BCE Inc.

Good morning, ladies and gentlemen. Welcome to the BCE Q1 2022 results conference call. I would now like to turn the meeting over to Mr. Thayne Fotopoulos. Please go ahead, Mr. Fotopoulos.

Thank you, Elena, and good morning to everybody. It's good to be back with all of you this quarter hosting today's conference call. As usual, here with me today are Mirko Bibic, BCE's President and CEO, and our CFO, Glenn LeBlanc. You can find all of the relevant Q1 documents on the investor relations page of the bce.ca website, which we posted earlier this morning. However, before we begin, I'd like to 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 statements and information, and therefore are 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 our publicly filed documents for more details on assumptions and risks. With that out of the way, I will hand it over to Mirko.

Thank you, Thayne, and good morning, everyone. We've had a very positive start to the year. Our dedicated Bell team once again delivered strong operational financial results, driven by consistent and disciplined execution, leading broadband networks and services, and a focus on service excellence, all underpinned by a set of strategic initiatives that have guided us over the past two years, as you know, and that will continue to guide us in 2022 and beyond. Although Omicron undoubtedly is causing some near-term disruption, notably for Bell Business Markets and media advertising, we achieved robust total revenue and adjusted EBITDA growth of 2.5% and 6.4% respectively in Q1. This represents the first quarter in which our consolidated financial results surpassed pre-COVID levels. The second year of our historic CAPEX acceleration program is in full swing with close to a billion dollars in new capital spent in the quarter. We remain on pace to deliver approximately 900,000 new direct fiber connections and further expand our 5G service footprint to more Canadians while also launching a standalone 5G core, notably on 3.5 GHz spectrum. With our mid-term broadband internet build-out plan 80% completed, and 5G network service available to more than 80% of Canadians by year-end, we expect CapEx to begin decreasing starting in 2023. Bell's wireless performance in Q1 was a highlight, as we continued to balance market share growth with operating profitability. We led the industry once again this quarter in service revenue, ARPU, and EBITDA growth. In fact, at 8.7%, we delivered our best quarterly wireless service revenue growth rate in 11 years. This is reflective of our consistent focus on high value post-paid growth and effective subscriber base management. And our new unlimited ultimate plans introduced in February truly demonstrate the value prop of 5G and highlight Bell Mobility's differentiated offerings, serving as a catalyst for the consumer upgrade cycle from 4G to 5G handsets and service. On the enterprise side of things, our accelerated broadband investments mean that innovative applications, solutions, and platforms that rely on converged fiber and 5G networks are becoming more widely available. And our partnerships with leading hyperscalers will expand the use of multi-axis edge computing and other next-gen technologies. Building on these partnerships and our unmatched network capabilities, Bell was the first telco in the world to deploy Google Distributed Cloud Edge for core network functions, an important milestone that gives Bell the flexibility to deploy 5G network functionality in a variety of different architectures. And just last week, we launched the first public MEC in Canada powered by AWS Wavelength. The inaugural AWS Wavelength Zone has been launched in the Toronto region with customers including apparel retailer Rutsack, robot food delivery service Tiny Mile, and drone operator Drone Delivery Canada, among the first to leverage this new 5G infrastructure. As I've stated before, the demands of 5G-enabled network services and applications will require the fastest data speeds and the quickest response times to provide the very best user experience. And in that regard, our network capabilities and footprint breadth are unmatched. But we're not standing still. In fact, just this past April, we raised the bar with a widespread commercial introduction of a 3 gigabit symmetrical internet service in most areas of Toronto. These are speeds that cable networks just cannot match. And in February, we acquired internet provider Ebox to strengthen our competitive position and accelerate our market share gains in the value-seeking consumer segment of the Quebec market. Even as we continue to build globally leading broadband infrastructure, telecom services also remain affordable. If you compare the cost, for example, of a telecom service bundle, let's say pure fiber internet, IPTV, and unlimited mobile 5G data plans to the price of gasoline, an average sized car would require a monthly minimum of probably around $400 in gas. This is approximately two times higher than the cost of a starter package from Bell, which would give you unlimited usage 24-7 every day of any given month. According to the most recent StatsCan data, the price of all goods and services in aggregate across the Canadian economy over the past two years has increased about 9% versus a decline of 26% for telecom services. Turning to media, we continue to experience good momentum across our streaming distribution platforms and digital advertising markets. Total Crave subscriptions increased 3.4% over last year, while customers on direct streaming service grew a strong 19%. This, together with our Canadian-leading CTV AVOD app, continued rapid scaling of the SAM TV advertising sales tool, where year-to-date bookings are already 45% ahead of full-year 2021 levels, and our recently launched Nouveau Info digital platform, contributed to exceptional digital revenue growth of 84% this quarter. And lastly on media, FanDuel, North America's premier online gaming company, struck a multi-year agreement with TSN to become its official sportsbook partner, beginning in Ontario. Let me now turn to our strategic imperative to champion the customer experience. Our customer experience-focused culture enabled by the strong performance of our teams and investments in AI and machine learning capabilities continues to drive improved satisfaction, loyalty and retention as you see in lower year-over-year churn rates across all our wireless and wireline retail residential services. With innovations like enhanced self-serve and self-install, award-winning apps, move valet and virtual repair Bell had the largest reduction in customer complaints among national providers in the latest report from the CCTS, with a 36% reduction over the previous year. The share of Bell's overall complaints also decreased by 13%, reducing our share for a seventh consecutive year. So really, if you take a step back and take a view of the full picture, we're aggressively building out next-gen digital networks. We're aggressively executing on our digital-first media strategy. We're gaining subscribers, share, revenue, and earnings growth is coming along with it, and that's on the back of our digital networks and platforms. We're digitizing our customer experience tools, both those we use to serve customers and those that our customers are using themselves. And all of this is allowing us to stop using and to, in fact, decommission legacy networks, products, and tools, from copper to satellite technologies, where appropriate and beneficial. I also wanted to highlight now a couple of developments on the ESG front. Following the formalization of our commitment in 2021 to hold Bell to the highest ESG standards with the launch of Bell for Better, we've broadened our strategic imperatives to include sustainability directly in our corporate strategy. Consistently ranked as one of Canada's greenest employers, we've set increasingly ambitious environmental targets with our commitments for GHG emissions and waste reduction. These include a 57% reduction of our absolute Scope 1 and Scope 2 emissions by 2030, the recovery of 7 million used TV receivers, modems, Wi-Fi pods and mobile phones over the next two years, and reaching and maintaining a 15% total waste-to-landfill reduction ratio by 2025. Reflecting our continued efforts to engage and invest in our people, we were recently named as a top family-friendly employer, One of the best workplaces for young people and young professionals, as well as a top diversity employer for a sixth consecutive year in 2022. Just for those following along, I'm going to turn now to slide six. Provide an overview of some key operating metrics for the quarter. I'll start first with wireless. As I mentioned, definitely a highlight this quarter. We added 34,230 new net postpaid mobile phone subscribers. That's up 4% from last year. Really a great result underpinned by our best ever Q1 postpaid churn result, which improved 10 basis points over last year and now sits at 0.79% for the quarter. We also were even more targeted in our competitive approach as our objective is to get the right market share, as I've mentioned several times in past quarters. We're really focusing on high-value smartphone subscribers to grow service revenue and ARPU. It's a disciplined approach for sure, and it's paying dividends, as you can see by our industry-leading ARPU growth, and that was up an impressive 5.1% in Q1. This was supported by increased travel, which drove higher roaming volumes and higher monthly recurring charges due to a greater mix of customers on premium rate plans. For mobile connected devices, the strategic focus remains on IoT subscriptions as innovative new business and consumer applications begin to emerge with 5G, and these increased 6.5% over last year to approximately 94,000. So that's wireless, and let's move now to wireline. You know, the fiber acceleration strategy is really working. We added more than 26,000 net new retail internet customers, and that represents a 23% increase over last year. And if you look specifically at our fiber-to-the-home footprint, we delivered an even stronger result with 38,049 new customer additions, and that once again drove strong residential internet revenue growth, sitting at around 8% in Q1. We also added 12,260 net UIP TV subscribers. That's up 14.6% versus Q1 last year, and that's on the back of our customer segmentation approach and lower customer churn. And satellite TV net customer losses were, for all intents and purposes, stable year over year at just over 20,000, while home phone net losses improved 17% to 42,345. So if you put it all together, accelerated fiber expansion, customer experience improvement, lower customer churn, and the best product offerings are continuing to drive more and more customers onto Bell 5. At the end of Q1, 91% of Bell residential households with internet and TV were on our fiber network. At Bell Media, in addition to continued strong digital momentum, TV advertising demand in Q1 strengthened versus last year, despite some advertiser pullback in some sectors due to the Omicron lockdowns and some supply chain disruptions. This was the result of a fuller live sports programming schedule with more NFL playoff games, our Super Bowl broadcast, which was the most watched program in the quarter, and that helped to keep TSN and RDS atop the rankings again. Continued strong specialty news performance and nouveau broadcast, which continued to outpace all other French-language conventional TV competitors in viewership growth with prime time audiences that were up 13% this winter. Taken all together, these factors drove a 7% year-over-year increase in total TV ad revenue. This was above pre-pandemic levels for a third consecutive quarter and 11% higher than Q1 of 2019. I'm going to hand it over to Glenn in a second, but before I do, I'd like to acknowledge the Bell team as we began our return to a new, more flexible hybrid workplace in early April after a long two-year hiatus. And I want to thank them for their outstanding support for one another and for our customers under very difficult circumstances. What they've done in keeping Canadians connected and informed every single day has been nothing short of impressive. I truly believe that our company has come out of COVID stronger. We're still in COVID, but we're coming out of this stronger. We have an ambitious customer first agenda. We have an ambitious network build agenda, and we have a corporate purpose that's clearer and more important than ever. And on that, over to you, Glenn.