Our capital comes from our investors, lenders and free cash flow that is generated from our operations. We achieve financial growth through ongoing investment in our purpose to advance how Canadians connect with each other and the world, while seeking to deliver sustainable shareholder returns through consistent dividend growth.
By focusing on operational excellence and cost discipline throughout every part of our business, we aim to deliver leading broadband fibre and wireless networks in locations large and small. We seek to provide truly differentiated communications services to Canadians and drive revenue growth by leveraging our networks to serve our customers.
Build the best networks
Operate with agilityand cost efficiency
Drive growth withinnovative services
How we monitor impact and progress :
2022 financial performance
| 2022 Target | Actual | 2022 Performance and results | |
|---|---|---|---|
| Revenue growth | 1%–5% | 3.1% | BCE revenues grew by 3.1% in 2022, compared to 2021, driven by higher service revenue of 3.0%, and higher product revenue of 3.8%, reflecting growth from our Bell Wireless and Bell Media segments, partly offset by a modest decline in our Bell Wireline segment. |
| Adjusted EBITDA growth | 2%–5% | 3.1% | BCE adjusted EBITDA grew by 3.1% in 2022, compared to 2021, driven by increases in our Bell Wireless and Bell Media segments, whereas our Bell Wireline segment remained stable year over year. The growth reflected greater revenues, partly offset by higher operating expenses. |
| Net earnings growth | Data not available | 1.2% | In 2022, net earnings increased by 1.2%, compared to 2021, due to higher adjusted EBITDA, lower severance, acquisition and other costs, lower income taxes and a higher net return on post-employment benefit plans, partly offset by higher other expense mainly due to net mark-to-market losses on derivatives used to economically hedge equity settled share-based compensation plans, higher depreciation and amortization, higher impairment of assets, and higher interest expense. |
| Capital intensity | 21% | 21.2% | 2022 capital expenditures of $5,133 million, increased by 5.8% over last year, with a corresponding capital intensity ratio of 21.2%, up 0.5 pts over 2021, reflecting the accelerated buildout of our wireline FTTP and wireless 5G networks. |
| Net earnings per share (EPS) growth | Data not available | –0.3% | Net earnings attributable to common shareholders in 2022 increased by $7 million, compared to 2021, due to higher adjusted EBITDA, lower severance, acquisition and other costs, lower income taxes and a higher net return on post-employment benefit plans, partly offset by higher other expense mainly due to net mark-to-market losses on derivatives used to economically hedge equity settled share-based compensation plans, higher depreciation and amortization, higher impairment of assets, and higher interest expense. Despite increased net earnings attributable to common shareholders, EPS in 2022 decreased by $0.01, compared to 2021, due to a higher average number of common shares outstanding. |
| Adjusted EPS growth | 2%–7% | 5.0% | Excluding the impact of severance, acquisition and other costs, net mark-to-market gains (losses) on derivatives used to economically hedge equity settled share-based compensation plans, net equity gains (losses) on investments in associates and joint ventures, net gains (losses) on investments, early debt redemption costs and impairment of assets, net of tax and NCI, adjusted net earnings in 2022 was $3,057 million, or $3.35 per common share, compared to $2,895 million, or $3.19 per common share, in 2021. |
| Cash flows from operating activities | Data not available | 4.5% | In 2022, BCE’s cash flows from operating activities increased by $357 million, compared to 2021, mainly due to higher adjusted EBITDA, lower income taxes paid, lower contributions to post-employment benefit plans due to a partial contribution holiday in 2022, and lower severance and other costs paid, partly offset by lower cash from working capital and higher interest paid. |
| Free cash flow | 2%–10% | 2.9% | Free cash flow of $3,067 million in 2022 increased by $87 million, mainly due to higher cash flows from operating activities, excluding cash from acquisition and other costs paid, partly offset by higher capital expenditures. |
For a more detailed discussion of our 2022 financial performance including information on our capital expenditures and our capital markets strategy, see the BCE 2022 Annual MD&A.
Sustainable investor returns and strong capital structure
BCE seeks to deliver sustainable shareholder returns through consistent dividend growth, while maintaining investment grade credit ratings and considerable overall financial flexibility. This objective is underpinned by continued growth in free cash flow and a strong balance sheet, which supports a significant ongoing capital investment in advanced broadband networks and services that are essential to driving the long-term growth of our business.
Strong strategic execution by the Bell team enabled us to achieve our financial targets for the year while continuing to fund our network expansion plans. Bell continued to keep Canadians connected throughout 2022 by delivering market-leading innovations, laying the foundation for our long-term success, while providing the basis for our capital markets objective of delivering consistent dividend increases to our shareholders.
Our activities and outcomes Shareholder return performance and dividend growth and payout policy
BCE’s shareholder returnfootnote 1 was -4.2% in 2022 and +30.3% for the five-year period of 2018–2022. On February 2, 2023, we announced a 5.2%, or 19 cents, increase in the annualized dividend payable on BCE’s common shares for 2023 to $3.87 per share from $3.68 per share in 2022, starting with the quarterly dividend payable on April 17, 2023. This is BCE’s 15th consecutive year of 5% or better dividend growth. Our objective is to seek to achieve dividend growth while maintaining our dividend payout ratio within the target policy range of 65% to 75% of free cash flow and balancing our strategic business priorities. As at December 31, 2022, our dividend payout ratio was 108%, which is higher than our policy range due to a planned acceleration in capital expenditures. Although capital expenditures are expected to decrease in 2023, they will remain elevated compared to pre-2020 annual levels as we continue to make generational investments in our networks to support the buildout of our fibre, 5G and 5G+ network infrastructure.
To learn more about our dividend growth and payout policy, see BCE 2022 Annual MD&A section 1.4. Capital markets strategy.
Strong capital structure
BCE’s balance sheet is underpinned by a healthy available liquidityfootnote 2 position of $3.5 billion at the end of 2022, comprised of $99 million in cash, $50 million in cash equivalents, $700 million available under our securitized receivables program and $2.65 billion available under our $3.5 billion committed revolving and expansion credit facilities and an investment-grade credit profile, providing the company with a solid financial foundation and a high level of overall financial flexibility. BCE has an attractive long-term debt maturity profile with no maturities until the third quarter of 2023. We continue to monitor the capital markets for opportunities to lower our cost of debt and optimize our cost of capital. We seek to proactively manage financial risk in terms of currency exposure of our U.S. dollar-denominated purchases, as well as equity risk exposure under BCE’s long-term equity-based incentive plans and interest rate and foreign currency exposure under our various debt instruments. We also seek to maintain investment-grade credit ratings with stable outlooks.
Sustainable financing
In April 2021, Bell took a defining step in aligning its ESG objectives and intentions for future financings by publishing the BCE Inc. Sustainable Financing Framework, a first for a Canadian communications company. The framework will guide future issuances of green, social and sustainability bonds or other sustainable financings by Bell Canada. The proceeds of these financings are intended for a portfolio of eligible investments in any of the following 10 green and social categories: energy efficiency, eco-efficient production technologies and processes, pollution prevention and control, clean transportation, renewable energy, green buildings, climate adaptation, affordable basic infrastructure, access to essential services, emergency response and pandemic relief.
Sustainalytics, a leading ESG research and analysis firm, provided an independent second-party opinion that the BCE Sustainable Financial Framework is credible and impactful and aligns with the Sustainability Bond Guidelines 2018 and Green Loan Principles 2020. On May 28, 2021, Bell Canada became the first Canadian communications company to issue a sustainability bond with the offering in Canada of $500 million, 2.20% MTN Debentures, Series M 56, maturing May 29, 2028. In March 2022, we reported on the full allocation of the net proceeds which were used to fund both environmental and social eligible investments. Bell is focused on creating financial growth that is aligned with our purpose while generating positive returns for our investors. This in turn is expected to drive long-term value creation for all stakeholders.
To learn more, see our Sustainable Financing Framework and Sustainable Bond Allocation report at BCE.ca/investors/bonds/sustainable-financing-framework.
On November 9, 2022, Bell Canada announced that it has amended its existing $3.5 billion committed credit facilities to convert them to a sustainability-linked loan (SLL). The amendment introduces an annual pricing adjustment that reduces or increases the borrowing cost based on Bell’s performance of two key annual sustainability performance targets (SPTs) related to the following Bell science-based greenhouse gas (GHG) targets approved by the Science Based Targets initiative (SBTi): with 2 items i) Reducing absolute scope 1 and 2 GHG emissions 58% by 2030 from a 2020 base year; and ii) Reaching 64% of our suppliers by spend, covering purchased goods and services, having science-based targets by 2026. The SLL underscores Bell’s continued focus on environmental, social and governance (ESG) leadership by tying our performance on these key targets to our cost of financing.
Capital expenditures
As part of our accelerated capital expenditure program, the largest ever by a Canadian communications company, we expanded our fibre network to an additional 854,000 locations this past year, driving our highest annual retail Internet net activations in 16 years. Our award-winning 5G network covered 82% of Canadians by the end of 2022, with 5G+ available to 38% of the national population. We are continuing to make generational investments in our networks in 2023 to support the buildout of our fibre, 5G and 5G+ network infrastructure.
Bell’s leadership in the deployment of new and innovative networks and services is a direct result of our investment in research and development (R&D). Our investments in R&D enable us to continue providing our customers with products and services that are among the most advanced in the world. At the same time, R&D allows us to adopt new technologies that better support our own operations, champion the customer experience, and drive growth with innovative services. In 2022, Bell’s R&D spending was $587 million in capital expenditures and $57 million in operating expenses. Bell continues to collaborate with industry partners to drive innovation and create long-term value for Canadians. This includes support for university research to drive innovation in 5G, AI and cybersecurity. This helps deliver a stream of innovative technology to Canadian homes and businesses.
To learn more about our capital expenditures, refer to our BCE 2022 Annual MD&A.
