Mr. Mirko Bibic reports

BCE REPORTS FIRST QUARTER 2024 RESULTS

BCE Inc. has released results for the first quarter of 2024.

"Today's results reflect the Bell team's continued ability to successfully navigate a heightened competitive environment and achieve operational results in line with our expectations for the quarter," said Mirko Bibic, President and CEO of BCE and Bell Canada.

"Bell is off to a solid start with adjusted EBITDA and margin that were ahead of plan, demonstrating the team's focus on operational efficiencies and our continued efforts to address near-term economic pressures, while effectively balancing growth with profitability.

Bell's award-winning networks and our leading services continue to resonate with Canadians. We had our best Q1 retail Internet net additions in 17 years, up 13.9 per cent to 31,078, demonstrating customers' continued preference for fibre. We are also deftly navigating an actively competitive wireless landscape with our highest Q1 postpaid net activations since 2018, up 4.5 per cent to 45,247. Our pivot to digital at Bell Media helped drive digital revenue up 33 per cent as digital platforms and advertising technology drove strong growth. I'm pleased to report that this is the first quarter of year-over-year advertising revenue growth since Q4 2022.

We have been putting the right building blocks in place over the past few quarters as we transition to a company focused on providing our customers with the communications, tech services and digital media they need now and in the future."

KEY BUSINESS DEVELOPMENTS

Innovative partnerships to deliver for our customers

Bell announced a partnership with Google Cloud to introduce Google Cloud Contact Centre AI (CCAI) from Bell for Canadian businesses that will enable intelligent customer and agent experiences through generative AI-infused technology. Google CCAI from Bell is supported by Bell's Professional and Managed services teams and can be added to existing contact centre environments and to cloud contact centres of any size. Bell entered into a retail partnership with Loblaw to launch no name mobile , providing Canadians new affordable wireless options and prepaid plans, powered by PC Mobile and running on Bell's leading 4G network. no name prepaid plans will be available in all 278 No Frills grocery store locations across Canada.

Champion customer experience

Bell MTS received an Innovation Award at the 2023 Manitoba Excellence in Customer Contact Achievement (MECCA) awards6 and Bell MTS team members were additionally recognized at the awards for their customer experience excellence.7

Delivering the most compelling content

Bell Media's Crave streaming service became available on Amazon Prime Video in Canada. Crave's premium, ad-free plan can be purchased by Amazon Prime Members directly through their Prime Video account, expanding its reach and giving subscribers easier access to Crave's bilingual offering. Expanding the reach and discoverability of its platforms and content, Bell Media also launched 10 English and French-language free, ad-supported streaming television (FAST) Channels , available now on LG Channels and slated to roll out on Samsung TV Plus later this spring. Super Bowl LVIII was the most-watched Super Bowl on record with an average audience of 10 million viewers on CTV, TSN and RDS, up 16 per cent compared to last year and reaching 19 million Canadians - nearly 50 per cent of Canada's population. Additional sports highlights included the 2024 NCAA March Madness tournament and the 2024 IIHF Women's World Championship both on TSN and RDS, and the 2024 Masters Tournament on CTV, TSN and RDS.

Bell for Better

Bell has been named one of Canada's Greenest Employers 8 for the eighth consecutive year by Mediacorp. Bell was also named a Top Employer for Young People 9 for the seventh consecutive year, a Top Family-Friendly Employer 10 for the fifth consecutive year, and a Montreal Top Employer 11 for the 12th year in a row by the organization. Bell took the top spot among telecom providers and 51st overall in the Corporate Knights Global 100 12 most sustainable corporations for 2024, and ranked 127th in the 2024 Clean200 list 13 of global companies that earn the most from sustainable sources. Bell was also named the top telecom and ranked 3rd overall in the Globe and Mail's Road to Net Zero report14. As part of a $10M partnership with the Graham Boeckh Foundation to support and scale Integrated Youth Services (IYS) initiatives across the country, Bell supported the launch of a new provincial IYS initiative in Nova Scotia which will bring free mental health services to young people in seven communities around the province.

"BCE's Q1 results demonstrate that we're on the right path forward as we head further into 2024," said Curtis Millen, Chief Financial Officer of BCE and Bell Canada.

"Adjusted EBITDA was up 1.1 per cent, better than plan, driving an 80-point improvement in margin. Wireless and residential Internet revenue both grew 3 per cent, fuelled by our best Q1 wireless postpaid net activations since 2018 and our highest Q1 retail Internet net subscriber activations since 2007.

We said at the beginning of the year that 2024 will be a transformational year for Bell as we pivot our business to capture growth opportunities and focus on revenue generation. Our financial position remains healthy, and we remain confident in our agility and operational excellence in a period of heightened competitive intensity. With Q1 consolidated results that met our internal plan, together with stronger projected quarterly revenue, EBITDA growth and higher free cash flow generation as the year progresses, I am pleased to reconfirm our financial guidance targets for 2024."

BCE operating revenues were $6,011 million in Q1, down 0.7 per cent compared to Q1 2023. This result reflected 0.6 per cent lower service revenue of $5,192 million, due to a year-over-year decline at Bell Media, partly offset by growth at Bell Communication and Technology Services (Bell CTS), as well as a 1.6 per cent decrease in product revenue to $819 million.

Net earnings decreased 42.0 per cent to $457 million and net earnings attributable to common shareholders totalled $402 million, or $0.44 per share, down 44.6 per cent and 44.3 per cent respectively. The year-over-year declines were due to higher severance, acquisition and other costs related mainly to workforce reduction initiatives, higher other expense reflecting net mark-to-market losses on derivatives used to economically hedge equity settled share-based compensation as well as gains from the sale of land recognized in Q1 2023 related to our real estate optimization strategy, higher interest expense, as well as increased depreciation and amortization expense. These factors were partly offset by lower income taxes, higher adjusted EBITDA and lower asset impairment charges related to office spaces we ceased using as part of our real estate optimization strategy due to Bell's hybrid work policy. Adjusted net earnings were down 15.3 per cent to $654 million, resulting in a 15.3 per cent decrease in adjusted EPS to $0.72.

Adjusted EBITDA grew 1.1 per cent to $2,565 million, reflecting a 1.7 per cent increase at Bell CTS, partly offset by an 11.4 per cent decrease at Bell Media. BCE's consolidated adjusted EBITDA margin increased 0.8 percentage points to 42.7 per cent from 41.9 per cent in Q1 2023, driven by a 2.0 per cent improvement in operating costs reflecting lower timing-related programming costs at Bell Media and the favourable impact of various cost reduction initiatives and other operating efficiencies across the organization.

BCE capital expenditures were $1,002 million, down 7.7 per cent from $1,086 million last year, corresponding to a capital intensity15 of 16.7 per cent, compared to 17.9 per cent in Q1 2023. The year-over-year decrease is consistent with a planned reduction in capital spending and slowdown in our pure fibre build.

BCE cash flows from operating activities were $1,132 million, down 9.2 per cent from Q1 2023, reflecting increased cash taxes due mainly to the timing of instalment payments and higher severance, acquisition and other costs paid, partly offset by increased cash from working capital and higher adjusted EBITDA.

Free cash flow of $85 million was unchanged compared to Q1 2023 as lower cash flows from operating activities excluding acquisition and other costs paid were offset by a decrease in capital expenditures.

OPERATING RESULTS BY SEGMENT

Bell Communication and Technology Services (Bell CTS)

Total Bell CTS operating revenues increased 0.1 per cent to $5,375 million.

Service revenue grew 0.5 per cent to $4,556 million, driven mainly by ongoing expansion of our mobile phone, mobile connected device and retail Internet and IPTV subscriber bases, increased sales of business solutions services to large enterprise customers, as well as the financial contribution from acquisitions made over the past year including FX Innovation. This was partly offset by ongoing declines in legacy voice, data and satellite TV services, greater acquisition, retention and bundle discounts on residential home services compared to Q1 last year, lower overage revenue as a result of more mobile phone customers subscribing to unlimited and larger capacity data rate plans, as well as lower sales of international long-distance minutes to wholesale customers.

Product revenue decreased 1.6 per cent to $819 million, due to lower telecom data equipment sales to large enterprise customers, reflecting the normalization of sales volumes compared to exceptionally strong growth in Q1 2023 attributable to the recovery from global supply chain disruptions, and lower revenues from The Source. This was partly offset by higher wireless product revenue driven by a greater sales mix of higher-value mobile phones and the timing of mobile device sales to large enterprise customers in the government sector.

Bell CTS adjusted EBITDA grew 1.7 per cent to $2,448 million, yielding a 0.7 percentage-point margin increase to 45.5 per cent from 44.8 per cent in Q1 2023. This was driven by the flow-through of higher year-over-year service revenue and a 1.1 per cent reduction in operating costs reflecting lower cost of goods sold from decreased product sales in the quarter and the favourable impact of various cost reduction initiatives and other operating efficiencies.

Postpaid mobile phone net subscriber16 activations totaled 45,247, up 4.5 per cent from 43,289 in Q1 2023, representing our best Q1 result since 2018. The increase was driven by 34.6 per cent higher gross subscriber activations, driven by population growth, continued 5G and multi-product bundling momentum, effective promotions and stronger Virgin Plus performance. This was partly offset by an increase in mobile phone postpaid customer churn16 to 1.21 per cent from 0.90 per cent in Q1 2023, reflecting greater overall competitive market activity and promotional offer intensity compared to last year, as well as lower business customer demand attributable to a soft economy, and workforce and other cost rationalization initiatives undertaken by our enterprise customers.

Bell's prepaid mobile phone customer base declined by 20,039 net subscribers16 in Q1 2024, compared to a net loss of 16,654 in Q1 2023. Despite a 5.7 per cent increase in gross activations, the year-over-year decrease was the result of greater customer migrations to postpaid service and higher customer churn, which increased to 5.74 per cent from 5.28 per cent last year, reflecting more customer deactivations due to attractive promotional offers and availability of mobile 5G service on postpaid discount brands.

Bell's mobile phone customer base totalled 10,206,452 at the end of Q1 2024, a 3.1 per cent increase over last year, comprised of 9,362,275 postpaid subscribers, up 3.6 per cent, and 844,177 prepaid customers, down 2.1 per cent. In Q1 2024, we adjusted our mobile phone postpaid subscriber base to remove 105,802 very low to non-revenue generating business market customers.

Mobile phone blended ARPU was essentially unchanged at $58.14 in Q1 2024 compared to $58.15 in Q1 2023.

Mobile connected device net activations were down 6.1 per cent to 66,406 in Q1 2024, despite more connected car subscriptions and fewer data device deactivations, due to lower consumer and business IoT activations, which can fluctuate from quarter to quarter. At the end of Q1 2024, mobile connected device subscribers16 totalled 2,798,954, an increase of 11.5 per cent over last year.

Bell added 31,078 net new retail Internet subscribers16, up 13.9 per cent from 27,274 in Q1 2023. This represents our best Q1 result since 2007, driven by higher customer gross activations reflecting strong customer demand for fibre-based services, increased customer penetration of tenured fibre footprint, a focus on bundled offerings with mobile service and improved year-over-year small business performance. This was partly offset by higher customer deactivations attributable to aggressive promotional offers by competitors offering cable, fixed wireless and satellite Internet services.

Retail Internet subscribers totalled 4,496,712 at the end of Q117, a 5.1 per cent increase from last year, which includes 3,850 business customers gained from a small acquisition made in the quarter. In Q1 2024, we removed 11,645 turbo hubs customers from our retail high-speed Internet subscriber base as we are no longer actively marketing this product in our wireless-to-the-home footprint.

Bell added 14,174 net new retail IPTV subscribers16, up 30.0 per cent from 10,899 in Q1 2023, driven by higher customer activations from greater Internet pull-through and the success of our multi-brand segmentation approach, including standalone Fibe TV subscriptions and Fibe TV streaming service, which attained its highest Q1 activations since launch. At the end of Q1 2024, Bell served 2,084,516 retail IPTV subscribers17, a 4.3 per cent increase over last year.

Retail satellite TV subscribers are no longer being reported as of Q1 2024 as these customers no longer represent a significant proportion of overall revenues. Accordingly, satellite TV subscribers have been removed from our retail TV subscriber base, and we now report exclusively retail IPTV subscribers.

Retail residential NAS16 net losses improved by 6.3 per cent to 43,911 in Q1 2024, due to fewer customer deactivations. Bell's retail residential NAS customer base totalled 1,977,70617 at the end of Q1 2024, down 7.8 per cent from last year.

Bell Media

Media operating revenue decreased 7.1 per cent to $725 million in Q1 2024 as a result of lower year-over-year subscriber revenue, due mainly to a favourable retroactive adjustment in Q1 2023 related to a contract with a Canadian TV distributor, partly offset by higher advertising revenue.

Advertising revenue was up 1.6 per cent, due to increased year-over-year sales for our broadcast of Super Bowl LVIII, strong growth in digital advertising and improved out-of-home and radio performance. This result was achieved despite continued soft overall traditional broadcast TV advertiser demand, due to unfavourable economic conditions and delays in the delivery of newly scripted content due to the Hollywood writers' strike in 2023.

Subscriber revenue decreased 13.8 per cent, due mainly to the favourable retroactive adjustment in Q1 2023 referenced above.

Total digital revenues grew 33 per cent, the result of strong growth in digital advertising that was fuelled by Bell Media's programmatic advertising marketplace where growing customer usage of our expanded strategic audience management (SAM) TV sales tool drove a significant increase in advertising bookings this quarter, as well as by ad-supported subscription tiers on Crave and Addressable TV.

Adjusted EBITDA was down 11.4 per cent to $117 million, yielding a 0.8 percentage-point margin decline to 16.1 per cent, as a result of lower year-over-year operating revenue. Operating costs improved 6.2 per cent, reflecting lower TV programming costs due to content delays as a result of the Hollywood actors' and writers' strikes in 2023, restructuring initiatives undertaken over the past year as a result of the unfavourable economic and broadcasting regulatory environments, and the cessation of CRTC Part II fees in April 2023.

TSN remained Canada's number one sports network and the top specialty channel overall in Q1 2024; RDS remained the top-ranked French-language non-news specialty channel overall.

Bell Media was ranked number one in full-day viewership for all French-language entertainment specialty and pay channels.

COMMON SHARE DIVIDEND

BCE's Board of Directors has declared a quarterly dividend of $0.9975 per common share, payable on July 15, 2024 to shareholders of record at the close of business on June 14, 2024.

OUTLOOK FOR 2024

BCE confirmed its financial guidance targets for 2024, as provided on February 8, 2024, as follows:

Directly as a result of federal government policies, we plan a significant reduction in 2024 capital expenditures that will lead to a slowdown in our pure fibre build and lower spending in highly-regulated businesses. We expect increased interest expense, higher depreciation and amortization expense, and lower gains on sale of real estate to drive lower adjusted EPS in 2024. For 2024, we also expect higher severance payments related to workforce restructuring initiatives, higher interest paid and lower cash from working capital to drive lower free cash flow.

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 2024 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 2024 results on Thursday, May 2 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 1, 2024 by dialing 1-877-454-9859 or 647-483-1416 and entering passcode 3828464#. A live audio webcast of the conference call will be available on BCE's website at BCE Q1-2024 conference call .

About BCE

BCE is Canada's largest communications company18, providing advanced Bell broadband Internet, wireless, TV, media and business communications services. To learn more, please visit Bell.ca or BCE.ca .

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.

We seek Safe Harbor.