Cogeco Communications Inc.

Good day and welcome to the Cogeco Inc. and Cogeco Communications Inc. Q2 2025 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Patrice Ouimet, Chief Financial Officer of Cogeco Inc. and Cogeco Communications Inc. Please go ahead, Mr. Ouimet.

Thank you. So good morning, everyone. Welcome to our second quarter results conference call. So as usual, before we begin the call, I'd like to remind listeners that today's discussion will include estimates and other forward-looking information. We ask that you review the cautionary language in the press releases and MD&A issued yesterday, as well as in our annual reports regarding the various risks, assumptions, and uncertainties that could cause actual results to differ. With that, I will now pass the line to Fred Perron for opening remarks. Thank you, Patrice, and good morning, everyone.

We're pleased to share our Q2 results today and also provide an update on our transformation. As a reminder, our plan is to create additional shareholder value by increasing our cash flow, sustaining our dividend growth, and reducing our debt. with the option of also resuming share buybacks at one point in the future. Now, more specifically, we expect free cash flow to grow materially over the next two years, and let me be clear, this is not just an aspiration, it's a plan. This increase in cash flow will be enabled, in particular, by the natural end of a CapEx investment cycle in rural network-built and, to a lesser extent, network modernization efforts having reached our objectives. In addition, our relatively low dividend payout ratio as a percentage of cash flow provides sustainability and room for continued dividend growth. During the second quarter, we continued to pursue our three-year transformation program to further accelerate our performance. with the same five priorities we've been communicating since last year. That is Canada-US synergies, digitization of sales and service interactions, advanced analytics, network expansion completion, and wireless ramp-up. The merger of our US and Canadian teams is now well behind us. and we're very pleased to see the high level of engagement and collaboration of our colleagues on both sides of the border. While a lot of organizational synergies are already being captured from this change, we're just starting to scratch the surface around technical and operational synergies. On the wireless front, U.S. volumes are starting to ramp up following an initial tuning period. and the preparation for an upcoming Canadian wireless launch is progressing well. We've now opened pre-registrations for our existing Canadian wireline customers as part of our wireless pre-launch lead generation campaign, and demand has exceeded our expectations so far. In terms of operational performance, second quarter results were ahead of expectations as the teams continued to execute well and as we deferred certain investments to the back half of the year. More specifically, our transformation efforts contributed to the expansion of our consolidated EBITDA margins. Our fiber-to-the-home expansion program added close to 7,000 new homes passed in the quarter, mainly in Canada. In Canada, we also experienced another quarter of strong Internet subscriber metrics, despite ongoing competitive intensity in the market. And in the U.S., our customer satisfaction metrics and Ohio performance continue to show year-over-year improvements. At Cogeco Connection, our Canadian telecommunications business, We grew our internet customer base by a total of 8,300 subscribers this quarter. We've been adding customers under both the Cogeco and Oxio brands over the past year. Our Ontario subsidized network expansion program will continue throughout fiscal 2025 with an expected completion in fiscal 2026. As a reminder, Our Quebec network expansion program was largely completed in our previous fiscal year, and we're very satisfied with our customer additions in the completed regions of Quebec and Ontario to date with higher customer penetration levels than target. We've now increased the number of Canadian homes passed by nearly 145,000 since the beginning of fiscal 2022, primarily via fiber to the home, and in collaboration with governments. At BreezeLine, EBITDA and constant currency was stable with last year as revenue pressures from industry headwinds were offset by transformation-related cost savings. We're seeing increasing subscriber tenure resulting from higher customer satisfaction and an improved mix of higher margin services. As a greater proportion of our BreezeLine customers take increasingly fast internet speeds. This has helped offset the decline in subscribers for entry-level internet services due to competition. At Cogeco Media, the radio advertising market faces ongoing challenges. However, our digital advertising solutions continue to be a growing contributor to revenue, and our listener engagement remains strong. In Montreal, for example, Seven of the ten most listened-to radio programs in the city come from our stations. And now, let me turn the call over to Patrice to provide more details on our financial performance for the quarter.