Q4 2024 Rogers Communications Inc Earnings Call
Speaker Change: Thank you for standing by. This is the conference operator. Welcome to the Rogers Communications, Inc. Fourth Quarter 2024 Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded.
Speaker Change: I'm pleased to report that we continued to deliver industry, leading results in a highly competitive fourth quarter Q.
Speaker Change: Q4 caps, our third straight year of delivering results that lead the industry in.
Speaker Change: In 2024, we attracted more subscribers than any of our competitors, adding a combined 623000 wireless and internet net additions more Canadians continue to choose Rogers over any other carrier.
Speaker Change: We delivered the highest wireless margins the highest cable margins and stable ARPA.
Speaker Change: We also delivered the best service revenue and adjusted EBITDA growth in the industry and grew free cash flow by 26%.
Speaker Change: As it relates to the fourth quarter the environment remained very competitive and we continued to execute with discipline. It's clear our team has led the industry by balancing subscriber growth with financial performance.
Speaker Change: Wireless service revenue was up 2% adjusted EBITDA grew by 6% and we added 95000 net postpaid and prepaid phone subscribers. While this is down year on year. This was due to a much smaller market size as a result of government policies to reduce the new to Canada category.
Speaker Change: Nonetheless strong market share performance with the majority of our loading once again on our premium <unk> brand.
Speaker Change: Our margin profile remained very healthy at 66% and blended <unk> remained stable at $58. Despite the competitive intensity postpaid mobile phone churn improved to 153% a good improvement over last year.
Speaker Change: In cable we delivered on our commitment to return to growth in the fourth quarter.
Speaker Change: Although it is only marginally positive. This is a significant milestone in our drive to grow our market share and revenue in this business. We continued to deliver strong EBITDA growth in cable and we continue to benefit from ongoing efficiency gains in retail Internet net adds which were up 30%.
Speaker Change: Importantly, our focus on disciplined loading is evident and reflected in record margins of 59%.
Speaker Change: In media revenue was up 10% and adjusted EBITDA was a healthy $53 million, while the advertising market was a bit softer than anticipated in the quarter. Our overall business was strong. This year. This is a strong foundation for when we close on the acquisition of our competitors' stake in epilepsy.
Speaker Change: Overall, I'm very pleased with our operating and financial performance in the fourth quarter and throughout 2024.
Speaker Change: We are operating in a highly competitive environment and we let our competitors in wireless and cable loading and delivered financial results that lead the industry.
Speaker Change: Our strong results are underpinned by our network leadership and our innovative investments in 2024, we were awarded Canada's most reliable networks by independent testing agencies, who and what and open signal. We have made significant investment to remain Canada's largest and.
Speaker Change: Reliable <unk> network and I'm pleased to report that we are now also Canada's most reliable internet.
Speaker Change: Same time, we advanced several industry first in 2024, we delivered four gigabit download and one gigabit upload speeds and an ongoing trial with DOCSIS four technology.
Speaker Change: We partnered with <unk> to introduce wildfire detection technology to Canadian communities.
Speaker Change: We compete completed Canada's first national life trial of five G network slicing.
Speaker Change: And we're making meaningful progress on the launch of satellite to mobile technology.
Speaker Change: Twenty-five marks 40 years since Rogers launched wireless in Canada, and we continue to build on this innovation leadership.
Speaker Change: We started to rollout the Rogers <unk> suite of services to Canadians beginning with Canada's first home Internet backup solution Rogers Xfinity storm ready and yesterday, we launched Rogers Xfinity App T V.
Speaker Change: Together live television and streaming services together on one platform.
Speaker Change: Overall in 2024, we delivered strong results, while making meaningful progress on our long term growth strategy.
Speaker Change: Before I turn the call over to Glenn I wanted to touch on two transactions announced previously.
Speaker Change: First we announced an agreement with Bel to purchase its 37, 5% stake in Maple Leafs Sports and entertainment.
Speaker Change: This will take our current minority interest and MLS see to a majority of 75%.
Speaker Change: Spanning our ownership of MLS see as an important step to deliver long term growth and surface additional value from our world class sports and media assets.
Speaker Change: In December we received clearance from the competition Bureau, and we are now awaiting league and CRT see approvals.
Speaker Change: Second we announced an innovative first of its kind transaction to Canada to raise $7 billion through a structured equity investment for the sale of a minority stake in part of our wireless backhaul infrastructure.
Speaker Change: This transaction is reflective of our focus to de lever and further strengthen our investment grade balance sheet. We continue to work on definitive agreements and we will provide a more fulsome update at the appropriate time.
Speaker Change: Finally, let me touch on our 2025 outlook two.
Speaker Change: <unk> 2025, we expect markets to remain competitive and expect growth in wireless to continue to be impacted by the number of newcomers to Canada with this backdrop, we will remain disciplined in the market and balanced growth to ensure steady financial results. Our 2025 outlook reflects continued growth in <unk>.
Speaker Change: Service revenue.
<unk> EBITDA and free cash flow.
Speaker Change: This growth will be underpinned by approximately $4 billion in capital investments to grow our core businesses.
Speaker Change: We delivered strong operating and financial results and 2024, and we will remain focused on continuing this disciplined leadership in 2025.
Speaker Change: In closing I want to thank our team for delivering these results in a competitive environment. The team's consistent disciplined execution over the past three years has set the standard for our industry.
Glen: Over to you Glen.
Glen: Thank you Tony and good morning, everyone. Thank you for joining us.
Glen: I'm pleased to report that Rogers ended 'twenty 'twenty four with another strong quarter.
Glen: Our results reflected healthy service revenue and EBITDA growth continued strong margins and stable ARPA all of which are characteristic of the disciplined pricing and balanced approach. We have maintained in the marketplace for wireless and cable loading.
Glen: Wireless service revenue was up 2% and adjusted EBITA was up 6%.
Glen: Our wireless margin was up by 250 basis points year over year at industry, leading levels of 66%.
Glen: Through 2024, we have added 512000, net postpaid and prepaid phone additions, leading the Canadian wireless wireless sector for a third consecutive year.
Glen: As expected the wireless market remained highly competitive through the fourth quarter, reflecting the holiday season, and the lower growth environment.
Glen: In the fourth quarter Rogers delivered on its disciplined approach with 95000, net postpaid and prepaid phone additions down from 111000 last year, reflecting the smaller market size.
Glen: Postpaid mobile phone churn was 1.53% a 14 basis point improvement over last year.
Glen: As reflected in our prepaid loading we used our our flanker brands to effectively compete with very aggressive promotions in the marketplace.
Glen: Fortunately, our strong aggregate net phone additions throughout 2024, combined with our solid financial results stable, our pool and increased wireless margin demonstrates rogers emphasis to balance subscriber growth without compromising financial performance.
Moving to our cable business I am pleased to report we met our target and returned cable revenue back to slight year over year growth in the fourth quarter.
Glen: This is no small feat given that we started the year at an organic revenue decline of negative 4% year over year.
Glen: Cable adjusted EBITDA was up a healthy 5% year over year and our cable margin continues to reflect our focus on cost efficiency, reaching 59% for the fourth quarter, which is up 290 basis points from one year ago.
Glen: Internet net additions were up by 30% year over year, reaching 26000 in the fourth quarter.
Glen: Reflecting the strength of Canada's most reliable internet combined with the scale of our national footprint, both of which we will continue to leverage.
Glen: But.
Glen: Yes.
Glen: Sustained growth in our Internet subscriber base remains critical and will continue to be underpinned by leading technology and disciplined pricing in the market.
Glen: The ongoing trend for customers to adjust their video viewing preferences was reflected in our year over year decline of video subscribers, which was down 35000 year over year.
Glen: We continue to focus on efficiency initiatives to offset the impacts of this decline, which has driven a 7% decrease in operating costs this quarter compared to the prior year.
Glen: This focus combined with the stabilized revenue for cable has driven our 5% increase in cable EBITDA versus the prior year.
Glen: Additionally, we are investing in the video experience for our cost for our customers with enhanced content and capabilities.
These initiatives include broader content with NBC, Universal and Warner Brothers discovery, bringing the most watched lifestyle and entertainment content to Canadians.
Glen: This along with rolling out the Rogers Xfinity suite of services will ensure our customers experience the best in entertainment today and for years to come.
Glen: Finally.
Glen: Our sports and media revenue was up 10% and adjusted EBITDA was $53 million compared to $4 million last year.
Glen: This improvement was driven by higher sports and entertainment related revenue, including higher subscriber and other revenue as well as some benefit from the Taylor Swift Arris Tour Toronto concerts hosted at Rogers Center.
Glen: In Q4 advertising revenue was softer than originally anticipated, which contributed to our updating our full year consolidated service revenue growth to 7%.
Glen: Versus the 8% low end of our guidance range, which we first provided back in February last year.
Glen: Notwithstanding the later advertising revenue our media business delivered strong results in Q4 and for the full year with full year revenue and adjusted EBITDA growth of 6% and 9% respectively.
Glen: As we look to 2025, we entered the year with a very strong underlying media and sports business, even before completing the purchase of the additional 37, 5% stake in <unk>.
Glen: On a consolidated level total service revenue was up 2% in Q4, and adjusted EBITDA was up 9%. These.
Glen: These results reflect the strong performance and efficiency efforts across all three of our businesses.
Glen: As a result Rogers delivered consolidated margins of 46% in the fourth quarter.
Glen: Which is up 250 basis points from the prior year.
Glen: Capital expenditures for the quarter were $1 billion, reflecting our ongoing investment coast to coast in our Canadian wireless and wireline networks.
Glen: Free cash flow was also very strong at zero point $9 billion, reflecting a 7% increase year over year.
Glen: Turning to the balance sheet at year end, we had $4 8 billion of available liquidity comprised of $900 million in cash and short term deposits on hand, and $3 5 billion available under our bank credit facilities.
Glen: Our weighted average cost of all borrowings was four 6%.
Glen: And our weighted average term to maturity was 10 years.
Glen: We ended the year with a debt leverage ratio of four and a half times.
Glen: This is below our previously targeted level of achieving four two times by year end.
Glen: Which was primarily impacted by lower service revenue and adjusted EBITDA as well as slower than expected progress on asset sales originally anticipated in the 2020 for outlook.
Glen: As you recall last quarter, we announced that we entered into a non binding term sheet with a leading global financial investor for a proposed $7 billion structured equity investment.
Glen: The equity investment if completed would result in the investor acquiring a minority stake in a subsidiary.
Glen: That will own a portion of our wireless backhaul transport infrastructure with Rogers continuing to maintain operational control.
Glen: Substantially all of the net proceeds are expected to be used to reduce debt and further strengthen our balance sheet.
Glen: Okay.
Glen: As an update we continue to consider evaluate and work on definitive agreements with respect to the proposed equity investment completion has remained subject to entering into binding definitive documentation with the investor.
Glen: Please note that as we are in the midst of this process I won't be providing any further commentary nor update on this transaction during this call.
Glen: And finally, we continue to move forward on our agreement to buy the 37, 5% additional ownership stake and MLC for $4 7 billion.
Glen: Rogers will pursue the appropriate funding options for this transaction aligned with maintaining our investment grade balance sheet, including among other options raising an equity investment in our sports and media Holdings importantly, and just to be clear we are not considering issued issuing RCI com.
Glen: When shares to fund this purchase.
Glen: For our 2025 outlook.
Glen: Our current economic assumptions, we anticipate single digit growth for total service revenue and adjusted EBITDA strong free cash flow and continued investment in our networks coast to coast across Canada.
Glen: We anticipate the environment for our businesses to remain competitive in the coming year with continued moderating wireless subscriber growth versus 2024, as Canada's immigration and foreign student levels decline.
Glen: We anticipate total service revenue and adjusted EBITDA growth both in the range of zero percent to 3%.
Glen: Capital expenditures of $3 $8 billion to 4.0 billion and.
Glen: And free cash flow of 3.0 billion to $3 2 billion.
Glen: I will also highlight that this guidance excludes any impacts associated with our pending <unk> transaction.
Glen: 'twenty 'twenty four has been a very busy and competitive year and Rogers outperformed its peers in terms of financial performance and disciplined wireless and cable subscriber growth.
Glen: Our teams have worked tirelessly to execute effectively on our core businesses. While also moving forward on our longer term priorities. This has included integrating the Rogers and Shaw operations and driving growth in Canada across all of our core assets, while remaining focused on driving that.
Glen: <unk> leverage.
Glen: These are the priorities Rogers has consistently executed against and remains committed to.
Speaker Change: Tony and I are very proud of that patient and commitment of our entire team of Rogers' employees together against the backdrop of a highly competitive marketplace. We have once again delivered sector, leading operating and financial performance in 2024 for the third consecutive year and we have done.
Speaker Change: So while investing in bringing industry, leading technology and innovation and World Class Entertainment to Canadians and the best is yet to come.
Speaker Change: Thank you for your time this morning, and with that Kaylene may we please commenced with questions and answers. Thank you.
Speaker Change: Thank you.
Speaker Change: I'll now begin the question and answer session and join the question queue. You May Press Star then one on your telephone keypad, you'll hear a tone acknowledging your request okay. Using a speakerphone. Please pick up your handset before pressing any Keith.
Speaker Change: Let me withdraw your question alright. Thank you.
Speaker Change: Our first question is from drew Mcreynolds with RBC. Please go ahead.
Drew Mcreynolds: Yeah, Thanks, very much and good morning.
Two for me on first on the 2025 Psi surface revenue growth guidance.
Drew Mcreynolds: You just.
Tack, a little bit more your assumptions with respect to the volume side of the equation here for 2025, obviously, we're all aware, it's a moderating population growth environment, just curious as to what your expectation is there.
Speaker Change: And both impacts on wireless and cable and then secondly, maybe for you Glenn on the balance sheet.
Speaker Change: Youre not going to dive any deeper I don't think into the restructured equity financing.
Speaker Change: But can you.
Speaker Change: Give us a sense says in the scenario where.
If that doesn't occur.
Speaker Change: What are some of the alternatives you have in mind with respect to managing the balance sheet and getting to where you need to get.
Speaker Change: By the end of the year, just with respect to our investment grade ratings and targeted leverage thank you.
Speaker Change: Good morning drew and thanks for the questions I'll start with the volume and then Glenn will touch on your balance sheet question.
In terms of size of market as we look to 2025 be helpful to give you our perspective on 2024 and in particular.
Speaker Change: Exiting the market in the fourth quarter, what we saw in terms of net adds.
Speaker Change: <unk> size it was probably down our estimate.
Speaker Change: Between 25, and 30% year on year notwithstanding.
Speaker Change: The market continues to grow through penetration and a little bit of population growth for the full year 2024.
Speaker Change: <unk> is a market we estimate grew.
Speaker Change: Grew just over 4% down.
Speaker Change: Down from over 5% the year before and we saw progressive steady decline throughout each of the quarters.
Speaker Change: As we look to 2025, our estimate is the market is going to grow somewhere in the range of about 3%. We continue to see good penetration gains second handsets and.
Speaker Change: And we see good potential for growth.
Speaker Change: That side of it and so you know market growing at 3% us continuing to over index on market share.
Speaker Change: Is something we expect to deliver on this year.
Speaker Change: On the cable side and as we look to that market.
Speaker Change: You would've seen that.
Speaker Change: That size of market grow in two respects, one is homes passed and as construction.
Speaker Change: Volumes inflows continue to close out in 2024.
Speaker Change: We had a homes passed.
Speaker Change: Approaching 3%.
Speaker Change: For a for the year.
Speaker Change: We continue to expect it to be between two five and two 8% this year, but importantly for us, particularly with the launch of our fixed wireless access product during additional $6 5 million homes that is now an addressable market for us and has been and so for us that is a <unk>.
Speaker Change: <unk> potential opportunity in terms of market size. So we looked at it.
Speaker Change: Against that.
Speaker Change: Market size, we looked at our expectations and our targets are to obtain.
Speaker Change: Obtain subscriber share in both wireless and cable and <unk>.
Speaker Change: Putting those together with solid <unk> performance are that's how we came up with the revenue ranges in our guidance.
Speaker Change: And then drew with respect to your question on our balance sheet and our commitment to maintaining our investment grade ratings and that remains an absolute priority for us.
Speaker Change: And you've seen that I'm, not going to guide or speculate or or pre announce our intentions on on our potential or perspective capital raises.
Speaker Change: But I would emphasize we have several options open to us and and I'll leave it at that.
Speaker Change: But then just repeat we are absolutely focused and committed to maintaining our investment grade ratings.
Speaker Change: Okay. Thanks for that.
Speaker Change: Thank you drew next question Gili.
Speaker Change: Our next question comes back to a levy with UBS. Please go ahead.
Speaker Change: Great. Thank you two questions one on the wireless side can you characterize maybe the competitive environment post the holiday holiday season, <unk> used to be a slower activity periods in the past how are we seeing a little bit more returned to a normal trend here and if you would expect the churn.
Speaker Change: Moving to continue.
Speaker Change: Second question on Capex.
Speaker Change: Can you provide more color on the Capex drivers just curious should we assume that DOCSIS four <unk> upgrade would be maybe peak and capex starts to come down next year. Thank you.
Speaker Change: Thanks, Patty and good morning in terms of the competitive environment post the holiday season, as we moved into January.
Speaker Change: Sure.
Speaker Change: What we saw was typical of prior years with a slowdown in mall traffic and volume.
Speaker Change: What we did see is a pull out of promotional offers as you would expect we certainly did that and we saw that in the marketplace as well there are a few areas that.
Speaker Change: Our competitors continue to put out there in terms of small business offers but even that that promotional pricing.
Speaker Change: Pricing and tactics.
Speaker Change: Have slowed down as well, so we sort of see a normal course and that's about following our Q4 period that I would describe as a par for the course in terms of competitive intensity and promotional offers I wouldn't describe it as more intense or less intense than prior year as a comparator.
Speaker Change: So a good healthy competitive environment.
Speaker Change: Our focus on churn is has been and continues to yield.
Speaker Change: <unk> for us in both wireless as well as Internet key factor there is improvements in customer service and customer experience. It's been a focus for us, particularly given we have the largest wireless base.
Speaker Change: In the country and so it's an important value add strategy for us to do that we've been doing and delivering on a number of initiatives to improve that and you see that coming through in the results and our expectation is to continue to drive those churn improvements throughout 2025.
Speaker Change: And then on your question on Capex, I'll lead and Glenn will top up but a couple of things you should expect.
Speaker Change: Our capital program continues to focus the vast vast majority of our capital spend is on network.
Speaker Change: And network innovation.
Speaker Change: We intend to continue to lead in network performance predominantly centered around reliability.
Speaker Change: That's key for the customers today and so that's what we continue to focus on.
Speaker Change: We've been investing on the cable side and mid split.
Speaker Change: The West is completed we've announced that previously we continue to work quickly in the east and we see dramatic improvements in network performance insurance frankly.
Speaker Change: As we rollout.
Speaker Change: The mid split and that's a precursor to the DOCSIS four implementation, which will be later this year. So think about the DOCSIS four implementation as the less expensive part of it so what we what you do see in our capital.
Speaker Change: Investments for cable is more of the heavy lifting but even with that we're looking at a few hundred dollars per home passed.
Speaker Change: So a relatively modest investment.
Speaker Change: To deliver superior.
Speaker Change: Internet quality in the marketplace and the only thing I would add to that but he is that that that portion of the the rollout that'll be multi year, you won't see that in a in a large a large investment upfront that will take years to transition all of the subscribers that are.
Speaker Change: So so.
Speaker Change: The spend this year will be a if you want to call. It a peak it will certainly be there.
Speaker Change: The more prominent.
Speaker Change: Got it thank you.
Speaker Change: Thanks, Pat Your next question gaming.
Vince Valentini: The next question is from Vince Valentini with TD Cowen. Please go ahead.
Vince Valentini: Yes, thanks, very much tag on to Judy's question on volume that's very good color. There, if if you're expecting sort of 2.5% to 3% volume growth across cable and wireless your revenue growth guidance would then imply that to get to the near the high end your RP would be roughly flat to get to zero.
Vince Valentini: You'd need to see our pud down two or 3%.
Speaker Change: Am I missing something on the math there first off second off does that align with what we've seen in the past few weeks in terms of price announcements both on the Internet from both telcos and cable Cosan and and wireless even as early as this week with a bunch of favorable pricing changes if those all stack is.
Speaker Change: Is the zero percent ARPA growth. The best you can do for the for the full year granted first half may be a bit tougher, but if your your guidance is for the full year I'm. Just wondering if you can frame how you think about <unk> and the recent pricing changes versus that guidance.
Drew Mcreynolds: Good morning, Vince I'll start and Glenn will add some more detailed color, but as we set our frankly, our budgets and our guidance ranges for this year, we tried to take into account a number of puts and takes and come up with what we think is a fairly balanced prudent view of what we.
Speaker Change: We're going to deliver and as.
Speaker Change: You rightly pointed out we are operating against a market size that continues to grow and that's a good opportunity for us and we expect to.
Capture.
Speaker Change: Leading share.
Speaker Change: In wireless and growing share on the wireline side as well and then when you toggle that.
Speaker Change: Some of that is potentially impacted by further government policies that could be.
Speaker Change: More downside or more upside on that one it's difficult to predict for us in this political environment.
Speaker Change: What seems to be a sea of change here.
Speaker Change: For the country.
Speaker Change: And then we think about and have thought about some of the broader macroeconomic factors that could impact us, including some of the recent discussions.
Speaker Change: The discussions around tariffs with our U S neighbor and so those are the factors that we put into our thinking in our models. We certainly have what we would describe as on our <unk> playbook internally that we execute too and.
Speaker Change: You know our drive is as we make investments and provide more value.
Speaker Change: <unk> offerings to Canadians than.
Speaker Change: And then we look to areas, where we can monetize that and you should expect that and so I wouldn't describe zero as the best we can do we continue to look for ways to deliver more value.
Speaker Change: And improve our RP position, but there.
Speaker Change: There are headwinds as well from time to time, particularly in competitive periods.
Speaker Change: In terms of our competitors.
Speaker Change: Looking to leverage price.
Speaker Change: Above other factors, we've pivoted to product differentiation.
Speaker Change: And network superiority is increasingly.
Speaker Change: Increasingly our lead we will lean on price when we need to but.
Speaker Change: But that's our strategy and.
Speaker Change: So the range you see sort of takes into account all of those factors.
Vince Valentini: And Vince I don't have I don't really have anything to add to that I think we've we.
Speaker Change: We focus on our technology on the clarity around our brand and discipline around our pricing if there's an opportunity for upside on <unk> I love your optimism and as reflected here. If we can if we can find that opportunity we will.
Speaker Change: But we also emphasize going and investing in subscriber growth and making sure. We're competitive so some of that is against the backdrop of the competitive environment and that's why you see the ranges you see.
Speaker Change: Thanks, Glenn Thanks for clarifying Capex too.
Speaker Change: We asked that question already but is there anything meaningful in 'twenty five and what it carry into 26 for subsidized world projects I think Roger's want a lot of contracts in Ontario that are probably being built out right. Now just wondering if you can give us investors any sense is there is there some sort of temporary amount in there that that rolls off at some point.
Speaker Change:
It's multi year and in delivery you've seen it in some of our prior years.
Vince Valentini: That is a that's a portion of what we invest in and expanding our footprint Vince.
Vince Valentini: That will temper as we are as we move through the coming years, there will be a little bit more through 'twenty, five and beyond twenty-five but.
Vince Valentini: That's all that's all factored in as part of a part of that spend envelope is there an opportunity to lighten in future years, I'm not going to start guiding beyond 25, but we.
Vince Valentini: We balance what we invest in terms of expanding our footprint and in seeking subscriber growth as well.
Vince Valentini: Thank you.
Vince Valentini: Thank you.
Vince Valentini: Vince next question gaming.
Vince Valentini: The next question is from Mega Yankee right.
Speaker Change: Scotia Bank. Please go ahead.
Speaker Change: Great. Thank you for taking my questions.
Speaker Change: Operational performance continued to be.
Speaker Change: Quite strong advancing at a good clip ICU as.
Speaker Change: As you indicated but the markets investors don't like them.
Uncertainties related to balance sheet issues. So I understand that you can't discuss specifics on the backhaul deal, but maybe.
Speaker Change: Maybe I can ask a few questions around that.
Speaker Change: So first can you decide not to close on the MLS see transaction for some reason and is there a break fee is it onerous to not close on that transaction second.
Speaker Change: Can you provide some sense as to why the backhaul deal is.
Speaker Change: Late beyond what you had initially expected is it an <unk>.
Speaker Change: <unk> <unk> agency concern or just putting a final number on paper with the buyer.
And third you indicated that it could be possible to raise capital around your sports asset as the backstop.
Speaker Change: Can you help us understand how that could be set up and I guess my question is why not do this irrespective if the backhaul deal closes or not just to be on the safe side. Thank you.
Speaker Change: Alright, thanks for the question and articulating that.
Speaker Change: We've been very clear on our intent to de lever the balance sheet.
Speaker Change: And we have been making good solid progress on that and we'll continue to look to alternatives.
Speaker Change: That give us options.
Speaker Change: And that work the best for Rogers, Roger shareholders, and our balance sheet.
Speaker Change: And we have options in doing that so our intent.
Speaker Change: And our direction of travel is clear.
Speaker Change: If you look at the.
Speaker Change: The construct of our dividend payout ratio, our cash flow generation and the rate at which our free cash flow is growing which leads the industry. We're in the best position to continue to de lever organically. In addition to the options that we have in terms of the balance sheet to be clear our intent is to <unk>.
Speaker Change: Close on the MLS see transaction.
Speaker Change: Once we receive those approvals and we're comfortable with the ability.
Speaker Change: Of our funding strategy for that.
To to work within our balance sheet and remain investment grade.
Speaker Change: And then Mary the only thing I would add is you've asked on on the timing.
Speaker Change: The financing is a is a complex transaction I am pleased with the progress I'm not.
Speaker Change: I'm not going to to start predicting win.
Speaker Change: We will get to end of job again I gave my best estimate when we announced that we had signed the non binding terms in October.
Speaker Change: We've we've made some progress we have work to do and and I'm not going to update further than that in terms of why we are where we are I'm enthused.
Speaker Change: Enthusiastic about the opportunity I'll leave it at that the only thing I would add is that our guidance on free cash flow reflects that transaction, whether it does or doesn't come to fruition.
Speaker Change: It won't affect our guidance on free cash flow.
Speaker Change: Great. Thank you Matt next question Kelly.
David Barden: The next question is from David Barden with DLA. Please go ahead.
David Barden: Hi, good morning, its Matt sitting in for Dave. Thanks for taking the questions first if I could I just wanted to kind of circle back to that.
Speaker Change: The kind of underlying assumptions that the guidance commentary.
Speaker Change: Are you on your expected kind of market growth for wireless and cable were helpful.
Speaker Change: But you know last year, you kind of shared with US that you where you wanted to achieve the positive topline revenue growth by year end, which you manage in Q4, you know what is that outlook for.
Speaker Change: For the coming year, and how should we think about the balance of the.
Speaker Change: Revenue growth and the EBITDA growth between the two.
Speaker Change: Say it between basically the wireless and cable segments and maybe if you could provide a little bit of color also on kind of some of the dynamics behind your pricing expectations, I mean, particularly in wireless yeah. It does.
Speaker Change: I mentioned earlier, there is some pricing moves in the market but.
Speaker Change: But I think a big driver of the downward pressure, you're facing if I'm not mistaken and he can elaborate on it is from people from two years ago or three years ago.
Speaker Change: <unk> signed deals in a much higher price environment now coming due and even if prices are up a little there is still down relative to when you sign them.
Speaker Change: Years ago, so the balance the pressure in our pud between those that repricing of people coming off contract versus the current market price that you see on all the new subscribers would just be helpful color as we try to gauge where this market is going thanks.
Speaker Change: Thank you Matt on on the your questions around <unk>.
Speaker Change: Yep guiding between cable and wireless we don't guide for the individual.
Speaker Change: Business units you see in the update from Q4, where they are through Q4 and through 2024 on their revenue trajectories.
Speaker Change: M beyond remarking on where the market sizes are going into 2025, which you've heard I don't have anything further to add on that but I'm not going to give clarity around guiding in the individual be used.
Speaker Change: In terms of pricing dynamics look Matt we continue to look for opportunity to.
Speaker Change: Provide full value increasing value and monetize that simple as that and as I said earlier, we look to factors.
Speaker Change: Beyond.
Speaker Change: Just price.
Speaker Change: And if I look to some of the Differentiators, we have our credit card was a pretty significant advantage for us in the fourth quarter.
Speaker Change: Where customers.
Speaker Change: Could finance handsets over 48 months cutting their monthly payments in half.
Speaker Change: Tax rate, we had on that was far beyond expectations and those things our customers see value in.
Speaker Change: Additionally, and importantly data usage continues to grow in the 30% to 50% range and so well.
Speaker Change: So while pricing on a like for like basis.
Speaker Change: It may seem like it came down.
What we have is usage continuing to grow and so those customers from two to three years ago, maybe on plans and they are looking.
Speaker Change: To move to something that gives them more value.
Speaker Change: So when we look at.
Speaker Change: I would encourage you not to look narrowly at a particular category.
Speaker Change: Looking at our entire base there are a number of things in terms of acquisitions and we're always looking to what we would describe as base management.
Speaker Change: And look to the customer and continue to provide them value and as I said in the opening remarks. The vast majority of our loading is on the Rogers premium <unk> brand the attractiveness of the <unk> network together with unlimited.
Speaker Change: It is meaningful to consumers and so.
Speaker Change: We've had a long track record of stable our booth.
Speaker Change: And.
Speaker Change: The pricing competitiveness in certain times is nothing new and we will continue to balance it as we as we have in the past.
Speaker Change: Great. Thank you.
Speaker Change: Alright.
Speaker Change: Thank you Matt next.
Speaker Change: Next question Gaily.
Speaker Change: Thank you the.
Speaker Change: The next question is from Tim Casey with BMO. Please go ahead.
Thanks, Good morning.
Speaker Change: Yeah.
Speaker Change: Tony can you talk a little bit about the timing on M. L. S. C. When you think you can close it and maybe just a little color on whats holding it I mean.
Speaker Change: I assume there's nothing on the CRT D C with respect to broadcast deals you have the competition Bureau, so is it just league CIT is holding you back and and then I realize you don't want to talk about the structured equity, but how should we think of the interplay of those two deals is it.
Speaker Change: If its structured equity.
Speaker Change: As delayed or you can't get it to the finish line.
Speaker Change: Does that change how does that change how you think about M. L. L C.
Speaker Change: And then just on guidance.
Speaker Change: You you touched on it briefly but just how are you thinking about the economic outlook, because I mean it.
Speaker Change: It sure seems like Canada is going to take a hit and how is that factoring into your guidance. Thanks.
Speaker Change: Thank you Tim.
Speaker Change: Start with.
Speaker Change: Let's see approval process, Glenn will speak to.
Speaker Change: The second two items that you've highlighted.
Speaker Change: But in terms of MLS see the league approvals, it's a process and.
Speaker Change: I don't want to speculate on either league or CRT see approvals, which I'll talk to in a moment.
Speaker Change: But.
Speaker Change: It's a process and so.
Speaker Change: We're going through that we don't expect to see issues.
Speaker Change: But we're working through that on the CRT C side that one MLC does own NBA TV and so that does require CRT C approval.
Speaker Change: It seems to be a little slower than we anticipated in terms of that process.
Speaker Change: I don't want to speculate on time, because we are dependent on other organizations for that but it continues to move along we don't see issues.
Speaker Change: But we.
Speaker Change: We continue to go down the process and then Tim on your question of whether or not that's linked to the the prospective structured equity investment those are distinctly different.
Speaker Change: Independent deals independent timing no connection whatsoever.
Speaker Change: The structured equity investment of successful obviously helps helps fund and strengthen our balance sheet and so that remains a.
Speaker Change: And initiative.
Speaker Change: Its own right.
Speaker Change: We have ample liquidity on hand at $4 $5 billion at year end I have ample access to liquidity.
Speaker Change: Through a number of different options.
Speaker Change: Some immediate term some that would take some time to implement very very comfortable with our with our flexibility and.
Speaker Change: And options around all of that so so no connection between those two.
Speaker Change: And then your question on economic outlook.
Speaker Change: The guidance reflects current economic conditions and near term realities in the Canadian environment. It reflects where we are on population growth and the declining international.
Speaker Change: International student population and new to Canada segment. So it reflects those realities I'm not going to start speculating on what might happen with respect to our to tariffs or otherwise I look at where we are today and.
Speaker Change: That's reflected in our our determination over to others to manage the stewardship of the Canadian economy, and how we respond to a to the international realities.
Speaker Change: I'm confident that the Canadian economy is strong and weathers. These from time to time and and we'll come out the other side just fine.
Speaker Change: Okay great.
Speaker Change: Alright, Thanks, Tim next question Galen.
Speaker Change: The next question is from Benjamin Swinburne with Morgan Stanley. Please go ahead.
Speaker Change: Hi, Good morning, guys. It's Patrick I was speaking on behalf of Ben Swinburne, just wanted to ask a question on cable is there any more updates in terms of any synergy realization with shop any outstanding buckets, what's the progress with them and any potential margin uplift that you see.
Speaker Change: The second question I have relates to the upcoming election in Canada.
Speaker Change: Could you speak about how it how loading might be impacted if the conservative if the conservatives win.
Speaker Change: And whether you think people Faber tighter immigration policies. Thank you.
Speaker Change: On thank you Patrick on your first question.
Speaker Change: No no specific update we are.
Speaker Change: We have.
Speaker Change: Proceeded further and progress further on the integration I have mentioned on previous calls that we've substantially worked through the people side of the integration. We have some systems work that is nearing completion, we have other systems work that is perhaps mid point too.
Speaker Change: To getting to the end on some of the more.
Speaker Change: Regional type systems integration that.
Speaker Change: Maybe had a bit of a longer term scale, but those are fairly minor.
Speaker Change: In relative to the overall savings I have mentioned.
Speaker Change: That the.
Speaker Change: The largest open item on our on cost efficiencies and synergistic savings now really lies around.
Speaker Change: Some of the long term build on our wireless cell sites with fiber backhaul versus microwave that can pull out some cost savings, we still have a significant opportunity our media content costs and then continued work on improved customer service and.
Speaker Change: <unk>.
Speaker Change: And improvements around our digital offering which can pull some of the.
Speaker Change: Some of those costs out while increasing our effectiveness in serving our customers those would be some of the larger.
Speaker Change: Priorities that.
Speaker Change: We're still looking at that I would put in the category at least in part if not entirely as synergy, but but from a cost synergy playbook, we've achieved $1 billion.
Speaker Change: And so I'm not going to provide any further granularity than that now we're really just working on year over year growth.
Speaker Change: The second part of your question Patrick.
Speaker Change: And assumptions in terms of immigration in the new to Canada category.
Speaker Change:
Speaker Change: We've been prudent in our thinking and our outlook for this year is based on what we have in front of us.
Speaker Change: We it's too difficult.
Speaker Change: And speculative to try to guess what.
Speaker Change: If and when there is a new government and what they're taken policies might be and how fast they implement.
Speaker Change: And so if there is upside then great. It's good for the industry and good for Rogers.
Speaker Change: We've taken a prudent approach based on the.
Speaker Change: What we have in front of us now.
Speaker Change: Great. Thank you.
Speaker Change: Thanks, Patrick gaming, we have time for two more questions. Please.
Speaker Change: Thank you.
<unk> is from Arris.
Speaker Change: Apache with Canaccord Genuity. Please go ahead.
Speaker Change: Good morning, Thanks for taking my question.
Speaker Change: I wanted to talk a little bit about the price action that you know that has been announced by your competitors or or or maybe also sort of communicated by yourself to.
Speaker Change: Two to your customers is there anything meaningfully different when we kind of look at it year over year, both on the cable side and across across your services.
Speaker Change: As we try to sort of thread the needle on ARPA here how.
Speaker Change: How should we look at the price changes that had been contemplated this year versus last year and then a quick follow up.
Speaker Change: With respect to your Internet loading.
Speaker Change: Maybe just an update on how you're doing in the west versus your sort of legacy footprint, maybe just.
Speaker Change: A quick thought on how the progress has been eight tenths of a share shift there. Thanks.
Speaker Change: Thanks Arvind to.
Speaker Change: Me a deal with the second part in terms of relative loading and I assume you're talking wireless as well as Oh home Internet.
Speaker Change: Home products, a couple of things I would say loading has been good and strong across the entire nation.
Speaker Change:
Speaker Change: With particular emphasis in the west the west continues to be our fastest growing market and.
Speaker Change: And we're pleased with the penetration gains we're seeing there that's been consistent.
Speaker Change: Post close of the Shaw So we're pleased with that.
Speaker Change: On the home Internet side mid split is done in the west and so we have a significant.
Speaker Change: Product advantage when it comes to.
Home Internet and now with the Rogers extremity rollout, we're very confident about the product differentiation that we have there.
Speaker Change: And then in the east as I mentioned earlier as we continue to rollout mid split.
Speaker Change: It's having an impact and so we like what we see and then of course.
Speaker Change: In Quebec, we.
Speaker Change: Continue to make strides, particularly now as we have the potential to offer a bundled product and that's a significant market opportunity for us so.
Speaker Change: We're hitting all of those and then Arvind on the first part of your question, maybe you could just repeat that who's on the recent price changes in the market.
Speaker Change: Competitors and ourselves and what how that compares with your are going to in terms of that.
Speaker Change: We make price adjustments based on.
The market activity size of market and frankly, the value proposition all in that we're putting in front of the consumer our competitors will do what they do.
Speaker Change: And.
Speaker Change: We will take a look at how consumers respond and then we respond accordingly based on that I don't want to speculate too much on.
Speaker Change: What anything happens over the course of one or two weeks and whether that sets any type of precedent for the rest of the year, It's a competitive environment and we will continue to make the moves we need to do to balance subscriber.
Speaker Change: Share leadership and ARPA growth.
Speaker Change: Okay.
Speaker Change: Okay. Thank you.
Speaker Change: Great. Thanks, Arlinda and gaming we have time for one more question.
Speaker Change: The next question is from Carol Kemple with Hilliard Lyons. Please go ahead.
Carol Kemple: Yeah. Good morning, Thanks for taking my questions.
Carol Kemple: First one can you remind us are pleased of the synergies in general between sports asset in the telecom business.
Carol Kemple: Just to see the benefits of integrating and I'll, let's see maybe going forward within Rogers given that in the past and we haven't I haven't seen really the market recognizing that value and then second question Hugh Thanks for the guidance you provided for between 25. That's helpful. I'm wondering if you can.
Carol Kemple: Provide an organic deleveraging our guidance for the year, you know are not notwithstanding what might happen with the structured equity.
Carol Kemple: Transaction, maybe what what the business will be able to do in terms of deleveraging in 2025. Thank you.
Carol Kemple: Joe I'll start with the first part and then Glenn will talk to the second piece of it.
Carol Kemple: In terms of.
Carol Kemple: Our strategy with respect to sports and entertainment I think theres three principles that I'll outline.
Carol Kemple: It warrants a deeper conversation.
Carol Kemple: That will come in due course, as we close MLS see but there are a few things I would highlight our ownership in sports and entertainment is significant and there is significant value, which is not reflected in our share valuation today.
Carol Kemple: And so that's.
Carol Kemple: That's the first point I'd make in those assets continue to grow at double digit rates in terms of value.
Carol Kemple: So it's a good growth opportunity for us strategically the second part is the integration of assets and the synergies it creates and Theres really two parts of that that you're getting at we see opportunities for operating cost synergies for sure.
Carol Kemple: As well as opportunities for revenue synergies.
Carol Kemple: Across the the assets and we expect to capitalize on that and then of course there are synergies is the largest.
Carol Kemple: Distributor of content and in particular sports content throughout the nation, we have the unique ability.
Carol Kemple: To look at the whole ecosystem from sports ownership, all the way to the viewing experience of the consumer whether it's in their home or on their mobile device and we think that's a huge opportunity.
Carol Kemple: For us to capitalize on.
Carol Kemple: And then the last piece, which is one for US which is how do we monetize that and through.
Carol Kemple: Investment vehicles, and the alternatives that we have and how do we surface that value for Roger shareholders and we're.
Carol Kemple: On that course, and as I said at the outset. This is something that you'll hear and see more of.
Carol Kemple: As we go down that strategy, but the value opportunity is significant for Roger shareholders.
Speaker Change: And then Jerome on the your question around the organic Delevering, you see our guidance around EBITDA growth and free cash flow.
Carol Kemple: We will apply.
Speaker Change: The available free cash flow.
Speaker Change: Of which we retain a substantial substantial portion certainly relative to our peers to to invest back in our balance sheet.
Speaker Change: And and lower leverage.
Speaker Change: Accordingly, and so we will have some.
Speaker Change: Some emphasis around the organic delevering as well as our other balance sheet initiatives that we've touched on I'm not going to guide.
Speaker Change: On leverage beyond that but we will continue to emphasize that delevering, we have a ways to go.
Speaker Change: It remains a priority focus for us.
Speaker Change: Thank you.
Speaker Change: Thank you. Thank you.
Speaker Change: Jerome and thanks, everyone for joining us and if theres any follow up please reach out to the Rogers team here. Thank you. Thank you all.
Speaker Change: This concludes our question answer session and today's conference call. You may disconnect. Your lines. Thank you for participating and have a pleasant day.
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