Financial Data and Key Metrics - Adjusted EBITDA increased by 5.3% in Q4 2023, driving a 1.9-point margin increase to 39.7% [24] - Adjusted EPS grew by 7% in Q4 2023 [24] - Free cash flow saw a 913millionyear−over−yearpositiveswinginQ42023[25]−ResidentialInternetrevenuegrewby7.11 billion over the next two years, including a 500millionyear−over−yeardecreasein2024[12]−Thecompanyisundertakingasignificantworkforcerestructuring,eliminatingapproximately4,800positions,whichwillyieldcostsavingsof150 million to 200millionin2024[14]−Thecompanyisleveragingautomation,digitization,andAItodrivecostsavingsandimprovecompetitiveness[16]ManagementCommentaryonOperatingEnvironmentandFutureOutlook−Thecompanyfacedsignificantmediaadvertisingheadwinds,unsupportivegovernmentandregulatorydecisions,andamacroeconomicenvironmentmarkedbyhigherinterestratesandsustainedinflationin2023[5]−Thecompanyexpectsrevenuegrowthof02.8 billion to 3.05billionin2024,reflecting400 million in one-time severance payments [35] - The company is increasing its common share dividend by 3.1% for 2024, marking its 16th year of uninterrupted dividend growth [22] Other Important Information - The company is selling 45 radio stations and closing 107 Source stores as part of its strategic refocusing [13] - The company is migrating customers to its fibre network, transitioning 110,000 residential customers in 2023 [20] - The company introduced a new next-generation Fibe TV service, currently available in Atlantic Canada, with plans for a broader rollout [21] Q&A Session Summary Question: Regulatory environment and long-term profitability [41] - The company is reducing CapEx by at least $1 billion over the next two years due to regulatory pressures and may consider further cost reductions if regulatory conditions worsen [43][44] - The company is shifting investments from fibre expansion to growth and transformation initiatives [45] Question: Free cash flow guidance and dividend sustainability [48] - The company expects free cash flow growth despite significant one-time severance payments and higher interest expenses, with the dividend supported by underlying free cash flow growth [49] Question: Long-term outlook for dividend growth [53] - The company will assess dividend growth year by year, balancing it against growth and transformation CapEx, with 3% considered appropriate for 2024 [54] Question: Cost reduction strategies and copper decommissioning [56] - The company is focusing on digital transformation, AI, and product rationalization to drive cost savings and improve efficiency [58][59][60] Question: Macroeconomic conditions and business performance [62] - The company is seeing strong growth in enterprise solutions and wireless loadings, with cautious monitoring of small business closures and customer payment patterns [63][64][65] Question: Working capital and free cash flow [68] - The company expects working capital pressures to normalize over time, with some items taking more than one year to resolve [69] Question: Network convergence and fixed wireless [71] - The company has a fixed wireless product since 2018 and is satisfied with its current addressable market, though it faces competition from Starlink in rural areas [72] Question: Adjusted EBITDA guidance [74] - The lower end of the adjusted EBITDA guidance reflects cost savings from workforce reduction and potential impacts from the advertising market [75] Question: Postpaid phone churn and competition [77] - The company is leveraging household bundling, premium loadings, and customer experience improvements to manage churn, which has increased but remains under control [78] Question: CapEx reduction and fibre expansion [81] - The company is reducing CapEx due to regulatory decisions and reallocating investments to growth and transformation initiatives, with fibre expansion plans adjusted accordingly [82]
