Good day and welcome to Cogeco Inc. and Cogeco Communications Inc. Q2 2024 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Patrice Ouimet, Senior Vice President and Chief Financial Officer. Please go ahead, Mr. Ouimet. Thank you. So good morning, everybody, and welcome to this second quarter conference call. As usual, before we begin the call, I'd like to remind listeners that the call is subject to forward-looking statements which can be found in the press releases issued yesterday. Now, I would like to start by welcoming and congratulating Frédéric Perron, who took over the role as President and CEO of Cogeco on March 11. I've had the pleasure of working closely with Fred while he was leading our Canadian operations in telecommunications, and he certainly did a tremendous job transforming the business to set it up for the future. So Fred, welcome, and I will let you now take over the call with your opening remarks. Thank you, Patrice, for the kind words. Good morning, and thank you, everyone, for joining us for our Q2 2024 results. For those of you who may not know me, as Patrice mentioned, I've led Cogeco Connexion for the past three and a half years, having previously worked at other telecom operators in several countries. The North American industry is undergoing several changes at the moment, which is something I've also experienced while working in Europe. Though it's still a bit early after five weeks into the job to lay out all of our plans for the coming years and for fiscal 2025 more specifically, I can already say that shareholder value creation will be at the forefront of our strategy and culture as we set our future course of action. In my first months in the job, I'm taking time to review all aspects of our operations to identify areas where we can increase our performance. I'm truly excited about that opportunity. Our plans will certainly include a strong focus on driving profitable growth through an acceleration of digitization across our enterprise, as well as synergies across our various units. Of course, we will also grow our recently announced American wireless business and will continue to pursue our capital-light entry into the Canadian wireless market. With that said, let's get right into our Q2 results. Our second quarter consolidated results were in line with our expectations as we focused on balancing subscriber growth with financial performance while remaining disciplined with our cost structure. Cogeco Connexion, our Canadian telecommunications business, delivered another quarter of strong internet subscriber additions driven by gains across our legacy and network extension areas and under our OXIO brand in and out of footprint. OXIO is becoming an increasingly important growth driver for the company, and its digital sales, service, and IT platform enables a lower cost structure for the corporation, which will also benefit the company more broadly over time. Additionally, we announced the tuck-in acquisition of the Niagara Regional Broadband Network, or NRBN, in Q2, which is a fully fiberized network expanding our B2B presence and access to municipalities, universities, schools, and hospitals in the region. In the United States, our customer attraction retention efforts and service enhancements over the past several quarters have contributed to higher customer satisfaction scores and positive media commentary. Our Ohio operations have also benefited from customers increasingly taking higher-speed internet offerings, driving higher revenue per customer, and expanding Adjusted EBITDA margins while offsetting customer losses at lower price points. In both Canada and the U.S., we continued to see the financial benefits from our Fiber to the Home network expansion programs that contributed to new internet subscribers in both markets. In Q2, we added close to 19,000 homes passed, bringing our total to 228,000 homes passed since the beginning of fiscal 2022, representing nearly 8% organic growth in our network. We're now largely done with the Quebec expansion and are busy building in Ontario. Additionally, we look forward to the BEAD funding program in the U.S., which will provide subsidies to extend networks in underserved and unserved areas. In terms of mobile developments, we were pleased to announce that Breezeline Mobile will launch this spring with a progressive rollout in the states that we serve. This Pure MVNO wireless service will provide our customers access to reliable, competitively priced, and flexible mobile data packages. Not only will the upcoming launch of this service improve our bundling offering, it will also increase our addressable markets, strengthen our product mix, and improve existing customer retention and satisfaction, all the while being capital-efficient and accretive to our business in due course. In Canada, we're continuing our MVNO access negotiations. We cannot provide further details on these negotiations at this time, but we can say, however, that we look forward to providing our Canadian customers with wireless options. At Cogeco Media, advertising sales continued their momentum again this quarter. We're also making progress with our new digital solutions and multi-platform audio content, which open up new revenue streams. I will now review our operational segment results. Let's start with our Canadian operations. As mentioned earlier, we continued to expand our network to more homes in new areas in both Quebec and Ontario. We added 14,600 homes passed in Q2 and a total of nearly 119,000 homes passed since the beginning of fiscal 2022, most of which is part of government subsidy programs. Our Canadian team maintained a solid track record in Q2 by growing its internet customer base by 8,900 across our traditional markets, network expansion areas, and under our digital OXIO brand in and out of our wireline footprint. It is the fifth consecutive quarter that we report strong internet customer growth in Canada. Moving on to our US operations, we continued our fiber network expansion program during the quarter with 4,000 new homes passed and 109,000 homes passed since the beginning of fiscal 2022. As noted in our prior quarter, we're continuing to see an improving product mix of higher-margin services and customer tenure driven by a greater proportion of new connections taking faster internet speeds. This has resulted in a higher average revenue per unit and an increased customer lifetime value. As always, we remain focused on achieving cost efficiencies and implementing product improvements. In Ohio, we've significantly increased our network capacity and have proactively swapped video equipment to our IPTV solution. These efforts, in addition to brand awareness and customer service improvements, are gaining traction with our customers as evidenced by our rising customer satisfaction levels and the types of services taken by our customers. Though more work remains to be done, we remain committed to eventually reach positive Ohio internet subscriber numbers. With regards to the U.S. Affordable Connectivity Program, or ACP, which provides a $30 monthly credit to eligible U.S. residents, this program is expected to be defunded over the coming weeks. It is, however, worth noting that Breezeline has considerably less exposure to ACP than the industry average, with under 4% of its internet subscriber base under ACP. That percentage is much lower when expressed as a percentage of revenue. Also, since most of our customers under ACP take more than the entry-level service, there are several opportunities available to mitigate the impact, and we have plans to address it. That being said, we could see some negative PSU movements from lower ARPU subscribers leaving this program in the next two quarters. For Cogeco Media, we reported another quarter of the year-over-year growth in revenue, with advertising sales modestly rebounding in our digital solutions, social media formats, and revamped studio facilities now providing meaningful contributions to revenue growth. Now, let me turn the call over to Patrice, who will provide more details on our financial performance for the quarter. Patrice, over to you. Thank you, Frédéric. So in Canada, Cogeco Connexion revenue increased by 1.4%, resulting mainly from the OXIO acquisition and a higher internet service customer base. Adjusted EBITDA increased by 0.3% in constant currency as revenue growth was partially offset by higher sales and other operating expenses to drive support and support customer growth, sorry. In the US, Breezeline's revenue decreased by 2.8% in constant currency, mainly driven by lower video subscriptions and a lower customer base over the past year, partially offset by higher revenue per customer and a better product mix. Adjusted EBITDA increased by 0.5%, driven by a higher gross margin reflecting more internet within the revenue mix, as well as the impact of cost reduction initiatives. Turning to the consolidated numbers for Cogeco Communications, at the consolidated level, revenue declined by 0.7% in constant currency while EBITDA declined by 1%. Although EBITDA in both our Canadian and U.S. businesses slightly increased in the quarter, the decline in the consolidated EBITDA was due to an increase in certain corporate costs, including those related to our plan to offer mobile services in Canada. Diluted earnings per share increased by 0.5%, reflecting the benefit of fewer shares outstanding due to the buyback we made in December. Capital intensity was 23.4% compared to 21.2% last year, mainly from higher CapEx spending in Canada. Excluding network expansion projects, capital intensity was 20% in the quarter. Free cash flow in constant currency declined 15.4%, largely due to a mix of higher CapEx and financial expenses. Excluding network expansion projects, free cash flow decreased by 22.5%. Our net debt-to-EBITDA ratio was 3.5 turns in the quarter, which is 0.1 turn higher than the prior quarter. This is primarily due to additional funds drawn in relation to the December share buyback, the initial payment for the 3800 MHz spectrum purchase, and the acquisition of NRBN that Fred referred to. We continue to target a net debt-to-EBITDA ratio in the low 3 times over time. And finally, we've declared a dividend of CAD 0.854 per share in the quarter. At Cogeco Inc., revenue in constant currency declined by 0.6% and EBITDA by 1% as a result of Cogeco Communications' performance. Media operations revenue increased by 4.2% due to strong listener engagement across many other stations and positive contributions from digital advertising. Diluted earnings per share increased 7%, driven by a lower share count resulting from the December share repurchase in Cogeco Inc. A dividend of CAD 0.854 per share was declared for the quarter. Now, let's look at Cogeco Communications' financial guidelines for fiscal year 2024, which we first provided to investors in early November. With Q2 results in line with our expectations, we are maintaining our annual guidelines. Our assumptions remain the same as outlined on our last call. As relates to Q3, we currently expect consolidated revenue to increase in the low single digit in constant currency and Adjusted EBITDA to be similar to last year's results. Capital intensity is anticipated to be approximately one percentage point above the Q3 results of last year. At Cogeco Connexion and Breezeline, in Q3, we expect both revenue and Adjusted EBITDA to be in the low single digit growth compared to last year. Below the EBITDA line at the consolidated level, we expect acquisition, integration, restructuring, and other costs to be CAD a few million higher than what we recorded in Q3 of last year and financial expense to be in line with Q2 of this year. In terms of CapEx, we expect Q3 to be in line with the CapEx spend of Q2 of this year, which reflects ongoing strategic growth investments, including network expansions and our mobility preparations. With the issuance of CAD 275 million in senior unsecured notes during the quarter, we extended our debt's weighted average term to maturity to 5.2 years. And finally, we continue to anticipate that Cogeco Communications' dividend will represent a payout of 39% of free cash flow for the year at the midpoint of the guidelines or 27% when excluding network expansions. At Cogeco Inc., we have issued the same financial guidelines as Cogeco Communications and are maintaining such guidelines. And now, Frédéric and I will be happy to take your questions. Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press star, followed by the one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star, followed by the two. If you are using a speakerphone, please lift a handset up before pressing any keys. Your first question comes from Maher Yaghi with Scotiabank. Please go ahead. Congratulations, Fred, on the new appointment. It's been four years to the day, I think, since our first discussion. I wanted to maybe just ask you, since you joined, what as you saw the market change in Canada when it comes to broadband, what are the initiatives that you think Cogeco should continue to do to continue to grow its market share? We've seen you guys OXIO has been quite successful since you acquired it. You've been adding quite a bit of customers even out of home. Do you have any plans to expand the offering across Canada or keep it within, let's say, Ontario and Quebec? And the push that you want to make, is it going to be restricted to eastern Canada or think about expanding it nationally? Yeah. Hi, Maher. Good to hear your voice, and thanks for the kind words. Maher, the Canadian market has been competitive for quite some time now, especially on the Quebec side, and this quarter was no different. Now, our growth in PSUs and market share is relatively diversified, so it comes from four main sources. And that diversification in our PSU growth is what's sustained our growth for the past five consecutive quarters now. So it comes from, essentially, as I said, four main areas. It comes from our legacy footprint, where we're gaining a little bit. It comes from network expansion programs, which are subsidized and on fiber. And it comes from OXIO both in our footprint and outside of our footprint. And that's, as I said, what's driven our growth for the past five quarters, and that's how we intend to continue. Can I ask you maybe just a follow-up on that? When you look at the Canadian business, which you have been very involved in, what are your medium-term expectations when it comes to the business as you see more and more bundled product offerings in the marketplace and pricing pressure with some of the key competitors offering fiber to the home? How should we think about that business when it comes to its projected medium-term growth rate? Yeah, Maher. In both cases, I think you're alluding in your question to both bundling with wireless as well as the development of fiber by competition. These are two trends that we've been dealing with successfully for quite some time. What we're seeing now is, of course, prices have been under pressure, but again, it's not a new phenomenon for us. There have been green shoots in some pockets of possibly seeing the floor on prices in the quarter, but still a little bit too early to tell. As it relates to the projection, I guess, Patrice, I don't know if you want to comment, but perhaps when we give guidance for next year, that would be the best time to do it. Yes. And Maher, as you know, the Canadian business has been growing in a low single digit fashion in past years. This year is no different, probably a little lower than from what we've presented versus a couple of years ago. But I would say it's still in the same range. And for the future, stay tuned, I guess, as we talk more about the future year. Later on this year, we'll be able to talk more about it. Okay. Great. And one last question on the U.S. business with the ACP program funding coming out with no funding coming up after April. Some of the companies in the U.S., like AT&T, indicated that they will continue to offer the low-priced products in the marketplace to support customers and, in a way, also to protect the downside in terms of subscriber losses. Have you guys indicated what your plans are for that program product offering? Are you going to continue to support it or just absorb the subscriber losses if customers can't afford it anymore? Yeah. So we have a plan in place, Mayor. And basically, so the majority of our customers actually subscribe to more than just the $30 plan. So we have a plan there, basically, if people want to change the types of plans that they have. And we have some offers that will be in place as well for those who are just at the entry-level package of $30 that basically costs nothing because the government pays for it. We'll have alternatives for this as well. So I don't think we're very different from what you have explained, and the idea will be to minimize the impact of it. The revenue piece we're getting today is quite small from this, given the fact that some customers will take video or faster speeds as well. Okay. Great. Thank you. Thank you. Your next question comes from Matthew Griffiths with Bank of America. Please go ahead. All right. Thank you for taking the question. I just wanted to follow up on kind of your view on the competitiveness and intensity of the market. I heard you on price, but I was wondering if this increases your focus on looking for ways to control costs and bring them down and whether we should be kind of staying tuned for more work to be announced kind of on that front. Maybe just a follow-up to the ACP question. My understanding is the presence or absence of ACP has an influence on the bidding that is going to happen for the BEAD program. It can influence projections of penetration and how much customers are going to take up the product if a subsidy program is in there for consumers. And so I was wondering how the defunding of ACP is altering your approach to BEAD bidding as you prepare for that. Thanks. All right. Thank you. Okay. So I'll start with the second question on ACP. If you look even at how we're operating today, the ACP program customers under the ACP program are quite a small portion of our customer base. And as a revenue, it's very small. So when we look at BEAD, obviously, we take different factors into account to look at penetration and the pricing we are planning to get in these areas. So that plays into it, but I would not say that's something that we expect to be large. Just to be sure, basically, the BEAD program provides funds to go in areas where there's no high-speed Internet today, and that's really the only viable alternative to get there. If a portion of the population would normally rely on ACP to subscribe, well, that would not be there, but I would say it should normally be quite small when you look at the equation. On the first part of your question, Matthew, it's Fred. I'm a big believer in digitization and advanced analytics to both improve revenue and reduce cost. Some of those efforts have already started. So we're deploying more and more self-serve capabilities for our customers. And now we have work underway to accelerate our use of AI in some of those capabilities, using the same platform, by the way, across both countries, which leads me to also talk about harmonization of technologies across the two sides of the border, which also represents an opportunity for us. So stay tuned. More to come on that over the coming quarters. Okay. Perfect. And maybe just a quick follow-up. Now that the U.S. launch of wireless has taken place, what sort of reporting will investors get on that kind of emerging part of your business? Yeah. So in terms of the financial metrics, we will see over time, but obviously, this will start small this year. So you should not see any separate reporting on this. And over time, we will determine how to do this. I would say most companies in the industry include the results together. And in terms of PSUs, typically, we would report this separately. Again, it's going to be quite small this year as we're just getting started, so probably more appropriate for the next few years for the next year. So we can talk more about this later. All right. Great. Thank you so much. Your next question comes from Stephanie Price with CIBC. Please go ahead. Good morning. Congrats, Fred, on the appointment. Thank you. I was hoping you could dig a little bit more into the U.S. internet net adds. Obviously, you saw a sequential improvement in the quarter, especially in the Ohio market. Can you talk a little bit about what you're seeing in terms of competitive intensity and just the improvement in subscriber losses in the quarter? Yeah. Stephanie, it's Fred. I'll take that one. For the US, it's important to separate the story in Ohio with the rest of our footprint. In Ohio, it was always or it's been a competitive market for quite some time. Our focus has been on really strengthening our operations and strengthening our brand perception in that market because we came in with a new brand. We're making good progress on that. We've really improved our network capacity. We've deployed IPTV solutions, and we're improving our sales and marketing blocking and tackling as well. That's the driver of some of the sequential improvements that you see in Ohio. As it relates to the rest of the footprint, it remains a competitive market with FWA, of course, being a big driver of the competition. FWA, we're seeing early signs of possible easing off, but it's still a little early to call, and that's one that we're keeping our eyes on. Thanks for the color. Then just in terms of the Canadian market, just hoping you can talk a little bit more about the acquisition of NRBN, a regional broadband network, and maybe more broadly, how you're thinking about M&A opportunities at this point. As Patrice noted, your leverage is a little bit above kind of the target range here. How do you kind of think about tuck-ins and maybe even larger M&A deals at this point? Yeah. I'll answer more broadly about M&A. And this is one topic that obviously, we've been talking about. And I can really reiterate what Patrice has said publicly on this topic, which is large acquisitions are unlikely for the reasons that you've mentioned. Small tuck-ins can always happen if they make strategic sense for us. And then as it relates to divestitures, we are open to pruning some of our assets, but I think no commitments were made on that front. This company has done divestitures in the past, maybe not the recent past, but that's something we're always open to look at. Great. Thank you for the color. Thank you. Your next question comes from Vince Valentini with TD Cowen. Please go ahead. Thanks. I had another question, but the NAG or broadband, I'm not sure you fully answered it. Can you flesh out sort of what the impact will be in future quarters and revenue and EBITDA and how it fits? Yes. And one of the reasons we bought it as well is we never control, obviously, the timing of when companies are put for sale. And this one was right in the area where we have our traditional footprint, and we were very excited to be able to add that to it. It's really more geared towards the commercial business. And they have developed a smaller footprint in fiber to the home residential network as well. Yes. Let me just get back to you a bit later on in this call on what we're talking about, but it's not major because it was not a large acquisition on what it will mean for the next few quarters. Maybe that's just a segue, though, Patrice or Fred. And hello, Fred. Nice to meet you virtually. The B2B in total, can you level set us? We haven't talked about it for a while where that's at as a percentage of revenue and EBITDA. And is that segment actually growing within the total revenues we see? And if you want to break that down between Canada and the US, feel free. Yeah. In the B2B segment, Vince, we operate mostly on the small end of that market. Given our regional footprint and the asset efficiency that we're looking for, it didn't make much sense for us to go in the larger segments. We do have a couple of deals here and there, but our focus is mostly on the small segment. In terms of revenue growth, I can say for Canada, that the B2B segment is growing just slightly faster than the consumer segment. As a percentage of our total revenue, I don't know if this is something we disclose, so I'll look at Patrice for that. Yeah. So actually, we have a note on this. So it's between the two countries, between 10% and 12%. We can point you to the exact information if you want after this call. Thank you. The question I was going to ask you initially was just CapEx. Apologies if you already covered this, but CapEx seems to be trending a bit below the full-year guidance. Now, I think you just said third-quarter CapEx will be similar to second quarter. Do you catch up in the fourth quarter, or is that CAD 700-775 guidance a bit too high now? We're probably going to land at the low end of that range as opposed to when we started being at the middle. Obviously, CapEx is always something we try to optimize during the year, but obviously, it's a bit spotty on a quarterly basis. Because of the seasons as well, some construction, especially in Canada, does not happen in the winter. So there's a bit of that going on. But I would say, yeah, we're probably going to be more at the lower end. To your previous question on revenue, so it's not that meaningful, but on a full-year basis, an NRBN will add about 1% to the revenue of CCX, so not that impactful. Thank you. Thank you. Your next question comes from Jérôme Dubreuil with Desjardins. Please go ahead. [Foreign language]. Thanks for taking my questions. Frédéric, congrats on the appointment as well. First question is on wireless in the U.S. since you officially announced the launch there. Looking at some of the U.S. peers that have launched similar services, it's not easy to turn a profit. Fred, can you maybe talk about the advantages you might have that could help you turn a profit on wireless in the U.S. going forward? Bonjour, Jérôme. I'll answer the question about wireless. So just to give you a little bit more color on where we're at on this one, we've completed the friendly user trial, and we're now in soft launch in one of our states that we operate in with scaling up throughout the rest of this month and then a relatively rapid scaling in the other states after that. We're focused mostly on our existing customers. So the customer needs to be either an existing wireline customer or to become one at the same time as they buy wireless. To your question about economics, the main value of the wireless product will be on the wireline business. So it's going to be churn reduction, customer satisfaction on the wireline business, as well as broadening our eligible pool of new customers who are looking for a bundled offer who we could not serve in the past. As a standalone business, we expect wireless to become accretive in the medium to long term. Okay. Thank you. Second question is in terms of price increases potential. We're seeing quite elevated competition in Canada and the U.S. If you can maybe discuss if there have been recent price increases and if you think you have the capacity to implement some of those in the medium term. Yeah. So So hi, Jérôme. Yeah. So obviously, we want to pace price increases to make sure, obviously, our customers get value for the goods we're offering. We did have price increases in the two countries in March, not necessarily a large one, but those are the latest ones. So you're going to see this appearing in the next quarter. [Foreign language]. Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from Tim Casey with BMO. Please go ahead. Yeah. Thanks. Good morning. I just wanted to talk about your broader initiatives in Canada and across the footprint in the context of I've noticed you've been doing some television advertising. I don't recall the Cogeco brand being advertised on a mass media like that before. And I'm just wondering if we should read anything into that in terms of your expectations of new products like Rogers' Fixed Wireless coming in your footprint. And back to earlier questions of what you want to do with the brand and potentially expanding out of market and obviously, eventually, a wireless offering. Can you just talk about how you're approaching the brand broadly and if we should read anything into your media spend? Thank you. Hi, Tim. I wouldn't read too much into the media spend. In fact, television advertising is something that's not new for us. It's something that we've been doing from time to time. And so I wouldn't read too much into it. That would be the short answer on this. And part of your question was about Rogers' Fixed Wireless Access. It's not them having a visible impact on our results so far. Okay. But what about plans to expand your offers out of footprint on your various brands? Anything you want to talk about there? Nothing new there either. Our main out-of-footprint product is OXIO out-of-footprint, which, by the way, we're also leveraging in footprint. I wouldn't plan any major changes on that front. Thank you. Your next question comes from Aravinda Galappatthige with Canaccord. Please go ahead. Good morning. Thanks for taking my question. I just wanted to focus on Breezeline. I think, Patrice, you guided to low single-digit EBITDA growth there. Does that include any sort of incremental launch cost with respect to wireless? And maybe can you just talk to sort of that incremental piece? I know you gave a number earlier in the year on what that was going to be. But is that sort of more back-end loaded with respect to fiscal 2024? We had planned from the start to have some investments to launch the mobile product in the U.S. And we knew it would not be initially in the year. So I would say this is according to the initial plan when we first issued guidance. We set up a small team to do this. Obviously, then there's a bit of marketing. But because we're targeting primarily our customers or the footprint where we operate, where we're already doing marketing, it's not that meaningful. So I would say there's a bit more in Q3 and Q4 than initially, but it's really not something that would be visible. Okay. Thank you. And then to the extent that you can comment, sort of the Canadian MVNO endeavor, is that really about sort of more the process with respect to the MNOs and the regulator, or is there a little bit more work that you have to do on your end as well? I mean, is that what's impacting the timeline there? Yeah. Basically, where we are right now is still in negotiations. As you know, the process requires a number of negotiations with various parties. We are still in this process and at the same time building what's required to be able to launch as well. I would say the situation is not that different from what I said last quarter. That being said, we are making progress. It's just more difficult to go with more precision publicly because, obviously, these discussions are going on privately, but it's progressing. Okay. Thank you very much. Thank you. There are no further questions at this time. Please proceed. Okay. Well, thank you, everyone. Feel free to call us if you have other questions. Otherwise, we will see you for the next quarter in Q3. Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your line.