Q4 2024 Quebecor Inc Earnings Call
The conference is now being recorded.
Good day, everyone.
Thank you for standing by.
Speaker Change: Welcome to Quebecois Inc.'s financial results for the fourth quarter and full year 2024 conference call. I would like to introduce Hugues Simard, Chief Financial Officer of Quebecois Inc. Please go ahead.
Speaker Change: Ladies and gentlemen, welcome to this Quebecois conference call. My name is Hugues Simard, I'm the CFO and joining me to discuss our financial and operating results for the fourth quarter of 2024 and also the full year 2024 is Pierre-Claude Pladeau, our CEO.
Speaker Change: Anyone unable to attend the conference call will be able to listen to a recording by telephone or webcast. Access details are available on our website.
Speaker Change: The recording will be available until May 29th of this year. As usual, I also want to inform you that certain statements made on the 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 the regulatory authorities.
Let me now turn the floor to Pierre Cal.
Merci, Eugen.
And good morning, everyone.
Speaker Change: So 2024 marks the first complete year of operations after, let's call it, our transformative and game-changing acquisition of Freedom Mobile in April 2023.
Speaker Change: What a year it was. What a performance we have to show for.
Despite being the latest to the Canadian Wireless Party,
The Smaller Troublemaker
Speaker Change: who both do and have forever changed the telecom landscape. Our 2024 report card ranks us as the Canadian telecom with the strongest and most resilient cash flow.
Speaker Change: The best profitability, once again, the measures and consistent capital allocation strategy.
Speaker Change: In fact, the only Canadian telecom to consistently, quarter after quarter, reduce its debt while steadily growing dividends and wisely buying back its undervalued stock.
Speaker Change: The lowest leverage ratio and most solid balance sheet while continuing to invest significantly in our networks and our best of client experience and to increase our market share across the country.
Speaker Change: Our financial results speak for themselves, with cash flow up 17% in Q4 and 18% for 2024.
Speaker Change: and EBITDA up 4% in Q4 and 6% for the year.
Speaker Change: A lower depth and a leverage ratio down to 3.21, I'm sorry, 3.31 times.
Speaker Change: We are very proud of our steadily improving performance, the resilient execution of our development plan, and the disciplined management of our operation and balance sheet.
Rarely.
Speaker Change: As it's been seen in the telecom markets across the world, that the disruptor maintains the best momentum, the strongest cash flow generation capability, the most robust balance sheet, and the only improving credit ratings in the industry.
Speaker Change: Before turning to the review of our operation, I would like to comment on a few regulatory matters.
Speaker Change: With respect to the FDTP decision, we believe that access to the FDTP on an aggregated basis across Canada is a step in the right direction. The lower internet prices...
Speaker Change: giving us the opportunity to expand outside Quebec by offering triple play services, which is wireless, internet and television. However,
Speaker Change: The CRTC must set proper wholesale rates which consider the actual retail prices of FTP services.
We are particularly concerned by tele-tactics.
Speaker Change: to try and convince the CRTC that they qualify as a new entrant in the Eastern Region of Canada.
Moreover, the commission interim rates for old cell fiber.
Speaker Change: set in the fall of 2024, gave TALIS much lower rates for the FDTP access in Quebec and Ontario than in western provinces.
Speaker Change: enabling it to compete aggressively with the established players while we are at a disadvantage in Western Canada due to 17% higher rates for the same FTPP access.
Speaker Change: This unacceptable situation prevents competitors from marketing uniform retail offers in all parts of Canada and prevents Quebec Oil from creating healthy competition in Western Canada by offering a wider range of affordable choices.
Speaker Change: Quite simply, TPIA rates should be the same coast to coast.
Why should Western Canadians pay more for Internet?
Good question.
on the CRTC Broadcasting Consultations.
A Fair and Equitable Regulatory Framework
Speaker Change: that includes a drastic reduction in the current financial, administrative and regulatory burdens weighing on our Canadian broadcasters, and that's a meaningful financial contribution from a foreign online service.
for far too long.
Speaker Change: These powerful entities have enjoyed an undue competitive advantage, allowing them to access the Canadian broadcasting market without contributing to it.
Speaker Change: Well, Canadian broadcasters are subject to numerous regulatory obligations, high costs, and a lack of flexibility that impacts their competitiveness and may endanger their long-term perspective.
Honestly.
Speaker Change: I feel like a broken record on this topic. I've been talking about this for so long, I can't even remember when exactly.
Speaker Change: I will now review our operational results for the fourth quarter of 2024, starting with the telecom sector.
Speaker Change: Another solid performance of steadily profitability growth from our telecom operation in 2024, with EBITDA up 1.2% in Q4 and up 4.7% for the year.
Speaker Change: These results are a testament to the rigorous and disciplined execution of our wireless expansion plan of profitable market share growth across Canada.
the innovative and affordable offers we have introduced.
over the last two years.
Speaker Change: are increasingly resonating with Canadians throughout the country, and we are retaining customers at levels never seen before, despite all the retaliation tactics of our competitors, which bode very well for the future.
Speaker Change: In the wireless front, competition continued to massively discount their premium services.
Speaker Change: offering unreasonable 60% discount during Q4 promotional periods via door-to-door initiatives, simply and stupidly pushing all telecoms revenue down.
Speaker Change: with a disciplined approach of continuing to reduce our operating expenses through better digital execution, more efficient technical and customer service operations, as well as improved synergies with Freedom Mobile.
Speaker Change: We lowered our equipment subsidies with our BYOD activations, strategically adjusted wireline pricing towards the end of the year, and optimized the positioning of our lineup of brands to mitigate pressure on price.
Our prudent strategy was successful in overcoming these competitive challenges.
As shown in wireless,
Speaker Change: by the remarkable performance of 88,000 net addition in the fourth quarter, 21,000 more than in Q4 last year, the only wireless player to improve
Speaker Change: thus ending the year with the addition of 373,000 new lines in 2024.
Speaker Change: reaching a total of more than 4.1 million wireless subscribers by year-end, a 10% growth year-over-year.
Speaker Change: And in Wireline, all services revenues are trending up sequentially as compared.
the last year.
This continues.
Steady quarter-after-quarter growth in subscribers.
Speaker Change: market share and profitability is the result of the convergence of our diverse and complementary lineup of brands and services strategically positioned to address the different needs of all Canadian consumers.
Speaker Change: as well as the fruits of long-standing investment in client experience and service excellence.
Speaking of customer experience, Lutron says,
Speaker Change: and Freedom Mobile, all set up in the most recent Léger WoW Index released in January 2025, in which Videotron ranked once again as the top telecom provider in Quebec for in-store experience, while Fizz,
Speaker Change: held its position as the Canadian leader in online experience for the sixth consecutive year and Freedom rose to the third place for online experience.
Speaker Change: These impressive rankings truly demonstrate our continuous efforts to exceed customer expectations and our unwavering commitment to unparalleled customer experience, both in-store and on our digital platforms.
Speaker Change: Furthermore, the most recent annual report released on January 15 by the Commission of Complaints for the Telecom Television Services, the CCTS.
clearly shows
Speaker Change: how our three brands continue to outperform the industry and customer satisfaction.
Speaker Change: While the volume of complaints logged by the CCTS for the industry as a whole jumped by a sizable 38%, Duotron recorded an outstanding drop for the third year in a row, down 14%.
Speaker Change: The results achieved by Fizz and Freedom are even more vote-worthy given the major expansion of both brands and the substantial growth in their subscriber base.
Our longstanding leadership and client experience explain, in large part,
Speaker Change: One of our most impressive performance of 2024, and this is the continued decrease in mobile churn.
Speaker Change: which registered as the lowest of our industry in Q4 and is continuing to come down in contrast with our competitors.
Speaker Change: Our growth and performance also based, quite simply, on giving Canadian consumers what they want and need at the right price.
Speaker Change: As an example, Freedom recently added access to cutting-edge 5G Plus technology to all its monthly mobile plans, regardless of price.
Speaker Change: Existing customers with a compatible phone would also see 5G access automatically added to their existing 5G plans at no additional cost, marking a significant step forward in the democratization of high-speed mobile connectivity.
Speaker Change: Freedom is also expanding the reach of its Rome Beyond offering, allowing users to enjoy the features of their mobile plan in more than 100 international destinations.
Speaker Change: The first in Quebec to offer international enrollment plans, Dutronc also brought to its international destination to 100 as part of his Canada International Plan.
Speaker Change: Carrying on our expansion plans, FIS and Freedom also extended their service territory in several Canadian regions throughout MP&O agreements.
Speaker Change: FIZ added new subscription zones in British Columbia, Alberta, Manitoba, Ontario and Quebec, giving access to FIZ 100% digital universe with an additional 2.2 million Canadians.
in addition
Speaker Change: Freedom Enhanced is wireless network in Ontario, Alberta, and British Columbia in recent months by activating 180 new sites.
Speaker Change: Videotron expanded its wireless service area in the Gaspésie and Côte-Nord regions and widened its service area in the Bas-Saint-Laurent region.
Speaker Change: Hydro-Tron also announced that it will contribute to improving wireless coverage by building at least 37 new mobile phone infrastructures.
Speaker Change: and Abitibi-Tébiscamingue and the Laurentians as part of a partnership with the Gouvernement du Québec.
Speaker Change: With the growing success of Freedom and Fit, our consolidated wireless ARPU decreased by $1.93 to $34.36 in the fourth quarter of 2020.
Speaker Change: attributable, in large part, to the diminutive impact of free and prepaid services and fifth, entry-level prices.
Speaker Change: But also, due to higher promotional discounts and lower overage revenues as our plans are getting richer to the benefit of all of our consumers.
This R2 decrease has started to diminish sequentially.
Speaker Change: recently, and we would have expected this trend to continue going forward and not been for the creeping discounts and the increasingly aggressive pricing from the big three flankers over the past few days.
As we have said repeatedly,
Speaker Change: While we are proud of our continuous improvement of our network,
Speaker Change: The reality is that we need to maintain a price differentiation.
Speaker Change: on the wireline front, which remained unduly competitive throughout the fourth quarter.
as I pointed out earlier.
Speaker Change: We saw our internet customer base decline by 2,000 in the fourth quarter.
That's it.
Speaker Change: with our new Freedom on Internet service, just gradually launched earlier this year.
and with Fizz TV, still in Betabowl.
and currently excluded from our TV figures.
Speaker Change: We have only just started to scratch the surface of the bundling opportunities.
Speaker Change: which are significant and for which we have the right strategies in place to deliver growth this year.
As I said in my opening remarks,
Speaker Change: 2024 was the first full year of our transformative and industry changing expansion plans.
are cross-canon.
Our operational and financial results.
Speaker Change: clearly show that we are executing our plan diligently and that our strategies are resonating with Canadian consumers.
The clear success of our unique customer centric positioning
force competitors to retaliate on price.
thereby diluting the value of their premium service.
Our effective marketing strategies
Speaker Change: rely not only on great pricing, but also on a second-to-none customer service.
A High Performance and Reliable Network.
and thus, quite frankly, a way more enjoyable experience overall.
Our mobile growth speaks for itself.
Speaker Change: and we are extremely proud to be promoting healthy competition, innovative, peace of mind plans.
and affordable prices.
without compromising on network performance and customer experience.
Speaker Change: As the Canadian telecom industry continues to evolve after the 2023 seismic change, we are more and more confident in its perspective and in the solid foundation that we are building.
Speaker Change: We have new services about to launch, new territories on which to gain traction, new network technology being put in place, and hopefully new regulation that will support the performance challenger that we are.
Speaker Change: Now, turning to the media segment, TVR Group posted an Adjusted Even Doll of $11 million in 2024.
A favorable variance of 17 million
Speaker Change: Despite the continued and significant decline in our advertising revenues, as seen everywhere else in the global media industry, we are able to improve our earnings.
Speaker Change: These were largely driven by the return of major production to our male studios and the reduction in operating costs resulting from the restructuring plan for our television operations announced in November 2023.
Speaker Change: As part of the restructuring, TVR Group Media, Television Studio, and Quebecois Newsroom
will be unified under one roof in Montreal.
Speaker Change: This ambitious project is expected to be completed in the upcoming weeks.
Speaker Change: We'll provide our media group with top-tier studios as well as a modern newsroom design to promote collaboration and adaptability, allowing us to streamline improving our industry-leading news operation.
Speaker Change: Finally, the sports and entertainment segment. We solidify our leadership in the event markets in the 2024 with the acquisition of Ivenma, a company specializing in large-scale and corporate events.
Speaker Change: I will now ask Hugues to review our detailed financial results.
Hugues Simard: On a consolidated basis in the fourth quarter of 2024, Quebecois recorded revenues of $1.5 billion, a marginal decline of 0.4% from last year.
Hugues Simard: EBITDA reached $589 million, up $24 million or 4%, and cash flows from operating activities increased $57 million to $392 million, a 17% increase compared to the same quarter last year.
Hugues Simard: In our telecom segment, total revenues decreased by $32 million, or 2%, mainly as a result of a declining trend of wireline services and equipment revenues, as we are now renting our Helix devices since the second quarter of 2024.
Hugues Simard: but also by opting for a more disciplined approach on mobile devices, lowering our subsidies and significantly improving our gross margin on mobile devices by more than $20 million.
Hugues Simard: This effective strategy, combined with our rigorous cost management and synergetic gains from the integration of Freedom Mobile, helped us increase our EBITDA by $7 million, or 1% for the quarter. Our EBITDA margin improved by 2% this quarter and by 0.4% for the year.
Did he come, CapEx?
Hugues Simard: Excluding the acquisition of Spectrum licenses was up by $42 million for the full year, but down $25 million in the quarter due to a favorable impact of governmental credits as we increased our investments in 5G network expansions, growth opportunities, and leased wireline devices.
Hugues Simard: As a result, our quarterly telecom adjusted cash flows from operations increased by $32 million, or 8%, and by $63 million, or 4%, on a year-over-year basis.
Hugues Simard: The telecom segment ended the year with a record 1.8 billion dollars in adjusted cash flows from operations.
Hugues Simard: Our media segment recorded revenues of $195 million, or a 5% decrease.
Hugues Simard: an EBITDA going from 10% to $15 million for the quarter.
Hugues Simard: Our sports and entertainment segment revenues increased by 23% to 69 million dollars and the EBITDA
Hugues Simard: of $11 million for the quarter represents a $9 million increase compared to the same quarter last year.
Hugues Simard: Quebec Corp reported a net income attributable to shareholders of $178 million in the quarter or $0.76 per share.
Hugues Simard: compared to a net income of $146 million or $0.63 per share reported in the same quarter last year.
Hugues Simard: Adjusted income from operating activities excluding unusual items and losses on valuation of financial instruments came in at 187 million dollars or 80 cents per share compared to an adjusted income of 168 million or 73 cents per share in the same quarter last year.
Hugues Simard: For the full year, Quebec Corp's revenues were up 4% to $5.6 billion and EBITDA was up 6% to $2.4 billion.
EBITDA from our telecom segment grew 5% to $2.3 billion.
an improvement of $105 million over the year before.
Hugues Simard: Quebec Forest cash flows provided by operating activities reached 1.72 billion dollars, an 18% increase over 2023.
Hugues Simard: As of the end of the quarter, Quebecois' net debt-to-EBITDA ratio decreased to 3.31 times, still the lowest of all telecom competitors and operators in Canada.
Hugues Simard: I would also point out that we are the only telecom company in Canada to continue to regularly reduce our debt and strengthen our balance sheet.
Hugues Simard: thanks to our steady and disciplined cash flow generation capabilities quarter after quarter, even after investing $300 million in Spectrum, as well as purchasing and cancelling 3.6 million Class B shares, for a total investment of $115 million.
Hugues Simard: We intend to continue to de-lever over the next quarters and operate in the low threes as we have said before.
On November the 8th,
Hugues Simard: of last year Videotron issues 700 million dollars of senior notes in the US investment grade market yielding 5.7 percent.
Hugues Simard: Our balance sheet remains very strong, with available liquidity of $855 million at the end of the fourth quarter. Pro forma, the reduction of Videotron's revolving credit facilities from $2 billion to $500 million in January of this year.
Hugues Simard: Our available liquidities are more than sufficient to fulfill our commitments and support our development plans.
Hugues Simard: Finally, in light of these results and following our plan to distribute between 30% and 50% of our free cash flows, I am happy to report that Quebecois' Board of Directors declared yesterday a quarterly dividend of $0.35 per share for both Class A and Class B shares, up from $0.325 per share, an increase of 8%.
Hugues Simard: We thank you for your attention, and we'll now open the lines for your questions.
Hugues Simard: Ladies and gentlemen, on the phone, if you'd like to queue up to ask a question at this time, please dial star 1 on your phone's keypad. The first question is from Stephanie Price from CIBC. Please go ahead.
Stephanie Price: Good morning. You mentioned in your prepared remarks retaining customers at levels never seen before. Just curious if you can give us any update on churn in the quarter and and how you're kind of thinking about customer retention at this point?
Stephanie Price: from quite a higher point and have been bringing Churn down over the past couple of years.
Stephanie Price: and that is true for all the other brands as a matter of fact, not only Freedom has come down, Videotron continues to come down on shares and Fizz also continues to come down.
Stephanie Price: And when we blend the three, we are now, I won't give you the number because we don't release it, but we are the lowest of, in Q4, we were the lowest of all four, of all, yeah, all four operators in wireless.
Speaker Change: How do you think about ARPU growth versus volume growth in the coming quarters? I saw that you brought your $39 offer down to $35 as a flash sale. Do you see the opportunity for ARPU declines to moderate in the second half of the year? How should we think about pricing for 2025?
Speaker Change: Well, Stephanie, we don't know yet what will be the outcome of...
Speaker Change: I think that I said that we are always ready to make sure that we will be in a position to retain the way that we would like to address the market. We certainly also again have some strong experience for our customer service, which makes a difference.
Speaker Change: so that therefore, you know, we consider that as a significant asset.
Speaker Change: On top of which, and I refer to that also in my fair remarks,
Speaker Change: Bundling is now, you know, something that, you know, we have the capacity to move on. Certainly, you know, it's on a TPI basis, we all know this, for the other services, but, you know, down the road we'll see how technology will evolve.
Speaker Change: We're seeing some, you know, fixed wireless technology being implemented. This certainly, you know, is something that we're looking for, we're looking at.
that position ourselves, I would say, interestingly for the future.
Speaker Change: is something that we're following and that will give us some additional possibilities you know to get a retention mode and also on an acquisition basis.
Great, thank you very much.
Speaker Change: Thank you. The next question is from Jérôme Zubré from Desjardins. Please go ahead.
Speaker Change: like we've been seeing in the quarter. So in order to try to assess that I'm wondering if you're if there are new things that you are implementing right now on wireless that could really keep you going in terms of market share gains.
Thank you, Jérôme.
and Fred Finch.
Speaker Change: It's not easy, as you know, we've never been given guidances. But what we know is the way that we operate, the way that we execute.
Speaker Change: We don't know what will be this year, again, you know, what will be the competitors' strategies.
Speaker Change: We know that we've been executing well and we look forward to continue the way that we've been delivering it.
Speaker Change: to reinvent the wheel here. We did it and we look forward to continue to do it.
Speaker Change: Other than, you know, as I just said, that with the addition of bundling capabilities
could be even more favorable.
And if I may add, we agree.
Speaker Change: Jerome, you said this morning that you continue to like us as freedom provides it with solid growth runway So we agree with that and we think that that barely, you know above 10% market share globally or nationally rather You know, there's there's quite a bit of runway. So we agree with your statement
Speaker Change: Alright, good to hear. And Eric, maybe a second one, last year you provided kind of an expected payout ratio for the year. Are you ready to provide that this year too?
Speaker Change: On the cash flow, it gets us down, I guess what you're looking for is our guidance on cash flow which last year came out at roughly a billion dollars.
30% fail, right?
Speaker Change: So, on cash flow, you know, we're looking at stability, as we've said before, you know, for this year.
Speaker Change: You know, we believe that, you know, we're quite confident in terms of our ability to continue to, you know, to generate that, you know, call it billion-ish. I think we delivered the goods this year, a little over that billion dollars that we had talked about a year ago.
and we intend to continue to deliver along those lines.
with roughly 300 million dollars that we spent in 2024.
It should not be repeated.
Yeah, understood. Thank you. Merci beaucoup.
All right. Thank you.
Matthew Griffiths: The next question is from Matthew Griffiths from Bank of America. Please go ahead.
Matthew Griffiths: Good morning. Thanks for taking the question. First one, just on broadband. In the quarter, obviously, some net losses on the broadband side.
Just curious if you could share your thoughts if
Matthew Griffiths: If that's driven by maybe you were more price-disciplined in the quarter and so there's you know
Matthew Griffiths: you know, you're happy to give up some of the subscriber growth, or whether it was an increase in your competitor's kind of promotional intensity that kind of depressed what you were able to win in the market. And separately on wireless,
Matthew Griffiths: I'm just curious if you could share your thoughts on what proportion of the market you think that you're kind of effectively addressing with your brands, I mean really particularly outside of Quebec, I mean do you think that like the combination of fizz and freedom?
Matthew Griffiths: gets you, you know, like half, two-thirds, three-quarters. Do you think the premium section of the market is...
Matthew Griffiths: growing, or do you think it's shrinking? Because you made some comments earlier about how the big three are diluting their offerings at the high end. So if you, you know, just, you know, what you're seeing in the market and where you think you, you know, stand to compete effectively and win given your brands. Thanks.
Speaker Change: There's a lot of questions here, Matthew. We only get a chance once every quarter, so we've got to take advantage.
Speaker Change: I understand that very well. So I'll try to do my best in answering them. So on the broad bit, well, again, you know...
um
Speaker Change: You know, we're the incumbent, you know, in our footprint, and, you know, we've seen
Speaker Change: repricing could be very expensive. We've been seeing this, you know, with our competitors and, you know, we decided that we will not follow them.
Speaker Change: Two, obviously, you know, the compensation of not being able to add some internet subscribers.
Speaker Change: So, should we continue to move in this direction? Obviously, we're not going to give any direction publicly on that, for the matter that you understand very well. But, I guess that, you know,
Speaker Change: We need to protect our revenues, and this is therefore, you know, will be the top priority for us. And where we're not the incumbents, as we are in the world of business,
Speaker Change: Obviously we have more capability, we have this, but sometimes we're surprised.
Speaker Change: by the fact that even our competitors are lowering their prices and facing the effect for them.
Speaker Change: to be forced to reprice their base, and we've seen the effect, the impact of that on the way that, you know, they've been delivering results for the for the 2024 year or so.
Speaker Change: We think that we have, and this goes to your second question,
Speaker Change: How do we see the Canadian market? We think that our brands, Freedom and Mobile,
portion of the market.
Speaker Change: Is this 75? Is it, you know, the 35? Is it 90%? What would be, you know, the premium market? Is the premium markets shrink or is shrinking?
we can, you know, even answer positively.
Speaker Change: to this question when we're seeing the flankers strategy of our competitors.
they are the ones sometimes that is moving to reduce
what we can consider being the premium market.
Speaker Change: Previously, obviously, there was only one market when the three operators were only, you know, commercializing.
They're premium brands, but things change.
Speaker Change: And what we've been seeing, certainly also the immigration, we'll see where the immigration will go in 2025.
is we're certainly seeing, you know...
Speaker Change: this portion of the market growing instead of shrinking, and then, therefore, probably, you know, to the effect of shrinking the premium market.
available.
That's great. Thank you so much for the color.
All right, thank you.
Speaker Change: The next question is from Drew McReynolds from RBC. Please go ahead.
Speaker Change: you know, maybe the wireless EBIT does, you see it in Q1. And then, the third question here, just in terms of what you're seeing through Q1 here on volume,
Speaker Change: Jarek, all you just talked about characterizing the market you play and we clearly saw some moderation of industry volume in Q4. Just wondering what you're seeing from your perspective in Q1 in terms of wireless market expansion and overall volumes. Thank you.
Speaker Change: Thanks Drew, and hi. On your first question, so CAPEX guidance for the year, you know we we've talked about this. Last year we ended up on telecom just a little under 600 and a little over 600 on a consolidated basis.
Speaker Change: We're looking at 650 as guidance for Telecom CapEx for 2025.
and just slightly higher than that on a consolidated basis.
Speaker Change: So that should, as we had said, there's nothing new in that in that message, you will remember that we had said last year that we were going to...
Speaker Change: that we were going to gradually increase gap X and and that's what we're doing. I'll let Pierre-Karl pick up your second question. Your third question. Oh your third question, yes that's right.
I think, Drew, you were referring to the Q1 25.
Yeah, that's right, you know what?
Speaker Change: speaking now we're not going to be able to give you a
Speaker Change: all disclosure but what I can say is that you know we and yet that you you guys are well aware but you know what is taking place so I would say you know it is slower than last year
a little bit slower than last year.
Speaker Change: Okay, okay. I'd love for you to elaborate, but that's fine. Thank you for that. And then Hugues, just back on wireless events for Q4.
Hugues Simard: We don't we we don't give it out. I'm sure you guys will be upset at me now but you know we
Yeah, we we gave it up for a while without
really giving it out and the reason as I
Hugues Simard: explained before. We weren't trying to be coy. It's just that we run this business, and especially on the OPEC side, you will all understand that
Hugues Simard: which are in and of themselves estimates and we felt that this was not reflective.
and I'm sure you can work out the...
the split amongst yourselves.
Hugues Simard: evenly throughout some odd numbers. So we're going to go away from this now and just give you the consolidated EBITDA. I'm happy that you're upset again.
Hugues Simard: against you and not against me. Oh, they're always against me, not you.
Now let's not understand it. Thanks very much for that.
Thanks, Drew.
Speaker Change: All right, thank you. The next question is from Aravinda Galapathige from Canaccord Genuity. Please go ahead.
Speaker Change: Okay, on the fizz side, well, you know, this is a new brand and we're not going to spend zillions of dollars, you know, to make that brand known.
Speaker Change: what we're seeing and this is a special also to say this because you know there's some
personal reference.
Speaker Change: You can gain certain gifts, you know, if you bring additional customers. So, you know, we consider, and this is our experience we have in Quebec, that, you know, we're starting slower.
Speaker Change: And, you know, we're going, bit by bit, increasing by the fact that, you know, the knowledge of the brand is being expanded.
Speaker Change: and the experience throughout, you know, the digital universe is also, you know, being better known.
So it's
slower but solid
Speaker Change: I would say that. Is it comparable to our previous experience? I would say almost.
We need to make sure that
Speaker Change: Because our experience in Quebec is that TPIAs have been there for many, many years.
Speaker Change: We can't say this as strongly in certain areas in Canada. I think of the western part of the country.
Speaker Change: There, you know, we need to work harder to make sure that, you know, the Freedom Mobile first, which was not as strong as it was in Ontario, would be better known. And then our TPIA.
Speaker Change: opportunity will also be known. So we're expecting the same trend, something that you know will grow, not at a magical rate, but a steady rate, bit by bit, on an everyday low price I would say.
Speaker Change: And this is what we're looking for and this is what we expect, you know, to be able to deliver.
Thank you very much. I'll pass the line.
Speaker Change: Thank you. The next question is from Mayor Iaghi from Scotiabank. Please go ahead.
Thank you for taking my questions.
Mayor Iaghi: I have some follow-up questions on the free cash flow guidance.
and take a big picture about 2025.
Mayor Iaghi: How should we think about your telecom, top line, and EBITDA? Because the reason I'm asking is, you took some price action on Freedom recently with some price increases and repricing, let's say.
Mayor Iaghi: Obviously to stem the decline in ARPU that you're seeing in that business, but as
Speaker Change: Do you think this is because volumes have been so soft that they're trying to make You know get their quarter in and if that's the case Why shouldn't we expect that price action or price pressure to continue throughout the year?
Speaker Change: And how should we think about that in terms of you being able to grow top line in telecom in 2025? Is this something you...
Speaker Change: you're hoping to achieve, or at this point in time, you see it as more of an upside surprise, and we should maybe think about the top line as flat to down for 2025? That's one question.
The second question I have is on free cash flow.
I just wanted to make sure when you said, Doug...
Speaker Change: The $300 million that you spent on Spectrum, how are we reallocating that within the spending pattern in 2025? Thank you.
So I'll start with the first one.
Speaker Change: So you guys, you know, know those guys much better than we do, you know. You guys should talk to them, you know, on a quarterly basis. You should be able to answer the question because honestly, I don't know.
Speaker Change: I don't know what they have in mind, so again, the only thing I can say is that we will continue as we've been facing this situation for a while.
I refer to what your colleague wrote this morning.
Speaker Change: It's about price aggression. Pricing aggression writes this. I mean, well, you know, we're facing this. And again, you know, we're not going to let our market share, our positioning, moving...
to the end.
the false direction.
So, yeah, I guess we're reacting.
Speaker Change: and we're improving our customer service, we're improving our services, we're adding some opportunities, you know, and we're making our brands better known. All those things, bit by bit, you know, there's a list of dozen things that we're doing which is able, somewhere, to...
to reframe what our competitor is doing.
Speaker Change: And you are probably right, you know, sometimes we've been seeing this at the end of the quarter. I don't know, are they, is there bonus paid on RGU achievements?
Speaker Change: I don't know, but certainly it's a little bit weird, but we're used to seeing this, and we will react accordingly.
Speaker Change: So, on the free cash flow, just before, you know, to answer, I think it's important, again, you know, to...
Speaker Change: to mention that, you know, we are disciplined and we're, you know, the only
Speaker Change: a company that is able, you know, to reduce our debt, we will continue to do so.
Speaker Change: this year. And, you know, our free cash flow is free cash flow.
Speaker Change: It means that it's all, it's after all expenses. It's after our interest, obviously. It is after our taxes. It is after leases.
Speaker Change: It is after capital expenditure. It is the money that we're bringing to the bank. This is our definition.
Speaker Change: And, you know, we expect to continue to deliver strong results in 2025. I don't know if you have anything to add.
Speaker Change: Spectrum purchases. As Gakal just said, we're looking at reducing our debt more this year than we did in 2024, knowing that
Speaker Change: you know where dividends are going so there'll be a slight increase in dividends but nothing
Speaker Change: nothing major and there's no surprise you know to to wait or consider on the dividend policy I think that you know we've been talking to you for the last what three four years now
Speaker Change: It's well established, the board of directors are completely in sync with that, so we look forward to continuing the same strategy for the years to come.
and just flexing on the...
Speaker Change: On revenue growth, are we to expect revenue growth to turn positive sometime in 2025 on the telecom side?
We expect...
We expect this to take place.
Thank you.
would say, we expect and we hope.
Sometime in 2025. Thank you.
Speaker Change: Alright, the next question is from David McFadgen from Cormac. Please go ahead, David.
Okay, thanks. A couple of questions.
David McFadgen: So I was looking at the mobile equipment review. I thought it would have been a bit higher. So I guess The reason why it wasn't is it because you're just seeing more BYOD new ads come on stream?
David McFadgen: Well prices, well yes there's some BYOD but it's I mean it's I mean it's all about our view right it's all about
David McFadgen: you know, prices, you know, Q4 is a competitive, is a promotional...
David McFadgen: quarter, as it always is. And you saw where our pew, I mean, we are stabilizing our pew, or starting to stabilize our pew, as you saw, which sequentially is
David McFadgen: is coming down a little bit less than it had been for the past few quarters.
David McFadgen: But it still is, so obviously that mathematically just impacts the top line. But we picked up quite a bit, as I said in my remarks, on subsidies to help us increase profitability.
David McFadgen: but mostly the top-line impact had to do with the, you know, with the pricing, the pricing. So who knows, as Pierre-Carl said, you know, for Q1.
but where is it going to go? We'll see.
Okay, so I would...
David McFadgen: I was talking primarily about mobile equipment revenues, so do you mean that you're the reason why the revenues... Oh, mobile equipment, sorry, okay, I misunderstood your question. On mobile equipment, yes, we lowered, it was a lower volume on, first of all, and secondly, we were, as I said, on subsidies, a lot more disciplined.
David McFadgen: So, it was all in all a much more disciplined quarter in Q4 than the previous one.
than the one in 2023.
Speaker Change: Okay. And then when we look at the CapEx, you know, you signal that the telecom CapEx will be $650 million or thereabouts in 2025. Is most of that growth being driven on the wireless side or is you also increasing CapEx on the wire line?
Speaker Change: Well, it's both. It's both. We are continuing to invest in
Speaker Change: but Wireline is also continuing to be, you know, we have technological advances that we are working on in Wireline.
Speaker Change: on the DOCSIS front, and we will continue to invest in our wireline network in Quebec, for sure. So it'll be both, really.
Speaker Change: Okay and then you talked about on the wireless side you know you want to have a bit of a price discount relative to the big three. Is there sort of a range that you try and stick to like you want to be 10% lower or 20% more or something like that?
Speaker Change: Well, we were comfortable. I'll answer more. You know, we have been, I think if you look back throughout 2024, David,
You will see that we have reacted and have
Speaker Change: have tried to maintain a few dollars. It ebbed and flowed a little bit, but it's sort of a handful of dollars advantage on a monthly package.
Speaker Change: sort of a spot where we were comfortable and you know if our competition is
Speaker Change: as they have tried or as they are trying over the past few days to diminish, then we feel that we need to maintain that advantage. So we've reacted accordingly this morning, as you saw, and we'll see how that goes.
Okay. All right. Thank you.
11. Thank you.
Speaker Change: All right. The final question is from Tim Casey from BMO. Please go ahead.
Speaker Change: There were some aggressive moves on the fourth quarter with respect to handset promotions.
Speaker Change: Could you give us an update there on what you're seeing and how you'd react? And then, just follow up, Pierre-Carl, you mentioned your, I guess, contemplating fixed wireless access.
Speaker Change: Is this a 2025 thing? Is it an outside of Quebec thing? Just any thoughts you could share there would be helpful. Thank you.
Speaker Change: Okay, well yeah, what we're seeing is interesting technology. We're not going to obviously, you know, go full-blown there. We, in fact, you know, we're
Speaker Change: I will go at Barcelona for next week. This is the World Mobile Congress. We're going to have a chance.
to again, you know, chat and talk with our suppliers.
Speaker Change: We already, you know, saw some interesting implementation. So, again, it's not going to be full-blown. This is something that we know that has...
Speaker Change: possibilities, opportunities in the future. We're not, we will continue to move in the direction that we've been moving previously. I think this is, you know, something as a, something that should be considered as
Speaker Change: expansion which we will do obviously because you know we expect to be one day or another a full
Speaker Change: facility-based wireless operator, and this is, I would say, not a weapon but certainly an asset that we we should consider in the toolbox that will be available for the telecom operators in the future.
Speaker Change: Quite simply, we just didn't, you know, we tried things out. We released, as you saw, our Black Friday end-of-year promotions.
It was just, as we are building...
Speaker Change: you know, other levers to pull, and I think that's a proof that we are successful in building these other levers.
Speaker Change: than having to, in Q4, which is traditionally a very strong quarter for equipment subsidies, we felt, and we were in a position not to be as, being able not to be as aggressive.
Speaker Change: and we were then, you know, a bit more disciplined, which will, as I'm sure you've understood, which will certainly help our future RQ stabilizing and eventually perhaps even growing.
Thank you.
Speaker Change: We didn't have any questions from Vince. He's on a plane. He couldn't be here this morning.
Speaker Change: So, we thank you all and wish you a nice spring break.
and talk to you next water. Thank you.