BCE(BCE) - 2024 Q4 - Earnings Call Transcript

Financial Performance and Key Metrics - BCE achieved a consolidated EBITDA margin increase of 1.2 percentage points to 43.4%, marking the highest annual margin performance in over 30 years [8] - Adjusted EBITDA rose by 1.5%, leading to a 90-point margin improvement to 40.6% [46] - Total revenue decreased by 0.8%, reflecting competitive pricing pressures and declines in legacy services [46] Business Line Performance - Wireless service revenue declined by 1.5%, but the company expects improvement in ARPU going forward [51] - Internet revenue grew by 3.4%, indicating a balance between market growth and disciplined pricing [52] - Business solutions revenue increased by 14%, driven by technology services and acquisitions [52] Market Performance - Digital revenue in media grew by 19% year-over-year, now comprising 42% of total media revenue, up from 35% in 2023 [11] - The company reported a 12% increase in households subscribing to mobility and Internet service bundles [10] Company Strategy and Industry Competition - BCE's strategic focus includes enhancing customer experience, leading in business technology services, and transforming into a digital media powerhouse [16] - The company plans to grow its fiber footprint significantly, targeting approximately 12 million fiber passings in North America by 2028 [22] - BCE aims to generate $1 billion in annual revenue from technology solutions by 2030 [26] Management Commentary on Operating Environment and Future Outlook - Management acknowledged ongoing macroeconomic and regulatory pressures impacting revenue growth [14] - The company anticipates a revenue loss of approximately$125 million in 2025 due to the transition of consumer electronics sales [58] - Future revenue growth is contingent on improvements in wireless and broadband pricing [57] Other Important Information - BCE plans to reduce capital expenditures by $500 million in 2025, with a projected capital intensity ratio of approximately 14$7 billion expected from planned sales [42] Q&A Session Summary Question: Can you elaborate on the US fiber footprint expansion and noncore asset sales? - Management indicated that the focus is on closing the acquisition of Ziply Fiber, which will drive growth in the core fiber business [79] - Noncore asset sales do not include Bell Media, as the digital pivot is a key growth vector [78] Question: What is the target leverage ratio by the end of 2025? - The company aims to maintain a strong investment-grade credit rating and reduce net leverage, with ongoing asset reviews to strengthen the balance sheet [90] Question: What are the expectations for revenue growth guidance? - Revenue growth is dependent on sustained pricing increases in a competitive environment, with the potential for improvement if recent pricing changes stick [121]