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BCE Inc T.BCE.P.R


Primary Symbol: T.BCE Alternate Symbol(s):  BCEIF | T.BCE.PR.A | T.BCE.PR.L | T.BCE.PR.B | T.BCE.PR.M | BCEPF | T.BCE.PR.C | T.BCE.PR.N | BCEXF | T.BCE.PR.D | T.BCE.PR.Q | BCPPF | T.BCE.PR.E | T.BCE.PR.R | T.BCE.PR.F | T.BCE.PR.S | T.BCE.PR.G | T.BCE.PR.T | T.BCE.PR.H | T.BCE.PR.Y | BECEF | T.BCE.PR.I | T.BCE.PR.Z | BCE | T.BCE.PR.J | BCEFF | T.BCE.PR.K

BCE Inc. is a Canada-based communications company. The Company provides wireless and fiber networks. The Company operates through one segment: Bell Communication and Technology Services (Bell CTS). Bell CTS segment provides a range of communication products and services to consumers, businesses and government customers across Canada. Its wireless products and services include mobile data and voice plans and devices and are available nationally. Its wireline products and services comprise data (including Internet access, Internet protocol television (IPTV), cloud-based services and business solutions), voice, and other communication services and products, which are available to its residential, small and medium-sized businesses and large enterprises customers primarily in Ontario, Quebec, the Atlantic provinces and Manitoba. This segment includes its wholesale business, which buys and sells local telephone, long-distance, data, and other services from or to resellers and other carriers.


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Post by KillaDipon May 02, 2024 9:04am
215 Views
Post# 36019132

RBC Initial Take

RBC Initial Take
BCE Inc.
Q1/24 Results Slightly Better than Forecast (and Likely Better than Feared)
TSX: BCE | CAD 45.72 | Sector Perform | Price Target CAD 54.00
Sentiment: Neutral
Our view
Q1/24 results were slightly better than forecast with 2024 guidance reiterated as expected. At current levels, we view the results
as neutral to a modest positive for the shares.
First impression
• Q1/24 results slightly better than forecast. Consolidated revenues and EBITDA were $6,011MM (-0.7% YoY) and $2,565MM
(+1.1%), respectively, versus our estimates of $6,068MM and $2,535MM (consensus is $6,044MM and $2,541MM).
Consolidated EBITDA margins were 42.7% (+75bps YoY) versus our 41.8% estimate (-15bps). Adjusted EPS was $0.72 versus our
estimate of $0.69 (consensus is $0.70). Please see Exhibit 1 for a detailed summary of Q1/24 results.
• Balancing growth and profitability within Bell CTS with YoY growth to accelerate as 2024 progresses. Bell CTS revenues and
EBITDA were $5,375MM (+0.1% YoY) and $2,448MM (+1.7%), respectively, versus our estimates of $5,416MM and $2,439MM
(consensus is $5,394MM and $2,432MM). Bell CTS revenues comprised wireless and wireline revenues of $2,458MM (+4.6%)
and $2,911MM (-3.3%), respectively, versus our estimates of $2,459MM and $2,950MM. EBITDA margins were 45.5% (+71bps
YoY) versus our 45.0% estimate. Key wireless metrics: (i) network revenue growth was +3.0% YoY versus our estimate of +3.7%;
(ii) postpaid and prepaid net additions were +45k and -20k, respectively, versus our estimates of +43k and -21k (consensus is +38k
and -17k); (iii) ARPU growth was flat YoY versus our estimate of -0.5% (consensus is -0.4%), which benefited from the removal of
106k low to non-revenue generating business market postpaid subscribers; and (iv) postpaid churn was 1.21% (+31bps), versus
our 1.18% estimate (with the YoY increase consistent with Rogers at +31bps). Wireline RGUs were largely in line: (i) Internet
net additions were +31k, versus our estimate of +30k (consensus is +29k); (ii) retail IPTV net additions were +14k (versus our
-5k estimate for total television net additions) with the company no longer reporting retail satellite TV subscribers; and (iii)
telephony net losses were -44k versus our -46k estimate (consensus is -45k).
• Renewed advertising growth at Bell Media. Bell Media revenues and EBITDA were $725MM (-7.1% YoY) and $117MM (-11.4%),
respectively, versus our estimates of $747MM and $96MM (consensus is $735MM and $108MM). EBITDA margins were 16.1%
(-79bps YoY) versus our estimate of 12.8% and 16.9% in Q1/23. Advertising revenues were up +1.6% YoY due to continued growth
in digital advertising moderated by lower demand for traditional broadcast TV and radio advertising while subscriber revenues
were down -13.8% reflecting a tough YoY comp due to a $37MM one-time retroactive revenue benefit realized in Q1/23 (with
100% flow-through to EBITDA).
• Other notables. (i) 2024 guidance was reiterated; (ii) FCF was stable YoY at $85MM, the quarterly cadence of which is consistent
with management expectations and prior commentary; (iii) on April 25, 2024, Bell Media launched 10 ad-supported streaming
television (FAST) channels with additional channels and platform partners expected to be announced later this year; and (iv)
the company entered into a retail partnership with Loblaw Companies to launch no name mobile, available in all 278 No Frills
locations across Canada.
• What to look for on the 8:00am call (#1-844-933-2401). (i) an update on the wireless and Internet competitive environments;
(ii) progress on lowering the cost to serve, including the cadence in realizing targeted cost savings; and (iii) the extent to which
renewed advertising growth is sustainable at Bell Media.
 
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