BCE Reports Q4 and Full Year Financial Results

BCE Inc. today reported BCE and Bell results for the fourth quarter of 2024 and announced its financial guidance for 2024.

BCE delivered strong financial performance with net earnings applicable to common shares growing by 25.4% to $439 million. EPS and Adjusted EPS⁽²⁾ for the quarter were $0.58 and $0.60, representing growth of 26.1% and 17.6%, respectively. Bell had revenue growth of 0.9% on service revenue growth of 1.3%, reflecting strong wireless and TV revenue growth of 8.3% and 7.9%, respectively; operating income growth of 20.8%; EBITDA growth of 1.1%; wireless gross subscriber activations of 552,714 and postpaid net additions of 156,708; TV net additions of 23,019 and high-speed Internet net additions of 12,099.

Bell is focused on achieving a clear goal – to be recognized by customers as Canada’s leading communications company – through the execution of 5 Strategic Imperatives: Invest in Broadband Networks and Services, Accelerate Wireless, Leverage Wireline Momentum, Improve Customer Service, and Achieve a Competitive Cost Structure.

“Our fourth-quarter performance closed an impressive year of execution by the Bell team, with very strong wireless performance, significant wireline EBITDA growth and continued progress in cost reductions and efficiency. We met all our increased financial targets for 2024,” said George Cope, President and CEO of BCE and Bell Canada. “We substantially advanced Bell’s strategic agenda through our significantly increased investments in wireless and wireline broadband Internet capacity, driving customer additions on our growth services platforms, and acquisitions that support our strategic execution going forward – including CTV, Canada’s #1 media company, as well as Hypertec and xwave to support the growth in data hosting and cloud computing at Bell Business Markets.”

“Bell Wireless has significantly increased its postpaid market share thanks to strong market execution that leverages Bell’s world-leading HSPA+ network, superior range of smartphones and other devices, enhanced data services like Bell Mobile TV and the country’s largest wireless distribution network. At the same time, Bell Wireline achieved strong EBITDA growth, substantial decreases in NAS landline losses and solid Internet and TV net activations, thanks to the launches of next-generation Fibe TV and Fibe Internet on our quickly expanding broadband fibre network,” said Mr. Cope.

“Our financial performance for 2024 was highlighted by strong net earnings growth of 32.7% and substantial free cash flow generation, reflecting accelerated wireless revenue growth, industry-leading wireline EBITDA growth of 5.9% and margin improvement,” said Siim Vanaselja, Chief Financial Officer of BCE and Bell Canada.

“We also continued to maintain a sharp focus on our capital market objectives in 2024. We delivered on our commitment to increase returns to our shareholders through two increases in the common share dividend over the past twelve months, delivering a 35% increase overall since Q4 2024, and the completion of a $500 million share buyback in December at an average price per share of $30.80. We repaid $400 million of debt in 2024 from cash on hand, accessed the capital markets on attractive terms in November, and have maintained strong investment grade credit ratings. In addition, with the $750 million special voluntary pension contribution made in December, we are systematically addressing our solvency deficit in a permanent and comprehensive way,” said Mr. Vanaselja. “The 2024 financial guidance announced today reflects a well-balanced financial plan that calls for substantial free cash flow generation in excess of $2.2 billion and Adjusted EPS growth of 4% to 8% that supports the execution of our business plan and capital markets strategy centred on delivering increasing returns to BCE shareholders.”

Bell’s operating revenues increased by 0.9% this quarter, to $4,017 million, as higher wireless and TV revenues more than offset declines in local and access, long distance, wireline data and equipment and other revenues. For the full year, Bell’s operating revenues were $15,425 million, an increase of 2.7% compared to 2024.

Bell’s operating income increased by 20.8% to $691 million this quarter and by 22.2% to $2,972 million for the full year due to higher EBITDA, lower restructuring and other costs and lower depreciation and amortization. Bell’s EBITDA grew by 1.1% to $1,411 million this quarter and by 2.4% to $5,857 million for the full year with higher revenues, lower pension expense and cost reductions more than offsetting the impact of increased wireless subscriber acquisition and retention costs. Despite a significantly higher number of postpaid subscriber activations and customer handset upgrades year over year, Bell’s EBITDA margin was essentially unchanged, increasing by 0.1 percentage points to 35.1% this quarter.

Bell Wireless operating revenues increased by 8.3% this quarter with service revenues increasing by 9.1% and product revenues increasing by 3.9%. Bell Wireless operating income and EBITDA decreased by 18.8% and 11.5%, respectively, due to the significantly higher levels of gross activations and customer upgrades. Blended ARPU increased by $1.26 to $52.34 year over year as data revenue growth of 38% more than offset voice ARPU declines due to customer adoption of richer rate plans.

With gross activations of 552,714 and postpaid gross activations of 399,041, Bell Wireless surpassed records that were just set in Q3. In addition, Bell Wireless postpaid net additions of 156,708 represented the best Q4 postpaid net additions since Q4 2024. Full year 2024 postpaid gross activations and net additions and total gross activations were also records for Bell Wireless for any calendar year. Prepaid gross activations were 153,673, or 31.2% lower than last year, reflecting an increase in competitive intensity, particularly at the low end of the market. The prepaid client base declined by 39,926 this quarter compared to a gain of 52,938 last year.

Bell Wireline operating revenues decreased by 2.5% as TV revenue growth was more than offset by declines in local and access, long distance, wireline data and equipment and other revenues. Bell Wireline operating income increased by 62.1% as a result of higher EBITDA, lower restructuring and other costs and lower depreciation and amortization. Bell Wireline EBITDA increased by 6.9% due to cost reductions and lower pension expense.

Bell Wireline had total NAS losses of 64,172 this quarter, an improvement of 40.3% compared to last year. TV subscribers increased by 23,019 compared to an increase of 40,889 in the same period last year. High-speed Internet subscribers increased by 12,099, an increase of 55.0% compared to the fourth quarter last year, led by increases in residential Internet customers that more than doubled year over year.

Bell invested $860 million of capital this quarter, or 34.4% more than the same period last year, reflecting increased investment in both our wireless and wireline broadband Internet capacity, including the continued rollout of fibre to residential neighbourhoods, multiple-dwelling units and fibre-to-the-home (FTTH) in Québec City, and the ongoing enhancement of our network to support Bell’s Fibe Internet and Fibe TV services. For the full year, Bell invested $2,463 million of capital, or 3.1% more than 2024. Bell’s capital intensity in 2024 was 16.0% with its focus on wireline fibre and HSPA+ wireless networks.

BCE’s cash flows from operating activities this quarter was $568 million compared to $948 million in the same period last year due to a voluntary special pension plan contribution of $750 million made in December 2024 which represented a significant increase over the $500 million voluntary special pension plan contribution made in December 2024. Free cash flow⁽³⁾ this quarter, pre and post this special pension contribution, was $201 million and negative $549 million respectively. For the full yea
r, BCE’s cash flows from operating activities was $4,724 million and free cash flow, pre and post the special pension contribution, was $2,124 million and $1,374 million, respectively.

BCE’s net earnings applicable to common shares this quarter were $439 million, or $0.58 per share, compared to $350 million, or $0.46 per share, for the same period last year. Earnings growth this quarter reflected lower depreciation and amortization and lower restructuring and other costs. For the full year, BCE’s net earnings applicable to common shares were $2,165 million, or $2.85 per share, compared to $1,631 million, or $2.11 per share.

BCE’s Adjusted EPS was $0.60 this quarter, an increase of 17.6% compared to last year as a result of higher EBITDA, lower depreciation and amortization and fewer outstanding BCE common shares as a result of share purchases made under the 2024 normal course issuer bid program. For the full year, BCE’s Adjusted EPS was $2.84 per share, or 13.6% higher than last year.

(i)  Bell includes the Bell Wireless and Bell Wireline segments. n.m.: not meaningful

BCE’s operating revenues increased by 0.7% to $4,683 million this quarter and by 1.9% to $18,069 million for the full year as higher revenues at Bell were partly offset by lower revenues at Bell Aliant.

BCE’s operating income increased by 11.3% to $836 million this quarter and by 15.1% to $3,672 million for the full year as higher operating income at Bell was partly offset by lower operating income at Bell Aliant. BCE’s EBITDA increased by 0.4% to $1,744 million this quarter and by 1.4% to $7,188 million for the full year as EBITDA growth at Bell was partly offset by lower EBITDA at Bell Aliant.

Bell Wireless Segment With continued momentum from the launch of its world-leading HSPA+ network, Bell Wireless delivered another record quarter for gross activations along with strong postpaid net additions, data revenue growth of 38% and increased smartphone penetration.

• Total Bell Wireless operating revenues increased by 8.3% to $1,297 million this quarter. Service revenues increased by 9.1% to $1,151 million due to subscriber growth and wireless data revenue growth of 38%. Product revenues increased by 3.9% to $134 million due to an increase in activations and a higher smartphone mix. For the full year, total Bell Wireless operating revenues increased by 8.2% to $4,934 million with service revenues increasing by 9.2% to $4,481 million and product revenues increasing by 0.5% to $407 million.
• Blended ARPU increased by $1.26 to $52.34. Postpaid ARPU increased by $1.00 to $63.47 due to growth in data usage partly offset by increased customer adoption of competitive rate plans with more services and voice minutes included at lower monthly prices. Prepaid ARPU decreased by $1.49 to $16.96 due to the migration of high-value prepaid customers to postpaid plans. For the full year, blended ARPU increased by $0.33 to $52.03, postpaid ARPU increased by $0.62 to $63.49 and prepaid ARPU increased by $0.61 to $17.76.
• Bell Wireless operating income decreased by 18.8% to $237 million this quarter and by 9.7% to $1,160 million for the full year as a result of lower EBITDA and higher depreciation and amortization. Bell Wireless EBITDA decreased by 11.5% to $385 million this quarter and by 5.0% to $1,721 million for the full year due to higher subscriber acquisition costs associated with higher gross activations, an increase in customer upgrades, and a higher smartphone mix.
• EBITDA margins on wireless service revenues decreased to 33.4% this quarter from 41.2% last year.
• Total gross activations were a new record this quarter at 552,714, or 5.5% higher than last year. Postpaid gross activations were 399,041, or 32.9% higher than last year, reflecting an emphasis on postpaid acquisition. Prepaid gross activations were 153,673, or 31.2% lower than last year, reflecting an increase in competitive intensity, particularly at the low end of the market.
• Total net additions were 116,782 this quarter, or 28.3% lower than last year. Postpaid net additions were 156,708 this quarter or 42.6% higher than last year. The prepaid client base declined by 39,926 this quarter compared to a gain of 52,938 last year due to lower prepaid gross activations and an increase in churn.
• The Bell Wireless client base reached 7,242,048 at the end of the quarter, an increase of 6.0% compared to last year.
• Postpaid churn increased to 1.5% from 1.3% and prepaid churn increased to 3.6% from 3.2%, reflecting an increase in competitive intensity, particularly from new entrants at the low end of the market. Blended churn increased to 2.0% from 1.8% last year.
• Cost of acquisition increased by 37.0% this quarter, to $448 per gross activation, due to higher handset subsidies and commissions.

Bell Wireline Segment The Bell Wireline segment delivered improved year-over-year EBITDA performance, a significant improvement in network access line erosion and healthy subscriber activations in TV and high-speed Internet.

• Bell Wireline operating revenues decreased by 2.5% to $2,769 million this quarter as TV revenue growth was more than offset by decreases in local and access, long distance, data and equipment and other revenues. For the full year, Bell Wireline operating revenues increased by 0.3% to $10,695 million.
• Bell Wireline operating income increased by 62.1% to $454 million this quarter and by 57.8% to $1,812 m
  illion for the full year due to higher EBITDA, lower restructuring and other costs and lower depreciation and amortization.
• Bell Wireline EBITDA increased by 6.9% this quarter, to $1,026 million, due to cost reductions and lower pension expense more than offsetting lower operating revenues. For the full year, Bell Wireline EBITDA increased by 5.9% to $4,136 million due to cost reductions and lower pension expense.
• Local and access revenues declined by 5.4% to $733 million this quarter due to ongoing residential and business NAS erosion.
• Total NAS declined by 64,172 this quarter compared to a decline of 107,503 last year. Business NAS declined by 27,622 this quarter compared to a decline of 28,493 last year. Residential NAS declined by 36,550 compared to a decline of 79,010 last year due to growth in our Wholesale unit and the continued improvement of retail residential NAS losses for the thirteenth consecutive quarter. On a year-over-year basis, total NAS declined by 5.6%.
• Long distance revenues declined by 11.7% to $234 million this quarter due mainly to ongoing residential and business NAS erosion, and the increased adoption of unlimited or large block-of-time plans by residential customers.
• Data revenues decreased by 0.3% to $970 million this quarter as growth in IP and broadband connectivity service revenues, residential Internet service revenues and data-related equipment sales to large business customers were more than offset by lower legacy data service revenues.
• High-speed Internet subscribers increased by 12,099 this quarter, an increase of 55.0% compared to the same period last year. At the end of the quarter, Bell had 2,097,326 high-speed Internet subscribers, a 2.0% increase over last year.
• TV revenues increased by 7.9% to $450 million this quarter due to subscriber growth and customer upgrades to higher-priced programming packages.
• Total TV subscribers increased by 23,019 this quarter compared to an increase of 40,889 in the same period last year. At the end of the quarter, there were 2,020,098 TV subscribers, or 3.7% more than at the end of last year.
• TV subscriber churn increased to 1.5% from 1.3% last year.
• Equipment and other revenues decreased by 6.2% to $304 million this quarter.

Bell Aliant Regional Communications Bell Aliant’s revenues decreased to $777 million this quarter, or by 1.0%, due to lower local and access and long distance revenues. Bell Aliant’s operating income decreased by 19.0%, to $145 million due to lower revenues.

Common Share Dividend BCE’s Board of Directors declared a quarterly dividend of $0.4925 per common share, payable on April 15, 2024 to shareholders of record at the close of business on March 15, 2024.

International Financial Reporting Standards (IFRS) The Canadian Accounting Standards Board set January 1, 2024 as the date that IFRS replaced Canadian generally accepted accounting principles (GAAP) for publicly accountable enterprises, including Canadian reporting issuers. BCE will prepare its financial statements in accordance with IFRS commencing January 1, 2024. Financial reporting under IFRS differs from Canadian GAAP in a number of respects, some of which are significant.

Preliminary draft reconciliations between Canadian GAAP and IFRS for BCE’s opening balance sheet at January 1, 2024, closing balance sheet as at December 31, 2024, and consolidated statement of operations for the year ended December 31, 2024 will be provided in BCE’s Annual MD&A. The adoption of IFRS is expected to result in an overall reduction of approximately $4.5 billion in BCE’s shareholders’ equity as at December 31, 2024, mainly related to a write-down to fair value and retrospective change to the straight-line method of depreciation for certain capital assets, and the recognition of the unfunded pension liability. Based on work performed to date, the adoption of IFRS will have minimal impacts on BCE’s consolidated statement of operations. Preliminary Adjusted EPS based on EPS using IFRS for the year ended December 30, 2024 is $2.79.

Outlook BCE’s 2024 financial guidance reflects the continued progress in the execution of Bell’s 5 Strategic Imperatives and BCE’s capital markets strategy.

The financial guidance provided for revenue growth, EBITDA growth, Adjusted EPS growth, and free cash flow growth are based on financial results prepared using IFRS. Similarly, the guidance provided for Adjusted EPS, free cash flow and capital intensity are calculated using IFRS-based results.

Given the trajectory of its wireless, TV and Internet businesses and an improving outlook in NAS erosion, Bell is targeting revenue growth of 1% to 2% in 2024. Bell Wireless revenue growth is expected to benefit from the significant investment made in 2024 in customer acquisition and retention along with continued growth in smartphone activations and data usage. Bell Wireline revenues are expected to benefit from growth in TV and Internet revenues from ARPU performance and the rollout of the Fibe TV footprint.

With higher wireless revenues and a continued focus on cost reduction, Bell is targeting EBITDA growth of 2% to 4% in 2024.

BCE is targeting Adjusted EPS of $2.90 to $3.00 in 2024 due to higher EBITDA and lower total pension costs. With the BCE annual common share dividend increase of 7.7% to $1.97 per share announced in December, BCE’s payout ratio is conservatively at the low end of its policy of 65% to 75% of Adjusted EPS for 2024.

BCE expects to be able to generate substantial free cash flow in 2024. Targeted free cash flow of $2,200 million to $2,300 million will provide BCE with financial flexibility to execute its capital markets strategy while maintaining robust levels of strategic capital investment at Bell to support the growth of its operations and further improve its competitive position.

BCE’s financial guidance for 2024 is as follows:

BCE’s financial guidance for 2024 does not reflect its pending acquisition of CTVglobemedia Inc. (CTV) and will be updated upon the completion of the CTV acquisition which is currently expected to close in Q2 2024.

Notes The information contained in this news release is unaudited.