BCE reports 2020 Q4 and full-year results
Announces 2021 financial targets, 5.1% dividend increase and capital investment acceleration of at least $1 billion to advance fibre and wireless network expansion over the next 2 years
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.
MONTRÉAL, Feb. 4, 2021 /CNW Telbec/ - BCE Inc. (TSX: BCE), (NYSE: BCE) today reported results for the fourth quarter (Q4) and full-year 2020, provided financial guidance for 2021 and announced a 5.1%, or $0.17 per share, increase in the BCE annual common share dividend to $3.50. The company also unveiled an ambitious broadband network acceleration program enabled by an additional $1 billion to $1.2 billion in capital investment over the next 2 years.
"Today, BCE is proud to announce a significant acceleration in network capital investment to support Canada's recovery from the social and economic impacts of COVID-19 alongside a 5.1% increase in our common share dividend. These initiatives reflect our commitment to lead the buildout of Canada's next-generation digital infrastructure while also delivering increased dividend returns to the shareholders who have invested in Bell's strategy of broadband innovation and growth," said Mirko Bibic, President and CEO of BCE and Bell Canada.
"Bell's solid fourth-quarter Q4 and 2020 results – including welcoming 147,000 net new retail Internet, IPTV and wireless customers in Q4 – underscore the advantages of fast, reliable and high-capacity networks in a challenging and competitive marketplace. Bell's network leadership has kept Canadians connected, informed and entertained throughout COVID-19, with the round-the-clock support and ongoing investments in network capacity and digital platforms necessary to enable the business, government and front-line response to the crisis," said Mr. Bibic.
"Now, Bell looks forward to playing a key role in the country's move forward with an acceleration of at least $1 billion over the next 2 years to deliver fibre connections, rural Internet services and the fastest 5G network to even more Canadians. Since 1880, Bell has led the way in ensuring Canada's leadership position in the global communications sector, and our team is proud to advance how Canadians connect with each other and the world in 2021."
KEY BUSINESS DEVELOPMENTS
Accelerating Canada's best networks
Bell continues to lead the way in connecting rural Canada with Wireless Home Internet, including launching an unlimited usage option for WHI customers this week. Bell significantly stepped up WHI expansion in 2020, including to rural Atlantic Canada and in response to COVID-19 demand, while also doubling Internet access speeds for most WHI customers. Bell's 5G network was ranked Canada's fastest in PCMag's prestigious Fastest Mobile Networks Canada analysis, and now reaches more than 150 major urban areas and smaller communities across Canada with plans to double the footprint in 2021. Bell also helped accelerate broadband Internet rollouts throughout Québec with new measures simplifying access to support structures and a Centre of Excellence, and worked with Société de Transport de Montréal (STM) and industry partners to complete deployment of wireless service throughout Montréal's metro transit system.
5G research leadership
The most compelling content
Champion customer experience
Now more than ever: Bell Let's Talk Day sets new records
As part of Bell's commitment to support diverse communities, Bell Let's Talk announced the next 8 recipients of the Bell Let's Talk Diversity Fund, which provides grants up to $250,000 to organizations advancing mental heath services for Black, Indigenous and People of Colour (BIPOC) communities in Canada. Bell Let's Talk also announced new support for the QEII Foundation in Halifax, Montréal's Sainte-Justine University Hospital Centre, national youth mental health organization Jack.org, and Brain Canada in a $4 million partnership with the federal government. Applications for 2021's Bell Let's Talk Community Fund, the special $2 million annual program supporting local and grassroots organizations providing community access to mental health care, are now open.
"In every successive quarter since COVID-19 began, Bell has delivered sequential quarterly improvement in our operating results, underscoring the stability and resiliency of our company and the strength of our financial position," said Glen LeBlanc, Chief Financial Officer for BCE and Bell Canada. "As we enter 2021, our business fundamentals are sound, our competitive position remains strong and the Bell team's ability to execute is proven. We are poised to succeed with a rock-solid financial foundation driving both our unparalleled national investment strategy and BCE's higher common share dividend, and ready to deliver on the 2021 financial guidance targets we announced today."
BCE OPERATING RESULTS BY SEGMENT
COMMON SHARE DIVIDEND
OUTLOOK FOR 2021
Due to uncertainties relating to the severity and duration of COVID-19, including the current resurgence and possible future resurgences in the number of cases, and various potential outcomes, our business and financial results could continue to be significantly and negatively impacted in 2021. Accordingly, there can be no certainty that any of our 2021 financial guidance targets will be achieved. The extent to which COVID-19 will continue to adversely impact us will depend on future developments that are unknown and cannot be predicted, including the development and distribution of effective vaccines and/or treatment options, as well as new information which may emerge concerning the severity, duration and resurgences of COVID-19 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 made by BCE in developing its 2021 financial guidance targets, as well as the principal related risk factors.
CALL WITH FINANCIAL ANALYSTS
A live audio webcast of the conference call will be available on BCE's website at: BCE Q4 2020 conference call. The mp3 file will be available for download on this page later in the day.
(1) In Q2 2020, we updated our definitions of adjusted net earnings, adjusted EPS and free cash flow to exclude the impacts of discontinued operations as they may affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. As a result of this change, prior periods have been restated for comparative purposes.
(2) 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.
(3) 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 4, Segmented information, in BCE's Q3 2020 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.
(4) 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.
(5) 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
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 February 4, 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. Except as otherwise indicated by BCE, forward-looking statements do not reflect the potential impact of any special items or of any dispositions, monetizations, mergers, acquisitions, other business combinations or other transactions that may be announced or that may occur after February 4, 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.
Canadian Economic Assumptions
Canadian Market Assumptions
Assumptions Concerning our Bell Wireless Segment
Assumptions Concerning our Bell Wireline Segment
Assumptions Concerning our Bell Media Segment
Financial Assumptions Concerning BCE
The foregoing assumptions, although considered reasonable by BCE on February 4, 2021, may prove to be inaccurate. Accordingly, our actual results could differ materially from our expectations as set forth in this news release.
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 Safe Harbour Notice Concerning Forward-Looking Statements dated February 4, 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). This document is also available at BCE.ca.
BCE's Safe Harbour Notice Concerning Forward-Looking Statements dated February 4, 2021 is incorporated by reference in this news release.
The Bell Let's Talk initiative promotes Canadian mental health with national awareness and anti-stigma campaigns like Bell Let's Talk Day and significant Bell funding of community care and access, research and workplace leadership initiatives. To learn more, please visit Bell.ca/LetsTalk.
SOURCE Bell Canada
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