Q4 2020 Quebecor Inc Earnings Call
And the expression.
[music].
Okay.
[music] music.
And usually Q because that is luca because they needed and easy on this yesterday and I do I think lifetime value, whose loans I mean, that's all thank god.
Did he kubica heaters and saved if he can and yet the only domain the telecommunication and the media there for them. As you know you can see small either and I could do cubicles seafood and all employees.
Yeah, and he passed the only pan out quite yet.
To fail and they yourselves.
If anything else ASIC and young.
Yeah.
The conference is now being recorded.
Good morning, ladies and gentlemen, thank you for <unk>.
And welcome to Quebec for Inc Conference call I would like to introduce CMO Chief Financial Officer of Quebec for Inc. Please go ahead.
Good morning, ladies and gentlemen, and welcome to this give me a call conference call. My name is small and I'm, the CFO and joining me to discuss our financial and operating results for the fourth quarter and the full year 2020 are healthy and adult our president and Chief Executive Officer and Jonathan.
And <unk>, President and CEO of TD with Paul.
You will be able to listen to this conference call on tape until May 26th of this year by dialing eight seven and seven to 9381 and three three access going for eight 006 dash and playback access code and the same for eight 006 stash and this information is also available on Quebec, whereas website at Triple and W.
Give me a court and dotcom.
I also want to inform you that certain statements made on this call today may be considered forward looking and we would refer you to the risk factors outlined in today's press release and reports filed by the corporation with regulatory authorities.
Let's now start with our CEO, Jeff Calkins.
And and good morning, everyone.
And I worked together today to review the fourth quarter and the full years 'twenty and 'twenty. So are responding to the two ways of the COVID-19, pandemic, which first took us by surprise.
And we quickly adopted a prudent.
Diligent and.
And a disciplined approach to manage for the varying impacts on our different businesses.
And whereas and until they continue to deliver comparatively superior results and performance for.
Filling our ambition to keep Quebec, or as well connected informed and entertained.
Reviewing our financial results for the last quarter and the year, we demonstrated our resilience and our prudent cash flow management and all our businesses segments.
We generated more than 345 million and cash flow from operation and the fourth quarter.
<unk> 33 per cent and $1 3 billion and for the 'twenty and 'twenty year, and an increase of $168 million or 15%.
And light these results and following our plan to gradually increase dividends to represent 30 to 50 per cent of our net free cash flows and.
And I'm happy to report that get back on its board of directors declared yesterday, a quarterly dividend of 27.5 cents per share on both class a and class b shares up from 20.
838 per cent increase.
Turning to operational matters and starting with telecom you don't manage to successfully navigate the highly competitive and promotional last few months of the year to maintain its market leading market share as a gross wireless adds and a very strong growth and broadband subscribers.
Underlining once again, our ability to compete against our main competitors as well as the resellers and based on our superior products and unparalleled customer experience.
Sales continued to fuel our wireless growth, both and wireless and wireline where along with Alex.
Which reached more than 677000, Internet and video subscribers and just over a year at the Societally confirm you do at home as the leader and Telecom services and.
And go back.
The impact of the pandemic was of course much heavier on our media segment with a significant slowdown and advertising revenues and cross platform, but also a reduction and programming and content and production costs, the postponement of content and sports rights as well.
And as the receipt of government subsidies, which all and all carried down to and a net improvement of our media profitability.
Our sports and Entertainment segment was obviously and unfortunately for all intents and purposes.
Idle for the last quarter and for most of the year, but he's working hard.
And planning the restart and.
And as much as we can and answering that we're ready as soon as events are once again allowed.
On the regulatory front, we just learned this morning that the Supreme Court of Canada will not ear.
Regarding the series C or D C's decision on Internet all sales rates.
While we're disappointed with the court's decision.
It does not change the fact that the CRT D. C must review its 19, sorry, it's 'twenty and 19 order and provide cable carriers with reasonable and fair rates as we are the ones investing, Italy, and telecom infrastructures, which among other things allow the dip.
Appointment device speed Internet in underserved areas.
We're also awaiting the CRT D C decision regarding N V and OS as well as some form of action with respect to the C. B C at a joke and adopt dori behaviors and advertising rates and content acquisition.
Speaking of anti competitive practices it would be remiss not to play it out once again that our main competitors continue to block competition by among other things unduly unduly delaying access to telecom infrastructures with our growing list of allies and clothing.
And many small regional competitors, who are struggling to expand their networks. We are asking for quick action on this front.
Bell said on Tuesday that the issue has been solved from our perspective. This is once again just public posturing, because we're far from seeing significant progress.
And the field.
Let me be clear.
We always I've been vocal advocates.
Competition and.
And as long and it is fair and equitable and beneficial to all stakeholders.
Which is exactly what we did and wireless and Quebec as confirmed by the reason I said report on wireless devices, which shows that Quebec is the only province, and the country to have achieved the target of 25% price reduction.
And by the federal government.
We will continue to offer better pricing better products and continue to deliver good profitability because our hands on management and are clear vision, our proven business model and our unparalleled desire to win.
I will now let you.
And review our consolidated financial results.
And yes, you'd be accounts for.
For the fourth quarter and go backwards revenues were up 1% to $1 $1 billion and revenues from our Telecom segment grew 4% to $941 million go backwards EBITDA was up 7% to $527 million.
Our telecom segment recorded EBITDA growth of 4% to for 82, and our media segment recorded an EBITDA of $46 million for a $10 million favorable variance, mostly due to a significant decrease in costs at TVA sports from the postponement of the 'twenty and 'twenty 'twenty and 'twenty, one NHL season to this.
Earlier this year.
In 'twenty and 'twenty one.
We reported a net income attributable to shareholders of $160 million and the quarter are 64 cents per share compared with $145 million or 57 cents per share reported and the same quarter last year. This increase is mainly explained by the EBITDA improvement.
Adjusted income from continuing operations, excluding unusual items and gains or losses on valuation of financial instruments came in at $165 million or <unk> 66 cents per share compared to $160 million or <unk> 63 per share reported last year.
For the full year revenues were up 1% to $4 $3 billion, and EBITDA was up $73 million or four per cent to almost 1 billion $953 billion.
Yeah.
Adjusted income from continuing operations, excluding unusual items and gains or losses on valuation of financial instruments came in at $595 million for the year or $2.36 per share compared to $581 million or $2.27 per share last year.
Our cash flow from operations for the year of 2020, as Jack pointed out increased by 168 million or 15% to $1 3 billion.
Once again, demonstrating our resilience and strength of our business model.
Yeah.
At the end of the quarter, our net debt to EBITDA ratio was 268 times down from 291 times reported at the end of the fourth quarter of last year and the second lowest amongst the AR telecom, our peer group and Canada.
I would like to point out and the success of our recent financing where videotron issued $650 million of senior unsecured notes and the Canadian market, yielding 3.1, and two five or three and one eight per cent, which is a louis lowest coupon rate and this market.
And this issuance and addition to our liquidity of more than 1.9 billion positions us favorably for the upcoming spectrum auction and the maturities of our notes.
And <unk> and 'twenty and the the next ones being 2022 and 2023.
And in 2020, we purchased and canceled $6 5 million class B shares since we initiated our normal course issuer bid program 10 years ago, approximately $40 7 million class B shares have been repurchased and cancelled.
Finally, as Pascal said, Quebec for his board of directors declared yesterday, a quarterly dividend of <unk> 27, and a half cents per share on both classes of shares representing a 37 five per cent increase.
I will now turn it over to and also swept to review our telecom segments operations.
Good morning, everyone.
As we continue to be confronted with a second lockdown and the health and safety of our employees and customers remain our highest priority.
And that is why we help customers stay connected with loved ones during the holidays by suspending data caps on all broadband plus.
Also for mid December to the beginning of February despite the lockdown and the mandatory curfew.
While the vast majority of our stores remained open and there were so for essential services only.
And the balance of our employees continues to work safely from home.
This quarter marks the launch of our fiber network and important milestone and the deployment of this new technology.
While the department of several new sites will continue throughout 'twenty and 'twenty, one we are confident debt.
This will bring tobaccos closer to one another and then for the competitiveness of businesses and support Quebec for economic development.
And.
And I'm very proud to highlight that fifth tops Leger, 'twenty and 'twenty, while studying ranking.
Offering the best online experience and telecommunications.
And then also figures and the top down and ranking for best online experience all sectors combined far ahead from our competitors.
And in the quarter, despite softer economic conditions, we posted a solid operating performance with a growth of 43000 argues essentially doubling last year's performance.
And wireline.
Robin services grew 27000 customers and nine times more than last year and TV declines were 7000 lower than last year's.
Does that affect helix continues to gain traction and take rates exceed our expectations.
We now count more than 678000 and video and broadband subscribers for the platform.
Whether it is on gaining new clients are migrating current clients helix clearly helps us to mitigate T V declines increase broadband penetration and upsell services and bundled packages and finally contribute to lower churn rates and.
The quarter, we also initiated the noto and installed pilot for helix.
And this new option is about to be commercially launched allowing our customers to get our product more safely and more rapidly and to be more autonomous.
Our helix platform continues to evolve in order to meet consumer and changing needs for instance, concrete solutions like helix instant TV and our App based television distribution products are targeted to act to address actual consumer trends and preferences.
While being more flexible and more cost effective.
We also remain committed to delivering the best Wifi technology and performance for our customers and as such we have Jeff introduced and you helix Gateway based on Wi Fi six providing <unk> coverage as well as higher speeds for connected devices.
Home automation and advanced digital security, we're also launched during the fourth quarter using.
Using our helix Fi app, our customers can manage their Wi Fi network connected devices, and smart home equipment, such as smart light switches and thermostats.
The App also enhances the digital security for helix customers Wi Fi network by protecting it against malicious sites and fishing.
And the fourth quarter, we posted a strong performance and wireless services with 29000 net adds and a growth of 151000 lines for the full year.
Similar to September year over year performance for FIS was impacted in October of 2019, and performance was boosted by customers rushing and before the previously announced termination of the of the discount pricing.
Furthermore, once again this year, we have witnessed very aggressive black Friday promotions, mainly from bell.
And finally, and as we observed and the first lockdown market activity was rather slow and this second lockdown and more specifically during the usually busy holiday selling season.
After saying all of this.
I am, particularly pleased to reported that once again, we let the market with a 27% share of gross adds for this quarter.
Consolidated wireless ABP U for the quarter decreased two 6% year over year.
The loss of overage and roaming revenues and explains 75 per cent of the overall decline while the dilutive impact from a greater B Y U D and fifth customer base explained for the balance.
We don't try and mobile and fish, however, exhibits respective year over year inbound a btu growth, which bodes well for the future once we have cycled our base.
Finally monthly churn rate came down from one point for it to one 2% and the quarter.
Despite productions how to it for a few months in 'twenty and 'twenty Columbia Nickel was able to launch 20 original productions throughout the whole year seven of them during the last quarter.
We are starting off the year with a strong lineup of new programming maturing several original productions, starring the best Quebec actors directors writers and crews.
For instance, today, we launched Patrick's and it got it because.
The first series for the well known writer.
Mid January we also launched a documentary killed and easier which is already one of the top or one of the most sorry viewed content on the platform.
Finally, our OTT app and a well deserved makeover and we will now be available across Canada through platforms, such as Apple TV and Chromecast.
Turning to our fourth quarter financial results, we're proud to reported 4% growth and revenues to $941 million driven primarily by growth in wireless and broadband services and equipment sales.
EBITDA grew a solid four per cent and amounted to $482 million for the full year, we posted revenue growth of 4% for $3 $6 billion and EBITDA amounted to $1 9 billion for 3% growth.
And in 2020, we posted a strong free cash flow growth during the quarter, we generated $317 million and cash flow from operations $69 million higher than last year.
For the for year, we generated $1 3 billion and cash flow from operations for <unk>.
Growth of 13%.
Capital expenditures, including acquisitions of intangible assets amounted to $165 million index, and the fourth quarter and.
And 596 million for the full year, which was lower than the pandemic related revised guidance.
And in 'twenty and 'twenty, one and.
And the context of the continuing build out of our five G Wireless network wireless network extensions and rural areas and other strategic projects, we expect to spend between 600 million to six and 650 and Capex, excluding the acquisition of wireless spectrum licenses and the upcoming 3500 megahertz.
Spectrum auction.
I will now I'll turn it over to Jeff for a conclusion no secret password.
So looking ahead to another year impacted significantly by the entre and unpredictability and outside forces.
And we will maintain our financial discipline.
Rigorous management and our focus on delivering a superior resolved and all of our businesses segments.
These times golf or assured leadership, and Quebec or is proud to continue to assume its role as Quebec, leading corporate citizen, providing unfailing support to our employees clients and partners and Quebec population drew numerous programs contributions.
Measures and events for all Quebec, or who lives and I've been and are still being made difficult by these unprecedented times.
So I. Thank you for your attention and we'll now open the lines for questions.
Greater.
Of course.
So we already have a few and participants queued up and just as a reminder, if you want to ask a question. Please press star one.
And the the first question comes from Oh and.
And you brought from Zhang.
Please go ahead.
Jerome.
And we now see a bunch of delinquent loans so.
The first question regarding your wireless business and Ottawa.
And what kind of success are you seeing and this market with many operators President and do you expect this market to be a material source of future growth and.
And we've heard from a certain tiers that there could be a catch up in terms of working cap and.
Contribution in 'twenty and 'twenty, one do you expect this as well thank you.
Okay. So I'll start with a and the Ottawa market, obviously and the Ottawa market, we cannot bundled services and so you know when we when we approach when we do our marketing two to future customers and you know it's at.
It's obviously and obstacles. So we don't we definitely don't have the same kind of success that we have and this market is just related to this and on top of that as you mentioned your own the market is definitely more competitive because they are more operators and more brands and that market. So it obviously play out and that's for the.
And the future.
We're gonna be trying to take a different look at that market and we think it's still.
And it's still a market that is attractive to us.
And obviously don't forget that people are living and and get to know you know they usually work and Ottawa. So it's important that drive a strong network and that and that market and we'll definitely continue to do so but we will look at creative ways to approach. This market because we obviously don't have the same the same tools.
Working capital.
Yes, working capital and no we don't expect any any huge and huge swings at the beginning of this year.
Okay. Thank you.
Alright.
Question comes from.
Drew.
And <unk> from RBC.
Please go ahead Andrew.
Yes, thanks, very much and good morning and.
Just on the Internet net adds are Jack you alluded to obviously being a strong and and up nicely year over year.
And there's the view out there with B C accelerating fiber and that's going to kind of chip away at a.
And multiple cable codes here and just seems like to get an update on kind of net fiber expansion and your footprint and and the dynamic there and.
And then secondly are you know.
And this into helix can you drill down a little bit in terms of how Howard helix as you know, perhaps helping you with kind of renewed internet momentum and if that's the case.
And then third just last one here for you.
And I think we've chatted about this and the past, but when I look at your balance sheet, obviously and.
Better shape relative to most of your peers.
We continue to generate a lot of free cash flow et cetera, et cetera. I mean, that's the profile here is very different than it would've been a decade ago, maybe update us on just and investment grade rating and desire here are excited as are the path for it. Thank you.
Thanks, Andrew for the question with respect.
Back to our broadband our performance obviously helix plays are.
And as a measurable and and don't forget also you know we've launched.
Broadband services that for us and obviously for us contribute to this for this success with helix, what we see currently.
It's a major it's a major shift and awareness of the product of the.
For the awareness of the functionalities and the advantages that we that goes with that go with the products and on the Wi Fi experience is much better and than our competition.
And and obviously, the Alex Fi App, where you know on a single Hap you not only have your Wi Fi network demand everybody only and you also have the the home connected equipment and everything all you know combining the same and the same app. So it's those are mainly functionality and that obviously contribute to our our.
Success, and broadband and and churn is down with helix.
And so obviously when and when you talk about the net growth. It certainly helps on the net growth side because churn is down when you know when people are using <unk> are using our helix.
As far our our fear if you if we can call it that way with respect to fiber and fiber expansion from from our main competitor.
Theres no market, where the overlap is such and Canada, we have the highest overlap market and and you know in terms of our fiber and coax and our HFC and and and Quebec as though as you know is a is the most overlap market. So you know, we our estimate and that AR balance already cover and 90 per se.
And our 85 to 90 per cent of the BOP and the of the.
The market in terms of in terms of fiber.
And Sally fiber and at home and you know I and met probably 65% of that or close to 65% of that is fiber and at home.
It's a very much and you know over.
For a lot market. So if we are able to have that kind of success I don't think it's an additional five or 10 or 15% of overlap or fiber to the home overlap that will be.
<unk> to us absolutely not.
Okay.
On the on the investment grade debt question drew.
And I said and you know and the past you know our position is that for all intents and.
Purposes, we are investment grade and so I mean the.
The metrics our metrics are there.
Not only leverage but all the other metrics that are looked at very carefully and by the rating agencies.
And some of the outside and enforces and things.
Such as the regional lab and the regional.
Position and some regulatory uncertainty and things like that we are addressing and we just feel that you know we are investment grade I won't I won't speak for the rating agencies, who obviously need to update.
Themselves on results and things like that but.
We're working hard with them and it's as as we've said and the best I mean, we certainly believe that we're there and we will see a we will see where they come out.
Thank you Bob.
Alright.
Next we have a question from Jeff fan from Scotiabank.
Please go ahead Jeff.
Hi, Thank you and good morning.
Hope everyone's well I've got a few here the first one.
Just on the new features Jeff that you talked about regarding your broadband security et cetera, do you expect or do you assume that these will eventually drive.
<unk> growth related to your Internet and as you look further out and just to clarify are these features based on the Comcast ex one platform and whether there's any impact on cost and margins as you roll. These products out of the second question.
Just on Capex, the 600 to 650 million for next year or for 'twenty and 'twenty one what's the implicit assumption there regarding your five G rollout are you going at it and.
And a gradual pace or is there some acceleration through 'twenty. One wondering if you can just give us some color on that because it seems like yeah. He's one of your competitors is growing pretty fast and then the final question is probably more strategic when we think about go back or I mean, and the last decade, or so wireless has driven tremendous.
Amount of growth your wireline market share and then and it continues to pick up.
As you kind of look forward. The next several years, I mean, where where are the growth opportunities going forward for Quebec or are we talking about it.
Adjacent businesses adjacent geographies and wondering if you can just kind of speak to that at a very high level. Thanks.
And thanks, Thanks, Jeff and with respect to our <unk>.
To the broadband features yes.
Yes.
I'll comment and home connected features I should say well they all come from the ex one excellent platform. So Comcast ex one and obviously.
In terms of in terms of the the potential for.
Increasing our pool, obviously, there is potential for for increasing our pool, but as of now you know for us and just as it's more a question of making sure that the Quebec Yours will adopt those features will adopt our product to us and as we speak now its its moral and it's more acting like a churn reduction.
Strategy and rather than you know increasing our pud that being said, there's going to be a point, obviously, where adoption is such that there will be ability to to improve our pool and we also have obviously the opportunity to to pick up some margin on the equipment. We can obviously sell equipments our own connected equipments throughout our our channels.
Through our channel saw him so that's and certainly some potential for and you know picking up some some margin there.
And in terms of our 'twenty and 'twenty one.
Capex guidance and.
Yes, obviously and assumes that our you know and we are.
Continuing on deploying our five G and network and it's going to be a I would say more heavy or heavier this year than it was last year, but our plan is more and get a gradual plan and rather than you know going full steam with five G.
You know to US you know we understand there are some of our competitors are going more for seem that we are but the use cases are not clear to us, yes and to us are yet. So we are definitely preferred to be more prudent and it's been good for us and the path and that could be the first and being more prudent just on.
And the investment costs as an example, where you know equipment and equipment costs might be going down and whatnot, but we are taking more of a gradual.
With respect to our <unk> investment.
On the on your last question with respect to growth.
Jeff I mean, we and our position on that I mean, there still is I understand our growth has been has been very strong on wireless and.
And and as you can see continues to be and wireline.
There's still there's quite a bit of runway for us and Quebec, and we're focused on that and we will continue to deliver a very strong growth in our mind and and Quebec, because the opportunities are there that being said you know as we've said.
We'll also be opportunistic you know if.
If either regulatory or other events and create.
Create opportunities for us and you know, we'll certainly we'll certainly look at them and consider them and analyze them and but at this point, where we're very much focused on on getting and the maximum of growth that still that's still allowable for us and our home market.
I don't know maybe I should maybe it had the you are right dimension, you know that our growth for the last over 10 years have been fueled by the.
By a wireless business I remember in 2000 and tree when Fido winter.
And my recollection I think it was a C C. They believe the debt.
We would be interested right away, but debt to EBITDA ratio was and over seven times. So I guess that and there was probably not possible at that time.
But despite the fact of this situation, we thought that the food and the wireless would be the future and then therefore, you know and negotiate a day and <unk>.
Deal and.
Afterward.
The facility base after and proper representation in front of the government to be able to get some some set aside spectrum and build our own network. So today I guess that probably may be the opportunities are less obvious, but certainly our balance sheet as of of us providing them.
You know if some things is presenting.
And of growing our business and our industrial activity and therefore, you know where you would be and a good position and don't worry you back out and not by Transat.
That's great good to hear and.
Thank you very much.
Yeah.
Alright, and next we have a question from Matthew Griffiths from Bank of America.
Please go ahead Matthew.
Alright, thanks for taking the questions I just wanted to ask and go back to the five G issue and should we assume that given the success you've had with B Y O D.
And that still seems to be driving growth for you guys that you and your competitors are good and I have to probably be the ones to seed the market with devices and that your five G will probably at least lag by you know call. It two years and once those five day devices, there and the market and maybe.
Off of a financing contract.
And then separately.
And I want to touch on margin.
It seems like you have to fill.
Is and helix and you know a lot of leave various debt you can potentially drive higher margin and I was just wondering you know how much.
How much room do you see for margin growth and how much is going to have to be reinvested back in the business. If we look ahead over the next call it year or two.
Okay.
And with respect to you know obviously, the five year plan and obviously I will not go into specifics because of competitive issues, but.
But I think it's fair to assume that and any new technology.
And we tend to be more prudent and.
Our competitors and you know maybe they have.
So you know more leeway, but oh, we tend to be more for them because we want to make sure that when we do the investment that and it's going to pay off.
So in terms of the five G. You know and we know that the future is five G. But it's just a question of finding the right use cases, and the right time and and you know investing on the right pace so assuming debt.
And you know the fiber rollout will be completed later than our peers and I don't know I don't know, what's the department and plan for our peers, but I think you'll have to assume that are you know and we are prudent in the way that we're making are our investments.
And if and if it's and and if devices <unk> devices costs come down or our equipment. Our network equipment comes down or whatever you know in terms of cost and you know, obviously, it's going to be beneficial to us as well and.
On top of having the right use cases, and the right profitability expected from the investments.
And in terms of margins and you know you're right to mention that we have many levers.
And and you're right dimension that you know there might be other opportunities and our potential for improving margin you know when we look at our wireless business, we definitely see and improving margin business here and you know, we're getting more and more scale or our market share and Quebec is at about <unk> 21 per cent of the home.
Market. So you know we're more scalable and we were in the past obviously, so that has a benefit to the margin. Our fears are our business model is a very high margin business model because it's all digital.
And and very autonomous from a customer perspective, so it's certainly drive margin expansion on that front as well, so I'm still saying some some potential for margin and margin expansion that being said with the Comcast business model, we've switched from a capex model and where we were developing.
And house two and on.
And a licensing model, where you know we incur a cost and the P&L so that that and that will obviously act as a counterweight I would say two two to my comments about the margin expansion.
I will add on the under five G issue with them.
And you know obviously you know we can understand the competition can try to push posture themselves are on technology, but what we can say is that you know before a five G. There was for G. I L. T E. L. T advise advance and then before that was three G. So I guess that what we should say here is that and if you do it all.
<unk> been able to offer the latest technology, but not only the latest technology I think it's a matter of balance because you need to offer the good product and the good price with a good service and this is the experience that we've been providing to our customers and this is the experience that we will continue book to provide.
And to our customers and basically driving our capacity to continue to grow in terms of RG use and in terms of profitability.
Great. Thank you.
Okay.
Alright, and next we have a question from Vince Valentini from TD Securities. Please go ahead Vince.
Yeah.
Thanks, very much wanted to go back to a couple of points we addressed before.
First off per call very interesting that you mentioned the fido situation for many years ago and.
Your debt leverage at that time precluding you from getting involved.
<unk> was obviously, a national wireless carrier with pretty heavy presence in and.
And B C of all places.
You, you're mentioning that does that signal of that.
If the right opportunity came up that share gross into wireless outside of Quebec would be something you'd consider.
Yeah.
Well, certainly I would think that its simplicity and premature and you're not too to have conversation or discussion on that because there's no such a thing like any other capacity to operate them and does direction. So I guess debt you know that that kept that kind of of our conversations are required assumptions that are not met so.
I guess that it doesn't work to talk about it okay.
Okay.
On the Capex.
600 to 650 for this year.
Sure Jeff Whoever wants to you can you can you unpack that a bit in terms of the regulatory environment. I think last year, you were pretty explicit in debt.
And you were holding back on and some investments until you add some clarity on <unk> and I think the third party Internet files from the CRT D. C. So does this 600 to 650 and you still.
Some of that reservation and at that debt you may start to increase your spending once we get certainty on those files and.
And the second aspect of the Capex is I get that youre going and gradual on five G. But.
Does that mean.
Pace stays the same every year or could we potentially see an uptick and <unk> investment in 2022 and beyond versus what what's in this guidance for 2021.
Okay.
Respect to.
The regulatory.
Our assumptions.
Assumptions are and the assumptions about the regulatory environment, you know on which our Capex guidance lie.
Hum.
I think it's fair to assume that we're working off the same are the same assumptions. So the reason why and last year, we have reduced our GAAP capex guidance at the beginning of the year remember when we post our first guidance, we talked about the regulatory environment, and especially the uncertainty around the regulatory environment and you know.
Those assumptions and I think I thing.
And stick.
Good day.
And so we've posted in the same kind of out of Prudence.
With respect to our art, our Capex investments.
In terms of and in terms of the five day rollout and you know obviously this year 'twenty 'twenty, one and will be heavier than in 'twenty and 'twenty, because 2020 and was quite quite light.
And then and.
There's going to be.
<unk>, probably not constant I think anr and assumptions may be next year, and desserts and an uptick but it's nothing that would be material and it's nothing that we will not necessarily be able to finance through some other projects that are completed.
So I Wouldnt expect I Wouldnt bet on and increased Capex guidance for next year, because we're in the middle of this five year rollout.
Okay.
That's comforting to hear and maybe I can share.
Thank you and one or two more operational type questions.
You talked about the competitive environment and Black Friday.
More recently, we've seen some of the stores start to reopen and in Quebec, and I know when the stores reopen the first time around and like last August some of your competitors seem to get a bit aggressive with their promotions to try to load up on customers, while while the while they could.
Do you have any thoughts Jeff on the sort of current pricing and promotional environment are you seeing any early stages of that type of rational behavior again and and wireless.
Well, two things and I'm going to stay above that and well first of all.
Stores were essentially.
Closed for our acquisition of customers and I put it that way for the whole month of January well, starting in December and and ending and Faq on on February eight and so the market activity was quite slow and remember and I told that our you know last year and at the beginning of the pandemic.
When the market is slow and the wireless side of the business.
And because we're a net gainer of market share, it's obviously detrimental to us and so.
And so for January you know you're gonna have to expect isn't quite the same quite the same and it's true to admit.
I want to affirm that last year when stores reopen.
You know the operators got crazy.
I would not mention and I would not say that it was it is right now as crazy as it was before but I think it's the same kind of a it's the kind of the same kind of reaction that we're quite saying and you know this.
And this year as well, there's very aggressive promotions out there, we're not playing and we don't want to play that game, a 21% market share right. Now we don't think debt we have to play that game.
We can still attract customers at a fair price and we're not chasing customers that at.
Any price and I think you can see that from our EBITDA performance and you know I think it's quite clear that we're not chasing at any price.
And we will continue to do so and and and guess what we still maintain our leading market share in terms of share of gross adds even though.
And we're not we're not chasing and old customers with crazy prices. So I think I think we are on the on the right path.
To balance between customer acquisitions, and and EBITDA growth.
Yes, I would agree.
Sure good balance, Jeff and congratulations on that one last one on the Internet file people have asked for a bit about it.
Broadband and <unk> and some of the auxiliary services, but I'm not sure we've had right to the core of it yet of your Internet subs are up four percentage year over year.
And your revenue was up three 4%. So Europe is actually slightly negative most carriers in North America are seeing.
The ability to get better broadband and <unk>, whether it's actual price increases or its people moving up to faster tiers.
Is this is there some problem here and the market or is this just a delay and we hope for you can see some better broadband are protraction in 2021.
Well first of all.
And in 2020, you know back in March 'twenty, and 'twenty, you remember that our price increases are and you know the they take place and in March of <unk> and.
And every every year and last year, we have not increased our prices on broadband and so obviously, we don't have that kind of lift for us.
They're handling for the whole year, and so obviously, it and impacts our our EBITDA our growth because we don't we don't have to live for me you know our usual price increases this year and 2022 and 'twenty 'twenty. One we have increased our prices on every and every single service for every single product, so you're going to see a price increase.
On broadband and obviously, it's going to help them on top of that don't forget fifth day.
And as a lower price service.
Because of a different business model is still attracting the same kind of margin, but but you know the 100% digital model is a lower cost model and we can you know offer the service at a lower price and obviously as we've experienced and we continue to experience on the <unk> on the wireless side, there's going to be some impact from you know.
Our base increasing on students at a lower price. So you know that's Gonna Act again, as they kind of way to our price increases and.
And I will complete by talking about helix.
Rather than and positioning helix as a for one that.
I would say.
A premium product and I'm, not saying, it's not a premium product. It is a premium product, but and most of the cases, where the premium product commands a premium price we've decided not to use that kind of strategy for us. It's it's more like right now and churn reduction model rather than a you know our pool growth model and you know.
The you know Rogers and Shaw I know that they've used a different strategy and when they launch their there ex one based product and it's not that the strategy that we've used so as people are migrating to helix and we're not collecting more RP because they're migrating except if obviously the day.
They go on on higher speed services.
But but you know for the product itself, we're not commanding a higher price. So we've decided to be more accessible with respect to that product to accelerate adoption of the product to accelerate John reduction and you know to our TV and and.
And broadband services and I think it's it shows up and and our results.
Great and just just to level set everybody on the call. The rate increases you talked about or are these going through in and March and.
Is there any dollar amounts.
And talk to yet.
It's March 1st and Ah I would say it's about.
Four per cent.
Thank you.
Yes.
Okay.
Alright, and next up we have a question from David Mcfadden from core Mark Securities.
Please go ahead David.
Yeah, a couple of questions. If I may and usually you give us an indication of the wireless EBITDA growth year over year and the corridor I was wondering if you could do that and secondly, and you know.
And I know your share of gross adds are still quite strong at 27%, it's down a little bit from where it was the previous two quarters and I'm. Just wondering is that more a factor of the you know the pricing right now.
And is pricing going up or is it.
Just more increased competitive intensity and then lastly, just on the dividend and.
So it looks like youre going to be about for 'twenty and 'twenty, one anyway and see some lights on my model, you're going to be about and the midpoint of your target range of 30% to 50%. So just wondering you know looking out to 'twenty and 'twenty, two and beyond with EBITDA growth sort of B and the five to 10 per cent range or sorry, with the dividend growth be in the 5% to 10%.
Range of track EBITDA growth. Thanks.
Okay, and with respect to our wireless a margin growth or EBITDA growth I should say, that's what that was.
It's about 20% and the quarter David.
And with respect to your 27% share of gross adds which is lower than what we've exhibited in Q2 and Q3, you're right. It's lower but if you look at our past years or last year. Our passengers experience Q4 is usually lower in terms of share of gross adds because it's a very heavy promotional period.
And we're trying to be disciplined and the way that we act.
And on that front, so, it's usually lower and if you combine that with.
And the month of October and has been worse this year for FIS because of last year as you know our people are our customers rushing and because of the price increase that was due at the end of October.
And you combine that with the Covid.
I would say that explains why are we get a lower share of gross adds this quarter.
On the dividend side David.
As you know and the board of directors.
And are responsible for and is responsible for.
Adding.
The the decision so we cannot you know.
Over right I would say on the board.
This is why you know our policy was.
And was.
Mention or was disclose.
Which we will continue to apply certainly and you know there's some recommendations, but my and my lecture of of the board is it's a book.
Which will always follow a prudent perspective.
And and balanced perspective. So obviously there is a there is a and attention for for the shareholders. But also there is a significant attention from what you've been seeing you know for the last two decades at least you know that we would like to continue to grow the company. So we need to have.
Proper balance sheet debt will be able to provide growth and and the same time and balance to a.
And appropriate return to Australia.
Okay.
Okay alright, thank you.
I think that we have the last question operator from Paris and offer them to.
And two other what there's another and Adam yes, yes indeed.
Last question in the queue comes from Adam Shine from National Bank financial.
And it would have a question.
Okay. Thanks, a lot.
Yeah.
Thanks, a lot. Okay. Two quick quick questions Hi, there two quick questions for Jeff what just maybe a little color as to any traction and finally in the <unk> market, which was an area that you really were trying to finally penetrate them.
The second one if indeed wireless EBITDA growth is 20% it sort of looks like the rest of telecom actually reverted back to positive growth and I think you touched earlier and what are the questions on <unk>.
Some some platforms like fios, Internet, which provide some some lift and internet savings but.
Could you also talk about any other savings in terms of maybe benefits from digitization or evolving restructuring efforts that continue to perhaps reengage on margin expansion and the non wireless side of the business.
Okay, well in terms of the that'd be could be a market, it's a very strong market for us and and indeed.
You know we when we launched we it was we were very very successful and you're probably aware I think we've been very vocal and publicly that's a bellwether.
Refraining us with respect to our growth by putting in place some procedures that were you.
And I would say anti competitive.
But people were waiting for US you know and and it wasn't monopoly essentially and Oh and by the Dol and more specifically so people were waiting for is they were paying too much for their service there, we're not getting the right right right.
Service that it wouldn't be that and we're looking for them. So it's a it's and it's very successful I think on the top of my mind, I think and the Hawaii and and Val d'or would probably have a.
Three or 4000, and subscribers and that and that region and and we also have a we also have AR and am us where we did the acquisition.
And I must say for in total I believe its about 5000 and subscribers over there.
So it's a very successful market, we continue to be to be very aggressive with respect to our through our promotions because people are and were looking for us and you know and want to make sure that they know that we're there and.
And so I think our I think it's still going to continue for for the whole year for the old <unk> 2021 year.
With respect to wireline.
Margin.
And.
Yes, it's true it's a combination of a few things and and obviously the platforms you know like a like I said earlier and the call on the call.
But obviously, there's all there's always some initiatives that we put in place to cut costs here and <unk> got there.
And some restructuring here some restructuring there is digitalization and Youre right.
On a on a few fronts.
So I think and I think that it's a combination of a few factors there are still some initiatives and where are we are you know.
And working on them and and I think it's a it's a good sign for the future and I want to come back if if I may and on the abuse visa and Uh huh.
To me.
<unk>.
Scenario.
And the way and by the all as you know and we're not we're not using our own infrastructure, we're using bells infrastructure and we have some problems with respect to accessing the infrastructure and making sure that we could install our customers.
Even though things are going better and and they went and the beginning in the beginning and we still have and looking at all.
And if your customers and the backlog.
And it's it's it's still there and it's still an issue for US and you know obviously you want to work with with whoever the winner.
To make sure that this backlog is where it was very very quickly, but oh bellies still trying to stop us or at least for Australia.
I guess I guess, just one very quick last question, Jeff and some people might question some of the strength on Internet and wonder.
And if some of it was coming in terms of reseller.
Market share gains or extraction from there can you can you maybe just talk to that dynamic just briefly.
Well.
You know, it's it's it's hard to say and you know I think it's more a question for them and for US you know I don't know depending on the decision and what theyre going to do them, but so far I can say and 'twenty and 'twenty at least and.
It's pretty clear that the right service the right and network. It's offered by the cable goes not by resellers and I think as and it should be recognized by everyone. It is recognized at least by customers and it looked like it looks like it.
And I think it should and will continue that way that being said I don't know, what's going to be crts's decision and I definitely don't know what's going to be the tpa as what our resellers our reaction to that decision and the market.
I think the question was more specific to the internet to strength and this particular quarter JF and whether it was a disproportionate amount of sort of port ins from resellers as compared to sort of market share growth and other opportunities.
Great. Thanks, a lot appreciate it.
And on the a and a reseller situation and I guess it.
And I'll answer and I were in front of the permanent committee.
Of the.
Industry, our soft comments this week and.
We had the opportunity to re emphasize the fact that and that given the situation and.
We have been facing in front of the pandemic.
I think it's important to mention the fact that there wasn't a net were robust enough to be able to face the significant.
Significant increase in terms of demand.
And the result of that is that you know of the the telecom operators had been.
Invested and their network to be able to make sure that day, we will face a.
And that kind of situation and certainly not.
And lack.
Of offered debt.
And make some some problems with our industry with art and I went to our with our customers.
And so I would say that the proof of the pudding is eating and I think that the government had been and knowledge in this situation and yes again we've.
Got nothing against the resellers, but we need to make sure that we will compete on an equitable and fair grounds and our understanding is that the government right now.
And this series D C R and.
The proper mode to understand all this.
Which.
We should be favorable for the continuation of investment and our networks and the future.
Great Thanks for that pure Carl.
Yeah.
And last question, Yeah, I think it's Tim Tim Tim Casey from BMO. That's right go ahead. Please go ahead Tim.
Great. Thanks for squeezing me and just.
A couple of our wireless J P I questions.
J S. You gave us some churn numbers for Q4 can you.
Could you give us a tiered number remind us what it was in 2019 and and full year 2020.
And what your expectations and assumptions are for.
For 'twenty, one as you know there'll be some sort of a market reopening and.
You also talked about the ARPA decline.
I think you said, 25% with solutions from us.
And the remainder was roaming and overages.
I always thought you were not very exposed to rolling.
Maybe if you could unpack that a bit for us and.
And what you're assuming will happen with market reopening and the impact on <unk>.
And the context and certainly.
It seems that any any recovery is going to be later in the year and lastly, just quickly on M&A you did a couple of tuck under as recently of live theater and the music label are you still growing interest and more Oh those type of assets on the sports and entertainment side. Thanks.
Okay. Thanks for the question Tim.
In terms of the churn rate of one 2% and Q4 of 2020 and was one 4% and Q4 of 2019.
For the whole 'twenty and 'twenty year I don't have the number on the top of my head. Let me see it was one 1% you know obviously and.
Skewed by by the pandemic and you know obviously.
There was a you know when I'm, saying that market activity has is down because of the pandemic from and from a churn perspective, we also benefit from that.
But so one one per cent for the whole year and terms of last year next year and all I think the trend is set and we've been setting the trend for a few years now it's going down years after years and B.
Because people are getting more comfortable with our service and you know the pricing and everything and you know.
Well you know essentially the right operator for this business model and Quebec, So and with the bundling of our you know.
Many many services and put fears and the mix and all that kind of stuff. So I you know I.
And I'm definitely optimistic about the continuation of this <unk> of this decline in terms of in terms of the churn rates.
With respect to our pool.
And and the roaming Youre right you know if you compare ourselves to.
Other other operators on an absolute dollar basis, we're not talking about the same kind of numbers.
But when we talk about <unk>, it's more of a relative basis to our base and.
So you know for US roaming is mostly on the commercial side I mean on the business to business side that we are.
There's nowhere that we're getting hit these days.
And obviously, we can't wait for traveling to resume and business people to go and Toronto, and New York enter and Chicago.
On the.
Audiogram question Tim.
Yes, we're very happy with the acquisition of <unk> of that label one of the largest independent if not the largest independent of us.
And the.
Quebec based music.
At this point and will continue to be to be on the outlook as we've done for the past few years, you know whether it's for and video content are tuck in acquisitions or a music or I mean anything that really feeds our ecosystem is as I'm sure you know as we've talked about.
And in the past that feeds our stable of properties and content and all senses of the word whether it's video whether its eventual.
Whether it's a music and that feeds.
The pipe and our various and then gives us a very strong competitive advantage and in our various distribution platforms.
Thank you.
I think thank you all.
Yes that were at the end of the list of them.
Thank you for your attach and thank you for being there and we.
We'll talk to you next quarter.
And ladies and gentlemen, this concludes cubic cores, Inc. Financial results for the fourth quarter and full year 'twenty and 'twenty conference call. Thank you for your participation and have a nice day.
Yeah.