BCE reports 2023 Q4 and full-year results, announces 2024 financial targets and 3.1% annual dividend increase to $3.99 per share

MONTRÉAL, Feb. 8, 2024

• All 2023 financial guidance targets achieved
• 5.3% consolidated adjusted EBITDA¹ growth in Q4 yielded 1.9 percentage-point increase in adjusted EBITDA margin² to 39.7% — best quarterly result since Q1 2022
• Q4 net earnings of $435 million, down 23.3%, with net earnings attributable to common shareholders of $382 million, down 27.7% or $0.42 per common share; 5.7% increase in adjusted net earnings¹ of $691 million delivered adjusted EPS¹ of $0.76, up 7.0%
• Cash flows from operating activities up 15.4% in Q4 to $2,373 million; free cash flow¹ increased $913 million in Q4 to $1,289 million on lower capital expenditures, timing of cash tax instalments and higher working capital
• 170,831 total mobile phone and connected device net subscriber activations³ in Q4 drove 3.9% wireless service revenue growth and 0.4% higher blended ARPU⁴
• 55,591 retail Internet net subscriber activations³ in Q4 — second best Q4 result in nearly two decades – contributed to 5.4% residential Internet revenue growth
• Bell Media adjusted EBITDA up 14.7% in Q4 on lower operating costs including restructuring initiatives as total revenue declined 7.5% due to challenging advertising market conditions; digital revenue⁵ up 27% as digital platforms and advertising technology drove strong growth
• Planned minimum $500 million reduction in capital expenditures in 2024 and rollback of fibre network expansion reflect unsupportive federal government policies and CRTC decisions that discourage investment
• Undertaking largest workforce restructuring initiative in nearly 30 years, reducing approximately 4,800 positions, or 9% of all BCE employees in 2024, and driving in-year cost savings of $150 million to $200 million; 250 million annualized

MONTRÉAL, Feb. 8, 2024 /PRNewswire/ - BCE Inc. (TSX: BCE) (NYSE: BCE) today reported results for the fourth quarter (Q4) and full-year 2023, provided financial guidance for 2024, including a 3.1%, or $0.12 per share, increase in the BCE annual common share dividend to $3.99, and announced a workforce restructuring initiative, our largest in nearly 30 years, reducing approximately 4,800 positions, including 750 contractors, or 9% of all BCE employees.

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1 Adjusted EBITDA is a total of segments measure, adjusted net earnings and free cash flow are non-GAAP financial measures and adjusted EPS is a non-GAAP ratio. Refer to the Non-GAAP and Other Financial Measures section in this news release for more information on these measures.

2 Adjusted EBITDA margin is defined as adjusted EBITDA divided by operating revenues. Refer to the Key Performance Indicators (KPIs) section in this news release for more information on adjusted EBITDA margin.

3 Refer to the Key Performance Indicators (KPIs) section in this news release for more information on subscriber (or customer) units.

4 Effective Q1 2023, as a result of the segment reporting changes impacting intersegment eliminations, ARPU has been updated and is defined as Bell CTS wireless external services revenues (previously wireless operating service revenues), divided by the average mobile phone subscriber base for the specified period, expressed as a dollar unit per month. Refer to the Key Performance Indicators (KPIs) section in this news release for more information on blended ARPU. ARIVA.DE Börsen-Geflüster Kurse BCE 31,595 € +0,30%

5 Digital revenues are comprised of advertising revenue from digital platforms including web sites, mobile apps, connected TV apps and out-of-home (OOH) digital assets/platforms, as well as advertising procured through Bell digital buying platforms and subscription revenue from direct-to-consumer services and video-on-demand services.

"The Bell team has demonstrated strong executional discipline and cost containment this quarter, enabling Bell to deliver solid results in Q4 and throughout 2023," said Mirko Bibic, President and CEO of BCE and Bell Canada.

We continue to see a preference by customers for fibre, contributing to continued strong fibre Internet net subscriber activations and 7.1% residential Internet revenue growth in 2023. Bell's mobile phone customer base at the end of 2023 was up 3.4% over 2022. And I'm very pleased that we've reduced our share of industry complaints for an eighth consecutive year in the Commission for Complaints for Telecom-television Services (CCTS) 2022-2023 annual report.

As we close out 2023, our results demonstrate the critical importance of balancing near term and long term priorities to deliver for our customers and our shareholders. We took necessary action earlier this year to drive costs out of the business and to align costs to the revenue potential of each business segment. At the same time, we started putting the building blocks in place for our transformation from a traditional telco to a tech services and digital media leader, making some key investments to accelerate this transformation.

While it's clear that we are continuing to execute with discipline in a competitive marketplace, we need to take additional measures in response to increasingly unsupportive federal government and regulatory decisions, legacy business declines and a macroeconomic environment with higher interest rates and continued inflation. As our business is hampered by regulatory decisions that discourage investment, we are slowing the pace of our network expansion and capping fibre speeds. We intend to reduce capital expenditures by over $1 billion over the next two years, including a minimum $500 million year-over-year decrease in 2024 alone. In addition, we are undertaking a significant workforce restructuring initiative – our largest in nearly 30 years – reducing approximately 4,800 positions, or 9% of all BCE employees. I recognize that this decision is difficult for the team members impacted, and I thank each of them for their contributions.

Today's changes are difficult, but necessary to respond to evolving external drivers, accelerate our transformation and ensure Bell's future health and longevity so that we can continue to advance our purpose to advance how Canadians connect with each other and the world."

Workforce restructuring
To position Bell for future success, Bell is taking action to lower its cost structure and align costs to the revenue potential of each business segment. This includes Bell's largest workforce restructuring initiative in nearly 30 years, reducing approximately 4,800 positions, or 9% of all BCE employees in 2024, and driving in-year cost savings of $150 million to $200 million; $250 million annualized.

Reducing capital expenditures and fibre expansion
Bell announced its intention to reduce capital expenditures by over $1 billion in 2024-25, including a minimum of $500 million in 2024, and roll back fibre network expansion as a result of federal government policies and the CRTC's wholesale access rate decision that discourages network investment. Bell will also cap fibre speeds at three-gigabits per second. In Q4 2023, Bell reduced its capital investment by $105 million more than originally planned as a direct result of this decision.

Channel transformation
Bell announced a partnership with Best Buy Canada to operate 165 The Source consumer electronics stores, re-branded Best Buy Express. Bell will be the exclusive telecommunications provider, selling wireless and wireline (in footprint) services from its Bell, Virgin Plus and Lucky Mobile brands, as well as remain responsible for store operations and labour. Best Buy will assume responsibility for the consumer electronics assortment and procurement, as well as branding, marketing and e-commerce. With the strengths of Best Buy's buying power and supply chain, Bell will wind down The Source head office and back office operations, as well as close 107 The Source stores.

Innovative partnerships to deliver for our customers
Bell announced a partnership with global endpoint security leader SentinelOne to provide extensive data protection services for Bell's enterprise customers, SentinelOne's first partnership with a major telecommunications company in Canada. Bell also entered into a collaboration with ServiceNow, a digital workflow company, to launch Service Bridge capabilities on the ServiceNow platform, leveraging FX Innovation's deep industry expertise to elevate the end-to-end experience for Bell customers with customized solutions and automation capabilities. In collaboration with Microsoft, Bell expanded its hybrid work solutions for Canadian enterprises with the launch of Bell Operator Connect, pairing Bell's high-quality voice network and Microsoft Teams. Bell is also rolling out Microsoft 365 within its own enterprise IT environment. Bell announced a collaboration with Mila institute in Montréal to study and apply deep learning and AI capabilities on Bell systems to improve business performance, customer experience and accelerate AI innovations with cloud computing.

Champion customer experience
Bell continued to lead national telecom service providers in reducing its share of consumer complaints, according to the 2022-2023 Annual Report from the Commission for Complaints for Telecom-television Services (CCTS)⁶. Bell reduced its share of total industry complaints for an eighth consecutive year⁷, decreasing its share of complaints by 6% over the previous year. Bell Fibe TV customers in the Atlantic can now enjoy next generation capabilities and features including access to the Google Play app catalogue, Cloud PVR, and unlimited simultaneous streams with the Fibe TV app. Bell reached one million digital repair sessions on its self-serve Virtual Repair tool, and enhanced the tool with new features such as Wi-Fi check-up to help customers simplify the repair process.

5G leadership and the fastest Internet speeds
Bell secured the most 5G+ spectrum nationwide in the federal government's 3500 and 3800 MHz spectrum auctions, recently securing the acquisition of 939 licenses for 3800 MHz spectrum to enhance customers' digital experience nationwide. Bell 5G wireless was ranked Canada's fastest and best 5G network by Global Wireless Solutions for the third consecutive year⁸. GWS also confirmed that Bell 5G+ wireless on 3500 MHz spectrum is the fastest and best in the country⁸. Additionally, Bell pure fibre was ranked Canada's fastest Internet and Wi-Fi for a second time in a row by Ookla in its Q3-Q4 2023 Speedtest Awards⁹, and remains Canada's most awarded Internet service provider¹⁰.

Delivering the most compelling content
Bell Media announced its intent to divest 45 of its 103 radio stations to seven buyers, subject to CRTC review and other closing conditions. Once these transactions close, it's our intention that the divested stations will remain part of iHeartRadio Canada, helping to transform Bell Media's radio operation to an innovative audio business. To reach more audiences, Crave will soon be available on Amazon Prime Video channels in Canada. 2023 was the most watched year in Crave's streaming history; streams on Crave in Q4 2023 were up 8% year-over-year, and in Québec up 18% year-over-year. Bell Media's share of Canadian English entertainment specialty channels among A25-54 was its highest on record, increasing 7% over 2022. CTV Comedy Channel is the number one Canadian English entertainment specialty channel with A25-54. The 110^th Grey Cup was one of the year's biggest television events in Canada for TSN and RDS, attracting an average audience of 3.7 million viewers. TSN and RDS also announced broadcast and media rights agreements for the Professional Women's Hockey League's inaugural season as well as CONMEBOL Copa America 2024. Bell Media launched its newest campaign, Streets-to-Screens, a multiplatform program that leverages Bell Media's exclusive ad-synching Radio-to-Road program where select roadside digital boards synchronize with advertisements on specific radio stations using Bell First Party Data.

Bell Let's Talk Day
Bell Let's Talk launched its "Let's create real change" campaign, inviting Canadians to take meaningful action in mental health on Bell Let's Talk Day and throughout the year, while spotlighting mental health organizations across the country that provide supports and services for Canadians experiencing mental health issues.

As part of its ongoing commitment to improve access to mental health supports and services in communities across Canada, Bell Let's Talk announced 10 recipients of the Bell Let's Talk Diversity Fund. The Bell Let's Talk Post-Secondary Fund awarded $1 million in grants to 11 Canadian colleges, universities and CEGEPs to support mental health initiatives, and the 2024 Bell Let's Talk Community Fund is now open for applications.

Bell for Better
Bell and the Toronto Raptors teamed up to support newcomers to Canada, through Bell Inbound Assist, a new program that recognizes and supports community organizations that welcome newcomers to Canada through basketball programming. Three organizations will be selected to receive grants of up to $100,000 in partnership with MLSE Foundation. BCE was ranked the most sustainable communications company in the world in Corporate Knights' Global 100 most sustainable corporations for 2024¹¹. Bell Technical Solutions was honoured with an Outstanding Commitment to Employment Equity award in the 2023 Employment Equity Achievement Awards by Employment and Social Development Canada, a department of the Government of Canada¹².

Financial Highlights

($ millions except per share amounts) (unaudited)	Q4 2023	Q4 2022	% change	2023	2022	% change
BCE
Operating revenues	6,473	6,439	0.5 %	24,673	24,174	2.1 %
Net earnings	435	567	(23.3 %)	2,327	2,926	(20.5 %)
Net earnings attributable to common shareholders	382	528	(27.7 %)	2,076	2,716	(23.6 %)
Adjusted net earnings	691	654	5.7 %	2,926	3,057	(4.3 %)
Adjusted EBITDA	2,567	2,437	5.3 %	10,417	10,199	2.1 %
Net earnings per common share (EPS)	0.42	0.58	(27.6 %)	2.28	2.98	(23.5 %)
Adjusted EPS	0.76	0.71	7.0 %	3.21	3.35	(4.2 %)
Cash flows from operating activities	2,373	2,056	15.4 %	7,946	8,365	(5.0 %)
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