Slide 1: Q4 2020 Results & 2021 Financial Guidance Call
Q4 2020 Results & 2021 Financial Guidance Call February 4, 2021
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: 2021 strategic priorities & dividend growth
2021 strategic priorities & dividend growth Strategic priorities Dividend growth • 2-year increased capital investment program to • 5.1% increase for 2021 to $3.50 per share accelerate fibre, WTTP and 5G footprint expansion – Effective with Q1’21 payment on April 15, 2021 • Grow Internet penetration
Slide 4: Capital investment acceleration program
Capital investment acceleration program • 2-year plan to accelerate fibre, Wireless Home $1B-$1.2B Internet and 5G footprints over 2 years* – Funded with ~$1B in proceeds from sale of data centres 2021: ~60%-70% • Accelerated capital cost allowance program in 2022: ~30%-40% place for another 2 years
Slide 5: Network footprint advancement
Network footprint advancement 2021 plan • Growing combined FTTP and WTTP footprints Without With by ~850k-900k homes and businesses in 2021 advancement advancement • 62% of planned combined fibre and Wireless FTTP Locations Home Internet buildout program completed by end of 2021 ~400k-450k ~600k-650
Slide 6: Operational highlights & progress on strategic imperatives
Operational highlights & progress on strategic imperatives • Achieved 96% of 2019 adjusted EBITDA and generated $3.35B of FCF in 2020 despite COVID – Sequential improvement in operating results every quarter since start of COVID • 147K total wireless, retail Internet and IPTV net additions in Q4 • T
Slide 7: Q4 operating metrics
Q4 operating metrics Bell Wireless Bell Wireline Bell Media • 87K postpaid mobile phone net • 45K retail Internet net additions, up • Advertiser demand continuing to subscribers added(1), up 27% y/y 25% on growth across all brands steadily recover – 93k total postpaid net additions – 17% y/y expansi
Slide 8: Financial Results
Financial Results Bell
Slide 9: Q4 financial review
Q4 financial review ($M) except per share data Q4’20 Y/Y 2020 Y/Y Revenue 6,102 (2.8%) 22,883 (3.8%) Service 5,090 (2.8%) 19,832 (3.6%) Product 1,012 (2.7%) 3,051 (5.5%) Adjusted EBITDA 2,404 (3.2%) 9,607 (4.0%) Margin 39.4% (0.2 pts) 42.0% (0.1 pts) Net earnings 932 28.9% 2,699 (17.0%) Statutory EP
Slide 10: Wireless financials
Wireless financials Revenue • Total revenue down 1.9% in Q4 ($M) -3.5% • Continued steady improvement in quarterly 9,001 service revenue decline 8,683 – 2.5% decrease in Q4 reflects reduction in roaming due -1.9% to COVID travel restrictions and lower data overage – Q4 service revenue up ~1% normali
Slide 11: Wireline financials
Wireline financials Revenue • Q4 revenue decline of 1.3% similar to previous ($M) quarters in 2020 -0.9% – Q4’19 benefitted from non-recurring revenue items 12,317 12,206 • Total Internet revenue up 12% y/y in Q4 -1.3% 3,135 • 1.5% residential revenue growth — strongest 3,095 quarterly performance i
Slide 12: Media financials
Media financials Revenue • Further sequential quarterly improvement in ($M) overall financial results reflects stronger TV advertiser demand, Crave growth, and lower -14.5% programming and production costs 3,217 2,750 -10.0% • Q4 advertising revenue down 13% vs. 22% in Q3 879 791 • Adjusted EBITDA d
Slide 13: 2021 financial outlook
2021 financial outlook Bell
Slide 14: Revenue & adjusted EBITDA outlook
Revenue & adjusted EBITDA outlook BCE revenue • Positive growth in 2021 for all Bell segments – COVID turbulence expected to persist ($M) 2%-5% growth • Strong wireless growth – Focus on higher quality smartphone activations and lower device discounting – Roaming remains headwind with modest y/y imp
Slide 15: Pension funding & expense
Pension funding & expense BCE cash funding ($M) • Aggregate of all BCE pension plans in surplus position at YE2020 358 ~350-375 – Bell Canada plan solvency ratio over 102% vs. ~100% at YE2019 • 14% return on plan assets and ~65-70 bps decline in solvency discount rates in 2020 • Cash pension funding
Slide 16: Tax outlook
Tax outlook BCE cash income taxes ($M) Income tax expense • Statutory tax rate unchanged y/y at 27.0% • 2021 effective tax rate in line with statutory rate 846 ~800-900 – Lower y/y tax adjustments – Higher taxable income vs. COVID-impacted 2020 Cash income taxes • Cash tax savings from accelerated c
Slide 17: Adjusted EPS outlook
Adjusted EPS outlook Adjusted EPS(1) ($) • Adjusted EBITDA growth main driver of higher adjusted earnings in 2021 Tax adjustments 3.05-3.20 • Depreciation & amortization expense ~$200M- $250M higher y/y, due to growth in capital assets 3.02 ~1%–6% growth including from our capex acceleration program
Slide 18: Free cash flow outlook
Free cash flow outlook Free cash flow (1) ($M) • Flow-through from higher y/y adjusted EBITDA Accelerated capital investment • Pension funding, cash taxes and net interest paid relatively stable y/y 3,550-3,900 • Capex up y/y on accelerated capital spending ~6%–16% – Absolute dollar capex ~$400M hig
Slide 19: Healthy balance sheet and liquidity position
Healthy balance sheet and liquidity position Available liquidity • $3.8B of available liquidity at YE2020 • Investment grade credit ratings $3.8B – Net debt leverage ratio higher in 2021, due to expected 3.5 GHz spectrum purchases and *At December 31, 2020 accelerated capital investment program • No
Slide 20: Financial targets for 2021
Financial targets for 2021 BCE Revenue growth 2% to 5% Adjusted EBITDA growth 2% to 5% Capital intensity 18% to 20% Adjusted EPS growth(1) 1% to 6% Free cash flow(2) $2,850M to $3,200M Annualized common dividend(3) $3.50 per share (1) Before severance, acquisition and other costs, net mark-to-market