our teams and communities, and adherence to the highest financial, operational, and data governance standards, all overseen by our board at the Corporate Governance Committee. Our networks and services are important enablers of Canada's clean economy, with the power of 5G mobile connections poised to be a major factor in helping multiple sectors reduce emissions. Bell is an acknowledged leader in the green economy, recently becoming the first communications company in North America to achieve ISO 5001 certification for our energy management system and announcing our objective to achieve carbon neutral operations in 2025. And I'm happy to report that Bell was again named one of Canada's greenest employers, the only national communications provider to be ranked for a fifth straight year. And of course, through Bell Let's Talk, we're supporting mental health action in communities throughout Canada, helping over 1,100 organizations since 2010 with funding commitments now totaling more than $120 million, with an ultimate target of at least $155 million by 2025. We're undertaking meaningful actions to foster a more diverse workplace, including new targets for BIPOC representation in Bell's senior management team of 25% by 2025, and 40% of all new graduate and student hires in the same timeframe. Bell is also a member of the 30% Club and a signatory to the Catalyst Accord 2022, which aim to increase the proportion of women serving on Canadian corporate boards to at least 30%. At our annual shareholders meeting later this morning, we expect to exceed that objective. All this to say that ESG is an important focus area for us. Strong environmental, social, and governance practices contribute to driving better operating results and creating shareholder value. And given who we are and the role we play in our industry, we'll continue to build on that leadership position. Okay, over to slide five. and our operating metrics for Q1. I'll start with wireless. This quarter, we've modified our subscriber results reporting to align with many of our large North American peers as the Canadian industry evolves towards 5G. Specifically, we're now disclosing mobile phone and mobile connected device metrics separately. For comparability, we've restated our 2020 quarterly wireless subscriber metrics to reflect these changes. This change reflects our strategic focus on higher value smartphone loading and the associated margin and economics in terms of lifetime value and EBITDA growth, while also enhancing the transparency of our disclosure. Wireless customer activity was strong in Q1, despite ongoing COVID restrictions. Subscriber loading showed good year-over-year growth, post-paid churn remained low at 0.89%, and ABPU continued to recover. We delivered 33,000 mobile post-paid phone net ads this quarter, up 31,000 over last year. In terms of connected devices, we realized strong net ads of 74,000 or 51% higher year-over-year, reflecting increased demand for Bell IoT solutions, including connected car subscriptions. In prepaid, despite lower year-over-year churn, our customer base decreased by 31,000 net subscribers. Lower market activity reflected a slowdown in immigration and international travel to Canada during the pandemic, as well as reduced retail store traffic. resulting in 27% fewer gross ads compared to last year. That said, we've grabbed considerable market share over the past couple of years because of Lucky Mobile, which has higher than average ARPU, and I see prepaid growth resuming in the back half of this year. Lastly, on wireless, blended ARPU decreased 3.4%. This, of course, reflects the industry-wide pressure on roaming associated with travel restrictions. and lower data overage revenue as customers continue to subscribe to higher data threshold and unlimited plans. Notably, around 60% of existing customers who have migrated to unlimited have upgraded to higher rate plans, which sets us up well for the mass commercialization of 5G. Let's turn to wireline. We added 21,000 total new net internet customers, which compares well to last year's exceptionally strong result when we experienced a surge in demand as consumers began to work and spend more time at home. If we look at internet net ads within our fiber footprint specifically, it paints an even stronger picture. We delivered 37,000 retail residential internet net ads in our FTTH footprint. That's up an impressive 43% over last year. As our broadband footprint advantage keeps expanding, we begin to see almost immediately a favourable impact on both subscriber growth and internet revenue, which grew a very strong 12% in Q1. It's the reason we're so confident in our accelerated capital investment plan. In TV, we added 11,000 net new IPTV subscribers, 8,000 higher than last year, representing our first quarter of year-over-year growth in two years. This improvement can be attributed to strong Bell 5 TV and Virgin TV performance and lower customer churn, particularly in our fiber footprint. So that's a very positive result in a mature Canadian TV market, and it speaks to the pull-through impact and strong symbiosis between broadband internet, content, and digital media. Satellite net customer losses decreased for a sixth consecutive quarter, improving more than 7% versus last year. And we continue to see a reduction in home phone customer deactivations, resulting in 17% fewer net losses. And as I've mentioned in the past, any time the rates of decline slow for these high margin services, it's accretive to cash flow. Over to Bell Media now. Although total advertising revenue was down year over year due to COVID impacts on radio and out of home, TV advertiser demand continued to recover with a full quarter of Major League Sports. Our Super Bowl broadcast, which was the third highest in Canadian history, continued strong specialty news performance and the significant gains in primetime viewership and ad sales at our French-language conventional network, Google. Taken all together, this drove a 3.5% increase in TV advertising revenue in Q1. That's a very encouraging result that should strengthen as we're beginning to lap last year's COVID impact. TSN and RDS remain the top English and French language specialty pay TV channels in Q1, and building on our celebration of women leaders at Bell, TSN made history just last month with the first all-female broadcast of an NBA game. Consistent with our Digital First strategic focus, we made progress on growing our streaming distribution platforms and digital advertising markets. Crave enjoyed standout performance with its best quarter since the final season of Game of Thrones, adding 139,000 new subscribers in Q1 to surpass 2.9 million total customers. That's up 12% over last year. Digital revenues increased 16% in Q1 and now represent 17% of total Bell Media revenue and that's up 14% from last year. Going forward, we're expanding our digital ad inventory and modernizing our traditional distribution platforms to ensure they have the capabilities to enable dynamic ads on video on demand and ultimately on live TV. We want our entire ad inventory, both digital and traditional, to be more dynamic and addressable. Offering targeted advertising capabilities and leveraging data insights from across Bell for advertisers will enable us to take a bigger slice of the ad spending pie on any platform we operate, from 5TV to AltTV and Virgin TV to Bell Streamer to the traditional TV channels and the CTV AVOD app all the way potentially to Crave. Repatriating digital ad dollars back into Canada is a good thing for our economy, consumers, and certainly for Canadian broadcasters. And in support of this objective, yesterday we announced a new partnership with AT&T Zander to create Canada's first self-serve omni-channel advertising platform for TV and digital that will deliver increased automation functionalities and leverage data to facilitate new and easier media buying capabilities. The new platform will enable Canadian advertisers to run scaled, targeted campaigns using premium inventory over multiple platforms and channels. It's a great addition to Bell's strategic asset management suite of data-enabled and privacy-compliant tools and offers marketers and advertisers the ability to identify, understand, and connect with the right audiences. On that, I'll hand the call over to Glenn for a review of our Q1 financial results.