Q1 2025 BCE Inc Earnings Call

Operator: Good morning, ladies and gentlemen. Welcome to the BCE Q1 2025 results conference call.

Good morning, ladies and gentlemen, welcome to the BCE Q1, 2025 results conference call I would now like to turn the meeting over to Mr. Richard Benjamin. Please go ahead Mr. Benjamin.

Operator: I would now like to turn the meeting over to Mr. Richard Benjian. Please go ahead, Mr. Benjian. Thank you, Matthew.

Speaker Change: Thank you Matthew good morning, everyone and thank you for joining our call with me here today are merkle, Vivek, Bce's, President and CEO and our CFO Curtis Milot you.

Richard Benjian: Good morning, everyone.

Richard Benjian: And thank you for joining our call with me here today are Mirko Bibic, BCE's President and CEO, and our CFO, Curtis Millen. You can find all our Q1 disclosure documents on the Investor Relations page of the bce.ca website, which we posted earlier this morning. We have a lot of material to get through on this call.

Speaker Change: You can find all our Q1 disclosure documents on the Investor Relations page of the BBC Dot CA website, which we posted earlier this morning.

Speaker Change: We have a lot of material to get through on this call. However.

Richard Benjian: However, before we begin, I would like to draw your attention to our safe harbor statements on slide two, reminding you that today's slide presentation and remarks made during the call will include forward-looking information and, therefore, are subject to risks and uncertainty. Results could differ materially. We disclaim any obligation to update forward-looking statements except as required by law. Please refer to our publicly filed documents for more details on assumptions and risks.

Speaker Change: However, before we begin I would like to draw your attention to our safe Harbor statements on slide two reminding you that todays slide presentation and remarks made during the call will include forward looking information and therefore are subject to risks and uncertainties.

<unk> could differ materially we disclaim any obligation to update forward looking statements, except as required by law. Please refer to our publicly filed documents for more details on assumptions and risks with that out of the way I'll turn the call over to Marco.

Mirko Bibic: With that out of the way, I'll turn the call over to Mirko. Thank you, Richard, and good morning, everyone. I shared in February our strategic and operational roadmap that will guide our actions for 2025 and beyond, focusing on our customers and on creating value for shareholders. We have a clear strategy for growth, and that's anchored in 4 key priority areas, putting the customers first, providing the best Internet and wireless networks and services, unlocking potential for businesses with technology solutions, and building a digital and media content powerhouse. Moreover, we will continue to modernize and simplify how we do business and how we operate.

Marco: Thank you Richard and good morning, everyone.

Marco: In February our strategic and operational roadmap that will guide our actions for 2025 and beyond focusing on our customers that are creating value for shareholders. We have a clear strategy for growth and that is anchored in four key priority areas, putting the customers first providing the best Internet and wireless networks and services unlocking potential.

Marco: For businesses with technology solutions and building, a digital and media content powerhouse. Moreover, we will continue to modernize and simplify how we do business and how we operate.

Mirko Bibic: And before providing an update on our progress against each of these, I want to call out 2 key and very material developments. This morning, we announced a major partnership with PSP Investments, one of Canada's largest pension investment managers with approximately 265 billion dollars in net assets. PSP is an extremely experienced telecom investor. It will be helping us fund the expansion of our US business, which could see a commitment in excess of $1.5 billion. This will significantly de-risk our future funding requirements and bring support for our US fiber growth strategy, while still allowing us to proceed with our deleveraging plans.

Marco: Before providing an update on our progress against each of these I want to call out two key and very material developments. This morning, we announced a major partnership with PSP investments one of Canada's largest pension investment managers with approximately $265 billion in net assets PSP is an extremely experienced teller.

Marco: Investor It will be helping US fund the expansion of our U S business, which could see a commitment in excess of $1 $5 billion. This will significantly de risk our future funding requirements and bring support for our U S fiber growth strategy, while still allowing us to proceed with our deleveraging plans I'll describe our partnership and more deep.

Mirko Bibic: I'll describe our partnership in more detail in just a few minutes.

Marco: And just a few minutes secondly, given the significant changes in our economic and operating environment that have occurred since the fall of 2024. Our board has established the annualized dividend per BCE common share at $1 75 per share from $3 99 per share. This change will be effective with the July dividend.

Mirko Bibic: Secondly, given the significant changes in our economic and operating environments that have occurred since the fall of 2024, our board has established the annualized dividend per BC common share at $1.75 per share from $3.99 per share. This change will be effective with the July dividend payment. This will help us achieve more quickly our near term deleveraging target of 3.5 times adjusted EBITDA by the end of 2027, as well as our longer term target of 3.0 times.

Marco: Payment this will help us achieve more quickly our near term deleveraging target of three five times adjusted EBITDA by the end of 2027 as well as our longer term target of 3.0 times. Both of these developments are consistent with our strategy to optimize the balance sheet invest for growth and enhance total shareholder return.

Mirko Bibic: Both of these developments are consistent with our strategy to optimize the balance sheet, invest for growth, and enhance total shareholder returns.

Marco: Now onto the four priorities.

Mirko Bibic: Now on to the fourth priority. As you see on slide four, we're putting customers first as our top priority. Earlier this year, we became the first Canadian telecom company to name a dedicated chief customer experience officer. Since taking on this role, Adir Hassan has been hard at work on improving the entire customer experience, and that's grounded in four key commitments that define service excellence from a customer's point of view, and our path towards making it easy to do business with Bell. Our objective is to put our customers at the heart of every interaction with us.

Marco: As you see on slide four we're putting customers first is our top priority earlier. This year, we became the first Canadian Telecom company to name a dedicated chief customer experience officer since taking on this role at Deere has done has been hard at work on improving the entire customer experience and thats grounded in four key commitments that define service X.

Marco: <unk> from a customer's point of view and our path towards making it easy to do business with Bell. Our objective is to put our customers at the heart of every interaction with US we know their time is valuable and that's why we're prioritizing self serve tools to help customers get the support they need whenever they need it including $24 seven AI powered virtual assistance.

Mirko Bibic: We know their time is valuable. That's why we're prioritizing self-serve tools to help customers get the support they need whenever they need it, including 24-7 AI-powered virtual assistance, while keeping our phone lines free for more complex cases or people who prefer to speak to someone directly. We've also introduced the new intuitive digital bill, and we're improving the tools available to our representatives so that no matter how customers interact with us, our team has access to the same up-to-date information. And because we know that life does not wait, we're enhancing our callback experience so that our team can follow up without customers having to sit on hold.

Marco: While keeping our phone like free for more complex cases or people, who prefer to speak to someone directly. We've also introduced a new intuitive digital bill and we're improving the tools available to our representatives. So that no matter how customers interact with US our team has access to the same up to date information and because we know that life does not wait were enhanced.

Marco: Our call back experience, so that our team can follow up without customers having to sit on a whole.

Mirko Bibic: This approach will materially improve customer satisfaction, churn, and ultimately customer lifetime value and financial performance.

Marco: Approach will materially improve customer satisfaction churn and ultimately customer lifetime value and financial performance.

Mirko Bibic: Turning to slide five now.

Marco: Turning to slide five now.

Mirko Bibic: The next key priority is to provide the best fiber and the best 5G network. Internet and wireless, as you all know, are our largest businesses and most important revenue drivers. We've made significant investments over the past several years in fiber and 5G, which continue to receive third-party recognition for delivering the fastest download and upload speeds, lowest latency, robust security, and standout reliability and resilience.

Marco: The next key priorities to provide the best fiber and the best <unk> networks.

Marco: Internet and wireless as you all know our largest businesses and most important revenue drivers we've made significant investments over the past several years in fiber and <unk>, which continue to receive third party recognition for delivering the fastest download and upload speeds lowest latency robust security and standout reliability and resiliency.

Mirko Bibic: Now over to slides. I know I say this often, but I'm going to say it again. Fibre is the future. It's clearly the superior technology, and customers know it. Fibre gives us a sustainable advantage that will last for decades. Since 2020, when we made the decision to accelerate fiber deployment, we've increased our total footprint by more than 50%. We have the largest fiber footprint in Canada at more than 7.8 million households and business locations. And it's clear that our strategic investment is paying off. We more than doubled our internet customer base on Fiber to 3 million and over 60% of these customers are taking gigabit plus.

Marco: Now over to slide six I know I say this often but I can say it again fiber is the future. It's clearly the superior technology and customers know it fiber gives us a sustainable advantage that will last for decades. Since 2020, when we made the decision to accelerate fiber deployment, we've increased our total footprint by more than 50%.

Marco: We have the largest fiber footprint in Canada at more than $7 8 million households, and business locations and it's clear that our strategic investment is paying off with.

Marco: We more than doubled our internet customer base on fiber to $3 million and over 60% of these customers are taking gigabit plus speeds, we doubled our fiber revenue over the same period, where we have fiber our market share has grown 18% to 48%, where we've had fiber for a longer time, our market share is above 50%.

Mirko Bibic: We doubled our fiber revenue over the same period. Where we have fiber, our market share has grown 18% to 48%. Where we've had fiber for a longer time, our market share is above 50%. And if you look at our numbers quarter after quarter, we consistently capture the majority of new broadband additions with fiber. Moreover, where we have fiber, our mobility and Internet bundled sales continue to grow and now comprise more than 50% of our total residential housing. Our residential fiber penetration rate is approximately 44% across our entire footprint. That's a blended figure that comprises older tenured and more recently deployed markets.

Marco: And if you look at our numbers quarter after quarter, we consistently capture the majority of new broadband additions with fiber. Moreover, where we have fiber our mobility and internet bundle sales continue to grow and now comprise more than 50% of our total residential households are.

Marco: Our residential fiber penetration rate is approximately 44% across our entire footprint.

Marco: That's a blended figure that comprises older tenured and more recently deployed markets.

Mirko Bibic: In our oldest tenured markets, penetration is at 50% or higher. In our experience, the average penetration rate in new fiber footprint reaches 45% by the third year after deployment. And since we've built more than 1.9 million new fiber locations in the last three years, many of our markets are lower on the penetration curve.

Marco: And our oldest tenured markets penetration is at 50% or higher in our experienced the average penetration rate of new fiber footprint reaches 45% by the third year after deployment.

Marco: And since we have built more than $1 9 million new fiber locations over the last three years. Many of our markets are lower on the penetration curve all of that to say lots of room to grow the bottom line is this our commitment to fibers at the core of our strategy and where we have fiber we win.

Mirko Bibic: All that to say, lots of room to grow.

Mirko Bibic: The bottom line is this. Our commitment to fiber is at the core of our strategy, and where we have fiber, we win.

Mirko Bibic: Turning to the U.S. fiber market now on slide seven. The U.S. is a natural expansion market for BCE where we can leverage our deep expertise in building fiber infrastructure.

Marco: Turning to the U S fiber market now on slide seven the U S is a natural expansion market for BCE, where we can leverage our deep expertise in building fiber infrastructure as a reminder to investors. Let me briefly outline the reasons why the U S fiber market, so attractive U S fiber deployment lags behind.

Mirko Bibic: As a reminder to investors, let me briefly outline the reasons why the U.S. fiber market is so attractive. U.S. fiber deployment lags behind Canada. Only 51% of homes in the U.S. have fiber. Competitive dynamics are favorable given a largely two-player market driven by retail competition with no mandated wholesale access to fiber. The market structure is even more attractive for Ziply. Household income and economic growth across its four states in the Pacific Northwest is above the national average. There are one or fewer gigabit-capable competitors in 93% of the Ziply fiber's operating footprint, no multi-gig-capable competitors, and relatively less overbuilding activity in the Pacific Northwest than in some other U.S.

Marco: Canada, only 51% of homes in the U S of fiber.

Marco: Impaired to 75% here in Canada.

Marco: Fiber penetration also lags competitive.

Marco: Dynamics are favorable given our largely two player market driven by retail competition with no mandated wholesale access to fiber the.

Marco: The market structure is even more attractive for <unk> household income and economic growth across its four states in the Pacific Northwest is above the national average there are one or fewer gigabit capable competitors in 93% of simply fibers operating footprint, no multi gig capable competitors and relatively less.

Marco: We're building activity in the Pacific northwest that and some other U S regions. The U S as attractive fiber economics with a low cost to build and strong <unk> growth importantly, like in Canada U S customers are choosing fiber.

Mirko Bibic: regions. The U.S. has attractive fibre economics with a low cost to build and strong ARPU growth. Importantly, like in Canada, U.S. customers are choosing fibre.

Mirko Bibic: Which brings me to our acquisition of Ziply on slide eight. Ziply's delivering consistently strong results with EBITDA growing an impressive 17% in 2024, powered by fiber. This growth rate is even greater than planned. which is a testament to the Zipli management team's execution excellence. Management's demonstrated ability to execute will become even more valuable as the fiber footprint expands. Ziply's more mature, tenured markets have already reached 40% penetration. That compares with an average penetration rate of 23% in locations built in the last few years. So we're getting in at a very opportune time where there's still meaningful growth ahead of that penetration, particularly when you consider that over 40% of fibre locations were built in the last four years, with more to come.

Marco: Which brings me to our acquisition of simply on slide eight Zip.

Marco: Simply delivering consistently strong results with EBITDA growing an impressive 17% in 2024 powered by fiber this growth rate is even greater than planned.

Marco: Which is a testament to the Zippy management teams execution excellence managements demonstrated ability to execute will become even more valuable as the fiber footprint experience.

Marco: ZIP lease more mature tenured markets have already reached 40% penetration that compares with an average penetration rate of 23% and locations built in the last few years. So we're getting in at a very opportune time, where there is still meaningful growth ahead of that penetration, particularly when you consider that over 40% of fiber locations were built.

Marco: In the last four years with more to come.

Mirko Bibic: 85% of Ziply's approximately 400,000 retail subscribers are on pure fiber service. Ziply also benefits from a favorable operating mix with over 70% of total revenues from consumer and SMB and with a robust enterprise and wholesale business also built on the back of fiber. The acquisition is on track to close in the second half of 2025. It's an important part of our plan to generate sustained top line EBITDA growth.

Marco: 85% of ZIP leaves approximately 400000 retail subscribers are on pure fiber service simply also benefits from a favorable operating mix with over 70% of total revenues from consumer and SMB and with a robust enterprise and wholesale business also built on the back of fibre.

Marco: The acquisition is on track to close in the second half of 2025, it's an important part of our plan to generate sustained top line and EBITDA growth.

Mirko Bibic: Now let's move to slide 9. We previously said we'd be open to working with third parties to help fund our fiber growth in the U.S. as we look to strengthen our balance sheet, diversify our revenue streams, and improve free cash flow. There has been strong interest amongst financial partners to join us in capturing a significant growth opportunity, given the power of Ziply's assets and strong track record of its management team, and Bce's experience and success with Fibre.

Marco: Now, let's move to slide nine.

Marco: We previously said we'd be open to working with third parties to help fund our fiber growth in the U S. As we look to strengthen our balance sheet diversify our revenue streams and improve free cash flow. There's been strong interest amongst financial partners to join us in capturing the significant growth opportunity given the power of Zip lease assets and strong track.

Marco: Record of its management team and <unk> experience and success with fiber as mentioned, we're very pleased to announce a long term strategic partnership with PSP investments through their infrastructure portfolio to build new fiber locations in the U S and support Zip lease footprint expansion.

Mirko Bibic: As mentioned, we're very pleased to announce a long-term strategic partnership with PSP Investments through their infrastructure portfolio to build new Fibre locations in the U.S. and support Ziply's footprint expansion. Bce through Ziply will retain a 49% equity stake in the partnership with PSP owning 51%. PSP has been an investor in Ziply and knows the management team well.

Marco: BCE through simply we will retain a 49% equity stake in the partnership with PSP owning 51%.

Marco: <unk> has been an investor in assembly and knows the management team well <unk>.

Mirko Bibic: To be clear, and this is important, BCE will own 100% of Ziply's existing operations, subscribers and financials. Ziply, as a BCE subsidiary, will continue its fiber expansion within its remaining copper footprint. Ziply will also retain all retail customer relationships associated with the incremental fiber locations to be built by the strategic partnership. What the partnership will be focused on is building last-mile fibre in Ziply's growth markets. This includes the near-term development of approximately 1 million fibre passings in Ziply's existing states, with the ability to expand to 6 million fibre locations longer term. This will enable Ziply to eventually reach up to 8 million total fibre locations, an increase from its original target of 3 million.

Marco: To be clear and this is important BCE will own 100% of Zip lease existing operations subscribers and financials simply as the BC subsidiary will continue its fiber expansion within its remaining copper footprint simply will also retain all retail customer relationships associated with the incremental fiber.

Marco: Locations to be built by the strategic partnership.

Marco: What the partnership will be focused on is building the last mile fiber in ZIP lease growth markets. This includes the near term development of approximately 1 million fiber, passing and ZIP lease existing states with the ability to expand to 6 million fiber locations longer term. This will enable us to nimbly to eventually reach up to eight.

Marco: Million total fiber locations, an increase from its original target of $3 million.

Mirko Bibic: The strategic partnership structure is a cost-effective and capital-efficient way to fund our U.S. fiber growth while still meeting our deleveraging targets, and I'll detail that momentarily.

Marco: This strategic partnership structure as a cost effective and capital efficient way to fund our U S fiber growth, while still meeting our deleveraging targets and I'll detail that momentarily.

Mirko Bibic: Now let's move to slide 10. This long-term partnership provides clarity on our U.S. fiber ambitions. Zipli's ILAC footprint covers approximately 2 million customer premises. Upon closing of the acquisition, fiber will already be available to approximately 1.5 million of these locations. The remaining 500,000 locations will be built and owned by Zipli over the coming years as part of Zipli's existing end-to-forefront fiber build strategy. And as I mentioned, the partnership has long-term visibility into as many as 6 million additional locations outside of Zipli's 2 million location ILEC footprint. The partnership unlocks our ability to capture the significant additional footprint and related financial benefits.

Marco: Now, let's move to slide 10.

Marco: This long term partnership provides clarity on our U S fiber ambitions ZIP leaves ILEC footprint covers approximately 2 million customer premises upon closing of the acquisition fiber will already be available to approximately $1 5 million of these locations. The remaining 500000 locations will.

Marco: Be billed and owned by ZIP Lee over the coming years as part of this zip lease existing in footprint fiber build strategy.

Marco: And as I mentioned, the partnership has long term visibility into as many as 6 million additional locations outside of ZIP leased 2 million location ILEC footprint.

Marco: Partnership unlocks our ability to capture the significant additional footprint and related financial benefits.

Mirko Bibic: So when you combine our 8 million locations in Canada that have fiber this year, our US fiber assets will grow BC's position as North America's third largest fiber internet provider with access to approximately 16 million total passengers. There's clearly long-term growth potential in this critical space.

Marco: When you combine our 8 million locations in Canada that have fiber this year, our U S fiber assets will grow bce's position as north America's third largest fiber internet provider with access to approximately $16 million total passengers. There is clearly long term growth potential in this critical space.

Mirko Bibic: Turning now to slide 11 to wrap up on the U.S. fiber. The PSP strategic partnership is an exciting announcement for BCE and for our shareholders. It allows us again to support the fiber expansion in a cost-efficient manner while optimizing the balance sheet and improving our free cash flow profile. Through this endeavor, Ziply will retain the retail economics of its existing and future customer relationships in the fiber footprint to be deployed by the partnership, and this will improve BC's revenue and EBITDA growth profile. BC and PSP will proportionately fund any equity needed by the partnership as required over time.

Marco: Turning now to slide 11 to wrap up on the U S fiber.

Marco: The PSP strategic partnership as an exciting announcement for BCE and for our shareholders. It allows us again to support the fiber expansion in a cost efficient manner, while optimizing the balance sheet and improving our free cash flow profile.

Marco: Through this endeavors that we will retain the retail economics of its existing and future customer relationships in the fiber footprint to be deployed by the partnership and this will improve <unk> revenue and EBITDA growth profiles.

Marco: <unk> and PSP will proportionately fund any equity needed by the partnership as required overtime.

Mirko Bibic: significantly reduces the capital investment by BCE and improves BCE free cash flow by over $1 billion over the 2026-2028 time period. The partnership will also have its own non-recourse debt financing, which is anticipated to be the majority of its capital over time. This further reduces BCE's cash funding requirements. The partnership will be deconsolidated with all CapEx and debt financing remaining off BC's balance sheet. This structure and attractive cost of capital will improve our expected returns in the U.S. We're estimating an all-in rate of return in the U.S. of 20% or higher.

Marco: This significantly reduces the capital investment by BCE and improves BCE free cash flow by over $1 billion over the 2026 to 2028 time period the.

Marco: The partnership will also have its own nonrecourse debt financing, which is anticipated to be the majority of its capital overtime. This further reduces bce's cash funding requirement. The partnership will be deconsolidation with all capex and debt financing remaining off bce's balance sheet this structure and attractive.

Marco: Cost of capital will improve our expected returns in the U S. We're estimating an all in rate of return in the U S of 20% or higher.

Mirko Bibic: So now let me turn to the next element of our strategic roadmap, and that's on slide 12. Our third priority is to unlock the potential of businesses with the best technology solutions, and we set an ambitious goal, which I shared before, to generate a billion dollars in revenue by 2030. And we're well on our way.

Marco: So now let me turn to the next element of our strategic roadmap and Thats on slide 12, our third priority is to unlock the potential of businesses with the best technology solutions, and we set an ambitious goal, which I've shared before to generate $1 billion in revenue by 2030, and we're well on our way and just two days ago, we launched at <unk>, It's an all in.

Mirko Bibic: And just two days ago, we launched Ateco. It's an all-new Montreal headquarter technology solutions provider, and Ateco brings together, under the same banner, the tech startups we've recently acquired, which are FX Innovation, Cloud Kettle, and HGC Technologies. These competitive differentiators uniquely position it to deliver better outcomes for enterprise customers. Ateco's team of workflow automation experts will draw on their experience in the world's largest hyperscalers and automation platforms like AWS, Azure, Google Cloud, Salesforce, and ServiceNow to help customers streamline their operations, improve automation, enhance customer experience, and Facilitate Data-Driven Dissemination. We've created a one-stop shop for businesses networking and technology solutions needs.

Marco: New Montreal headquarter technology solutions provider and a telco brings together under the under the same banner. The Tech startups, we've recently acquired which are FX <unk> cloud.

Marco: Cloud Curdle and HTC technologies, it's competitive differentiator is uniquely positioned to deliver better outcomes for enterprise customers at <unk> team of workflow automation experts will draw on their experience in the world's largest hyperscale and automation platforms like AWS Azure, Google Cloud Salesforce.

Marco: And service now to help customers streamline their operations improve automation enhanced customer experience experience and.

Marco: And facilitate data driven decision making.

Marco: We've created a one stop shop for businesses networking technology solutions needs at Tek those capabilities position us to achieve significant growth in the enterprise space.

Mirko Bibic: Ateco's capabilities position us to achieve significant growth in the enterprise.

Mirko Bibic: I'll now move to slide 13.

Marco: I'll now move to slide 13, the fourth key area of focus is to build the digital media and content powerhouse our digital pivot in media is bearing fruit. After a lot of hard work and focused investments digital advertising is expected to have a total addressable market of $22 billion in Canada in 2028 up from 16 billion.

Mirko Bibic: The fourth key area of focus is to build a digital media and content powerhouse. Our digital pivot in media is bearing fruit after a lot of hard work and focusing. Digital advertising is expected to have a total addressable market of $22 billion in Canada in 2028, up from $16 billion in 2024. As we continue to capture more share of that digital advertising market, profitable growth lies ahead for Bell Media.

Marco: And in 2024, as we continue to capture more share of that digital advertising market profitable growth lies ahead for bell media.

Mirko Bibic: Our priorities in digital media and content are the following. Grow Crave from 4 million subscribers today to 6 million by 2028. Maintain sports leadership through the best breadth of content. Accelerating conversion to digital inventory and a focus on extending content value and monetization. This is already being realized with Bell Media's acquisition of a majority stake of global content distributor Sphere Abacus. This move expands Bell Media's content distribution opportunities.

Marco: Our priorities and digital media content are the following.

Marco: Crave from 4 million subscribers today to $6 million by 2028 maintain sports leadership through the best breadth of content.

Marco: Accelerating conversion to digital inventory and a focus on extending content value and monetization. This is already being realized with bell Media's acquisition of a majority stake of global content distributors sphere amicus. This move expands bell media content distribution opportunities.

Mirko Bibic: Let me touch briefly now on the fifth key pillar on slide 14. As I outlined in February, we have an extensive transformation program in place to modernize and simplify how we do business. We started this transformation in 2022 and it's already delivered $500 million in savings.

Marco: Let me touch briefly now on the fifth key pillar on slide 14.

Marco: As outlined in February we have an extensive transformation program in place to modernize and simplify how we do business. We started this transformation in 2022, and it's already delivered $500 million in savings at the time I stated that we had $500 million more to go through 2028 to achieve our goal of $1 billion in cost.

Mirko Bibic: At the time, I stated that we had $500 million more to go through 2028 to achieve our goal of a billion dollars in cost savings. Given our transformation momentum to date, we've upsized that objective by an additional $500 million for a new goal of $1.5 billion in total cost savings by the end of 2028.

Marco: Savings.

Marco: Given our transformation momentum to date, we've upsized that objective by an additional $500 million for our new goal of $1 $5 billion in total cost savings by the end of 2028.

Mirko Bibic: I'll now turn to our capital allocation strategy on slide 15. We're navigating a complex operating environment which has evolved significantly since the fall of 2024. In February of this year, we laid out a clear roadmap to adapt to this evolving environment, and I've kind of expanded on it today. Core to this plan is our capital allocation strategy. Strengthening the balance sheet, investing for growth, and driving total returns are the key priorities. Let me share the meaningful progress we've made over the last few months, beginning with optimizing our balance sheet. In February and March, we successfully accessed the hybrid debt markets in the U.S.

Marco: I'll now turn to our capital allocation strategy on slide 15, where.

Marco: We're navigating a complex operating environment, which has evolved significantly since the fall of 2024 in February of this year, we laid out a clear roadmap to adapt to this evolving environment and I've kind of expanded on it today.

Marco: This plan is our capital allocation strategy strengthening the balance sheet investing for growth and driving total returns are the key priorities.

Marco: Let me share the meaningful progress we've made over the last few months, beginning with optimizing our balance sheet.

Marco: In February and March we successfully access the hybrid debt markets in the U S and Canada, raising the Canadian equivalent of approximately $4 4 billion and our first hybrid notes offerings in each market given the 50% equity equity treatment afforded by the credit rating agencies. This has meaningfully improved our leverage ratio.

Curtis Millen: and Canada, raising the Canadian equivalent of approximately $4.4 billion in our first hybrid notes offerings in each market. Given the 50% equity treatment afforded by the credit rating agencies, this has meaningfully improved our leverage ratio. Consistent with our deleveraging plans, we repurchased several bonds trading at a discount to par value, reducing the amount of debt. These actions have collectively lowered our net debt leverage ratio by approximately 0.3 times since Q4, bringing it to approximately 3.6 times adjusted EBITDA. Given BC's healthy balance sheet and business mix, we are best in class from a credit ratings perspective in Canadian Telecom.

Marco: Consistent with our deleveraging plans, we repurchased several bonds trading at a discount to par value, reducing the amount of debt.

Marco: These actions have collectively lowered our net debt net debt leverage ratio by approximately three times since Q4, bringing it to approximately three six times adjusted EBITDA.

Marco: Given bce's healthy balance sheet and business mix, we are best in class from a credit ratings perspective, and Canadian Telecom.

Curtis Millen: In addition, our review of non-core assets continues to advance. The previously announced divestitures of NorthWestel and MLSC are progressing as expected, and we've launched two processes for additional divestitures. Proceeds from any new sale will support our deleveraging. The acquisition funding for Ziply is leveraged neutral and we structure the transaction in a way that balances growth with financial discipline.

Marco: In addition, our review of non core assets continues to advance the previously announced divestitures of northwest Hail and <unk> are progressing as expected and we've launched two processes for additional divestitures proceeds for many new sale will support our deleveraging efforts.

Marco: The acquisition funding for ZIP Lee is leverage neutral and we structure the transaction in a way that balances growth with financial discipline.

Curtis Millen: I've explained that in detail in the earlier sections on the U.S. Bottom line is the partnership will enable us to better capture the significant upside of fiber expansion, unlocking incremental cash flow to support deleveraging at the BCE level, and it complements our broader efforts to strengthen the balance sheet. And as I mentioned earlier, we're already seeing Ziply outperform expectations. In fact, since we announced the acquisition in November, the transaction multiple of 14.3 times estimated 2025 adjusted EBITDA is now already closer to $13,000. The Ziply team is driving very strong customer acquisition and penetration on its fiber metrics, and the metrics will get even better as we go forward, as we capture the incremental synergies and growth opportunity from the PSP partnership.

Marco: I've explained that in detail in the year over year and the earlier sections on the U S. Bottom line is the partnership will enable us to better capture the significant upside of fiber expansion unlocking incremental cash flow to support deleveraging at the BDC level and it complements our broader efforts to strengthen the balance sheet and as I mentioned earlier.

Marco: We're already seeing simply outperform expectations in <unk>.

Marco: Fact, since we announced the acquisition in November the transaction multiple of $14. Three times estimated 2025 adjusted EBITDA is now already closer to 13 times.

Marco: The ZIP lead team is driving very strong customer acquisition and penetration on its fiber metrics and the metrics will get even better as we go forward as we capture the incremental synergies and growth opportunity from the PSP partnership.

Curtis Millen: Now, the second component of our capital allocation strategy is investing for growth. Our approach remains grounded in those strategic pillars I've outlined previously, and we'll continue to execute on them with precision. The investments are designed to position us for sustained success in an evolving market from ensuring we'll remain an industry.

Marco: The second component of our capital allocation strategy is investing for growth our approach remains grounded in those strategic pillars I've outlined previously and we will continue to execute on them with precision.

Marco: The investments are designed to position us for sustained success in an evolving market for ensuring will remain an industry leader.

Curtis Millen: And the third aspect of our strategy is delivering value to shareholders. The focus is on maintaining a resilient and sustainable dividend, achieving leverage ratio targets and greater flexibility as we drive total shareholder return. And that brings me to slide 16 in our dividend announcement this morning, which encompasses all three components of our capital allocation strategy. We spent considerable time with our shareholders, discussing their perspectives and carefully evaluating our operating landscape. We must address a number of significant changes in our economic and operating environments that have occurred since the fall of 2024, as I mentioned. Today's actions will allow us to deftly navigate through this.

Marco: And the third aspect of our strategy is delivering value to shareholders. Our focus is on maintaining a resilient and sustainable dividend achieving leverage ratio targets and greater flexibility as we drive total shareholder returns.

Marco: And that brings me to slide 16, and our dividend announcement. This morning, which encompasses all three components of our capital allocation strategy we.

Marco: We spent considerable time with our shareholders discussing their perspectives and carefully evaluating our operating landscape, we must address a number of significant changes in our economic and operating environments that have occurred since the fall of 2024 as I've mentioned today's actions will allow us to definitely navigate through this cycle.

Curtis Millen: Considering these factors, we've made the appropriate decision to adjust our dividend. The annualized dividend per BC Common Share will be established at $1.75 per year, effective with the Q2 dividend payment. Even with the adjustment to the dividend, we continue to provide an attractive yield that is among the highest on the TSX-60. Additionally, we're updating our long-term common share dividend payout policy to target a payout range of 40-55% of free cash flow. This policy range provides us with more flexibility for dealing. To make it easier for investors to consider the effects of capital leases on our cash flow, we will begin to also disclose our free cash flow after capital lease repayments going forward.

Marco: Considering these factors we have made the appropriate decision to adjust our dividend the annualized dividend per BCE common share will be established at $1 75 per year effective with the Q2 dividend payments.

Marco: Even with the adjustment of the dividend we continue to provide an attractive yield that is among the highest on the <unk> 60.

Marco: Additionally, we are updating our long term common share dividend payout policy to targeted payout range of 40% to 55% of free cash flow. This policy range provides us with more flexibility for deleveraging.

Marco: To make it easier for investors to consider the effects of capital leases on our cash flow. We will begin to also disclose our free cash flow after capital lease repayments going forward. In addition, we will provide on an annual basis, the implied dividend payout ratio on the basis of free cash flow after capital lease repayments along with.

Curtis Millen: In addition, we will provide, on an annual basis, the implied dividend payout ratio on the basis of free cash flow after capital lease repayments, along with the payout ratio based on our policy. The Adjusted Dividend will support our deleveraging efforts while providing enhanced flexibility and positions us as a resilient dividend-paying company. By the end of 2027, we expect to achieve a net debt leverage ratio of approximately 3.5 times adjusted EBITDA pro forma ZIP lead with a longer-term goal of approaching three times by 2030. We will also eliminate the Treasury discount feature of the DRIP effective with the Q2 dividend payment on July 15.

Marco: The payout ratio based on our policy the adjusted.

Marco: The dividend will support our deleveraging efforts, while providing enhanced flexibility and positions us as a resilient dividend paying company.

Marco: By the end of 2027, we expect to achieve a net debt leverage ratio of approximately three five times adjusted EBITDA pro forma simply with a longer term goal of approaching three times by 2030, we will also eliminate the treasury discounts feature of the drip effective with the Q2 dividend payment on July 15. These.

Curtis Millen: These decisions are the right ones for the long-term health of BCE and the long-term interests of our shareholders. As we look to the future, I want to reiterate our unwavering focus on disciplined execution, financial resilience, and value creation. The steps we've taken this quarter demonstrate our ability to adapt and deliver in a challenging environment.

Marco: These decisions are the right ones for the long term health of BCE and the long term interest of our shareholders as we look to the future I want to reiterate our unwavering focus on disciplined execution financial resilience and value creation. The steps we've taken this quarter demonstrate our ability to adapt and deliver in a challenging environment.

Curtis Millen: And with that, I'll turn the call over to Curtis. Thank you, Mirko, and good morning, everyone. I'll begin on slide 18 with Bce. Adjusted EBITDA was essentially stable, while margin improved 40 points on the back of a 2.1% reduction in operating costs. Total revenue was down 1.3%. This can be largely attributed to a 7.4% decrease in low margin product sales, which included the loss of revenue from the store closures in 2024 and conversions to Best Buy. Our service revenue result reflected the flow-through impact of sustained competitive pricing pressures over the past year and ongoing declines in legacy voice, data, and satellite PV services.

Curtis: And with that I'll turn the call over to Curtis.

Curtis: Thank you Marco and good morning, everyone.

Curtis: I'll begin on slide 18 with BC.

Curtis: Adjusted EBITDA was essentially stable while margin improved 40 points on the back of a 201% reduction in operating costs.

Curtis: Total revenue was down one 3% this can be largely attributed to a seven 4% decrease in low margin product sales, which included the loss of revenue from the <unk> store closures in 2024 and conversions to best buy Express.

Curtis: Our service revenue results reflected the flow through impact of sustained competitive pricing pressures over the past year and ongoing declines in legacy voice data and satellite television services net.

Curtis Millen: Net earnings were up nearly 50% in Q1. The increase was due mainly to early debt redemption gains related to the repurchase, excuse me, of certain bonds trading at a discount to part value. Nothing notable on adjusted EPS, consistent with our 2025 guidance, assumptions for interest and depreciation expense, and a higher average number of shares outstanding because of the discounted treasury direct. It was down three cents compared to last year. CapEx was down $273 million this quarter. We remain on track to reduce capital investment by $500 million in 2025, in line with our plan. The CapEx reduction, lower cash taxes, and higher cash from working capital drove a $713 million dollar year-over-year increase in Q1 free cash.

Net earnings were up nearly 50% in Q1, the increase was due mainly to early debt redemption gains related to the repurchase.

Speaker Change: Excuse me a certain bonds trading at a discount to par value.

Speaker Change: Nothing notable on adjusted EPS, consistent with our 2025 guidance assumptions for interest and depreciation expense and a higher average number of shares outstanding because of the discount of Treasury dropped it was down three compared to last year.

Speaker Change: Okay.

Speaker Change: Capex was down $273 million this quarter, we remain on track to reduce capital investment by $500 million in 2025% in line with our plan.

Speaker Change: Capex reduction lower cash taxes, and higher cash from working capital drove a $713 million year over year increase in Q1 free cash flows.

Curtis Millen: Turning the bell CTS on slide 19. starting with a high-level summary of Q1 subscriber messages. Retail internet net ads of $9.5K were down versus an exceptionally strong Q1 last year. In addition to slowing industry growth due to fewer newcomers and less new fiber footprint expansion, our result this quarter reflected our consistent strategy to balance subscriber growth with financial performance. Importantly, customers continue to choose Fiber because we offer a superior product with a symmetrical speed advantage over cable. Where we have fiber, our subscriber loadings and market share gains remain strong. Our fiber-to-the-home customer base now accounts for 68% of our total retail internet subscribers.

Speaker Change: Turning to Bell Ccs on slide 19.

Speaker Change: Starting with a high level summary of Q1 subscriber metrics retail Internet net adds.

Speaker Change: <unk> 5000 were down versus an exceptionally strong Q1 last year.

Speaker Change: In addition to slowing industry growth to a fewer newcomers and less new fiber footprint expansion. Our result, this quarter reflected our consistent strategy to balance subscriber growth with financial performance.

Speaker Change: Importantly customers continue to choose fiber because we offer a superior product with a symmetrical speed advantage over cable.

Speaker Change: Where we have fiber our subscriber loadings and market share gains remained strong.

Speaker Change: Our fiber to the home customer base now accounts for 68% of our total retail internet subscriber base.

Curtis Millen: Moving to wireless. We recorded a small net loss in total mobile phone subs in Q1. compared to a 25,000 net ad last month. This was a function of a 7.7% decrease in gross activations, reflecting a slower market. However, consistent with our operating strategy to focus on margin accretive subscriber acquisition, we gained 25,000 net new customers on the main Bell brand. Notably, post-paid churn remained stable in Q1, following nine consecutive quarters of year-over-year increase. While it remains higher than we'd like, we're pleased with the improving trajectory.

Speaker Change: Moving to wireless we recorded a small net loss and total mobile phone subs in Q1 compared to 25000 net adds last year.

So as a function of a seven 7% decrease in gross activations, reflecting a slower market.

Speaker Change: However, consistent with our operating strategy to focus on margin accretive subscriber acquisition. We gained 25000 net new customers on the main Bell brand.

Speaker Change: Notably postpaid churn remained stable in Q1, following nine consecutive quarters of year over year increases while.

Speaker Change: While it remains higher than we'd like we're pleased with the improving trajectory managing our churn will continue to be a top priority.

Curtis Millen: Managing our churn will continue to be a top priority. Mobile phone ARPU is down 1.8%. This represents a second straight quarter of improvement in the year-over-year rate of decline. Our ARPU results this quarter reflected sustained competitive pricing pressure and lower roaming due in part to decreased travel to the U.S.

Speaker Change: Mobile phone <unk> was down one 8%. This represents a second straight quarter of improvement in the year over year rate of decline.

Speaker Change: Our <unk> results this quarter reflect a sustained competitive pricing pressure and lower roaming due in part to decrease travel to the U S.

Curtis Millen: Moving to Bell CTS financials. Internet revenue is up 2.4%. Solid results showing we're striking the right balance between sun growth and discipline pricing. We also saw continued strength in business solutions, where revenue grew 8% over last year. This was driven by higher sales of technology solutions, as well as acquisitions made over the past year. Wireless service revenue was down 0.8%. This is a notable improvement from the 1.5% decline in Q4. We expect the rate of decline will continue to improve going forward as ARPU increases. However, the industry will continue to feel the impact of the pricing levels in market over the last 12 months for a while longer.

Speaker Change: Moving to Bell Cts financials Internet revenue was up two 4% a solid result, so and we're striking the right balance between sub growth and disciplined pricing.

Speaker Change: We also saw continued strength in business solutions, where revenue grew 8% over last year.

Speaker Change: This was driven by higher sales of technology solutions as well as acquisitions made over the past year.

Speaker Change: Wireless service revenue was down 8%. This is a notable improvement from the one 5% decline in Q4.

Speaker Change: We expect the rate of decline will continue to improve going forward as <unk> improves.

Speaker Change: However, the industry will continue to feel the impact of the pricing levels and market over the last 12 months for a while longer.

Curtis Millen: Wireless product revenue is down $60 million this quarter. The year-over-year decline was the result of lower sales of mobile devices to large enterprise customers in the government sector, as well as the loss of revenue from the source store closures and 24 and convergence to best buy. Our EBITDA result was in line with plan. Notably, margin increased 20 points over the last year to 45.7%. The direct result of our significant and ongoing focus on cost management, as evidenced by a 2.7% reduction in operating costs.

Speaker Change: Wireless product revenue was down $60 million this quarter the year over year decline was the result of lower sales on mobile devices to large enterprise customers in the government sector as well as the loss of revenue from the <unk> store closures in 'twenty, four and conversions to best buy express.

Speaker Change: Our EBITA result was in line with plan, notably margin increased 20 points over last year to 45, 7%.

Speaker Change: As a direct result of our significant and ongoing focus on cost management as evidenced by a two 7% reduction in operating costs this quarter.

Curtis Millen: Turning over to Bell Media on slide 20. Continued digital momentum and strong overall financial performance marked by a fourth consecutive quarter of revenue and EBITDA growth. Digital revenues were up 12%. This was mainly on the back of strong Crave D2C streaming growth, which drove a 22% increase in Crave subscribers to 3.8 million. Notably, direct-to-consumer streaming subscriptions now comprise the majority of Total Crave subscribers. Total advertising revenue increased for a fifth straight quarter on the strength of digital, live sports, and events, increased spending related to the federal election, and the contribution of outage. Subscriber revenue growth of 7.8% was driven by continued direct consumer crave and sports streaming growth.

Speaker Change: Turning over to Bell media on slide 20.

Speaker Change: <unk> digital momentum and strong overall financial performance marked by a fourth consecutive quarter of revenue and EBITDA growth due.

Speaker Change: <unk> revenues were up 12%. This was mainly on the back of strong crave DTC streaming growth, which drove a 22% increase in crave subscribers to $3 8 million.

Speaker Change: Notably direct to consumer streaming subscriptions now comprise the majority of total <unk> subscribers.

Speaker Change: Total advertising revenue increase for fifth straight quarter on the strength of digital live sports and events increased spending related to the federal election, and the contribution of otitis media.

Speaker Change: Subscriber revenue growth of seven 8% was driven by continued direct to consumer crave and sports streaming growth.

Curtis Millen: Media Evita was up 35.9%, driving a substantial 4.4 point increase in margin to 20.5%. Really a nice performance by media by growing revenue, EBITDA, and margin.

Speaker Change: Media EBITDA was up 35, 9%.

Speaker Change: Abstention $4 four point increase in margin to 25% really a nice performance by media by growing revenue EBITDA and margins.

Curtis Millen: Turning to slide 21. Our balance sheet is very healthy with $4.7 billion of available liquidity and pension solvency surpluses totaling $3.8 billion at the end of Q1. We ended Q1 with a net debt leverage ratio of below 3.6 times adjusted EBITDA, compared to 3.8 times at the end of Q4. The decrease can be attributed to the combined impact of $4.4 billion in hybrid notes offerings issued in advance of the Ziply Fiber Transaction. and repurchases of bonds trading at a discount to principal.

Speaker Change: Turning to slide 21.

Speaker Change: Our balance sheet is very healthy with $4 7 billion of available liquidity and pension solvency surplus is totaling $3 8 billion at the end of Q1.

Speaker Change: We ended Q1 with a net debt leverage ratio of below $3 six times adjusted EBITDA compared to three eight times at the end of Q4.

Speaker Change: The decrease can be attributed to the combined impact of $4 4 billion in hybrid notes offerings issued in advance of the simply fiber transaction and repurchases of bonds trading at a discount to principal value.

Curtis Millen: We are highly focused on deleveraging our balance sheet with the execution of our plan toward a net debt leverage ratio of approximately 3.5 times adjusted EBITDA by the end of 2020. The plan includes substantial free cash flow generation, divestiture of non-core assets, and applying incremental retained cash resulting from the revised dividend level toward paying down debt. Our updated dividend payout policy of 40 to 55% of free cash flow is reflective of a balanced approach to capital allocation. This policy range allows us to fund our capital allocation priorities, which are to optimize the balance sheet, invest for growth, and return capital to shareholders.

Speaker Change: We are highly focused on deleveraging our balance sheet with the execution of our plan toward a net debt leverage ratio of approximately $3 five times adjusted EBITDA by the end of 2027.

Speaker Change: The plan includes substantial free cash flow generation divestiture of noncore assets and applying incremental retained cash resulting from the revised dividend level toward paying down debt.

Speaker Change: Our updated dividend payout policy of 40% to 55% of free cash flow is reflective of a balanced approach to capital allocation.

Speaker Change: This policy range allows us to fund our capital allocation priorities, which are to optimize the balance sheet invest for growth and return capital to shareholders.

Curtis Millen: To wrap up on slide 22. We remain confident in our proven ability to deliver under any circumstances. backed by the best networks and services.

Speaker Change: To wrap up on slide 22.

Speaker Change: We remain confident in our proven ability to deliver under any circumstances.

Speaker Change: Backed by the best networks and services, our ongoing business transformation.

Curtis Millen: Our ongoing business transformation. Consistent Operational Execution and Cost Efficiency. Relays are focused on the key strategic priorities that Mirko outlined to create long-term value for shareholders.

Speaker Change: <unk> operational execution and cost discipline.

Speaker Change: We're laser focused on our key strategic priorities that <unk> outlined to create long term value for shareholders.

Curtis Millen: I'd also notice that I am reconfirming our financial guidance targets for 2025 with the annualized common dividend at $1.75 per share.

Speaker Change: Also noticed that I am reconfirming, our financial guidance targets for 2025 with the annualized common dividend at $1 75 per share.

Richard Benjian: I will now turn the call back over to Richard and the operator to begin Q&A. Thanks, Curtis.

Richard: I will now turn the call back over to Richard and the operator to begin Q&A.

Richard Benjian: Before we start, I want to remind everyone that due to time constraints this morning because of our AGM that is taking place after this call, Please limit yourselves to one question and a brief follow-up so that we can get to as many in the queue as possible. With that, Matthew, we are ready to take our first question. Thank you.

Richard: Thanks, Curtis before we start I want to remind everyone that due to time constraints. This morning, because of our AGM that is taking place. After this call to please limit yourselves to one question and a brief follow up so that we can get to as many in the queue as possible.

Richard: With that Matthew we are ready to take our first question.

Richard: Thank you.

Maher Yaghi: The first question is from Maher Yaghi from Scotiabank. Please go ahead. Great, thank you for taking my question. Never easy decisions when companies decide to cut the dividends. doing it for the right reasons. I think it's very good.

Speaker Change: First question is from Mary <unk> from Scotia Bank. Please go ahead.

Speaker Change: Great. Thank you for taking my question are never easy decisions when companies decide to cut the dividends but.

Speaker Change: Doing it toward the right reasons I think it's very good.

Maher Yaghi: I wanted to ask you, in terms of your leverage target. that you mentioned in your prepared remarks and in your presentation, do they include any asset sales that have not been announced yet?

Speaker Change: I wanted to ask you in terms of your leverage targets that.

Speaker Change: That you mentioned.

Speaker Change: In your prepared remarks and in your presentation.

Speaker Change: Do they include any.

Speaker Change: Asset sales.

Speaker Change: Not been announced yet.

Maher Yaghi: And just to follow up in terms of wireless. When we look at gross loading in the environment that you're operating in. Do you think that Q1 was a... This is more the environment that you're going to be probably in for the rest of the year. Thank you. Thanks for the question, Maher. In terms of the leverage targets, so, you know, our plan remains as we announced a couple of months ago to sell the $7 billion in assets that includes MLSC, Northwest TEL, and a couple other processes that we have on the go. So, it basically factors in what we, what we announced last quarter.

Speaker Change: And just a follow up in terms of wireless.

Speaker Change: When you look at gross loading.

Speaker Change: The environment that you're operating in.

Speaker Change: Do you think that.

Speaker Change: Q1 was a.

Speaker Change: Barron quarter or this is more than environment that you are going to be probably end toward the rest of the year. Thank you.

Speaker Change: Thanks for the question of the buyer.

Speaker Change: In terms of the leverage targets so.

Speaker Change: Our plan remains as we announced.

Speaker Change: A couple of months ago to sell $7 billion in assets that includes MLC northwest Hell in a couple of other processes that we have on the go.

Speaker Change: Basically it factors in what we what we announced last quarter.

Speaker Change: On.

Mirko Bibic: Thanks for the question, Merit Smirko. On the wireless question, I'll give you maybe a bit about. broader answer but basically that to answer a very specific question but more context. So I would say that if you looked at early on in Q1 We were seeing some pricing stability green shoots. I think in the back half of Q1, there was a reversion to.

Speaker Change: Thanks for the question merits Marco on the wireless question I'll give you maybe a bit about.

Speaker Change: A broader answer.

Speaker Change: Basically that to answer very specific question, but more context. So I would say that if you looked at early on in Q1.

Speaker Change: We were seeing some pricing stability green shoots I think.

Speaker Change: And back half of Q1, there was a reversion to.

Speaker Change: Kind of frothy pricing activity across the industry. So you see from that the overall industry loadings in that including ours are affected.

Mirko Bibic: Aravinda Galappatthige, Drew McReynolds, Maher Yaghi, Jerome Dubreuil, Thane Fotopoulos, Mirko Bibic, Matthew Griffiths, Sebastiano Petti, Drew McReynolds, Maher Yaghi, Jerome Dubreuil, Thane Fotopoulos, Mirko Bibic, Matthew Griffiths, Sebastiano Petti, Drew McReynolds, Lauren Bonham, Bce Inc Aravinda Galappatthige, Drew McReynolds, Maher Yaghi, Jerome Dubreuil, Thane Fotopoulos, Mirko Bibic, Matthew Griffiths, Sebastiano Petti, Drew McReynolds, Maher Yaghi, Jerome Dubreuil, Thane Fotopoulos, Mirko Bibic, Matthew Griffiths, Jerome Dubreuil, We're okay in Q1, and as we improve churn, I think that's going to deliver what investors are expecting. Thank you.

Speaker Change: By the macro environment as well, including the clamp down on immigration and and then there is the kind of impact of pricing. So if you put the two together, we decided not to not to go after non accretive loadings.

Speaker Change: So what.

Speaker Change: The numbers behind the numbers is that we had pretty strong performance on the Bell brand again, and we had strong performance on cross sell and our wireless product margins.

Speaker Change: <unk> positive so.

Speaker Change: I think now to and that's the context for Q1 now to answer your specific question as we look into Q2 and the progress so far we see the metrics trending in the right direction for sure and we see <unk> decline improvement, we're seeing churn improvement.

Speaker Change: Sales were.

Speaker Change: Were okay in Q1, and as we improve churn I think that's going to deliver.

Speaker Change: What investors are expecting.

Speaker Change: Thank you.

Speaker Change: Thank you. Our next question is from drew Mcreynolds from RBC.

Drew Mcreynolds: Our next question is from Drew McReynolds from RBC. Please go ahead. Yeah, thanks very much. Good morning. I guess first on the 2025 reiteration of guidance. You know, Marco, you began to talk about Q2, and I know I understand visibility is not great. Just want to get a sense of, you know, the working assumptions in terms of reiterating guidance with respect to the competitive environment and macro. You know, we're just trying to assess, I guess, your degree of confidence in keeping within your existing guidance range. And then my follow up just on the on the target 3.5 times leverage for 2027.

Speaker Change: Please go ahead.

Drew Mcreynolds: Yes, thanks very much good morning.

Drew Mcreynolds: I guess first on the 2020 fives reiteration of guidance.

Drew Mcreynolds: Mark have you began to talk about Q2, and I know I understand visibility is not great.

Drew Mcreynolds: Wanted to get a sense.

Drew Mcreynolds: The working assumption in terms of reiterating guidance with respect to the competitive environment and macro.

Drew Mcreynolds: Trying to SaaS.

Drew Mcreynolds: I guess your degree of confidence and keeping within your existing guidance range and then my follow up just on the on the target three five times leverage for 2027. So great. Obviously, you guys are targeting.

Drew Mcreynolds: And so great, obviously, to get a target out there. You know, simplistically, if I kind of run that through my forecast, including kind of the non-core asset sales that you've announced, the aggregate 7 billion, I get some I get a leverage by 2027. That's just a little point 2.3 times lower than three and a half times. So I'm just trying to figure out if there's anything else here, whether it's even dog growth or higher kind of capex investment, given the announcement this morning, just just any other big picture puts and takes that, you know, may help reconcile that.

Drew Mcreynolds: Targeting they're.

Drew Mcreynolds: Simplistic quantify kind of run that through my forecast, including kind of the noncore asset sales that you've announced.

Drew Mcreynolds: In the aggregate.

Drew Mcreynolds: $7 billion I guess.

Drew Mcreynolds: Leverage.

Drew Mcreynolds: By 2027, that's just a little.

Drew Mcreynolds: Two three times lower than three five times, so I'm just trying to.

Drew Mcreynolds: Thank you route if theres anything else here, whether it's EBITDA growth or higher kind of Capex investment given the announcement. This morning, just any other big picture puts and takes that.

Drew Mcreynolds: You may help reconcile that and if I need to take that offline with Curtis Thats great.

Drew Mcreynolds: And if I need to take that offline with Curtis, that's great. Yeah.

Speaker Change: Yes, Hi, Jay Thanks for the question.

Drew Mcreynolds: Hi, Drew. Thanks for the question. Yeah, we de-levered in Q1 as we issued the hybrids, thought it was a good idea to issue hybrids to de-lever given the kind of uncertainty in the market. So once we closed Ziply, leverage would go back up given we're assuming Ziply-Fibre debt as well. And going forward, as you say, free cash flow growth, asset sales, then you made a comment about funding needs. The funding needs at the partnership are actually quite limited given our partnership with PSP and the ability to lever at the partnership level. So as Mirko said, the partnership by itself actually improves our free cash flow by over a billion dollars in the first three years.

Drew Mcreynolds: Yes, we delivered in Q1 as we issued the hybrids and thought it was a good idea to to issue hybrids to delever.

Drew Mcreynolds: Given the kind of uncertainty in the market.

Drew Mcreynolds: So once we closed <unk> leverage would go back up given where assuming simply fiber.

Drew Mcreynolds: That as well.

Drew Mcreynolds: Forward as you say free cash flow growth asset sales and then you made a comment about <unk>.

Drew Mcreynolds: Funding needs the funding needs at the partnership are actually quite limited given.

Speaker Change: Our partnership with PSP and the ability to lever at the partnership level. So as Marco said the partnership by yourself actually improves our free cash flow by over $1 billion in the first three years.

Drew Mcreynolds: So all of that will lead us to better free cash flow and de-leverage.

Speaker Change: All of that allowed us to.

Speaker Change: Better free cash flow and deleveraging on.

Mirko Bibic: On the first question, Drew, it's Mirko. I just, you know, in terms of the, the reconfirming of guidance, you know, we go back to February and when we provided guidance for the year, that's why we had a view of what the year would look like. And therefore we put the ranges in place that we did, you know, kind of with the. fairly. Relative terms, fairly wide range on on either end to to acknowledge the environment that we thought we would be in. So we're in a position to to reconfirm that guidance today. Thank you.

Drew Mcreynolds: On the first question drew its AMERCO at just in terms of the.

Drew Mcreynolds: <unk> firming of guidance go back to February.

Drew Mcreynolds: And when we provided guidance for the years, that's why we had a.

Speaker Change: Our view of what the year would look like and therefore, we put the range is in place that we did.

Speaker Change: Kind of with the.

Speaker Change: Fairly.

Speaker Change: Relative terms fairly wide range on either end too to acknowledge the environment that we thought we would be and so we're in a position to to reconfirm that guidance today.

Speaker Change: Alright, thank you.

Speaker Change: Thank you. Our next question is from Vince Valentini from TD Securities. Please go ahead.

Vince Valentini: Our next question is from Vince Valentini from TD Securities. Please go ahead. Thanks very much. First, just to clarify on guidance as well, $300 million gain on the bond redemptions helped your free cash flow in the first quarter, but you've not changed the guidance. Should you be at least trending to the high end of that free cash flow guidance given that boost, which I'm pretty sure you didn't expect when you gave us the guidance originally in February?

Speaker Change: Thanks, very much first just to clarify on guidance as well 300 billion gain on the bond redemptions helped your free cash flow in the first quarter, but you have not changed the guidance.

Speaker Change: Should you be at least trending to the high end of that free cash flow guidance, given that boost which I am pretty sure you Didnt expect when you gave us the guidance originally.

Vince Valentini: And then on the Ziply joint venture, can you just confirm you would be the exclusive retail partner on the Network Fibre Co and the extra 6 million homes, is that all planned construction or could some of that be buying existing assets in combination with CapEx? Thank you. Thank you Vince and Mirko.

Speaker Change: In February and then on the <unk> joint venture can you just confirm you would be the exclusive retail partner on the network fiber co and the extra 6 million homes does that all planned construction or could some of that be buying existing assets in combination with <unk>.

Speaker Change: Capex. Thank you.

Marco: Thank you. Thank you Vince it's Marco.

Mirko Bibic: I'll answer the last two questions first. So yes, the plan is for Ziply Fibre to be the exclusive tenant on the network. And on reaching the additional six million homes. and you asked a question there about the possibility of M&A. Like right now, the focus is closing the Ziply Fibre Transition. Shortly after that, we'll be in a position to close Network Fibre Co., which is the strategic partnership. Then the focus is going to be to execute on the build plan in that attractive U.S. market. So those are, I highlight that for a reason, that's going to be the focus.

Speaker Change: The first well I'll answer the last two questions.

Speaker Change: First so yes. The plan is for simply fiber to be the exclusive tenant on the network.

Speaker Change: And on that fiber and on reaching the additional 6 million homes.

Speaker Change: And you asked a question there about the possibility of M&A like right now the focus is closing the <unk> fiber transaction and shortly after that we'll be in a position to close network fiber co, which is the strategic partnership and the <unk>.

Speaker Change: Focus is going to be to execute on the build plan in that attractive U S. Market. So those are those are I highlight that for a reason that's going to be the focus.

Mirko Bibic: If down the road, we see we can more efficiently hit build targets through M&A, the goal will be to do so, but within the partnership and without intending to veer off of our deleveraging targets that we've expressed to all of you today. Thanks.

Speaker Change: If down the road, we see we can more efficiently build targets through M&A.

Speaker Change: The goal will be to do so.

Speaker Change: But within the partnership and without intending to veer off of our deleveraging targets that we've expressed to all of you today.

Speaker Change: Thanks, and then the gain on the repurchase so while we.

Curtis Millen: And then Vince, the gain on the repurchase. So while we were able to reduce our debt amount, principal amount by over 500, the actual gain is not included in our free cash. $798 million in the first quarter did not include that $300 million, Curtis? correct. The outperformance is largely working capital and cash tax time. Okay, I may have to take you offline because I don't see where it's backed out in your numbers, but I'll trust you. Thank you.

Speaker Change: We were able to reduce our debt amount principal amount by over 500. The actual gain is not included in our free cash flow.

Speaker Change: The $798 million in the first quarter did not include that $300 million Curtis.

Speaker Change: Correct.

Speaker Change: The outperformance is largely working capital and cash tax timing.

Speaker Change: Okay I may have take it offline because I don't see where its backed out in your numbers, but I'll Trust you. Thank you.

Speaker Change: Thank you.

Speaker Change: Thank you. Our next question is from Matthew Griffiths from Bank of America. Please go ahead.

Matthew Griffiths: Our next question is from Matthew Griffiths from Bank of America. Please go ahead. Oh, hi, thanks for taking the question.

Matthew Griffiths: Oh, hi, thanks for taking the question.

Matthew Griffiths: On the timing of this, the PSP, a kind of network Fibre Co, how should we think about that? I mean, obviously, you know, I know you're focused on closing things first, but is the, you know, what is the timeframe, generally, for the 6 million homes passed? And is the 1.5 million, billion, sorry, contribution from PSP, is that, is that tied to the 6 million passing number? Or is that just the initial investment, and to achieve the 6 million, additional funding is required?

Matthew Griffiths: On the timing of this.

Matthew Griffiths: PSP kind of network fiber co.

Matthew Griffiths: How should we think about that I mean, obviously.

Speaker Change: No you are focused on closing things first but what.

Speaker Change: What is the timeframe generally for this 6 million homes passed and is the $1 5 million billion sorry contribution from PSP is that is that directly tied to the $6 million passing number or is that just the initial investment and to achieve the $6 million.

Speaker Change: Additional funding is required.

Matthew Griffiths: Any detail would be, you know, helpful in understanding how this all, how the numbers that are presented kind of tie together.

Speaker Change: Any detail would be helpful. In understanding how this all how the numbers that are presented kind of tied together and then just quickly on the 25000 net adds on the main Bell brand I was curious how that compares year over year. Thank you.

Matthew Griffiths: And then just quickly on the 25,000 net ads on the main Bell brand, I was curious how that compares year over year. Thank you. Thank you, Matthew. So it's a long, the partnership is a long-term partnership through the infrastructure side of PSP, as I mentioned. So, you know, the goal will be to get to the six million homes over time. You can't build instantaneously, so that will take time. And the commitment that we express in terms of the financial contribution that will be provided over time as we build. So that's the intent there. And as I mentioned, we'll be.

Matthew Griffiths: Thank you. Thank you Matthew so on.

Matthew Griffiths: So its along the partnership as a long term.

Matthew Griffiths: Partnership through <unk> through the infra side of PSP as I mentioned so.

Matthew Griffiths: <unk> will be too.

Matthew Griffiths: will be providing debt financing at that partnership level as well to help fund that program.

Matthew Griffiths: Great. And then on the belt, yeah, I was looking for it. So, oh, sorry. It was a little bit. That's why there was a little bit of a stall. So it's down 9000 year over year. Okay. Okay, great. Thank you so much. I appreciate the clarity. Thank you.

Sebastiano Petti: Our next question is from Sebastiano Petti from J.P. Morgan. Please go ahead. Hi, good morning, everyone. Just one quick follow up on the $1.5 billion. Is that a capital call or a lump sum payment that you'll have to make? And then just following up on Drew's question, just thinking about the de-levering profile or the 3.5 net net net leverage target over time. We're just a lot of questions, a lot of inbounds from investors just trying to understand or square the math there. I mean, you have 7 billion of asset sales. coming through. You have $2 billion of Zipley debt that's coming on, that implies pretty significant de-levering.

Speaker Change: B Morgan. Please go ahead.

Matthew Griffiths: Okay.

Speaker Change: Hi, Good morning, everyone. Just one quick follow up on the $1 5 billion is that a capital call or a lump sum payment that you'll have to make and then just following up on drews question, just thinking about the delevering profile or the three five.

Speaker Change: Net debt leverage target over time.

Speaker Change: I'm just we're just my other question is a lot of inbounds from investors just trying to understand your square the math there I mean, you have $7 billion of asset sales.

Speaker Change: Coming through you have $2 billion of <unk> debt, that's coming on that implies pretty significant delevering.

Sebastiano Petti: but then it sounds like you're going to be re-levering. So is there a downgrade to free cash flow that we should be thinking about, particularly in light of the dividend? You have two million dollars without the dividend payment of cash each year. So I'm just trying to square that math there. And then also, lastly, on the dividend, sorry, Curtis, you know, why $175,000? Why did you land there? Thank you.

Speaker Change: But then.

Speaker Change: It sounds like you're going to be re levering.

Speaker Change: So.

Speaker Change: They're a downgrade to free cash flow that we should be thinking about particularly in light of the dividend you have $2 billion without the dividend payment of cash each year.

Speaker Change: So I'm just trying to square that math there.

Speaker Change: And then also definitely on the dividend.

Speaker Change: I'm sorry.

Speaker Change: Why why is 175 why did you land there. Thank you.

Speaker Change: Okay. So.

Mirko Bibic: Okay, so Curtis will answer the free cash flow question, but let me address the other two. Your first question, same question. Essentially what Matthew asked me, so it's going to the contributions to Network Fibre Co are over time as we build so it's not a one-time payment. The third question on why $1.75, on that one the board considered a range of options as I'm sure you can imagine and this is the level that the BCE board believes gives us the flexibility to achieve our capital allocation objectives. They're on page 15 of our presentation, so it's optimized the balance sheet, essentially accelerate deleveraging and optimize the cost of capital.

Speaker Change: Curtis will answer the free cash flow question, but let me let me address the other to your first question same.

Speaker Change: Essentially what Matthew asked me so it's going to the contributions to network fiber co or over time as we build so its not a one time payment.

Speaker Change: The third question on why $1 75 on that one the board considered a range of options as I'm sure you can imagine in this is the level that the BCE Board believes gives us the flexibility to achieve our capital allocation objectives and they are on page 15 of our presentation. So it's optimized.

Speaker Change: The balance sheet, essentially accelerate deleveraging and optimize the cost of capital and the flexibility to invest for growth. It is incumbent on us to continue to grow this franchise and then.

Mirko Bibic: The flexibility to invest for growth, it's incumbent on us to continue to grow this franchise and then return, deliver total shareholder returns to our shareholders by being a sustainable dividend paying company. So that's the range of options that we had considered, and taking in the input of investors over time, that's the number that the board felt gave us that flexibility. And then to address your leverage question, Sebastiano, so the $7 billion of asset sales is the gross number, but the MLSC proceeds, so the net proceeds from the $4.7 billion sale of MLSC are part of the sources and uses to acquire ZipliFibre.

Speaker Change: Return deliver total shareholder returns.

Speaker Change: To our shareholders by being a sustainable dividend paying.

Speaker Change: <unk>.

Speaker Change: So that's and so the range of options that we had considered and taking the input of investors over time, that's the number that the board felt gave us that flexibility.

Speaker Change: Then to address your leverage question Sebastiano. So the $7 billion of asset sales is the gross number.

Speaker Change: But the MLS see proceeds so the net proceeds from the $4 7 billion sale of Myc are part of our sources and uses to acquire simply fiber.

Sebastiano Petti: Got it, understood. And then maybe...

Speaker Change: Got it understood and then maybe.

Sebastiano Petti: So the Open Access Partnership, I guess, I mean. Yes, maybe the U.S. is behind in terms of fiber buildout in the U.S. relative to Canada, but the U.S. built 10 million fiber passings last year on pace to build another 10 million over the next several years, and you have very long-term, well-capitalized companies chasing additional passings. What gives you comfort, I guess, maybe in the greenfield opportunity of getting to that incremental 5 million that you guys have outlined above and beyond the three that you originally talked about with Zipley? We've done the work in our due diligence on the extent of classings that are there and ready to be built to at a low cost to build.

Speaker Change: So the open access partnership I guess I mean.

Speaker Change: Yes, maybe the U S is behind in terms of fiber build out in the U S, but relative to Canada.

Speaker Change: With the U S built 10 million fiber passing last year on pace to build another $10 million over the next several years and you have very long term well capitalized companies chasing additional passing.

Speaker Change: Just trying to.

Speaker Change: What gives you comfort I guess, maybe in the greenfield opportunity of getting to that incremental five 5 million that you got.

Speaker Change: Does have outlined above and beyond the three that you originally talked about would simply thank you.

Speaker Change: But we've done we've done the work in our due diligence on the extent of.

Speaker Change: As things that are there.

Speaker Change: There and ready to be built to.

Speaker Change: Our low cost to build so we've done some extensive due diligence on that so we are quite comfortable.

Mirko Bibic: So we've done some extensive due diligence on that, so we are quite comfortable, as is the Ziply Fiber team, as you can imagine. And on the first part, you said open access, but I don't know what you meant there. Sorry, yeah, sorry. It's more of a wholesale partnership. Yeah, so not open access, but the partnership is just to be clear, the partnership is not an open access partnership just to be clear on that. And then we, we also will be able to get to those 6M homes, which we've. Like I said, done extensive work on at an attractive cost of capital given the structure that we've established with PSP.

Speaker Change: Simply fiber team as you can imagine on the first part you said open open.

Speaker Change: Open access, but I don't know what you meant there.

Vincent: Vincent sorry.

Speaker Change: Yes, sorry, it was more of a wholesale partnership.

Speaker Change: So not necessarily open.

Speaker Change: The partnership is just to be clear the partnership is not an open access partnership just to be clear on that and then we also will be able to get to those 6 million homes, which we've.

Speaker Change: Kind of like I said done extensive work on at a at an attractive cost of capital given the structure that we've established with PSP and I'd say PSP is also a very experienced telecom infrastructure investor and and they see the potential here in the U S and particularly with simply fiber of which there are.

Mirko Bibic: And I'd say PSP is also a very experienced telecom infrastructure investor. And they see the potential here in the U.S. and particularly with Ziply Fiber, which they're already a shareholder of and working with us given our expertise. Thank you.

Speaker Change: Ready to shareholder and working with us given our expertise.

Speaker Change: Thank you.

Speaker Change: Thank you. Our next question is from Jones from <unk> Securities. Please go ahead.

Jerome Dubreuil: Our next question is from Jerome Dubreuil from Desjardins Securities. Please go ahead. Hey, thank you. Thanks for taking my question. First is on the acceleration of fiber deployments. Actually, it looks like an acceleration. I'm not sure that the timeframe is comparable, and it looks to be significant. So I'm trying to see, what is the rationale behind that? Is it now that your capital structure is in a better place that you can afford to do that? Or maybe are you seeing additional opportunity? And the second one, I mean, investors are going to be trying to figure out what the proforma free cash flow is going to be, proforma, the infraco, and the acceleration.

Speaker Change: Hey, Thank you thanks for taking my question.

Speaker Change: First is on the acceleration of fiber deployments it actually it looks like an acceleration and I'm not sure. The timeframe is comparable and it looks to be a significant so I'm trying to see what is the rationale behind that is it.

Speaker Change: Now that your capital structure is in a better place that you can afford to do that or maybe are you seeing additional opportunity in the second one.

Speaker Change: I mean investors are going to be trying to figure out what would the pro forma free cash flow.

Speaker Change: Gonna be a pro forma the infra co and the acceleration. So any details you can provide are you investing more.

Jerome Dubreuil: So any details you can provide? Are you investing more in terms of free cash net of all the transactions you are announcing this morning? Thank you. Thanks, Jerome.

Speaker Change: In terms of our free cash net of all the transactions. You are you are announcing this morning. Thank you.

Speaker Change: Thanks, Joe So on the acceleration point I just wanted to clarify so when we announced it simply fiber.

Mirko Bibic: So, on the acceleration point, I just want to clarify. So, when we announced Ziply Fibre initially, we indicated that they had a base case build plan to get to about 3 million homes by 2029, and with BCE's scale and resources, we would accelerate that 3 million homes to 2028. So, that doesn't change. We think we'll get to around 3 million homes by 2028. 2 million of those, of those 3 million, and most, and those 3 million will largely be in the 4 Pacific Northwest states in which ZipliFiber currently operates. What's different here is, you know, at close, we'll have 1.5 million of those 3 million already done.

Speaker Change: Italy, we indicated that they had a base case build plan to get to about 3 million homes by.

Speaker Change: By 2029, and with BCE scale and resources, we would accelerate that 3 million homes to 2028.

Speaker Change: So that doesn't change we think we will get to around 3 million homes by $2028 2 million of those of those $3 million.

And most and those 3 million will largely be in the four Pacific Northwest States in which simply fiber currently operates what what's different here is at close we will have $1 5 million of those 3 million already done. There is another 500000 copper lines in Zip leased fiber ILEC footprint that we need to upgrade to fiber.

Mirko Bibic: There's another 500,000 copper lines in ZipliFiber ILEC footprint that we need to upgrade to fiber by 2028. That will be funded by BCE. The other million homes will be part of the partnership. So, it's a different way of getting to the same 3 million homes in a way that's immediately free cash flow, and immediately improves the free cash flow profile of BCE by the billion dollars that I mentioned, given the support of PSP. It strengthens and increases our ability to capture that fiber opportunity. And in terms of the additional 5 million homes, therefore, those will be tackled over time beyond 2028 with PSP as a world-class financial partner.

Speaker Change: By 2028 that will be funded by BCE.

Speaker Change: The other million homes will be part of the partnership so it's a different way of getting to the same 3 million homes in a way that's immediately free cash flow kind of immediately improves our free cash flow profile of BCE by the $1 billion that I mentioned, given the support of <unk>.

Speaker Change: PSP, it strengthens and increases our ability to capture that fiber opportunity.

Speaker Change: And in terms of the additional 5 million homes. Therefore, those will be tackled over time beyond 2028 with PSP as a world class financial partner. So therefore, that's going to accelerate visibly fibers growth and accelerate and provided with expanded.

Mirko Bibic: So, therefore, that's going to accelerate ZipliFiber's growth and accelerate and provide it with expanded growth potential, again, in a financially flexible way, given that we'd be doing it through the strategic partnership.

Speaker Change: Growth potential again in a financially flexible way given that we'd be doing it through the strategic partnerships. So all all told we're going to be enhancing the returns associated with the simply fiber investment not to mention that.

Curtis Millen: So, all told, we're going to be enhancing the returns associated with the ZipliFiber investment, not to mention that it's already looking more creative than in November of 2024, given the management team's performance, even since we announced Then, Jerome, just to pile on, you asked a question about the free cash flow. I think one other input, so we've said in November, CapEx pro forma for Ziply would live within the 16.5% CDI envelope. Given the partnership with PSP, we expect that's going to be close to the 14.5%, and then after Ziply has built out the 500,000 locations within its ILAC footprint, as Mirko mentioned, then we would expect that C to I percentage to drop from there.

Speaker Change: It's already.

Speaker Change:

Speaker Change: Looking more accretive than in November of 2024, given the management team's performance, even since we announced the deal.

Speaker Change: Then just to pile on.

Speaker Change: You asked a question about the free cash flow I think one other input so we've said in.

Speaker Change: November Capex pro forma presumably would live within a 16, 5% C&I envelope.

Speaker Change: Given the partnership with PSP, we expect that's going to be closer to 14, 5%.

Speaker Change: And then after.

Speaker Change: After simply is built out.

Speaker Change: 500000 locations within its ILEC footprint.

Speaker Change: <unk> mentioned, then we would expect that percentage to drop from there.

Speaker Change: Thank you.

Patrick Ho: Thank you.

Speaker Change: Thank you. Our next question is from Patrick Ho from Morgan Stanley. Please go ahead.

Patrick Ho: Our next question is from Patrick Ho from Morgan Stanley. Please go ahead. Hey guys, thanks for having me on. Just two questions for me.

Patrick Ho: Hey, guys. Thanks for having me on just two questions from me. The first question is can you guys talk about how you guys are thinking about the new governments impact.

Mirko Bibic: The first question is, can you guys talk about how you guys are thinking about the new government impact? on key areas like TPI and immigration. And then the second question I have is you guys upsize your cost savings target goal by $500 million to $1.5 billion. Can you just unpack the various buckets that are within that additional $500 million cost savings and just where these items come from? Thank you. I'll take both. On the business transformation, like I said in my remarks, we've been quite successful on the initiatives we've undertaken since 2022, and that's delivered the $500 million that I've outlined and I've shared before.

Speaker Change: On key areas like TPI and immigration.

Speaker Change: And then the second question I had is you guys Upsized your cost savings target goal by 500 million to $1 5 billion can you just unpack the various buckets that are within that additional $500 million cost savings and just where are these items come from thank you.

Speaker Change: Yeah I'll take both on the on the business transformation like I said in my remarks, we have been quite successful on.

Speaker Change: The initiatives we have.

Speaker Change: Undertaken since 2022, and that's delivered the $500 million.

Speaker Change: Wind and I've shared before.

Mirko Bibic: And that's one of the key drivers that allows us to increase margins across BCE or after quarter. In terms of the initiatives, just to keep it kind of quick and it's things like automation, use of AI, consolidating billing stacks, modernizing ordering stacks, obviously continue on the cooperative fiber migration, self-serve, self-install, use of chatbots, virtual agents, including voice. So those are the kinds of things. You know, we're relying in part on the expertise of Ateco, the folks at Ateco to help drive workflow automation and unlocking the value from our Salesforce and ServiceNow environments. And if you think about it, there are significant learnings there, which we of course can bring to the benefit of our enterprise customers as we drive growth through tech services.

Speaker Change: And that's that's one of the key drivers that allows us to increase margins across BCE or after quarter.

Speaker Change: In terms of the initiatives just to keep it to keep it kind of a quick and simple it's things like automation use of AI consolidating billing stacks modernizing ordering stocks, obviously continue on the copper to fiber migration self serve self install use of chat bots virtual agents, including.

Speaker Change: Voice.

Speaker Change: Those are the kinds of things and we're also actually.

Speaker Change: We're relying in part on the expertise of our tech or the folks at <unk> to help drive workflow automation and unlocking the value from our sales force and service now environments and if you think about it there's significant learnings there, which we of course can bring to the benefit of our enterprise customers as we drive growth through Tech services. So we're.

Mirko Bibic: So we're both, you know, we go to the customer and say we're both an operator because the things we're suggesting our enterprise customers do, we're doing for ourselves through Ateco.

Speaker Change: Both.

Speaker Change: On and off we go to the customers who were both on operator because of the things, we're suggesting our enterprise customers do we're doing for ourselves through a telco.

Mirko Bibic: So that's the answer on the business transformation. And the first one was. First question.

Speaker Change: So that's.

Speaker Change: The answer on.

Speaker Change: On the business transformation and the first one was.

Richard: First question <unk> you are working with government. So thank you. Thank you Richard.

Mirko Bibic: TPIA. Oh, TPIA. Working with government. So, thank you. Thank you, Richard. We're looking forward to having constructive dialogue with the new federal government and top of the list in terms of topics would be the Fiber Resale File and it comes down to this. We celebrated our 145th birthday just last week and for 145 years. We've been building critical infrastructure in Canada for Canadians to connect Canadians and that allows Canada to grow because if you think about the networks that our industry provides, you know, you need it for everything from AI to cloud services to banking to connecting with your loved ones to entertaining yourself, everything.

Richard: We're looking forward to having constructive dialogue with the new federal government in profitable list in terms of topics would be.

Richard: The fiber fiber resale file and then it comes down that comes down to this we've.

Richard: Celebrated our.

Richard: 145th birthday, just last week and for 145 years.

Richard: We've been building critical infrastructure in Canada.

Richard: For Canadians to connect Canadians and that.

Speaker Change: Allows candidate a girl because if you think about the networks that our industry provides.

Speaker Change: You need it for everything from AI to cloud services to banking to connecting with your loved ones to entertaining yourself everything.

Mirko Bibic: And so we want to continue to do that and in order to continue to do that at the levels which we've been doing it, you do need ultimately an environment that encourages investment and allowing the largest players in the market to resell services on each other's networks is actually a direct incentive to investment and it's going to undermine the goal to have more resiliency and connect more Canadians, particularly in rural Canada. So I intend to take a very constructive approach and I think it's a logical position we have and we're looking forward to the dialogue.

Speaker Change: And so we want to continue to do that and in order to continue to do that at levels, which we've been doing it you do need ultimately an environment that encourages investment and allowing the largest players in the market to resell services on each other's networks is actually a direct disincentive.

Speaker Change: Two investment.

Speaker Change: And that's going to undermine the goal to have more resiliency and connect more Canadians, particularly in rural Canada, So Barry and intend to take a very constructive approach.

Speaker Change: And so the logical position, we have and we're looking forward to the dialogue.

Mirko Bibic: Great, thank you. Thank you.

Speaker Change: Alright, thank you.

Speaker Change: Thank you. Our next question is from Aaron <unk> from Canaccord Genuity. Please go ahead.

Aravinda Galappatthige: Our next question is from Aravinda Galappatthige from Canaccord Genuity. Please go ahead. Good morning. Thanks for taking my question. I'll start with the follow-up. I just wanted to make sure I heard you correctly.

Speaker Change: Good morning, Thanks for taking my question, let's start with the follow up.

Speaker Change: Just wanted to make sure I heard you correctly so.

Aravinda Galappatthige: So, the CapEx intensity ratio beyond 2025, it sounds like basically you will not exceed 40.5%. That would be sort of the new high point. I just wanted to confirm that.

Speaker Change: The capex intensity ratio beyond 2025, it sounds like basically you will not exceed 49, 5% that would be sort of the new high point I just wanted to confirm that and secondly.

Curtis Millen: And secondly, you know, based on sort of the business transformation, you know, cost reductions that you talked about, with respect to severance and restructuring cash costs, I mean, it was $330 million last year. You know, how should we – should that kind of be sort of the standard for the next couple of years? I wanted to confirm that as well.

Speaker Change: Based on set of business transformation.

Speaker Change: Cost reductions that you talked about with respect to severance and restructuring cash costs for.

Speaker Change: $330 million last year.

Speaker Change: How should we should that kind of be sort of the standard for the next set of next couple of years I wanted to confirm that as well.

Curtis Millen: So thanks, Aravinda, for the question. Yeah, I think 14.5% is the right range. I don't know if it's quite under 14.5%, but it's in and around 14.5%. Obviously, it depends a little bit on how fast we're driving subscriber growth and demand capex that comes along with that, but in the 14.5% range is a good estimate. And in terms of the cost reductions and cost to actually capture those, I would say these past couple of years have been higher on the one-time cost. There's still going to be some cost going forward to be able to capture benefits of transformation, but I would expect the cost to be going down over time as it's more and more process improvement as well.

Speaker Change: So thanks for the question Yeah I think.

Speaker Change: <unk> is the right range.

Speaker Change: I don't know if its quite under 14, five but its in around 14, five obviously it.

Speaker Change: It depends a little bit on on how fast, we're driving subscriber growth and <unk>.

Speaker Change: And demand Capex that comes along with that but in the 14, 5% ranges is a good estimate and in terms of in terms of the cost reductions.

Speaker Change: And cost to actually capture those I would say the past couple of years have been higher on the onetime cost theres still going to be some costs going forward too.

Speaker Change: To be able to capture benefits of transformation, but I would expect the cost to be going down over time.

Speaker Change: More and more.

Speaker Change: Process improvement as well.

Speaker Change: Okay. Thank you I'll pass the line.

Operator: Okay, thank you. I'll pass the line. Thank you. There are no further questions registered at this time.

Benjamin: Thank you there are no further questions registered at this time I would now like to turn the meeting over to Mr. Benjamin.

Richard Benjian: I would now like to turn the meeting over to Mr. Benjamin. Thanks again for your participation on the call this morning. As usual, I will be available throughout the day for follow-up questions or clarifications.

Benjamin: Thanks again for your participation on the call. This morning as usual I will be available throughout the day for follow up questions or clarifications, thanks and have a great day.

Operator: Thanks, and have a great day. Thanks, everyone. Thank you.

Speaker Change: Thanks, everyone.

Benjamin: Thank you.

Speaker Change: Thank you. The conference has now ended disconnect your lines at this time and we thank you for your participation.

Operator: The conference has now ended. Please disconnect your lines at this time and we thank you for your participation.

Operator: Please stand by and enjoy this music. If you wish to queue to ask a question, dial star 1.

Speaker Change: Please standby and enjoy this music if you wish to ask a question dial star one.

Speaker Change: <unk>.

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Speaker Change: Sure.

Speaker Change: Yes.