Rogers Communications Inc.

Thank you for standing by. This is the conference operator. Welcome to the Rogers Communications Inc third 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, then 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.

Thank you, Ariel, and good morning, everyone, and thank you for joining us. Today I'm here with our 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 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 very pleased to report that we delivered industry-leading results in the third quarter, our seventh consecutive quarter of growth and momentum. We also made substantive progress on integration. and we are now tracking six months ahead of our synergy targets and deleveraging plans. Our team is clearly firing on all cylinders, executing with discipline, and delivering on our commitments. Turning to results, we grew total service revenue by 40% and adjusted EBITDA by 52% in the third quarter. Our consolidated adjusted margin performance of more than 47% is 340 basis points higher than our competitor BCE and almost 1,000 basis points higher than Telus. We are clearly delivering through a consistent strategy that focuses on the quality of our assets, operational efficiency, and discipline execution. In wireless, we delivered industry-leading financial and operating results. We attracted 261,000 mobile phone net additions up 40,000 from a year ago. This reflects the best combined postpaid and prepaid loading in our company's history. This phone-only loading represents 94,000 more than BCE and over 100,000 more than TELUS. We did this while growing ARPU. Simply put, we continue to out-execute our peers and have done so consistently for the last two years. We also delivered impressive financial results in the quarter. Wireless service revenue was up 15%, adjusted EBITDA was up 18%, and wireless blended ARPU up 4%. It's clear Canadians are choosing Rogers more than any of our competitors. In cable, we saw market share gains accelerate across the East and the West. These gains are driven by our new bundled offers our network investments, and our 5G leadership. In the quarter, we added 18,000 internet customers. While we need to grow revenue, we've turned the corner on subscriber trends. Looking ahead, Alberta and British Columbia represent our fastest growing revenue markets, and we see good growth opportunity ahead. It's clear we're creating more competition in the West, and Canadians are responding. We also delivered cable margins of 54%. This represents a margin expansion of 650 basis points compared to last year and clearly demonstrates our focus on driving profitable growth despite a highly competitive market. Let me now turn to the Shaw integration. We just passed the six-month milestone and I'm very pleased with our momentum. Impressively, at the six-month mark, we are tracking six months ahead of our synergy targets and deleveraging plans. By year end, we now expect to realize $600 million in synergies and reach a debt leverage ratio of 4.8 times. As you will recall, we had planned to reduce our leverage by 1.6 times in 36 months after close. In just six months, we've already reduced our leverage by 0.5 times, well ahead of plans. Operationally, we've achieved some key milestones. We introduced Rogers Internet and TV services along with bundled offers. We consolidated our retail footprint, rebranded our corporate retail stores, and started selling both wireless and residential services in our retail channels. Importantly, we have largely integrated the two teams, and we are executing with one clear focus and plan. Overall, we have made significant progress in a short period of time. In the third quarter, we also led the industry with new technology and more affordable services. In Q3, we were awarded the best and most reliable 5G network in the country for the fifth year in a row. We launched 5G in the busiest sections of Toronto's subway system, and we are now upgrading the rest of the legacy network to 5G. Working around the clock, our teams will expand the network to the remaining 75% of the tunnels where no wireless network exists today. We introduced new technology to help detect and prevent forest fires. Partnering with SpaceX, satellite-connected sensors can better predict wildfires in remote areas without wireless networks. We're also deploying AI cameras on cell towers to detect smoke up to 20 kilometers away. We expanded Connected for Success, our low-cost internet program to Western Canada, and we just introduced Connected for Success Wireless across the country, available to 2.5 million low-income Canadians. The program builds on our commitment to make our services more affordable and accessible. We also introduced 48-month device financing with 0% interest and no mobile contract, only on a Rogers credit card. This Rogers-owned bank credit card platform reduces the monthly phone payments for our customers by 50%. Beyond that, the card offers a host of additional meaningful value add for our customers, including free roaming. And starting this holiday season, up to 3% cash back. The most valuable credit card aimed at rewarding, keeping, and attracting customers to Rogers wireless and cable services. With today's inflationary pressures, we're working hard to bring down prices and present more value for Canadians. According to the StatsCan Consumer Price Index, wireless prices have declined over 30% over the past three years. Looking ahead, we will harness the power of Canada's largest and most reliable 5G network to bring Canadians even more. This, along with our 10G and DOCSIS 4 internet roadmap, will ensure we deliver the next generation of world-leading services for Canadians. The future isn't just about more speed. It's about the convergence of products and services across networks. 10G will bring multi-gigabit speeds along with reliability and low latency to deliver a seamless customer experience in and out of the home. As a national cable operator that covers the majority of Canadian homes, we have a unique advantage. We don't have to rip out and replace our existing network or dig up neighborhoods. With 10G, we'll easily and economically upgrade our network with little to no disruption for the customer. Before I turn it over to Glenn, let me make a couple of closing comments. Overall, it was a record quarter, reflecting a clear focus and consistent execution. We delivered industry-leading results, exceeded Shaw integration targets, and delivered industry-leading innovations to Canadians. We have momentum, and we are winning in the market. We could not have done this on a consistent and sustained basis without the commitment, tenacity, and ingenuity of our Rogers team. And for that, a big thank you to the most talented group I've ever worked with. Well done, team. With that, I'll turn it over to Glenn.