Bell is following the AT&T model except they will keep the proceeds of the sale of Bell Media (just like they did with MLSE) to unload/pay down debt with the proceeds (and not give the shares of the spin-off to shareholders like T mistakenly did). The acquisition of Ziply was a good decision and its network growth will be funded by the Caisse de depot.
To prop up its share price, BCE is implementing or about to implement the following strategies:
1. Operational Efficiency
Cost Reduction: Streamline operations to cut costs without compromising service quality.
Automation: Invest in AI and automation to improve efficiency.
Divest Non-Core Assets and substantially reduce debt: Sell underperforming or non-core assets such as Bell Media or infrastructure to reduce debt to 20-25B and focus on profitable segments.
2. Strengthen Core Business
Network Expansion: Continue investing in 5G infrastructure and fiber-optic networks with funding partners partially funding expansion cost.
Customer Retention: Improve customer satisfaction to reduce churn in wireless and internet services.
Innovation: Develop new products and services to capture additional market share.
3. Enterprise Services
Complementary Services: Strengthen cloud, cybersecurity, and IoT services for business customers.
4. Financial Strategies
Dividend Policy: Maintain the dividend to keep income-focused investors engaged.
Debt Management: Optimize with the Caisse de Depot and Placements du Quebec the capital structure by managing debt levels and refinancing high-interest obligations after reduction to 20-25B following sale of Bell Media and Infrastructure assets.CDPQ did this with many Quebec corporations.
Share Buyback: Implement a 5% share repurchase program to reduce outstanding shares and dividend payments and increase EPS.
5. Address Market Perceptions
Transparency: Improve communication with investors about long-term strategies and progress.
Earnings Growth: Focus on demonstrating consistent and predictable earnings growth including with the expansion of Ziply.
6. With reference to asset sales:
There is always a buyer for a company with an adjusted EBITDA of ~ 900m considering this is one of Canada’s leading multimedia companies, operating across television, radio, digital media, and content production.
Television Networks
CTV: Canada’s largest private broadcaster, offering both national and local programming.
Specialty Channels: Including TSN (The Sports Network), RDS (Rseau des sports), and various CTV-branded specialty channels.
Crave: A streaming service providing a wide range of content, including original programming and partnerships with HBO and Showtime.
Radio Stations
iHeartRadio Canada: Encompassing numerous radio stations across the country, such as Virgin Radio, Pure Country, and others.
Digital Platforms
Crave: Bell Media’s flagship streaming service.
CTV.ca and CTV App: Offering live TV and on-demand streaming.
Content Production
Bell Media Studios: Produces a variety of shows, including The Marilyn Denis Show and Etalk.
Advertising
Astral: Bell Media’s outdoor advertising division, managing billboards and digital displays.
Adjusted EBITDA for the last 4 quarters total 838m and are shown below, thus assuming ~900m for 2025 leads to 9B ?
Q3 2024: Adjusted EBITDA increased by 25.1% to $254 million, with a margin improvement to 32.5%.
Q2 2024: Adjusted EBITDA grew by 1.9% to $218 million, delivering a 0.2 percentage-point increase in margin to 26.8%.
Q1 2024: Adjusted EBITDA was $218 million, reflecting a decrease of 11.4% compared to Q1 2023.
Q4 2023: Adjusted EBITDA was $148 million, representing a 14.7% increase from the same quarter in the previous year. This growth improved the Adjusted EBITDA margin to 18.0%, up from 14.5% in Q4 2022.
These figures reflect Bell Media’s ongoing efforts to adapt to the evolving media landscape, with a focus on digital transformation and content diversification which should command a multiple of 8-10x EBITDA or about 8B, reducing the net debt to ~ 30B.
And then the infrastructure..