BCE reports first quarter 2025 results
- Net earnings increased 49.5% to $683M YoY
- Free cash flow significantly improved to $798M from $85M
- Bell Media revenue up 6.9% with 35.9% adjusted EBITDA growth
- Digital revenue increased 12% driven by digital platforms
- Operating costs reduced by 2.1%
- Strategic partnership with PSP Investments securing potential US$1.5B+ commitment
- Adjusted EBITDA margin improved 0.4 percentage points to 43.1%
- Operating revenues declined 1.3% to $5.93B
- Adjusted net earnings decreased 3.2% to $633M
- Significant dividend cut from $3.99 to $1.75 annualized per share
- Mobile phone postpaid net subscriber losses of 9,598 vs. 45,247 additions last year
- Product revenue decreased 7.4% to $758M
- Service revenue declined 0.4% to $5.17B
- Mobile phone blended ARPU decreased 1.8% to $57.08
Insights
BCE's 56% dividend cut signals major capital allocation shift amid subscriber losses and regulatory headwinds despite improved free cash flow.
BCE's Q1 2025 results reveal a dramatic transformation in capital allocation strategy, headlined by a 56% reduction in the annualized dividend from $3.99 to $1.75 per share. This substantial cut marks a fundamental shift for a company long considered a stable dividend payer in the telecom sector.
The headline numbers present a mixed picture. While net earnings increased 49.5% to $683 million and net earnings attributable to common shareholders rose 56.7% to $630 million, these improvements stem primarily from higher other income related to early debt redemption gains rather than operational improvements. More tellingly, adjusted net earnings declined 3.2% and adjusted EPS fell 4.2% to $0.69, providing a clearer picture of underlying business performance.
The core Bell Communication and Technology Services segment shows concerning trends with operating revenues down 2.4% and service revenue declining 1.5%. Particularly troubling is the mobile phone subscriber base dynamics - BCE reported postpaid mobile phone net losses of 9,598 compared to net additions of 45,247 in Q1 2024, representing a substantial deterioration in subscriber acquisition. This reflects what management describes as "intense price competition" and likely signals market share losses.
The mobile phone blended ARPU decreased 1.8% to $57.08, indicating continued competitive pricing pressure. Internet subscriber growth also slowed dramatically with only 9,515 net additions versus 31,078 in Q1 2024.
The most positive aspect is the free cash flow improvement to $798 million from $85 million, driven by working capital improvements, lower income taxes paid, and reduced capital expenditures. However, the 27.2% decrease in capital expenditures appears strategic rather than efficiency-driven, with management citing "regulatory decisions that discourage network investment" as justification for slowing fiber expansion.
The dividend cut and deleveraging target (aiming for 3.5x net debt/EBITDA by 2027) signal management's concerns about balance sheet flexibility amid challenging market conditions. The partnership with PSP Investments for U.S. fiber expansion represents an attempt to find growth outside BCE's increasingly competitive home market while conserving capital.
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. The information contained in this news release is unaudited.
- Net earnings of
$683 million 49.5% with net earnings attributable to common shareholders of$630 million 56.7% or$0.68 - Adjusted net earnings1 of
$633 million $0.69 4.2% - Consolidated adjusted EBITDA1 essentially stable in Q1 2025 compared with Q1 2024 with 0.4 percentage-point increase in margin2 to
43.1% on2.1% lower operating costs - Free cash flow1 increased
$713 million $798 million 38.8% to$1,571 million - Bell Media revenue up
6.9% with35.9% adjusted EBITDA growth; digital revenue3 up12% as digital platforms and advertising technology continue to drive growth - Balanced capital allocation strategy:
- BCE annualized common share dividend established at
$1.75 - net debt leverage ratio1 of approximately 3.5 times adjusted EBITDA expected by end of 2027;
- discounted treasury issuances terminated under dividend reinvestment plan.
- BCE annualized common share dividend established at
"Over the past year, we have been laying the groundwork to position Bell for the years ahead," said Mirko Bibic, President and CEO, BCE and Bell Canada. "Bell's Q1 results reflect intense price competition and sustained regulatory uncertainty. With the current backdrop of macroeconomic and geopolitical instability, we need to stay more focused than ever on our core business and on winning customers over to Bell.
There are a number of significant changes in our economic and operating environments that have occurred since the Fall of 2024 that we need to address. We have made the appropriate decision to adjust our annualized dividend to
Today we also announced a major strategic partnership with Public Sector Pension Investment Board (PSP Investments), one of
As we look ahead to the rest of 2025, we will be focused on disciplined execution and continuing to strengthen the balance sheet. We will remain resilient in a challenging environment to deliver for our customers and shareholders."
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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, adjusted EPS is a non-GAAP ratio, and net debt leverage ratio is a capital management measure. 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 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. |
Driving growth through tech services
- Bell unveiled Ateko, a
Montréal -headquartered technology solutions provider. Standing for Automation and Tech Collaboration, Ateko's team of workflow automation experts draw on their experience with the world's largest hyperscalers and automation platforms to help customers streamline their operations and improve automation. - Bell launched a Security-as-a-Service (SECaaS) solution, hosted on its Canadian sovereign cloud. The service provides public and private sector organizations with top-tier cybersecurity solutions while ensuring data remains within Canadian borders, adhering to local privacy and security regulations.
Expanded partnerships delivering future-ready solutions
- Bell has deployed an AI-powered network operations solution built on Google Cloud to modernize Bell's network operations. The solution uses Google Cloud's Artificial Intelligence / Machine Learning capabilities for faster detection and resolution of network problems for enhanced overall network performance.
- Bell and Nokia expanded their 5G network infrastructure partnership, marking a major step forward in deploying Cloud Radio Access Networks (RAN) and paving the way for future Open RAN deployments.
The fastest pure fibre and 5G wireless networks
- Bell pure fibre Internet was awarded
Canada 's fastest Internet by Ookla® in their Speedtest Awards for the fourth consecutive time4, while its 5G and 5G+ networks were recognized by Global Wireless Solutions (GWS) as the fastest and best inCanada 5 in its 2024 nationwide assessment of 5G networks. - Bell pure fibre Internet now offers download and upload speeds of up to 8Gbps for residential and business customers in select areas of
Ontario and Québec – the fastest speeds available on the market today.
AI-driven solutions for a more secure customer experience
- Bell introduced a new suspicious call detection feature, which uses AI analytics to label suspicious callers with "likely fraud" or "possible spam" tags. The feature aims to help customers better identify fraudulent calls and builds on Bell's call-blocking technology, which has prevented over 6.6 billion fraudulent calls since its launch in 2021.
Delivering the most compelling content
- Bell Media acquired a majority stake in Sphere Abacus through its parent company Sphere Media International. This acquisition will expand Bell Media's content distribution, with Sphere Abacus becoming the primary international distributor of Bell Media's owned distribution rights.
- Bell Media launched live Connected TV inventory on TSN, digitizing part of TSN's linear inventory. This makes many live sports accessible on Connected TVs and allows for addressable advertising with tailored messaging based on demographic and behavioural data, maximizing impact for brands.
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4 Based on analysis by Ookla® of Speedtest Awards™ data for Q3-Q4 2024. Ookla trademarks used under license and reprinted with permission. |
5 Independent testing by GWS from February to November 2024 ranked Bell's 5G and 5G+ networks highest among Canadian national wireless carriers. GWS OneScore™ rankings for 5G+ performance and speeds are based on testing while actively using 3500 MHz spectrum. |
Financial Highlights
($ millions except per share amounts) (unaudited) | Q1 2025 | Q1 2024 | % change |
BCE | |||
Operating revenues | 5,930 | 6,011 | (1.3 %) |
Net earnings | 683 | 457 | 49.5 % |
Net earnings attributable to common shareholders | 630 | 402 | 56.7 % |
Adjusted net earnings | 633 | 654 | (3.2 %) |
Adjusted EBITDA | 2,558 | 2,565 | (0.3 %) |
Net earnings per common share (EPS) | 0.68 | 0.44 | 54.5 % |
Adjusted EPS | 0.69 | 0.72 | (4.2 %) |
Cash flows from operating activities | 1,571 | 1,132 | 38.8 % |
Capital expenditures | (729) | (1,002) | 27.2 % |
Free cash flow | 798 | 85 | n.m. |
BCE operating revenues were
- This result reflected a
7.4% decrease in product revenue to$758 million 0.4% lower service revenue of$5,172 million
Net earnings in Q1 increased
- The year-over-year increases were mainly due to higher other income primarily resulting from early debt redemption gains, partly offset by higher income taxes.
Adjusted net earnings were down
Adjusted EBITDA was down
BCE's adjusted EBITDA margin increased 0.4 percentage points to
- This year-over-year increase was driven by a
2.1% reduction in operating costs:- decreased labour costs attributable to workforce reductions and permanent closures of The Source stores as part of our strategic distribution partnership with Best Buy Canada;
- technology and automation-enabled operating efficiencies across the organization.
BCE capital expenditures in Q1 2025 were
- The year-over-year decrease is consistent with a planned reduction in capital spending largely attributable to slower FTTP footprint expansion, due to regulatory decisions that discourage network investment.
BCE cash flows from operating activities in Q1 were
- The year-over-year increase was mainly due to higher cash from working capital and lower income taxes paid, partly offset by higher interest paid.
Free cash flow was
- The year-over-year increase is mainly due to higher cash flows from operating activities, excluding cash from acquisition and other costs paid, and lower capital expenditures.
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6 Capital intensity is defined as capital expenditures divided by operating revenues. Refer to the Key Performance Indicators (KPIs) section in this news release for more information on capital intensity. |
Bell Communication and Technology Services7 (Bell CTS)
Total Bell CTS operating revenues decreased
Service revenue was down
- ongoing declines in legacy voice, data services and satellite services;
- greater acquisition, retention and bundle discounts on residential services compared to Q1 2024;
- lower mobile phone blended average revenue per user (ARPU)8,9,10.
These factors were partly offset by:
- expansion of our mobile phone, mobile connected device, IPTV and retail Internet average subscriber bases;
- the financial contribution from acquisitions made over the past year including Stratejm, CloudKettle and HGC Technologies;
- increased sales of business solutions to large enterprise customers and higher radio sales;
- flow through of rate increases.
Product revenue decreased
- lower mobile device sales to large enterprise customers in the government sector;
- a reduction in consumer electronics revenue from The Source due to permanent store closures that took place throughout 2024 as we converted to Best Buy Express as part of our strategic distribution partnership with Best Buy Canada.
This was partly offset by higher wireless device sales to consumers from higher upgrade volumes and contracted activations, moderated by greater discounting.
Bell CTS adjusted EBITDA decreased
- decreased labour costs;
- savings from our customer service centres driven by improved call placement;
- permanent closures of The Source stores as part of our strategic distribution partnership with Best Buy Canada;
- technology and automation-enabled operating efficiencies across the organization.
Postpaid mobile phone net subscriber losses were 9,598 in Q1, compared to net activations of 45,247 in Q1 2024.
The year-over-year decrease was the result of
Prepaid mobile phone net subscriber activations8,9,11 increased by 9,002 in Q1, compared to a net loss of 20,039 in Q1 2024. Despite a 3-basis point increase in mobile phone prepaid customer churn to
Bell's mobile phone customer base8,9,11 totalled 10,287,978 at the end of Q1 2025, a
Mobile phone blended ARPU was down
- increased competitive pressure on base rate plan pricing over the past year;
- lower overage revenue from customers subscribing to unlimited and larger capacity data plans;
- lower outbound roaming revenue as a result of decreased travel to
the United States .
Mobile connected device net activations decreased
At the end of Q1 2025, mobile connected device subscribers11 totalled 3,079,414, an increase of
Bell added 9,515 total net new retail high-speed Internet subscribers11 in Q1 2025, down
Despite continued strong demand for Bell's fibre services and bundled offerings with mobile service, the year-over-year decrease reflects:
- higher customer deactivations attributable to aggressive promotional offers by competitors and a greater number of customers coming off of promotional offers;
- less new fibre footprint expansion compared to last year;
- slowing industry growth given lower immigration and slower housing starts.
Retail high-speed subscribers7,8 totalled 4,416,962 at the end of Q1 2025, representing a
In Q1 2025, we reduced our retail high-speed Internet subscriber base by 80,666 subscribers, as at March 31, 2025, as we stopped selling new plans for this service under the Distributel, Acanac, Oricom and B2B2C brands. Additionally, at the beginning of Q1 2025, we reduced our retail high-speed Internet subscriber base by 2,783 subscribers to adjust for prior year customer deactivations following a review of customer accounts.
Bell's retail IPTV customer base decreased by 15,971 net subscribers in Q1 2025, compared to a net gain of 14,174 in Q1 2024. The year-over-year decrease was due mainly to:
- less pull-through of our full-service Bell Fibe TV product as a result of lower Internet volumes;
- greater competitive intensity;
- lower customer activations, particularly on our Fibe TV streaming service.
At the end of Q1 2025, Bell served 2,116,541 retail IPTV subscribers7,12, a
Retail residential NAS net losses were 47,430 in Q1 2025, compared to 43,911 in Q1 2024. The higher year-over-year net losses reflect fewer gross activations due to ongoing substitution to wireless and Internet-based technologies, along with less pull-through on reduced Internet activations.
Bell's retail residential NAS customer base7,11 totalled 1,772,611 at the end of Q1 2025 representing a
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7 In Q1 2025, we reduced our retail high-speed Internet, retail IPTV and retail residential NAS lines subscriber bases by 80,666, 441, and 14,150 subscribers, respectively, as at March 31, 2025, as we stopped selling new plans for this service under the Distributel, Acanac, Oricom and B2B2C brands. Additionally, at the beginning of Q1 2025, we reduced our retail high-speed Internet subscriber base by 2,783 subscribers to adjust for prior year customer deactivations following a review of customer accounts. |
8 In Q3 2024, we removed 77,971 Virgin Plus prepaid mobile phone subscribers from our prepaid mobile phone subscriber base as at September 30, 2024, as we stopped selling new plans for this service as of that date. Additionally, as a result of a recent CRTC decision on wholesale high-speed Internet access services, we are no longer able to resell cable Internet services to new customers in our wireline footprint as of September 12, 2024, and consequently we removed all of the existing 106,259 cable subscribers in our wireline footprint from our retail high-speed Internet subscriber base as of that date. |
9 In Q4 2024, we removed 124,216 Bell prepaid mobile phone subscribers from our prepaid mobile phone subscriber base as at December 31, 2024, as we stopped selling new plans for this service as of that date. |
10 ARPU is defined as Bell CTS wireless external services 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. |
11 Refer to the Key Performance Indicators (KPIs) section in this news release for more information on churn and subscriber (or customer) units. |
12 In Q2 2024, we increased our retail IPTV subscriber base by 40,997 to align the deactivation policy for our Fibe TV streaming services to our traditional Fibe TV service. |
Bell Media operating revenue increased
Advertising revenue was up
- higher digital advertising revenue, including the financial contribution from the acquisition of OUTEDGE Media Canada;
- greater advertiser demand for sports and premier live events including our broadcast of Super Bowl LIX and the 97th Oscars®;
- increased advertising spending related to the Canadian federal election.
Subscriber revenue increased
Total digital revenues grew
- continued Crave and sports direct-to-consumer streaming subscriber growth;
- higher digital advertising revenue reflecting growth in ad-supported subscription tiers on Crave and Connected TV.
Total Crave subscriptions increased
Adjusted EBITDA in Q1 2025 was up
COMMON SHARE DIVIDEND
On February 6, 2025, we announced that BCE's common share dividend and common share dividend payout policy would continue to be reviewed by the Board.
The Board has considered the macroeconomic, regulatory and competitive environments of BCE. Heightened economic uncertainty, inflationary pressures and the prospect of a global recession are weighing on consumer confidence. In addition, the decline in BCE's share price has resulted in a higher cost of capital. The Board also considered the impact of the unsupportive regulatory environment given recent CRTC decisions, ongoing aggressive competitive pricing, and a slowdown in immigration.
Greater financial flexibility and a prudent approach to capital management is required in the current economic, regulatory and competitive environments. Accordingly, the Board has determined to establish the annualized dividend at
This measure is expected to strengthen the Corporation's balance sheet, while providing enhanced flexibility in the context of economic uncertainty. BCE's Board has declared today a quarterly dividend of
BCE also announced today that the Board has determined to terminate the discounted treasury issuances under the Shareholder Dividend Reinvestment and Stock Purchase Plan effective from the July 15, 2025 dividend payment date. See BCE's separate news release issued today for additional information.
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13 Free cash flow after payment of lease liabilities is a non-GAAP financial measure. Refer to the non-GAAP and Other Financial Measures section in this news release for more information. |
OUTLOOK FOR 2025
BCE confirmed its financial guidance targets for 2025, as provided on February 6, 2025, as per the table below, with the annualized common share dividend of
2024 Results | 2025 Guidance | |
Revenue growth | (1.1 %) | ( |
Adjusted EBITDA growth | 1.7 % | ( |
Capital intensity | 16 % | Approx. |
Adjusted EPS growth | (5.3 %) | ( |
Free cash flow growth | (8.1 %) | |
Annualized common dividend per share |
For 2025, we expect:
- wireless and broadband competitive pricing flowthrough pressure from 2024, lower subscriber loadings, decreased wireless product sales and higher media content and programming costs to impact revenue and adjusted EBITDA;
- a slowdown of our fibre build in
Canada and efficiencies from transformation initiatives to drive lower capital expenditures; - increased interest expense, higher depreciation and amortization expense, lower gains on sale of real estate and a higher number of common shares outstanding due to the implementation in January and April 2025 of a discounted treasury dividend reinvestment plan to drive lower EPS;
- lower capital expenditures to drive higher free cash flow.
- Reduction in the BCE annualized common share dividend to
$1.75 $3.99
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 2025 financial guidance targets are based, as well as the principal related risk factors.
CALL WITH FINANCIAL ANALYSTS
BCE will hold a conference call with the financial community to discuss Q1 2025 results on Thursday, May 8 at 8:00 am eastern. Media are welcome to participate on a listen-only basis. To participate, please dial toll-free 1-844-933-2401 or 647-724-5455. A replay will be available until midnight on June 8, 2025 by dialing 1-877-454-9859 or 647-483-1416 and entering passcode 7485404. A live audio webcast of the conference call will be available on BCE's website at BCE Q1-2025 conference call.
BCE uses various financial measures to assess its business performance. Certain of these measures are calculated in accordance with IFRS Accounting Standards or GAAP while certain other measures do not have a standardized meaning under GAAP. We believe that our GAAP financial measures, read together with adjusted non-GAAP and other financial measures, provide readers with a better understanding of how management assesses BCE's performance.
National Instrument 52-112, Non-GAAP and Other Financial Measures Disclosure (NI 52-112), prescribes disclosure requirements that apply to the following specified financial measures:
- Non-GAAP financial measures;
- Non-GAAP ratios;
- Total of segments measures;
- Capital management measures; and
- Supplementary financial measures.
This section provides a description and classification of the specified financial measures contemplated by NI 52-112 that we use in this news release to explain our financial results except that, for supplementary financial measures, an explanation of such measures is provided where they are first referred to in this news release if the supplementary financial measures' labelling is not sufficiently descriptive.
A non-GAAP financial measure is a financial measure used to depict our historical or expected future financial performance, financial position or cash flow and, with respect to its composition, either excludes an amount that is included in, or includes an amount that is excluded from, the composition of the most directly comparable financial measure disclosed in BCE's consolidated primary financial statements. We believe that non-GAAP financial measures are reflective of our on-going operating results and provide readers with an understanding of management's perspective on and analysis of our performance.
Below are descriptions of the non-GAAP financial measures that we use in this news release to explain our results as well as reconciliations to the most directly comparable financial measures under IFRS Accounting Standards.
Adjusted net earnings – Adjusted net earnings is a non-GAAP financial measure and it does not have any standardized meaning under IFRS Accounting Standards. Therefore, it is 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 equity losses (gains) on investments in associates and joint ventures, net losses (gains) on investments, early debt redemption costs (gains), impairment of assets and discontinued operations, net of tax and NCI.
We use adjusted net earnings and we believe that certain investors and analysts use this measure, 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 equity losses (gains) on investments in associates and joint ventures, net losses (gains) on investments, early debt redemption costs (gains), 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 directly comparable financial measure under IFRS Accounting Standards is net earnings attributable to common shareholders.
The following table is a reconciliation of net earnings attributable to common shareholders to adjusted net earnings on a consolidated basis.
($ millions)
Q1 2025 | Q1 2024 | |
Net earnings attributable to common shareholders | 630 | 402 |
Reconciling items: Severance, acquisition and other costs Net mark-to-market (gains) losses on derivatives used to Net losses on investments Early debt redemption gains Impairment of assets Income taxes for above reconciling items |
247
(1) 2 (266) 9 12 |
229
90 6 - 13 (85) |
Non-controlling interest (NCI) for the above reconciling items | - | (1) |
Adjusted net earnings | 633 | 654 |
Free cash flow and free cash flow after payment of lease liabilities – Free cash flow and free cash flow after payment of lease liabilities are non-GAAP financial measures and they do not have any standardized meaning under IFRS Accounting Standards. Therefore, they are 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 define free cash flow after payment of lease liabilities 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 principal payment of lease liabilities, 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 and free cash flow after payment of lease liabilities to be important indicators of the financial strength and performance of our businesses. Free cash flow and free cash flow after payment of lease liabilities show how much cash is available to pay dividends on common shares, repay debt and reinvest in our company. We believe that certain investors and analysts use free cash flow and free cash flow after payment of lease liabilities to value a business and its underlying assets and to evaluate the financial strength and performance of our businesses. The most directly comparable financial measure under IFRS Accounting Standards is cash flows from operating activities.
The following tables are reconciliations of cash flows from operating activities to free cash flow and free cash flow after payment of lease liabilities on a consolidated basis.
($ millions)
Q1 2025 | Q1 2024 | |
Cash flows from operating activities | 1,571 | 1,132 |
Capital expenditures | (729) | (1,002) |
Cash dividends paid on preferred shares | (39) | (46) |
Cash dividends paid by subsidiaries to NCI | (13) | (14) |
Acquisition and other costs paid | 8 | 15 |
Free cash flow | 798 | 85 |
($ millions)
Q1 2025 | Q1 2024 | |
Cash flows from operating activities | 1,571 | 1,132 |
Capital expenditures | (729) | (1,002) |
Cash dividends paid on preferred shares | (39) | (46) |
Cash dividends paid by subsidiaries to NCI | (13) | (14) |
Acquisition and other costs paid | 8 | 15 |
Free cash flow | 798 | 85 |
Principal payment of lease liabilities | (304) | (297) |
Free cash flow after payment of lease liabilities | 494 | (212) |
The term net debt does not have any standardized meaning under IFRS Accounting Standards. Therefore, it is unlikely to be comparable to similar measures presented by other issuers.
We define net debt as debt due within one year plus long-term debt and
In Q1 2025, we updated our definition of net debt to include
We, and certain investors and analysts, consider net debt to be an important indicator of the company's financial leverage.
Net debt is calculated using several asset and liability categories from the statements of financial position. The most directly comparable financial measure under IFRS Accounting Standards is long-term debt. The following table is a reconciliation of long-term debt to net debt on a consolidated basis.
($ millions)
March 31, | December 31, 2024 | |
Long-term debt | 33,869 | 32,835 |
Less : | (2,225) | - |
Debt due within one year | 5,323 | 7,669 |
1,741 | 1,767 | |
Cash | (1,049) | (1,572) |
Cash equivalents | (3) | - |
Short-term investments | - | (400) |
Net debt | 37,656 | 40,299 |
A non-GAAP ratio is a financial measure disclosed in the form of a ratio, fraction, percentage or similar representation and that has a non-GAAP financial measure as one or more of its components.
Below is a description of the non-GAAP ratio that we use in this news release to explain our results.
Adjusted EPS – Adjusted EPS is a non-GAAP ratio and it does not have any standardized meaning under IFRS Accounting Standards. Therefore, it is unlikely to be comparable to similar measures presented by other issuers.
We define adjusted EPS as adjusted net earnings per BCE common share. Adjusted net earnings is a non-GAAP financial measure. For further details on adjusted net earnings, refer to Non-GAAP Financial Measures above.
We use adjusted EPS, and we believe that certain investors and analysts use this measure, 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 equity losses (gains) on investments in associates and joint ventures, net losses (gains) on investments, early debt redemption costs (gains), 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.
A total of segments measure is a financial measure that is a subtotal or total of 2 or more reportable segments and is disclosed within the Notes to BCE's consolidated primary financial statements.
Below is a description of the total of segments measure that we use in this news release to explain our results as well as a reconciliation to the most directly comparable financial measure under IFRS Accounting Standards.
Adjusted EBITDA – Adjusted EBITDA is a total of segments measure. We define adjusted EBITDA as operating revenues less operating costs as shown in BCE's consolidated income statements.
The most directly comparable financial measure under IFRS Accounting Standards is net earnings.
The following table is a reconciliation of net earnings to adjusted EBITDA on a consolidated basis.
($ millions)
Q1 2025 | Q1 2024 | |
Net earnings Severance, acquisition and other costs Depreciation Amortization Finance costs Interest expense Net return on post-employment benefit plans Impairment of assets Other (income) expense Income taxes | 683 247 941 331
423 (25) 9 (308) 257 | 457 229 946 316
416 (16) 13 38 166 |
Adjusted EBITDA | 2,558 | 2,565 |
A capital management measure is a financial measure that is intended to enable a reader to evaluate our objectives, policies and processes for managing our capital and is disclosed within the Notes to BCE's consolidated financial statements.
The financial reporting framework used to prepare the financial statements requires disclosure that helps readers assess the company's capital management objectives, policies, and processes, as set out in IFRS Accounting Standards in IAS 1 – Presentation of Financial Statements. BCE has its own methods for managing capital and liquidity, and IFRS Accounting Standards do not prescribe any particular calculation method.
The net debt leverage ratio is a capital management measure and represents net debt divided by adjusted EBITDA. Net debt used in the calculation of the net debt leverage ratio is a non-GAAP financial measure. For further details on net debt, refer to Non-GAAP Financial Measures above. For the purposes of calculating our net debt leverage ratio, adjusted EBITDA is twelve-month trailing adjusted EBITDA.
We use, and believe that certain investors and analysts use, the net debt leverage ratio as a measure of financial leverage.
A supplementary financial measure is a financial measure that is not reported in BCE's consolidated financial statements, and is, or is intended to be, reported periodically to represent historical or expected future financial performance, financial position, or cash flows.
An explanation of such measures is provided where they are first referred to in this news release if the supplementary financial measures' labelling is not sufficiently descriptive.
We use adjusted EBITDA margin, blended ARPU, capital intensity, churn and subscriber (or customer or NAS) 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.
BCE is
Through Bell for Better, we are investing to create a better today and a better tomorrow by supporting the social and economic prosperity of our communities. This includes the Bell Let's Talk initiative, which 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 initiatives throughout the country. To learn more, please visit Bell.ca/LetsTalk.
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14 Based on total revenue and total combined customer connections. |
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Richard Bengian
richard.bengian@bell.ca
Certain statements made in this news release are forward-looking statements. These statements include, without limitation, statements relating to BCE's 2025 guidance (including revenue, adjusted EBITDA, capital intensity, adjusted EPS, free cash flow and annualized common dividend per share), BCE's common share dividend and dividend payout policy target, certain benefits expected to result from BCE's new annualized common share dividend rate and revised dividend payout policy target, BCE's expected net debt leverage ratio target to be reached by the end of 2027, the termination of discounted treasury issuances under BCE's Shareholder Dividend Reinvestment and Stock Purchase Plan (DRP), the proposed acquisition by BCE, through Bell Canada, of Northwest Fiber Holdco, LLC (doing business as Ziply Fiber (Ziply Fiber)), the formation of Network FiberCo, a strategic partnership to accelerate the development of fibre infrastructure through Ziply Fiber in underserved markets in
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 May 8, 2025 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. We regularly 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 May 8, 2025. 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. Given the unpredictability of global trade disputes, and the speed and magnitude of the shifts, the economic outlook is highly uncertain. Trade policy uncertainty is making it difficult for households, businesses and governments to plan. It is also difficult to project how
- Slowing economic growth, given the Bank of
Canada 's most recent estimated growth in Canadian gross domestic product of0.8% or1.6% in 2025 depending on two scenarios for howU.S. trade policy could unfold, both of which represent a decrease from the earlier estimate of1.8% - Slower population growth because of government policies designed to slow immigration
- Slowdown in consumer spending reflecting a decline in consumer confidence
- Slowing business investment, particularly by businesses in sectors most reliant on
U.S. markets - Stable to higher level of CPI inflation
- Ongoing labour market softness
- Interest rates expected to remain at or near current levels
- Canadian dollar expected to remain 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 higher 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 telecommunications solutions or alternative over-the-top (OTT) competitors
- The Canadian traditional TV and radio advertising markets are expected to be impacted by audience declines as the advertising market growth continues to shift towards digital
- Declines in broadcasting distribution undertaking (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 CTS Segment
Our forward-looking statements are also based on the following internal operational assumptions with respect to our Bell CTS segment:
- Stable or slight decrease in our market share of national operators' wireless mobile phone net additions as we manage increased competitive intensity and promotional activity across all regions and market segments
- Ongoing expansion and deployment of Fifth Generation (5G) and 5G+ wireless networks, offering competitive coverage and quality
- Continued diversification of our distribution strategy with a focus on expanding direct-to-consumer (DTC) and online transactions
- Slightly declining mobile phone blended average revenue per user (ARPU) due to competitive pricing pressure
- Continuing business customer adoption of advanced 5G, 5G+ and Internet of Things (IoT) solutions
- Continued scaling of technology services from recent acquisitions made in the enterprise market through leveraging our sales channels with the acquired businesses' technical expertise
- Improving wireless handset device availability in addition to stable device pricing and margins
- Moderating deployment of direct fibre to incremental homes and businesses within our wireline footprint
- Continued growth in retail Internet subscribers
- Increasing wireless and Internet-based technological substitution
- Continued focus on the consumer household and bundled service offers for mobility, Internet and content services
- Continued large business customer migration to Internet protocol (IP)-based systems
- Ongoing competitive repricing pressures in our business and wholesale markets
- 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, which, in many cases, are also sold as a service by Bell Business Markets (BBM) to ensure continuity of customer relationships and adjacent revenue growth opportunities - Increasing customer adoption of OTT services resulting in downsizing of television (TV) packages and fewer consumers purchasing BDU subscriptions services
- Realization of cost savings related to operating efficiencies enabled by our direct fibre footprint, changes in consumer behaviour and product innovation, digital and AI adoption, product and service enhancements, expanding self-serve capabilities, new call centre and digital investments, other improvements to the customer service experience, management workforce reductions including attrition and retirements, and lower contracted rates from our suppliers
- No adverse material financial, operational or competitive consequences of changes in or implementation of regulations affecting our communication and technology services 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 digital revenue expected to reflect scaling of Connected TV, DTC advertising and subscriber growth, as well as digital growth in our out-of-home (OOH) business contributing towards the advancement of our digital-first media strategy
- Leveraging of first-party data to improve targeting, advertisement delivery including personalized viewing experience and attribution
- Continued escalation of media content costs to secure quality content
- Continued scaling of Crave, TSN, TSN+ and RDS through expanded distribution, optimized content offering and user experience improvements
- Continued support in original French content with a focus on digital platforms such as Crave, Noovo.ca and iHeartRadio
Canada , to better serve our French-language customers through a personalized digital experience - 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
- No adverse material financial, operational or competitive consequences of changes in or implementation of 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 2025:
- An estimated post-employment benefit plans service cost of approximately
$205 million - An estimated net return on post-employment benefit plans of approximately
$100 million - Depreciation and amortization expense of approximately
$5,100 million $5,150 million - Interest expense of approximately
$1,775 million $1,825 million - Interest paid of approximately
$1,850 million $1,900 million - An average effective tax rate of approximately
17% - Non-controlling interest of approximately
$60 million - Contributions to post-employment benefit plans of approximately
$40 million - Payments under other post-employment benefit plans of approximately
$60 million - Income taxes paid (net of refunds) of approximately
$700 million $800 million - Weighted average number of BCE common shares outstanding of approximately 935 million
- An annualized common share dividend of
$1.75
Assumptions underlying expected continuing contribution holiday in 2025 in the majority of our pension plans
We have made the following principal assumptions underlying the expected continuing contribution holiday in 2025 in the majority of our pension plans:
- At the relevant time, our defined benefit (DB) pension plans will remain in funded positions with going concern surpluses and maintain solvency ratios that exceed the minimum legal requirements for a contribution holiday to be taken for applicable DB and defined contribution (DC) components
- No significant declines in our DB pension plans' financial position due to declines in investment returns or interest rates
- No material experience losses from other events such as through litigation or changes in laws, regulations or actuarial standards
The foregoing assumptions, although considered reasonable by BCE on May 8, 2025, 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 2025 guidance, are listed below. The realization of our forward-looking statements, including our ability to meet our 2025 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 negative effect of adverse economic conditions, including from trade tariffs and other protective government measures, including the imposition of
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 2024 Annual MD&A dated March 6, 2025, and BCE's 2025 First Quarter MD&A dated May 7, 2025 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 sedarplus.ca) and with the
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SOURCE Bell Canada (MTL)
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