Slide 1: Q4 2021 Results & 2022 Financial Guidance Call
Q4 2021 Results & 2022 Financial Guidance Call February 3, 2022
Slide 2: Safe harbour notice
Safe harbour notice Certain statements made in this presentation are forward-looking statements. These forward-looking statements include, but are not limited to, statements relating to BCE’s financial guidance (including revenues, adjusted EBITDA, capital intensity, adjusted EPS and free cash flow)
Slide 3: Focused execution on strategic priorities drives 2021 results
Focused execution on strategic priorities drives 2021 results 1 Financial • Attained 99% of pre-COVID 2019 consolidated revenue and adjusted EBITDA(1) in 2021, performance contributing to y/y net earnings growth of 7.2% 2 • Surpassed accelerated network expansion targets in 2021 with ~1.1M new direc
Slide 4: Focused execution on strategic priorities drives 2021 results
Focused execution on strategic priorities drives 2021 results 5 • Bell is Canada’s fastest and most awarded 5G network(1) Building • Significant 3.5 GHz spectrum; fibre to 94% of cell sites; 2,700 central offices available for MEC blocks for • Strategic & MEC partnerships: Amazon Web Services (AWS),
Slide 5: Q4 operating metrics
Q4 operating metrics Bell Wireless Bell Wireline Bell Media • 110k postpaid mobile phone net • 16k retail residential RGU net adds, • TV advertising revenue up 14% y/y adds, up 49.2% vs. Q4’20 and 47k up 25k y/y on strength across conventional, higher than Q4’19 – 2nd straight quarter of positive ne
Slide 6: 2022 strategic priorities & dividend growth
2022 strategic priorities & dividend growth Strategic priorities Dividend growth • Surpass pre-COVID 2019 financial performance • 5.1% increase for 2022 to $3.68 per share – Effective with Q1’22 payment on April 15th • Hit accelerated network expansion targets • Growth capital to: • 14th consecutive
Slide 7: Laying the foundation for future growth
Laying the foundation for future growth • Entering second year of historic 2-year capex ~$1.7B investment acceleration program Capex advancement program* • Largest annual network buildout ever with up to 2021: ~$800M ~800M 900K new fibre locations passed in 2022 2022: ~$900M ~900M *Increase over pre
Slide 8: Financial Results
Financial Results Bell
Slide 9: Q4 financial review
Q4 financial review ($M) except per share data Q4’21 Y/Y 2021 Y/Y Revenue 6,209 1.8% 23,449 2.5% Service 5,243 3.0% 20,350 2.6% Product 966 (4.5%) 3,099 1.6% Adjusted EBITDA 2,430 1.1% 9,893 3.0% Margin(1) 39.1% (0.3 pts) 42.2% 0.2 pts Net earnings 658 (29.4%) 2,892 7.2% Statutory EPS 0.69 (29.6%) 2
Slide 10: Wireless financials
Wireless financials Service revenue • Service revenue and adjusted EBITDA surpassed pre-COVID 2019 levels for second ($M) 3.7% consecutive quarter 6,400 6,169 6.3% • Q4 adjusted EBITDA up 5.3% on flow-through 1,652 of 2.8% total revenue growth 1,554 • 6.3% service revenue growth – best quarterly Q4'
Slide 11: Wireline financials
Wireline financials Revenue • Q4 revenue decline comparable to Q3’21 ($M) -0.2% • Residential revenue growth in Q4 driven by 7% 12,206 y/y increase in Internet revenue 12,178 -0.5% • Product revenue down 10.5% y/y in Q4 3,095 3,079 • Improving business wireline results — best Q4'20 Q4'21 2020 2021 q
Slide 12: Media financials
Media financials Revenue • Q4 advertising revenue up 12% y/y ($M) – Return to more normal regular sports and fall TV 10.4% schedules compared to Q4’20 – Improved y/y out of home performance 3,036 – Radio recovery delayed due to COVID 5th wave 7.3% 2,750 849 • Digital revenues grew 36%, reflecting Cr
Slide 13: 2022 financial outlook
2022 financial outlook Bell
Slide 14: Revenue & adjusted EBITDA outlook
Revenue & adjusted EBITDA outlook BCE revenue growth • Growth ranges for 2022 consistent with 2021 and remain wide to absorb further COVID turbulence ($M) – 2022 performance to surpass pre-COVID 2019 levels 1%-5% 2.5% • Continued strong wireless growth – Maintain focus on higher-value mobile phone a
Slide 15: Pension funding and expense
Pension funding and expense Total pension cash funding(1) ($M) • Solvency ratio(3) of all major BCE pension plans above 105% at YE2021 Payments under other post-employment benefit plans – Largest DB plan (Bell Canada) at 111% Contributions to post-employment benefit plans Contribution holiday – 5.5%
Slide 16: Tax outlook
Tax outlook BCE income taxes paid Income tax expense ($M) • 2022 statutory tax rate unchanged y/y at 27% • 2022 effective tax rate in line with statutory rate 913 – Tax adjustments essentially stable y/y ~800-900 – Higher taxable income vs. 2021 Income taxes paid • Incremental capex in 2022 to gener
Slide 17: Adjusted EPS outlook
Adjusted EPS outlook Adjusted EPS growth • Higher adjusted EBITDA key driver of adjusted net earnings(1) growth in 2022 ($) • Lower y/y interest on post-employment benefit 2%-7% obligations 5.6% 3.25 • Depreciation and amortization expense up 3.19 to ~$100M-$150M y/y, due to accelerated capex 3.40 i
Slide 18: Free cash flow outlook
Free cash flow outlook Free cash flow growth • Strong flow-through of higher adjusted EBITDA ($M) • Reduced pension funding and cash taxes completely offset higher y/y capex in 2022 2%-10% • Higher net interest paid, reflects higher debt (10.5%) outstanding 3,050 to • Capex up y/y on higher incremen
Slide 19: Strong balance sheet & liquidity position
Strong balance sheet & liquidity position Available liquidity(1) • $3.4B of available liquidity at YE2021 $3.4B • Investment grade debt metrics incl. $0.2B in cash – Net debt leverage ratio expected to be relatively stable in 2022, reflecting payments made for 3.5 GHz *At Dec. 31, 2021 spectrum acqu
Slide 20: Financial targets for 2022
Financial targets for 2022 BCE 2021 2022E Revenue growth 2.5% 1% to 5% Adjusted EBITDA growth 3.0% 2% to 5% Capital intensity 20.6% 21% Adjusted EPS growth 5.6% 2% to 7% Free cash flow growth (10.5%) 2% to 10% Annual common share dividend(1) $3.50 $3.68 (1) Increase to $3.68 per share from $3.50 per
Slide 21: Appendix
Appendix Bell
Slide 22: Key financial assumptions for 2022
Key financial assumptions for 2022 BCE 2021 2022E ($M) except per share data Post-employment benefit plans service cost 266 ~255 Interest on post-employment benefit obligations 20 ~(70) Depreciation & amortization expense 4,609 ~4,700-4,750 Interest expense 1,082 ~1,075-1,125 Average effective tax r
Slide 23: Non-GAAP and other financial measures
Non-GAAP and other financial measures BCE uses various financial measures to assess its business performance. Certain of these measures are calculated in accordance with International Financial Reporting Standards (IFRS or GAAP) while certain other measures do not have a standardized meaning under G
Slide 24: Non-GAAP and other financial measures (cont'd)
Non-GAAP and other financial measures (cont’d) Non-GAAP Financial Measures (cont’d) Adjusted net earnings Adjusted net earnings is a non-GAAP financial measure and it does not have any standardized meaning under IFRS. Therefore, it is unlikely to be comparable to similar measures presented by other
Slide 25: Non-GAAP and other financial measures (cont'd)
Non-GAAP and other financial measures (cont’d) Non-GAAP Financial Measures (cont’d) Available liquidity Available liquidity is a non-GAAP financial measure and it does not have any standardized meaning under IFRS. Therefore, it is unlikely to be comparable to similar measures presented by other issu
Slide 26: Non-GAAP and other financial measures (cont'd)
Non-GAAP and other financial measures (cont’d) Non-GAAP Financial Measures (cont’d) Free cash flow Free cash flow is a non-GAAP financial measure and does not have any standardized meaning under IFRS. Therefore, it is unlikely to be comparable to similar measures presented by other issuers. We defin
Slide 27: Non-GAAP and other financial measures (cont'd)
Non-GAAP and other financial measures (cont’d) Non-GAAP Financial Measures (cont’d) Net debt The term net debt does not have any standardized meaning under IFRS. Therefore, it is unlikely to be comparable to similar measures presented by other issuers. We define net debt as debt due within one year
Slide 28: Non-GAAP and other financial measures (cont'd)
Non-GAAP and other financial measures (cont’d) Non-GAAP Financial Measures (cont’d) Capital expenditures excluding the capital expenditure acceleration program The term capital expenditures excluding the capital expenditure acceleration program does not have any standardized meaning under IFRS. Ther
Slide 29: Non-GAAP and other financial measures (cont'd)
Non-GAAP and other financial measures (cont’d) Non-GAAP Financial Measures (cont’d) Free cash flow excluding the capital expenditure acceleration program The term free cash flow excluding the capital expenditure acceleration program does not have any standardized meaning under IFRS. Therefore, it is
Slide 30: Non-GAAP and other financial measures (cont'd)
Non-GAAP and other financial measures (cont’d) Non-GAAP Financial Measures (cont’d) Free cash flow excluding the capital expenditure acceleration program (cont’d) The following table is a reconciliation of cash flows from operating activities to free cash flow excluding the capital expenditure accel
Slide 31: Non-GAAP and other financial measures (cont'd)
Non-GAAP and other financial measures (cont’d) Non-GAAP Ratios A non-GAAP ratio is a financial measure disclosed in the form of a ratio, fraction, percentage or similar representation and that has a non-GAAP financial measure as one or more of its components. Adjusted EPS Adjusted EPS is a non-GAAP
Slide 32: Non-GAAP and other financial measures (cont'd)
Non-GAAP and other financial measures (cont’d) Non-GAAP Ratios (cont’d) Capital intensity excluding the capital expenditure acceleration program The term capital intensity excluding the capital expenditure acceleration program does not have any standardized meaning under IFRS. Therefore, it is unlik
Slide 33: Non-GAAP and other financial measures (cont'd)
Non-GAAP and other financial measures (cont’d) Total of Segments Measures A total of segments measure is a financial measure that is a subtotal or total of 2 or more reportable segments and is disclosed within the Notes to BCE’s consolidated primary financial statements. Adjusted EBITDA Adjusted EBI
Slide 34: Non-GAAP and other financial measures (cont'd)
Non-GAAP and other financial measures (cont’d) Capital management measures A capital management measure is a financial measure that is intended to enable a reader to evaluate our objectives, policies and processes for managing our capital and is disclosed within the Notes to BCE’s consolidated finan