Making a world of difference
Our focus on putting customers and communities first, underpinned by our world-leading networks, innovative technology and globally recognized culture, is facilitating transformational change and making a meaningful difference for citizens around the world.
In 2022, our TELUS team realized remarkable successes, as we further scaled our operations globally, delivered consistently industry-leading business results and, once again, affirmed our distinction as the world leader in social capitalism.
By building globally leading networks and delivering services and customer experiences that eclipse our peers, your Company earned the trust and patronage of tens of millions of people, enabling us to give back worldwide. Simply put, no other company cares as much, invests as much in social outcomes, or recycles benefits back into our communities as much as we do at TELUS.
Making a world of difference for our customers and communities
Your Company once again demonstrated that when things are at their worst, our TELUS team is at our best. This was highlighted throughout 2022 by our support for disaster relief efforts to assist those impacted by Hurricane Fiona in Atlantic Canada, Hurricane Ian in Florida, flooding in Pakistan, the humanitarian crisis in Ukraine and the unrest in Iran. Overall, we enabled $6.6 million in humanitarian and emergency relief in 2022, through cash and in-kind contributions from TELUS, our team members, our customers and TELUS Friendly Future Foundation (TFFF).
Exemplifying our long-standing commitment to give where we live, TELUS, our team members and retirees donated $125 million in cash, in-kind contributions, time and support programs in 2022 to charitable and community organizations, representing approximately five per cent of our pre-tax profits – far exceeding the North American average of one per cent. Moreover, our 2022 TELUS Days of Giving mobilized over 65,000 members of our TELUS family, helping to drive 1.44 million volunteer hours globally. Since 2000, our TELUS family has generously devoted $1.5 billion, including two million days of volunteerism, demonstrating our caring culture in action.
Visiting the Humanitarian Centre for Ukrainians in Sofia, Bulgaria alongside dedicated TELUS International team member Zaharina Vetseva, as well as Krumena Kuneva from the For The Good Foundation. In 2022, our TELUS family contributed $5.2 million in humanitarian relief to support people impacted by the conflict in Ukraine.
Enabling vital connections through our world-leading networks
Every day, TELUS leverages the power of technology to enable vital connectivity for millions of people. Given this responsibility, it is critical that we continually invest in our world-leading networks. Since 2000, your Company has invested $239 billion in network infrastructure, operations and spectrum, and we plan to invest an additional $70 billion through 2026. In 2022, we connected 224,000 new premises to our gigabit-enabled PureFibre network – a globally unmatched wireline infrastructure that delivers the fastest, most robust communications technology in the world to three million households and businesses. We also expanded our national, next-generation 5G network to reach 83 per cent of the Canadian population, powering Canada’s economy and making our lives easier, safer and healthier through increased speeds, reliability and capacity.
These investments have amplified the superiority of TELUS’ networks, which have earned multi-year recognition for speed, network quality, user experience and expansiveness from independent third-party organizations. Notably, global analytics company, Opensignal, recognized TELUS with five industry awards in the year for both our 4G and 5G networks, making TELUS Canada’s most awarded network by Opensignal for the 11th consecutive time. Similarly, TELUS was honoured with three awards from U.S.-based Ookla in 2022, including being named North America’s Fastest Mobile Network according to results from Speedtest by Ookla. Moreover, Canada-based Tutela recognized our wireless network with four national awards for Excellent Consistent Quality, Core Consistent Quality, 5G Excellent Consistent Quality and 5G Core Consistent Quality. Likewise, our wireline network also received praise, ranking as the fastest nationwide internet service provider (ISP) in Canada among major ISPs by U.S.-based PCMag for the third consecutive year.
Why does this matter? Because reliable networks are the backbone of digital economies, enabling positive outcomes for all of us. TELUS’ global-best networks drive economic growth, innovation and job creation, while ensuring that everyone can stay connected to what matters most, including healthcare, safe and healthy food, online education, friends and family, and the flexibility to work remotely; all with the attendant environmental benefits.
Our networks are the engine that powers our purpose and brings to life our brand promise, Let’s make the future friendly. Every day, TELUS helps grow the number of family-supporting jobs, nurtures the health and well-being of citizens and lifts up marginalized communities. Indeed, your Company has connected 342,000 individuals through our four Connecting for Good programs, providing vital support for low-income families and seniors, at-risk youth, people living with disabilities, individuals experiencing homelessness and Indigenous women surviving violence.
Creating a more sustainable food and consumer goods supply system
Through TELUS Agriculture & Consumer Goods, we are creating more value for the entire supply chain, while improving the safety, quality and sustainability of food and other goods in a way that is traceable and clear to the end consumer. This includes helping to effectively manage and reduce the disconcerting amount of goods that never end up in the hands of consumers due to waste, spoilage, quality issues and inaccurate forecasting.
Building meaningful relationships with Indigenous communities and organizations
Our team is committed to progressing Reconciliation by forging relationships and expanding connectivity to Indigenous communities. To date, TELUS has invested more than $80 million to connect 144 Indigenous lands and more than 84,000 people living on those lands to our world-leading PureFibre network.
In 2022, as part of our Indigenous Reconciliation Action Plan commitments, your Company and TFFF contributed $1 million to digitize the Witness Blanket, a 12-metre-long art installation, created to recognize the atrocities of Canada’s residential school system; established an Indigenous Advisory Council; launched our Truth and Reconciliation e-learning program for team members; formalized a three-year partnership with the Moose Hide Campaign, an Indigenous-led movement that strives to end violence against women and children; and realized a 300 per cent increase in volunteerism supporting Indigenous initiatives and causes. Notably, our TELUS Indigenous Communities Fund has committed $300,000 to 15 Indigenous-led community programs since its launch in late 2021.
Investing in sustainable businesses and charitable organizations
Now in its third year, the TELUS Pollinator Fund invests in for-profit startups that drive social and environmental change to make a world of difference. In 2022, we grew the Fund’s portfolio to 26 companies, and to date, we have committed almost $40 million in investments to socially innovative startups. Importantly, over 40 per cent of our portfolio companies are led by women and more than 50 per cent are led by Indigenous and racialized founders. Today, the TELUS Pollinator Fund is one of the world’s largest corporate impact funds, bolstering TELUS’ position as the world leader in social capitalism.
TELUS continues to give back through TFFF, which committed $10.6 million in cash donations to 548 charities in 2022, while fundraising $3.3 million and securing $30 million in investments from the TELUS team to establish a new bursary fund. Since its inception in 2018, TFFF has contributed nearly $36 million to communities, supporting the incredible work of our TELUS Community Boards in Canada. Across the globe, TELUS Community Boards have invested $100 million in cash donations in more than 8,000 initiatives since 2005, providing support for underserved citizens. In 2022, we expanded the regional reach of three Community Boards in Canada and launched our first U.S. Community Board in North Carolina.
Building a brighter future in Guatemala and beyond
More than 850 volunteers took part in our 14th annual TELUS International Days of Giving in Guatemala City. Together, the group helped construct the Instituto del Norte High School – the 12th school our team has built in Guatemala to date – which will benefit 2,000 students and their families. Since our first TELUS International Days of Giving in Manila in 2007, our extended TI family has positively impacted the lives of more than 1.2 million people in 30 countries – and growing.
Recognizing our passionate and purpose-driven team at the heart of our success
At TELUS, we are fortunate to have the best team on the planet. These dedicated individuals enable your Company to provide unparalleled support for our customers, worldwide. During 2022, we continued investing in our TELUS team with the launch of our Well-being Advisory Group, the delivery of mental health training to over 12,000 team members and the expansion of our virtual care apps, with 24/7 support offered through LifeWorks. These initiatives earned TELUS two gold awards from Excellence Canada in 2022.
Your Company once again achieved world-leading team member engagement of 83 per cent, placing TELUS in the top 10 per cent of Canadian employers and the top quartile of employers, globally. Equally important were our ongoing efforts to build an inclusive culture. In 2022, we created an integrated diversity and inclusion website, accessible to both team members and customers. We also launched an employment strategy to support hiring Indigenous Peoples and delivered allyship learning circles to over 800 team members. We believe that advancing diversity is vital, as increasingly, citizens choose to do business with companies that share their values. By building a team that reflects the beautiful diversity of our society, TELUS has achieved industry-leading results in customer growth and loyalty.
Growing and serving the most loyal customer base in our industry
Undeniably, your Company’s commitment to always put our customers first has earned us the most loyal customer base in our industry. In 2022, we achieved blended mobile phone, PureFibre internet, Optik TV, security and voice churn rates all below one per cent. Moreover, we achieved a postpaid mobile phone churn rate of 0.75 per cent, representing our ninth consecutive year of industry-leading customer loyalty with churn rates of less than one per cent – one of the few telecoms in the world to achieve such an accomplishment.
TELUS also recorded over one million new client additions in 2022 – an all-time high and well above our Canadian peers. In mobility, we added 401,000 new mobile phone customers, our strongest year since 2010, along with record-high connected device net additions of 368,000. In fixed, we added a best-ever and industry-leading 274,000 new client additions, reflecting strong growth across internet, security and TV. Furthermore, over the last three years through the pandemic period, we have added nearly 2.8 million net new total customer additions, demonstrating the significant economic value we are creating through our superior product portfolio. This industry-leading growth reflects the consistent potency of our operational execution, unmatched bundled product offerings across mobile and home, and team member culture focused on delivering exceptional customer experiences over our globally leading PureFibre and 5G networks. Our efforts to embrace digitization and create simplified customer experiences underpin our success, as demonstrated by consistent growth in usage of the My TELUS app and self-serve digital transactions.
Supporting team member well-being around the world
In 2022, TELUS completed the acquisition of LifeWorks, welcoming 7,000 skilled and talented team members into our TELUS Health family. Notably, the powerful combination of our organizations creates a globally leading, end-to-end, digital-first employee primary and preventative healthcare, mental health and wellness platform serving clients in over 160 countries and covering 68 million lives. TELUS Health’s domestic and global operations are bolstered by our TELUS International team through their proven expertise in digital transformation and client service excellence.
Achieving consistent and sustained industry-leading business results
Once again in 2022, your Company achieved strong financial results across our business, as evidenced by our industry-leading operating revenues and Adjusted EBITDA growth of 8.6 and 9.5 per cent, respectively, while net income was up 1.2 per cent. Moreover, cash flow from operations increased by 9.6 per cent and free cash flow was higher by an industry-leading 64 per cent. Indeed, we continue to differentiate ourselves through our unique growth businesses, including TELUS International (TI), TELUS SmartHome Security, TELUS Health and TELUS Agriculture & Consumer Goods.
TI realized strong financial growth in 2022, delivering double-digit increases in revenue, net income and EBITDA, along with leading EBITDA margins. These strong results demonstrate TI’s position as a trusted advisor for premier digital customer experiences and IT services for its over 650 global clients across key industry verticals, including tech and games, communications and media, eCommerce and fintech, banking, financial services and insurance, consumer goods, healthcare and life sciences, and travel and hospitality. In early 2023, TI closed its acquisition of WillowTree, a full-service digital product provider, further advancing our ambition to continue building TI into a global asset of consequence and scale. Importantly, the acquisition also supports the acceleration of TELUS’ ongoing digital transformation and key product development across our business, particularly in health, agriculture and consumer goods.
As Canadians returned to more pre-pandemic behaviours in 2022, TELUS continued to offer peace of mind through our innovative security and automation services, welcoming an industry-leading 174,000 new security customers through a mix of organic growth and the acquisition of Vivint Smart Home. Impressively, TELUS SmartHome Security led the industry in 2022, responding to 2.3 million high-priority alarms with an average response time under 60 seconds. Thanks to our team’s exceptional customer service, we were named the most trusted brand for home security in Canada for the second year in a row by BrandSpark and received global recognition at the Stevie International Business Awards, outperforming 3,700 other nominees from 67 countries.
Stepping up to answer challenges to healthcare and global food security
Collectively, our TELUS team is energized by improving outcomes for people around the world. Indeed, we are not just a company, but a movement of human beings with a passion for social purpose. Two areas of our business in which we drove meaningful change in 2022 were TELUS Health and TELUS Agriculture & Consumer Goods.
TELUS Health achieved several milestones, including the completion of our historic acquisition of LifeWorks, a world leader in providing digital and in-person solutions that support the mental health and well-being of individuals and their families. We also continued to meaningfully scale our health business in 2022, nearing the $1 billion milestone in health services revenue, an increase of 75 per cent, covering 68 million lives through our programs, growing our virtual care members to 4.5 million and executing more than 580 million digital health transactions.
As we worked to improve access to healthcare, we launched our new TELUS Health Virtual Pharmacy service, enabling individuals to manage their prescriptions online, chat with a pharmacist by video or phone, and have medications delivered to their door. We also launched an exciting evolution in our suite of virtual healthcare solutions, TELUS Health MyPet, connecting customers and their pets to veterinary health advice through a mobile app. As we progress into 2023, we will continue to focus intensely on integrating and scaling our global health operations to build the healthiest communities and workplaces on the planet, under the leadership of our new TELUS Health President Sid Kosaraju.
In addition, TELUS Agriculture evolved to become TELUS Agriculture & Consumer Goods in 2022, as our team continues to integrate and grow this compelling global business, achieving revenue growth of 24 per cent and reaching $354 million in annual revenues. We are creating significant value as the leading provider of agriculture and consumer goods technology solutions around the world, as we advance the sector’s efficiency and effectiveness, including food quality production, waste reduction, food and retail execution, and trade promotion optimization, all through data analytics.
We continued to meaningfully scale our health business in 2022, covering 68 million lives through our programs, growing our virtual care members to 4.5 million and executing more than 580 million digital health transactions.
Helping businesses thrive in a digital world
Our TELUS Business Solutions team also contributed meaningfully to our success by delivering solid financial growth, expanding our 5G, Internet of Things and industry solutions, and securing landmark contract wins and customer renewals in the public and private sectors. Notably, for the second year in a row, TELUS was recognized as one of the top 10 best business-to-business (B2B) brands in Canada, as our team continues to pursue exciting opportunities with some of Canada’s top brands to help businesses thrive in a digital world.
To support our business customers, we recommitted $1 million to #StandWithOwners, shining a spotlight on small business owners. Similarly, we introduced ShopWithOwners.ca, a free online platform where entrepreneurs can reach customers seeking to shop locally. As proud supporters of Canadian business, your Company has committed $2.5 million since 2020 to empower owners.
Outperforming our peers to realize unparalleled results for shareholders
TELUS’ exceptional performance in 2022 was the culmination of our collective focus on delivering our proven growth strategy, to the benefit of all stakeholders we serve – including you, our investors.
Beginning in 2023, we are targeting a decline in annual capital expenditures to approximately $2.6 billion, a significant reduction over 2022, given the conclusion of our accelerated broadband investment program. We expect this will support meaningful and sustainable free cash flow expansion, in concert with ongoing strong EBITDA contribution growth, and value creation across our TI, TELUS Health and TELUS Agriculture & Consumer Goods businesses. Notably, it will also be complemented by the additional revenue and cost benefits that fibre ubiquity and increased digitization will deliver. In addition, in 2023, we have allocated $75 million to support the development and monetization of excess real estate assets as a result of copper decommissioning.
Our consistently strong results and transformational investments enable TELUS to create unparalleled long-term value for our shareholders. Thanks to these results, your Company has maintained a robust balance sheet while returning significant capital to investors. Notably, since the beginning of 2000 through January 31, 2023, TELUS has generated a total shareholder return of 705 per cent. This result is double the Toronto Stock Exchange’s S&P/TSX Composite Index (TSX) return of 348 per cent and 699 points higher than the return from the MSCI World Telecom Services Index of 5.6 per cent. Moreover, over the past 10 and 15 year time periods, TELUS has surpassed the TSX return by an average of 114 percentage points.
Keeping people safe and connected
SmartWear Security offers discrete personal safety devices, disguised as necklaces, bracelets and keychains, that can instantly connect you with friends or family in the event of an emergency, and dispatch emergency services to your location. By harnessing the power of technology and our world-leading networks, TELUS is providing customers with an extra layer of protection, while fostering a sense of personal empowerment with their safety.
Delivering value for investors and families through our dividend growth program
Importantly, the conclusion of our accelerated broadband investment initiative, coupled with ongoing leading operational and financial performance, will augment the long-term sustainability of our industry-leading dividend growth program, now in its 13th year. Indeed, in 2022, we announced for the fourth time since 2011, the extension of our dividend growth program, targeting annual increases of seven to 10 per cent from 2023 through 2025. Furthermore, we also announced our 23rd dividend increase since 2011, raising our annual dividends declared by approximately seven per cent over 2021. Notably, since 2004, TELUS has returned $23 billion to shareholders, including $18 billion in dividends and more than $5 billion in share purchases, representing $16 per share.
This is just one of the ways we support our investors around the world, including individual shareholders, mutual funds and pension plans, and our TELUS team members, who collectively represent our fifth largest shareholder. When we put our customers and communities first, the resulting prosperity enables us to deliver better outcomes for the families, retirees and pensioners who invest in TELUS.
Our team is dedicated to protecting the planet our children will inherit, as demonstrated by our long-standing history of meeting, or exceeding, ambitious environmental targets.
Creating a healthier planet and more vibrant communities
TELUS’ commitment to sustainability is foundational to our leadership in social capitalism. Our team is dedicated to protecting the planet our children will inherit, as demonstrated by our long-standing history of meeting, or exceeding, ambitious environmental targets. This leadership was evident in 2022 when TELUS completed our second and third sustainability-linked bond offerings. This sustainable financing structure ties the effective interest rate to the achievement of our long-term, science-based, operational greenhouse gas (GHG) reduction targets, specifically, a 46 per cent reduction in absolute scope 1 and 2 GHG emissions from 2019 levels by 2030. Further reinforcing this commitment, we also initiated a campaign to plant our one millionth tree and a program in support of a circular economy – repairing, recycling and reusing wireless devices – saving 3.8 million devices from landfills since 2000.
Your Company reached several sustainability milestones in 2022, including effectively having 90 per cent of our electricity requirements coming from renewable sources, which has also driven millions of dollars in cost savings. Likewise, we officially opened TELUS Sky in Calgary – one of the most technologically innovative and environmentally sustainable developments in North America – and received the Sustainability Excellence Award at the World Sustainability Awards in Germany.
TELUS endorsed the United Nations Global Compact’s (UNGC) CEO Water Mandate, a movement that mobilizes business leaders to address global water challenges through corporate water stewardship, in partnership with the United Nations, governments, civil society organizations and other stakeholders. As signatories to the UNGC, TELUS takes action and shares progress in respect of human rights, labour, environmental and anti-corruption practices, reinforcing our commitment to creating stronger, more sustainable communities.
This commitment extends beyond sustainability, to embracing tax morality as a means of investing in our communities. Since 2000, TELUS has paid approximately $54 billion in total tax and spectrum remittances to our federal, provincial and municipal governments. These funds support public works projects and critical national infrastructure, as well as education, healthcare, national defence, cultural pursuits and initiatives that improve the social and economic well-being of our communities.
Making our planet healthier
Our culture of caring was actively displayed throughout 2022 as team members continued to find ways to help create stronger, healthier communities around the world. Keeping our shorelines clean of debris was just one way our team gave back to help preserve our planet for future generations and bring our social purpose to life.
Making the future friendly for people around the world
At TELUS, we believe we must all work together to create a brighter tomorrow. In 2022, we continued to meaningfully integrate social purpose into our marketing and communications efforts, while evolving our social media presence, leading to TELUS being the most followed brand on social media across all of our key industry peers.
Our team’s efforts throughout the year earned TELUS brand resonance as the world leader in social capitalism. This has resulted in global accolades, including being named the Most Valuable Telco Brand in Canada by Brand Finance at $10.1 billion, one of Canada’s Most Authentic Brands and Canada’s Most Trusted Telecom Brand by Gustavson Brand Trust Index, one of Canada’s Best B2B Brands by Report on Business, and the Most Respected Mobile Service Provider in Canada as voted by the Canadian public.
Setting bold social and financial targets for 2023 and beyond
As our team progresses through 2023, we will do so with our hallmark passion for purpose, as reflected by our bold social impact, community giving and financial targets.
Firstly, we will continue to give where we live, guided by our 2023 social impact targets, which include: inspiring our TELUS family to contribute 1.5 million hours of volunteerism, improving outcomes for a cumulative 430,000 low-income Canadians through our Connecting for Good programs, contributing $95 million to charitable and community organizations, launching an annual $1 million bursary program to support students aspiring to attend post-secondary institutions, and investing a further $20 million through the TELUS Pollinator Fund to support socially innovative startups.
Secondly, we anticipate that 100 per cent of our electricity will effectively come from renewable or low-emitting sources by 2025, our operations will be net carbon neutral by 2030 or earlier, we will become a zero-waste company by 2030, and our energy efficiency will improve by 50 per cent from 2019 levels by 2030.
Finally, our industry-leading financial targets for 2023 include growth in consolidated operating revenues and Adjusted EBITDA of up to 14 and 11 per cent, respectively, capital expenditures of approximately $2.6 billion, and robust free cash flow of approximately $2 billion, up close to 60 per cent.
Bridging divides
Throughout 2022, we continued to expand the reach of our world-leading networks, enabling more communities across Canada with the most advanced network technologies. Driven by our vision to connect all citizens for good, and powered by our globally unmatched TELUS PureFibre network and next-generation 5G network, we are giving citizens access to the digital tools they need, including providing mobile phones to new Canadians, to drive improved health, social and economic outcomes.
Expressing our gratitude for your continued patronage and support
Throughout 2022, your Company drove positive outcomes across the globe. Our more than 142,000 team members and retirees will leverage that same passion and spirited teamwork in 2023, to drive industry-leading operational and financial results, while continuing to always put our customers and communities first. I invite you all to follow my social media channels for updates throughout the coming year, as I highlight our team’s social purpose in action and recognize remarkable members of our team. On behalf of our entire TELUS family, thank you to our shareholders, customers and community partners for empowering us to make a world of difference. Together, let’s continue to make the future friendly.
Darren Entwistle
Proud member of the TELUS team for more than two decades
February 17, 2023
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