Rogers Communications Inc.

Thank you for standing by. This is the conference operator. Welcome to the Rogers Communications, Inc. second quarter 2023 results conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. Following the presentation, we'll conduct a question and answer session. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, You may signal an operator by pressing star and zero. I would now like to turn the conference over to Paul Carpino, Vice President of Investor Relations with Rogers Communications. Please go ahead, Mr. Carpino.

Great. Thanks, Ariel. And good morning, everyone, and thank you for joining us. Today I'm here with President and Chief Executive Officer Tony Staffieri and our Chief Financial Officer Glenn Brandt. Today's discussion will include estimates and other forward-looking information for from which our actual results could differ. Please review the cautionary language in today's earnings report and in our 2022 annual report regarding the various factors, assumptions, and risks that could cause our actual results to differ. With that, let me turn it over to Tony to begin.

Thank you, Paul, and good morning, everyone. I'm pleased to report that Rogers delivered strong results in the second quarter, the seventh consecutive quarter of growth for the company. These results reflect disciplined execution and healthy momentum in our core businesses against a healthy backdrop. Our country continues to grow at a robust pace, led by immigration, and you see we're off to a good start in operating at a new level of scale. The second quarter represents our first full quarter since closing Shaw, and we're very pleased with the quality of the Shaw assets and our early momentum. They have a robust network, an extensive track record in the West, and an exceptional customer service team. Together, we now operate Canada's only national wireline network, passing 9.8 million homes with 4.8 million customers. This builds on our Rogers 5G wireless network, which supports 11.4 million mobile subscribers, the largest and fastest growing customer base in Canada. In our industry, scale and quality of assets matter. With Shaw, we have both, and we are already seeing some early successes and wins. We have seen market share gains in the West, including double digit subscriber growth, and we expect our share in the West to continue to grow in the coming quarters. Earlier this month, we introduced Rogers Internet and TV services in Shaw territory, along with bundled services across our channels. The early uptake on these services is encouraging. Although early days, we're encouraged by the strong store traffic as loyal Shaw and Rogers customers look to bundle more services given our stronger value proposition in the West. I expect this interest will continue as we make good progress on integrating our networks and systems to offer a seamless customer experience. To support this customer experience, we've extensively trained our frontline teams Our thousands of frontline employees are now able to see both Rogers and Shaw account information simultaneously. This team includes the repatriation of all Shaw customer care roles back to Canada, making our customer service team 100% Canadian-based. We've also seen good uptake from the half-million Shaw mobile customers upgrading to the Rogers 5G network. Their feedback on the network shift has been very favorable, and we believe we will continue to benefit from this going forward. Overall, in these first 15 weeks, we are tracking ahead of our integration targets and we continue to be impressed with the quality and commitment of the Shaw team. Turning now to the quarter, we delivered strong results. Rogers once again delivered industry-leading growth in wireless. More Canadians continue to choose Rogers and you see this reflected in our postpaid mobile phone net additions of $170,000, up 39% from one year ago. Year-to-date postpaid mobile phone net additions are now at $265,000, up 41% from the first six months of 2022. This performance has been underpinned by two key factors. First, our superior distribution, quality network, and wireless value proposition is driving market share growth. Second, we continue to execute with discipline and gain a strong share of the population growth opportunities across the entire country. We're also seeing double digit growth in subscribers moving to Rogers unlimited plans as demand for data continues to soar. Today, more than half of the Rogers postpaid base are on unlimited plans. Despite rising prices in other sectors, the July StatsCan Index shows wireless prices in the country were down 15% year-over-year. At Rogers, we're focused on growing customer data use on our network. Our value proposition is focused on giving more data at lower prices on the country's largest and best network. In fact, the latest study from Umlot, the independent benchmarking organization of Accenture, found Rogers to have the best and most reliable network in Canada. We're extremely proud of these results given our clear focus on network capital allocation and believe it is key to our continued future growth. In cable, as one national company, we see tremendous opportunity for growth and to provide consumers and businesses with much needed choice in the West. In the second quarter, cable service revenue and quarterly adjusted EBITDA double to over $2 billion and $1 billion, respectively. At the same time, margins continue to expand with the synergy benefits we are starting to see across the cable business. Importantly, we continue to gain momentum on subscriber growth. More to do here, but the fundamentals are headed in the right direction. Overall, I'm pleased with our progress and momentum in Q2. Let me now turn to our balance sheet and our delevering initiatives. Given our strong financials, Rogers is already deleveraging its business, driven by adjusted EBITDA growth, which was up 38% in the quarter. Importantly, we will continue to invest in our network and operational infrastructure. Our debt leverage ratio of 5.1 times improved since closing the transaction. We are targeting a further reduction to a debt leverage ratio of 4.9 times by the end of 2023. We are pacing confidently to achieve our target to reduce leverage by 1.6 times over 36 months, which would get leverage back to pre-acquisition ranges. Our delivering efforts will be further supported by our plans to sell $1 billion of non-core assets within the next 12 months. Given our scale and financial performance, we believe these targets are fully achievable. Finally, let me touch on our upgraded guidance for 2023. Earlier today, we increased our full year guidance for free cash flow and adjusted EBITDA. These increases are driven by strong execution in our underlying businesses and the confidence we have in our cost synergy plan. Collectively, the quality of our now combined Shaw and Rogers assets, the strength of our underlying business momentum, and the confidence we have in the growth opportunities position us well for near and long-term growth. I would like to thank the entire Rogers team from coast to coast for their continued commitment to our customers. I'm very proud of our team's accomplishments and our performance in the second quarter. With that, I will turn the call over to Glenn.