Slide 1: Q4 2023 Results & 2024 Financial Guidance Call
Q4 2023 Results & 2024 Financial Guidance Call February 8, 2024
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: Executing on key 2023 strategic priorities
Executing on key 2023 strategic priorities Financial • Achieved all 2023 guidance targets performance • Maintained stable y/y adjusted EBITDA margin(1) of 42.2% • Expanded pure fibre footprint in 2023 by targeted ~650K new locations – Leading Multi-Gig service eligibility with 3 Gbps symmetrical spe
Slide 4: Executing on key 2023 strategic priorities (cont’d)
Executing on key 2023 strategic priorities (cont’d) Broadband • Continued strong FTTH Internet subscriber momentum growth & • Residential Internet revenue up 7.1% y/y multi-product bundling • Mobility + Internet customer activations up 27% in 2023 • Digital revenue(1) up 19% in 2023 and now comprise
Slide 5: Capex and workforce restructuring
Capex and workforce restructuring Capex reduction & de-emphasis of Workforce reductions declining businesses • Fibre network build continuing, but at a slower • Reducing workforce by ~4,800 in 2024 pace due to CRTC wholesale decision – Includes elimination of ~750 contractors – Fibre deployment targ
Slide 6: Laying the foundation for future growth
Laying the foundation for future growth • Strategic distribution partnership with Best Buy Canada • Acquisition of FX Innovation Accelerating • ServiceNow partnership, the leading digital workflow company investments in key • Distribution of Crave on Amazon Prime Video Channels growth areas • Scalin
Slide 7: 2024 dividend increase
2024 dividend increase • $0.12 increase for 2024 to $3.99 per share – Effective with Q1’24 payment on April 15th 3.1% • Maintaining commitment to dividend growth objective Common share dividend increase for 2024 • 3.1% dividend growth rate for 2024 reflects current circumstances – Current BCE share
Slide 8: Financial & Operating Results
Financial & Operating Results
Slide 9: Consolidated financial results
Consolidated financial results ($M) except per share data Q4’23 Y/Y 2023 Y/Y Revenue 6,473 0.5% 24,673 2.1% Service 5,348 (0.1%) 21,154 0.9% Product 1,125 3.6% 3,519 9.4% Adjusted EBITDA(1) 2,567 5.3% 10,417 2.1% Margin 39.7% 1.9 pts 42.2% 0.0 pts Net earnings 435 (23.3%) 2,327 (20.5%) Statutory EPS
Slide 10: Bell Communication & Technology Services
Bell Communication & Technology Services Revenue ($M) Q4 operating metrics • 128,715 mobile phone postpaid net adds +2.9% – 2nd highest Q4 consumer postpaid net adds after Q4’22 21,926 • Mobile phone ARPU up 0.4% y/y to $58.71 21,301 +1.7% • 55,591 total retail Internet net adds 5,744 – 2nd best Q4
Slide 11: Bell Media
Bell Media Revenue ($M) Q4 operating Metrics • Digital revenues up 27% y/y (4.2%) • ~3.1M Crave subscribers – DTC subscribers up 14% 3,254 3,117 • TSN and RDS are leading sports networks(1) (7.5%) – TSN: #1 specialty TV channel overall 889 – RDS: top non-news specialty TV channel overall 822 • Frenc
Slide 12: 2024 financial outlook
2024 financial outlook Bell
Slide 13: Revenue and adjusted EBITDA outlook
Revenue and adjusted EBITDA outlook BCE revenue ($M) • Bell CTS underpinned by strong subscriber and business service solutions growth – Continued focus on premium mobile phone customer loadings 0%-4% with increased emphasis on market growth +2.1% – Leverage existing fibre footprint, network speed l
Slide 14: Adjusted EPS outlook
Adjusted EPS outlook Adjusted EPS ($) • ~$200M y/y increase in interest expense reflects higher outstanding debt level and higher rates (4.2%) • Depreciation and amortization expense up ~$100M y/y, reflecting significant, but reduced, (7%)-(2%) capex investment in fibre and mobile 5G 3.21 2.98 • Net
Slide 15: Free cash flow outlook
Free cash flow outlook Free cash flow ($M) • Significant one-time severance payments related to 2024 workforce restructuring initiative – ~$400M in 2024 related to ~4,800 employee reduction vs. ~$70M in 2023 related to ~1,300 employee reduction +2.5% • ~$300M increase in interest paid driven by (11%
Slide 16: Balance sheet & liquidity position
Balance sheet & liquidity position • $5.8B total available liquidity going into 2024 Available liquidity(1) • Net debt leverage ratio in 2024 expected to remain relatively stable y/y $5.8B – 2024 maturities totalling ~$2B already largely pre-funded incl. $547M in cash – Secured 3800 MHz spectrum for
Slide 17: Financial targets for 2024
Financial targets for 2024 BCE 2023 guidance 2023 results 2024 guidance Revenue growth 1% to 5% 2.1% 0% to 4% Adjusted EBITDA growth 2% to 5% 2.1% 1.5% to 4.5% Capital intensity(1) 19% to 20% 18.6% <16.5% Adjusted EPS growth(2) (7%) to (3%) (4.2%) (7%) to (2%) Free cash flow growth(3) 2% to 10% 2.5%
Slide 18: Appendix
Appendix Bell
Slide 19: Key financial assumptions for 2024
Key financial assumptions for 2024 BCE ($M except per share data) 2023 2024E Post-employment benefit plans service cost 206 ~215 Net return on post-employment benefit plans 108 ~70 Depreciation & amortization expense 4,918 ~5,000 to 5,050 Interest expense 1,475 ~1,650 to 1,700 Average effective tax
Slide 20: 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 21: 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 22: 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 23: 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 24: 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 25: 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 26: 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 27: 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