This news release contains forward-looking statements. For a
description of the related risk factors and assumptions, please see
the section entitled "Caution Regarding Forward-Looking Statements"
later in this news release.
- BCE revenue grows 1.2%, adjusted EBITDA up 0.5%,
representing the first quarter of growth since the beginning of the
COVID-19 crisis
- Broadband additions up 51% year over year – 108,468 total
combined wireless mobile phone and mobile connected device, retail
Internet and IPTV net additions
- 32,925 postpaid mobile phone net additions, up 31,366; net
mobile connected device additions grew 51% to 74,159
- 21,208 retail Internet net additions with 12% Internet
revenue growth; 10,696 IPTV net additions represent first quarter
of year-over-year growth since Q1 2019
- Broadband network acceleration program under way with over
$1 billion in capital invested in Q1;
on track to reach up to 6.9 million total fibre and WHI connections
by year end
- Strong financial position with $6.5
billion of available liquidity at the end of Q1; cash flows
from operating activities up 37.3% to $1,992
million, driving 54% higher year-over-year free cash flow of
$940 million
- Net earnings of $687 million
with net earnings attributable to common shareholders of
$642 million, or $0.71 per common share; adjusted net earnings of
$704 million generated adjusted EPS
of $0.78, down 1.3%
MONTRÉAL, April 29, 2021 /CNW
Telbec/ - BCE Inc. (TSX: BCE), (NYSE: BCE) today reported results
for the first quarter (Q1), including the first quarter of positive
revenue and adjusted EBITDA growth since the beginning of the
COVID-19 crisis, and significant progress in Bell's broadband
network acceleration program.
"As we celebrate the 141st anniversary of Bell's
founding in Montréal today, our Q1 results highlight how the Bell
team continues to step up to support our customers and communities
in 2021. Keeping the country connected and informed while building
momentum in a recovering economy, Bell delivered continued
sequential quarterly improvement in our results, including positive
revenue and adjusted EBITDA growth for the first time since the
beginning of the COVID crisis," said Mirko
Bibic, President and CEO of BCE Inc. and Bell Canada. "As we all deal with the ongoing
social and economic challenges of COVID-19, Bell is focused on
advancing how Canadians connect with each other and the world.
Building the best networks, launching innovative services and
delivering the most compelling content is supporting an improved
growth trajectory for Canada's largest communications company and
delivering positive benefits for all our stakeholders."
"The speed and quality of our networks, the exclusive services
that leverage them and our team's commitment to champion customer
experience helped grow Bell's broadband market share in Q1 with
108,468 net new mobile, retail Internet and IPTV customers – a 51%
increase over Q1 last year – alongside continued leadership in
traditional and digital media platforms," said Mr. Bibic. "We're
building on this success with our accelerated fibre, rural and 5G
network rollout program now under way to support Canada's ongoing
recovery and long-term broadband leadership, reflected in our
significantly increased capital investment and network connection
numbers in Q1, as we also continue to invest in our communities.
Consistently ranked as one of Canada's greenest companies and a key
enabler of a sustainable economy, Bell is leading the way in
international environmental certification and our commitment to
carbon neutral operations in 2025. With the continuing crisis
impacting the mental health of students across the country, Bell
Let's Talk was proud to invest in colleges and universities across
the country to support their rollout of new mental health national
standards for post-secondary students."
KEY BUSINESS DEVELOPMENTS
Bell's continued ESG leadership
Bell was again named
one of Canada's Greenest Employers, the only national
communications provider to be ranked for a fifth straight year;
became the first North American communications company to receive
ISO 50001 certification for energy management; and announced our
plan to achieve carbon neutral operations in 2025. Bell launched
commercial availability of highly energy efficient 400G wavelength
service for cloud providers, data centre operators and others
moving massive amounts of data; an innovative solar powered cell
site project in Abitibi-Témiscamingue; and trials of aluminium
tower structures sourced from local materials in Saguenay. With
COVID-19 heightening mental health impacts on students on campus
and studying remotely across Canada, the Bell Let's Talk
Post-Secondary Fund announced more than $3 million in grants to 123 colleges and
universities nationwide to support implementation of the National
Standard of Canada for Mental Health and Well-Being for
Post-Secondary Students and the Québec Action Plan on Student
Mental Health for Higher Education.
Build the best networks: Top speeds, coverage
acceleration
Executing our accelerated network investment
plan, Bell increased capital expenditures by 30% compared to Q1
2020, delivering even more broadband connections to help enable
Canada's social and economic recovery from COVID-19. Canada's
fastest-ranked network, Bell 5G coverage grew to more than 30% of
the national population in Q1, and we brought fibre and rural
Wireless Home Internet access to 148,000 more homes and businesses.
Bell announced new partnerships with the federal and provincial
governments to bring broadband access to hard-to-serve areas,
including Québec's Operation High Speed project, the
federal Universal Broadband Fund and multiple initiatives
in Atlantic Canada.
Driving growth with innovative services
Leading the
way in 5G service innovation, we launched TSN 5G View / Vision 5G
RDS, an immersive in-game sports viewing experience powered by the
Bell 5G network. The feature lets fans control how they watch the
action directly from their Bell smartphones, including Montreal
Canadiens and Toronto Maple Leafs home games, while enhancing TSN
and RDS broadcasts with announcer and analyst up-close access
through the service's 80 in-arena cameras. Bell and Honda Canada
announced a new connected car partnership equipping Honda and Acura
vehicles with Built-in Wi-Fi hotspots powered by the Bell LTE
network.
Champion customer experience
Our focus on making it
easier to do business with Bell continues to drive industry-leading
improvement according to the mid-year report from the Commission
for Complaints for Telecom-television Services (CCTS). For 6 years
in a row, Bell has led all major Canadian carriers in reducing
customer complaints to the CCTS – which again dropped 17% from
August 2020 to January 2021. Our high-profile support for
customers and communities throughout the COVID crisis is reflected
in Bell remaining the most valuable communications brand in
Canada in the latest Brand Finance
report.
Deliver the most compelling content
Leveraging our
content and digital leadership, Bell Media and AT&T's
Xandr are working together to deliver Canada's first digital
self-serve platform for advertisers. Accelerating media innovation
in Québec, Noovo launched the Noovo Info news service, lifestyle
destination NoovoMoi.ca and the enhanced Noovo.ca and new Noovo
App, offering over 5,000 hours of French-language content from Bell
Media channels. High-demand programming like Zack Snyder's Justice
League, the #1 title ever on Crave boosted total Crave
subscribers 12% year over year to 2.9 million, while Super Bowl LV
attracted the big game's third-largest Canadian audience ever on
CTV, TSN and RDS. Bell and our production partners received 181
nominations for the 2021 Canadian Screen Awards.
BCE Q1 RESULTS
Financial Highlights
($ millions except
per share amounts) (unaudited)
|
Q1
2021
|
Q1
2020
|
%
change
|
BCE
|
|
|
|
Operating
revenues
|
5,706
|
5,640
|
1.2%
|
Net
earnings
|
687
|
733
|
(6.3%)
|
Net earnings
attributable to common shareholders
|
642
|
680
|
(5.6%)
|
Adjusted net
earnings(1)
|
704
|
714
|
(1.4%)
|
Adjusted
EBITDA(2)
|
2,429
|
2,418
|
0.5%
|
Net earnings per
common share (EPS)
|
0.71
|
0.75
|
(5.3%)
|
Adjusted
EPS(1)
|
0.78
|
0.79
|
(1.3%)
|
Cash flows from
operating activities
|
1,992
|
1,451
|
37.3%
|
Capital
expenditures
|
(1,012)
|
(777)
|
(30.2%)
|
Free cash
flow(3)
|
940
|
611
|
53.8%
|
"Bell's Q1 results represent a promising start to the year,
reflecting significantly better performance trajectories and steady
sequential quarterly improvement across all our business segments,"
said Glen LeBlanc, Chief Financial
Officer for BCE and Bell Canada.
"Bell's strengthening performance, including ongoing strong free
cash flow generation, further solidified our very healthy financial
position, with $6.5 billion of
available liquidity at the end of Q1 and a historic pension plan
solvency surplus position that bodes well for the possibility of a
pension contribution holiday on our larger defined benefits plans
in the near future. As we re-confirm our guidance targets for 2021.
Bell is well positioned to execute our network acceleration plans,
including participation in the upcoming federal 5G spectrum
auction, while delivering sustainable dividend growth to our
shareholders."
- BCE delivered positive operating revenue growth in Q1 despite
the ongoing impacts of COVID-19 on consumer and commercial
activity. Total operating revenue was up 1.2% over Q1 2020 to
$5,706 million, driven by 18.6%
growth in product revenue to $738
million from increased sales of premium mobile phones and
business telecom data equipment. Service revenue declined 1.0% to
$4,968 million, due mainly to
year-over-year declines in wireless roaming, media advertising and
business customer spending on wireline services.
- Net earnings declined 6.3% to $687
million and net earnings attributable to common shareholders
totalled $642 million, or
$0.71 per share, down 5.6% and 5.3%
respectively. The decreases were due to higher severance,
acquisition and other costs as well as higher depreciation and
amortization expense, partly offset by higher adjusted EBITDA and
higher other income.
- Adjusted net earnings were $704
million, or $0.78 per common
share, down 1.4% and 1.3% respectively from $714 million, or $0.79 per common share, in Q1 2020.
- Adjusted EBITDA grew 0.5% to $2,429
million, driven by a 2.1% increase at Bell Wireline and
partly offset by declines of 0.5% at Bell Wireless and 7.7% at Bell
Media. BCE's consolidated adjusted EBITDA margin decreased 0.3
percentage points to 42.6%, due to the flow-through impact of lower
year-over-year service revenue and higher low-margin product
sales.
- BCE capital expenditures increased 30.2% to $1,012 million for a capital
intensity(4) ratio of 17.7%, compared to 13.8% in Q1
2020. The year-over-year increase in capital spending is consistent
with our 2-year program to accelerate the rollout of Bell's
broadband fibre and Wireless Home Internet networks and the
expansion of mobile 5G.
- BCE cash flows from operating activities totalled $1,992 million, up 37.3% from Q1 2020. The
increase was driven by higher cash from working capital and lower
income taxes.
- Free cash flow increased 53.8% to $940
million, compared to $611
million in Q1 2020, due to higher cash flows from operating
activities, excluding cash from discontinued operations and
acquisition and other costs paid, partly offset by higher capital
expenditures.
BCE OPERATING RESULTS BY SEGMENT
Bell Wireless
Effective January
1, 2021, we changed our reporting of wireless subscriber
results and associated operating metrics, such as ABPU and churn,
to disclose mobile phones and mobile connected devices, which
includes IoT devices, separately. For comparability, we have
restated our 2020 quarterly wireless subscriber results and related
operating metrics where applicable to reflect these changes. Our
revised reporting reflects our strategic focus on higher-value
mobile phone subscribers, enhances the transparency of our wireless
subscriber metrics disclosure and aligns with industry peers.
- Total wireless operating revenue increased 3.2% to $2,100 million.
- Service revenue was down 2.1% to $1,514
million, the result of lower roaming revenue due to
decreased travel during COVID-19, and reduced data overage as
customers continued to adopt plans with higher data thresholds,
including unlimited and shareable options.
- Product revenue increased 20.1% to $586
million, reflecting a greater sales mix of premium mobile
phones and stronger year-over-year consumer electronic sales at The
Source, including significantly increased online shopping.
- Reflecting the decreases in high-margin roaming and data
overage revenue, wireless adjusted EBITDA decreased 0.5% to
$923 million, resulting in a 1.6
percentage-point drop in margin to 44.0%.
- Bell added 2,405 total net new postpaid and prepaid mobile
phone customers(4), compared to a net loss of 2,496 in
Q1 last year.
- Postpaid mobile phone net additions totalled 32,925, up from
1,559 in Q1 2020. The significant year-over-year improvement
reflects an 18.8% increase in gross additions, due to our emphasis
on higher-value accretive smartphone transactions and higher sales
through direct channels. Postpaid mobile phone customer churn
remained stable at 0.89%.
- Bell's prepaid mobile phone base decreased by 30,520 net
subscribers, compared to a net loss of 4,055 in Q1 2020. Lower
overall market activity reflected a slowdown in immigration and
international travel to Canada during COVID-19, as well as reduced
retail store traffic, resulting in 26.5% fewer gross additions
compared to last year. Mobile phone prepaid customer churn improved
0.35 percentage points to 4.68%.
- Bell's mobile phone customer base totalled 9,166,748 at the end
of Q1, a 2.2% increase over last year, comprising 8,361,264
postpaid subscribers, up 2.3%, and 805,484 prepaid customers, up
1.5%.
- Mobile phone blended average billing per user (ABPU) decreased
3.4% to $70.34, reflecting reduced
roaming and reductions in data overage revenue.
- Mobile connected device net activations increased 51.5% to
74,159 with increased demand for Bell IoT solutions, including
connected car subscriptions. Mobile connected device subscribers
totalled 2,130,312 at the end of Q1, an increase of 13.5% over last
year.
Bell Wireline
- Total wireline operating revenue increased 1.5% in Q1 to
$3,081 million.
- Despite lower spending by large business customers and volume
declines in small business due to COVID-19, wireline service
revenue was up 0.9% to $2,927 million
as Internet revenue increased 12% over last year.
- Product revenue increased 14.1% to $154
million compared to Q1 2020, due mainly to higher sales of
data equipment to the government sector.
- Wireline adjusted EBITDA grew 2.1% to $1,363 million, reflecting the flow-through of
higher year-over-year revenue. This drove a 0.2 percentage-point
improvement in margin to 44.2%. Consistent with the year-over-year
growth in revenue, operating costs increased 1.0%.
- Bell added 21,208 new retail Internet customers, compared to
22,595 in Q1 2020. Within Bell's direct fibre footprint, retail
Internet net additions were 36,806, up 43.2%. Retail Internet
customers totalled 3,730,576 at the end of Q1, a 4.3% increase over
Q1 last year.
- Bell TV added 10,696 net new retail IPTV subscribers, up from
2,852 in Q1 2020, representing our first quarter of year-over-year
growth in 2 years. The positive result reflects improved Bell Fibe
TV performance, strong demand for the new Virgin TV service and
lower customer churn, particularly in our IPTV fibre
footprint.
- Retail satellite TV net customer losses improved 7.5% to
19,808, due to fewer customer deactivations during COVID-19 and
improved small business net activations.
- At the end of Q1, Bell had a combined total of 2,723,368 retail
IPTV and satellite TV subscribers, down 1.1% from Q1 2020.
- Retail residential NAS net losses improved 17.1% to 51,069,
reflecting fewer customer deactivations during COVID-19. Bell's
retail residential NAS customer base totalled 2,432,863 at the end
of Q1, a 7.7% decline from last year.
Bell Media
- Media operating revenue decreased 5.2% to $713 million, due to continued weak advertiser
spending in out of home and radio, partly offset by higher
year-over-year TV advertising driven by stronger sports and news
specialty performance, and the incremental contribution from our
French-language network Noovo.
- Subscriber revenue was slightly lower compared to Q1 2020, due
to the timing of contract renewals with some Canadian TV
distributors that was largely offset by higher revenue from Crave
streaming subscriber growth. Crave subscribers increased 12% over
last year to surpass 2.9 million total customers in Q1.
- TSN remained Canada's #1 sports network and top specialty
channel overall in Q1, and made history with the first all-female
broadcast team of an NBA game in March; RDS remained the top
French-language sports network with strong growth in key
audiences.
- Noovo also grew its market share with key demographics by 3.7
points and increased primetime viewership by 34%.
- Adjusted EBITDA decreased 7.7% to $143
million due to the flow-through impact of lower revenue,
resulting in a 0.5 percentage point reduction in margin to 20.1%.
This was partly offset by a 4.5% improvement in operating costs,
reflecting TV production shutdowns and delays, labour savings and
the temporary waiving of CRTC Part I and Part II broadcasting
licence fees due to COVID-19.
COMMON SHARE DIVIDEND
BCE's Board of Directors has
declared a quarterly dividend of $0.875 per common share, payable on July 15, 2021 to shareholders of record at the
close of business on June 15,
2021.
OUTLOOK FOR 2021
BCE confirmed its financial guidance
targets for 2021, as provided on February 4,
2021, as follows:
|
February 4
Guidance
|
April
29
Guidance
|
Revenue
growth
|
2% – 5%
|
On track
|
Adjusted EBITDA
growth
|
2% – 5%
|
On track
|
Capital
intensity
|
18% – 20%
|
On track
|
Adjusted EPS
growth
|
1% – 6%
|
On track
|
Free cash flow
($M)
|
$2,850 –
$3,200
|
On track
|
Annualized common
dividend per share
|
$3.50
|
$3.50
|
Due to uncertainties relating to the severity and duration of
the COVID-19 pandemic, including the current resurgence and
possible future resurgences in the number of COVID-19 cases, and
various potential outcomes, it is difficult at this time to
estimate the impacts of the COVID-19 pandemic on our business or
future financial results and related assumptions. Our business and
financial results could continue to be significantly and negatively
impacted in future periods. The extent to which the COVID-19
pandemic will continue to adversely impact us will depend on future
developments that are difficult to predict, including the
prevalence of COVID-19 variants that are more contagious and may
lead to increased health risks, the timely distribution of
effective vaccines and treatments, and the potential development
and distribution of new vaccines and treatments, as well as new
information which may emerge concerning the severity, duration and
resurgences of the COVID-19 pandemic and the actions required to
contain the coronavirus or remedy its impacts, among others. Please
see the section entitled "Caution Regarding Forward-Looking
Statements" later in this news release for a description of the
principal assumptions on which BCE's 2021 financial guidance
targets are based, as well as the principal related risk
factors.
CALL WITH FINANCIAL ANALYSTS
BCE will hold a
conference call for financial analysts to discuss Q1 2021 results
on Thursday, April 29 at 8:00 am eastern. Media are welcome to participate
on a listen-only basis. To participate, please dial toll-free
1-800-806-5484 or 416-340-2217 and enter passcode 9028147#. A
replay will be available until midnight on May 29, 2021 by dialing 1-800-408-3053 or
905-694-9451 and entering passcode 1119668#.
A live audio webcast of the conference call will be available on
BCE's website at BCE Q1-2021 conference call.
NOTES
The information contained in this news release
is unaudited.
(1) The terms adjusted net earnings and adjusted EPS do not have
any standardized meaning under IFRS. Therefore, they are unlikely
to be comparable to similar measures presented by other issuers. We
define adjusted net earnings as net earnings attributable to common
shareholders before severance, acquisition and other costs, net
mark-to-market losses (gains) on derivatives used to economically
hedge equity settled share-based compensation plans, net losses
(gains) on investments, early debt redemption costs, impairment of
assets and discontinued operations, net of tax and non-controlling
interest (NCI). We define adjusted EPS as adjusted net earnings per
BCE common share. We use adjusted net earnings and adjusted EPS,
and we believe certain investors and analysts use these measures,
among other ones, to assess the performance of our businesses
without the effects of severance, acquisition and other costs, net
mark-to-market losses (gains) on derivatives used to economically
hedge equity settled share-based compensation plans, net losses
(gains) on investments, early debt redemption costs, impairment of
assets and discontinued operations, net of tax and NCI. We exclude
these items because they affect the comparability of our financial
results and could potentially distort the analysis of trends in
business performance. Excluding these items does not imply they are
non-recurring. The most comparable IFRS financial measures are net
earnings attributable to common shareholders and EPS. The following
table is a reconciliation of net earnings attributable to common
shareholders and EPS to adjusted net earnings on a consolidated
basis and per BCE common share (adjusted EPS), respectively.
($ millions except per share amounts)
|
Q1 2021
|
Q1 2020
|
|
TOTAL
|
PER
SHARE
|
TOTAL
|
PER SHARE
|
Net earnings
attributable to common shareholders
|
642
|
0.71
|
680
|
0.75
|
Severance,
acquisition and other costs
|
65
|
0.07
|
12
|
0.01
|
Net mark-to-market
(gains) losses on derivatives used to
economically hedge equity settled share-based compensation
plans
|
(44)
|
(0.04)
|
20
|
0.03
|
Net gains on
investments
|
-
|
-
|
(10)
|
(0.01)
|
Early debt redemption
costs
|
39
|
0.04
|
12
|
0.01
|
Impairment of
assets
|
2
|
-
|
5
|
0.01
|
Net earnings from
discontinued operations
|
-
|
-
|
(5)
|
(0.01)
|
Adjusted net
earnings
|
704
|
0.78
|
714
|
0.79
|
|
|
|
|
|
|
(2) The terms adjusted EBITDA and adjusted EBITDA margin do not
have any standardized meaning under IFRS. Therefore, they are
unlikely to be comparable to similar measures presented by other
issuers. We define adjusted EBITDA as operating revenues less
operating costs, as shown in BCE's consolidated income statements.
Adjusted EBITDA for BCE's segments is the same as segment profit as
reported in Note 3, Segmented information, in BCE's Q1 2021
consolidated Financial Statements. We define adjusted EBITDA margin
as adjusted EBITDA divided by operating revenues. We use adjusted
EBITDA and adjusted EBITDA margin to evaluate the performance of
our businesses as they reflect their ongoing profitability. We
believe certain investors and analysts use adjusted EBITDA to
measure a company's ability to service debt and to meet other
payment obligations or as a common measurement to value companies
in the telecommunications industry. We believe that certain
investors and analysts also use adjusted EBITDA and adjusted EBITDA
margin to evaluate the performance of our businesses. Adjusted
EBITDA is also one component in the determination of short-term
incentive compensation for all management employees. Adjusted
EBITDA and adjusted EBITDA margin have no directly comparable IFRS
financial measure. Alternatively, the following table provides a
reconciliation of net earnings to adjusted EBITDA.
($ millions)
|
Q1
2021
|
Q1
2020
|
Net
earnings
|
687
|
733
|
Severance,
acquisition and other costs
|
89
|
16
|
Depreciation
|
895
|
858
|
Amortization
|
238
|
230
|
Finance
costs
|
|
|
Interest
expense
|
267
|
277
|
Interest on
post-employment benefit obligations
|
5
|
12
|
Impairment of
assets
|
3
|
7
|
Other (income)
expense
|
(8)
|
47
|
Income
taxes
|
253
|
243
|
Net earnings from
discontinued operations
|
-
|
(5)
|
Adjusted
EBITDA
|
2,429
|
2,418
|
BCE operating
revenues
|
5,706
|
5,640
|
Adjusted EBITDA
margin
|
42.6%
|
42.9%
|
(3) The term free cash flow does not have any standardized
meaning under IFRS. Therefore, it is unlikely to be comparable to
similar measures presented by other issuers. We define free cash
flow as cash flows from operating activities, excluding cash from
discontinued operations, acquisition and other costs paid (which
include significant litigation costs) and voluntary pension
funding, less capital expenditures, preferred share dividends and
dividends paid by subsidiaries to NCI. We exclude cash from
discontinued operations, acquisition and other costs paid and
voluntary pension funding because they affect the comparability of
our financial results and could potentially distort the analysis of
trends in business performance. Excluding these items does not
imply they are non-recurring. We consider free cash flow to be an
important indicator of the financial strength and performance of
our businesses because it shows how much cash is available to pay
dividends on common shares, repay debt and reinvest in our company.
We believe certain investors and analysts use free cash flow to
value a business and its underlying assets and to evaluate the
financial strength and performance of our businesses. The most
comparable IFRS financial measure is cash flows from operating
activities. The following table is a reconciliation of cash flows
from operating activities to free cash flow on a consolidated
basis.
($ millions)
|
Q1 2021
|
Q1 2020
|
Cash flows from
operating activities
|
1,992
|
1,451
|
Capital expenditures
|
(1,012)
|
(777)
|
Cash dividends paid
on preferred shares
|
(31)
|
(36)
|
Cash dividends paid
by subsidiaries to NCI
|
(13)
|
(14)
|
Acquisition and other
costs paid
|
4
|
9
|
Cash from
discontinued operations (included in cash flows from operating
activities)
|
-
|
(22)
|
Free cash
flow
|
940
|
611
|
(4) We use ABPU, churn, capital intensity and subscriber
units to measure the success of our strategic imperatives. These
key performance indicators are not accounting measures and may not
be comparable to similar measures presented by other issuers.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Certain
statements made in this news release are forward-looking
statements. These statements include, without limitation,
statements relating to BCE's financial guidance (including
revenues, adjusted EBITDA, capital intensity, adjusted EPS and free
cash flow), BCE's 2021 annualized common share dividend, BCE's
network deployment and capital investment plans, including its
two-year increased capital investment program to accelerate
broadband network and 5G footprint expansion, the potential impacts
on our business, financial condition, liquidity and financial
results of the COVID-19 pandemic, our post-employment benefit plans
funding, BCE's business outlook, objectives, plans and strategic
priorities, and other statements that are not historical facts.
Forward-looking statements are typically identified by the words
assumption, goal, guidance, objective, outlook, project,
strategy, target and other similar expressions or future or
conditional verbs such as aim, anticipate, believe, could,
expect, intend, may, plan, seek, should, strive and
will. All such forward-looking statements are made pursuant
to the 'safe harbour' provisions of applicable Canadian securities
laws and of the United States
Private Securities Litigation Reform Act of 1995.
Forward-looking statements, by their very nature, are subject to
inherent risks and uncertainties and are based on several
assumptions, both general and specific, which give rise to the
possibility that actual results or events could differ materially
from our expectations expressed in or implied by such
forward-looking statements and that our business outlook,
objectives, plans and strategic priorities may not be achieved.
These statements are not guarantees of future performance or
events, and we caution you against relying on any of these
forward-looking statements. The forward-looking statements
contained in this news release describe our expectations as of
April 29, 2021 and, accordingly, are
subject to change after such date. Except as may be required by
applicable securities laws, we do not undertake any obligation to
update or revise any forward-looking statements contained in this
news release, whether as a result of new information, future events
or otherwise. From time to time, we consider potential
acquisitions, dispositions, mergers, business combinations,
investments, monetizations, joint ventures and other transactions,
some of which may be significant. Except as otherwise indicated by
us, forward-looking statements do not reflect the potential impact
of any such transactions or of special items that may be announced
or that may occur after April 29,
2021. The financial impact of these transactions and special
items can be complex and depends on the facts particular to each of
them. We therefore cannot describe the expected impact in a
meaningful way or in the same way we present known risks affecting
our business. Forward-looking statements are presented in this news
release for the purpose of assisting investors and others in
understanding certain key elements of our expected financial
results, as well as our objectives, strategic priorities and
business outlook, and in obtaining a better understanding of our
anticipated operating environment. Readers are cautioned that such
information may not be appropriate for other purposes.
Material Assumptions
A number of economic, market,
operational and financial assumptions were made by BCE in preparing
its forward-looking statements contained in this news release,
including, but not limited to the following:
Canadian Economic Assumptions
Our
forward-looking statements are based on certain assumptions
concerning the Canadian economy, which in turn depend on important
assumptions about how the COVID-19 pandemic will evolve, including
the progress of the global vaccination rollout. Notably, it is
assumed that broad immunity is achieved by mid-2021 in the U.S.;
later in 2021 in Canada, other
advanced economies and China; and
in 2022 in other emerging-market economies. In particular, we have
assumed:
- Strong rebound in economic growth as the economy recovers from
the significant impacts of the COVID-19 pandemic, given the Bank of
Canada's most recent estimated growth in Canadian gross domestic
product of around 6.5% on average in 2021, representing an increase
from the earlier estimate of around 4%
- Improving consumer confidence as vaccinations roll out and
restrictions are eased
- Strengthening business investment outside the oil and gas
sector as uncertainty recedes
- Employment gains expected in 2021, despite ongoing challenges
in some sectors
- Accelerating trend toward e-commerce
- Low immigration levels until international travel and/or
health-related restrictions are lifted
- Prevailing low interest rates expected to remain at or near
current levels for the foreseeable future
- Canadian dollar expected to remain at or near current levels.
Further movements may be impacted by the degree of strength of the
U.S. dollar, interest rates and changes in commodity prices.
Canadian Market Assumptions
Our forward-looking
statements also reflect various Canadian market assumptions. In
particular, we have made the following market assumptions:
- A consistently high level of wireline and wireless competition
in consumer, business and wholesale markets
- Higher, but slowing, wireless industry penetration
- A shrinking data and voice connectivity market as business
customers migrate to lower-priced traditional telecommunications
solutions or alternative OTT competitors
- While the advertising market continues to be adversely impacted
by cancelled or delayed advertising campaigns from many sectors due
to the economic downturn during the COVID-19 pandemic, we do expect
gradual recovery in 2021
- Declines in broadcasting distribution undertakings (BDU)
subscribers driven by increasing competition from the continued
rollout of subscription video on demand (SVOD) streaming services
together with further scaling of OTT aggregators
Assumptions Concerning our Bell Wireless
Segment
Our forward-looking statements are also based on the following
internal operational assumptions with respect to our Bell Wireless
segment:
- Maintain our market share of national operators' wireless
postpaid net additions
- Continued growth of our prepaid subscriber base
- Continued adoption of smartphone devices, tablets and data
applications, as well as the introduction of more 5G, 4G LTE and
LTE Advanced devices and new data services
- Continued deployment of 5G wireless network offering coverage
that is competitive with other national operators in centres across
Canada
- Improvement in subscriber acquisition and retention spending,
enabled by increasing adoption of device financing plans
- Unfavourable impact on mobile phone blended ABPU, driven by
reduced outbound roaming revenue due to travel restrictions as a
result of the COVID-19 pandemic, reduced data overage revenue due
to continued adoption of unlimited plans and the impact of a higher
prepaid mix in our overall subscriber base
- Increased adoption of unlimited data plans and device financing
plans
- No material financial, operational or competitive consequences
of changes in regulations affecting our wireless business
Assumptions Concerning our Bell Wireline
Segment
Our forward-looking statements are also based on
the following internal operational assumptions with respect to our
Bell Wireline segment:
- Continued growth in retail Internet and IPTV subscribers
- Increasing wireless and Internet-based technological
substitution
- Continued aggressive residential service bundle offers from
cable TV competitors in our local wireline areas
- Continued large business customer migration to IP-based
systems
- Ongoing competitive repricing pressures in our business and
wholesale markets
- Continued competitive intensity in our small and medium-sized
business markets as cable operators and other telecommunications
competitors continue to intensify their focus on business
customers
- Traditional high-margin product categories challenged by large
global cloud and OTT providers of business voice and data solutions
expanding into Canada with on-demand services
- Accelerating customer adoption of OTT services resulting in
downsizing of TV packages
- Further deployment of direct fibre to more homes and businesses
within our wireline footprint and fixed WTTP technology in rural
communities
- Growing consumption of OTT TV services and on-demand streaming
video, as well as the proliferation of devices, such as tablets,
that consume large quantities of bandwidth, will require ongoing
capital investment
- Realization of cost savings related to management workforce
reductions including attrition and retirements, lower contracted
rates from our suppliers, operating efficiencies enabled by a
growing direct fibre footprint, changes in consumer behaviour and
product innovation, new call centre technology that is enabling
self-serve capabilities, and other improvements to the customer
service experience
- No material financial, operational or competitive consequences
of changes in regulations affecting our wireline business
Assumptions Concerning our Bell Media
Segment
Our forward-looking statements are also based on
the following internal operational assumptions with respect to our
Bell Media segment:
- Overall revenue is expected to reflect a gradual economic
recovery in 2021 combined with subscriber revenue growth and
strategic pricing on advertising sales. However, revenue
performance is expected to continue to be negatively impacted by
the effects of the COVID-19 pandemic on many sectors of the
economy.
- Continued escalation of media content costs to secure quality
programming, as well as the return of sports and entertainment
programming; however, in the short term, savings can still be
expected due to production delays, shortened sports seasons, and
possible cancellations from the ongoing COVID-19 pandemic
- Continued scaling of Crave through broader content offering and
user experience improvements
- Investment in Noovo news and more French-language original
content to better serve our French-language customers with a wider
array of content, in the language of their choice, on their
preferred platforms
- Enhanced market-leading attribution through our Strategic
Audience Management (SAM) tool
- Ability to successfully acquire and produce highly rated
programming and differentiated content
- Building and maintaining strategic supply arrangements for
content across all screens and platforms
- Continued monetization of content rights and Bell Media
properties across all platforms
- No material financial, operational or competitive consequences
of changes in regulations affecting our media business
Financial Assumptions Concerning BCE
Our
forward-looking statements are also based on the
following internal financial assumptions with respect to BCE
for 2021:
- Total post-employment benefit plans cost to be approximately
$300 million, based on an estimated
accounting discount rate of 2.6%, comprised of an estimated above
adjusted EBITDA post-employment benefit plans service cost of
approximately $275 million and an
estimated below adjusted EBITDA net post-employment benefit plans
financing cost of approximately $25
million
- Increase in depreciation and amortization expense of
approximately $200 million to
$250 million compared to 2020
- Interest expense and payments of approximately $1,050 million to $1,100
million
- An effective tax rate of approximately 27%
- NCI of approximately $60
million
- Total cash pension and other post-employment benefit plan
funding of approximately $350 million
to $375 million
- Cash income taxes of approximately $800
million to $900 million
- Average number of BCE common shares outstanding of
approximately 905 million
- An annual common share dividend of $3.50 per share
The foregoing assumptions, although considered reasonable by BCE
on April 29, 2021, may prove to be
inaccurate. Accordingly, our actual results could differ materially
from our expectations as set forth in this news release.
Material Risks
Important risk factors that could cause
our assumptions and estimates to be inaccurate and actual results
or events to differ materially from those expressed in, or implied
by, our forward-looking statements, including our 2021 financial
guidance, are listed below. The realization of our forward-looking
statements, including our ability to meet our 2021 financial
guidance targets, essentially depends on our business performance,
which, in turn, is subject to many risks. Accordingly, readers are
cautioned that any of the following risks could have a material
adverse effect on our forward-looking statements. These risks
include, but are not limited to: the COVID-19 pandemic and the
adverse effects from the emergency measures implemented or to be
implemented as a result thereof, as well as other pandemics,
epidemics and other health risks; adverse economic and financial
market conditions, a declining level of retail and commercial
activity, and the resulting negative impact on the demand for, and
prices of, our products and services; the intensity of competitive
activity including from new and emerging competitors; the level of
technological substitution and the presence of alternative service
providers contributing to the acceleration of disruptions and
disintermediation in each of our business segments; changing viewer
habits and the expansion of OTT TV and other alternative service
providers, as well as the fragmentation of, and changes in, the
advertising market; rising content costs and challenges in our
ability to acquire or develop key content; the proliferation of
content piracy; higher Canadian smartphone penetration and reduced
or slower immigration flow; regulatory initiatives, proceedings and
decisions, government consultations and government positions that
affect us and influence our business; the inability to protect our
physical and non-physical assets from events such as information
security attacks, unauthorized access or entry, fire and natural
disasters; the failure to transform our operations, enabling a
truly customer-centric service experience, while lowering our cost
structure; the failure to continue investment in next-generation
capabilities in a disciplined and strategic manner; the inability
to drive a positive customer experience; the complexity in our
operations; the failure to maintain operational networks in the
context of significant increases in capacity demands; the risk that
we may need to incur significant capital expenditures to provide
additional capacity and reduce network congestion; the failure to
implement or maintain highly effective information technology (IT)
systems; the failure to generate anticipated benefits from our
corporate restructurings, system replacements and upgrades, process
redesigns, staff reductions and the integration of business
acquisitions; events affecting the functionality of, and our
ability to protect, test, maintain, replace and upgrade, our
networks, IT systems, equipment and other facilities; in-orbit and
other operational risks to which the satellites used to provide our
satellite TV services are subject; the failure to attract and
retain employees with the appropriate skill sets and to drive their
performance in a safe environment; labour disruptions and
shortages; our dependence on third-party suppliers, outsourcers and
consultants to provide an uninterrupted supply of the products and
services we need to operate our business; the failure of our vendor
selection, governance and oversight processes; security and data
leakage exposure if security control protocols affecting our
suppliers are bypassed; the quality of our products and services
and the extent to which they may be subject to manufacturing
defects or fail to comply with applicable government regulations
and standards; the inability to access adequate sources of capital
and generate sufficient cash flows from operating activities to
meet our cash requirements, fund capital expenditures and provide
for planned growth; uncertainty as to whether dividends will be
declared by BCE's board of directors or whether the dividend on
common shares will be increased; the inability to manage various
credit, liquidity and market risks; pension obligation volatility
and increased contributions to post-employment benefit plans; new
or higher taxes due to new tax laws or changes thereto or in the
interpretation thereof, and the inability to predict the outcome of
government audits; the failure to reduce costs, as well as
unexpected increases in costs; the failure to evolve practices to
effectively monitor and control fraudulent activities; unfavourable
resolution of legal proceedings and, in particular, class actions;
new or unfavourable changes in applicable laws and the failure to
proactively address our legal and regulatory obligations; the
failure to recognize and adequately respond to climate change
concerns or stakeholder and governmental changing expectations on
environmental matters; and health concerns about radiofrequency
emissions from wireless communication devices and equipment.
We caution that the foregoing list of risk factors is not
exhaustive and other factors could also adversely affect our
results. We encourage investors to also read BCE's 2020 Annual
MD&A dated March 4, 2021
(included in BCE's 2020 Annual Report) and BCE's 2021 First Quarter
MD&A dated April 28, 2021 for
additional information with respect to certain of these and other
assumptions and risks, filed by BCE with the Canadian provincial
securities regulatory authorities (available at Sedar.com) and with
the U.S. Securities and Exchange Commission (available at SEC.gov).
These documents are also available at BCE.ca.
About BCE
BCE is Canada's largest communications
company, providing advanced Bell broadband wireless, TV, Internet
and business communications services alongside the country's
premier content creation and media assets from Bell Media. To learn
more, please visit Bell.ca or BCE.ca.
Bell supports the social and economic prosperity of our
communities with a commitment to the highest environmental, social
and governance (ESG) standards. We measure our progress in
increasing environmental sustainability, achieving a diverse and
inclusive workplace, leading data governance and protection, and
building stronger and healthier communities. This includes
confronting the challenge of mental illness with the Bell Let's
Talk initiative, which drives mental health awareness and
action with programs like the annual Bell Let's Talk Day and Bell
funding for community care, research and workplace programs
nationwide all year round.
Media inquiries:
Marie-Eve Francoeur
514-391-5263
marie-eve.francoeur@bell.ca
Investor inquiries:
Thane Fotopoulos
514-870-4619
thane.fotopoulos@bell.ca
SOURCE Bell Canada