August 5, 2022

TELUS reports excellent operational and financial results for second quarter 2022

Industry-leading total Mobile and Fixed customer growth of 247,000, up 24,000 over last year and our strongest second quarter on record, driven by higher year-over-year customer growth across our portfolio of leading Mobile and Fixed services

Leading customer growth reflects strong demand for our superior bundled offerings over world-leading broadband networks and leading customer loyalty results, including Blended Mobile Phone Churn of 0.81 per cent

Consolidated Revenue, Adjusted EBITDA, Net Income and Earnings Per Share growth of 7.1 per cent, 8.9 per cent, 45 per cent and 36 per cent, respectively, reflecting consistent execution excellence; Adjusted Net Income and Earnings Per Share of 21 per cent and 23 per cent, respectively

Continued operating momentum in our high-growth, technology-oriented verticals with robust Revenue growth across TELUS International, TELUS Health and TELUS Agriculture & Consumer Goods

Shareholders of LifeWorks approve our proposed acquisition; transaction to add significant scale, strengthening TELUS Health’s position as a leading global provider of digital primary and preventative healthcare, mental health and wellness solutions for employers 

Quarterly dividend declared of $0.3386 per share, up 7.1 per cent over the same period last year, supported by leading Adjusted EBITDA growth and significant expected future cash flow expansion beginning in 2023

Vancouver, B.C. –TELUS Corporation today released its unaudited results for the second quarter of 2022. Consolidated operating revenues and other income increased by 7.1per cent over the same period a year ago to $4.4 billion. This growth was driven by higher service revenues in our two reportable segments: TELUS technology solutions (TTech) and Digitally-led customer experiences – TELUS International (DLCX). TTech service revenue growth was driven by higher mobile network revenues, increased internet and data service revenues, growth in agriculture and consumer goods service revenues, and growth in health services revenues. Increased DLCX revenues resulted from organic growth from both expanded services for existing clients and growth from new clients. See Second Quarter 2022 Operating Highlights within this news release for a discussion on TTech and DLCX results.

"In the second quarter, the TELUS team once again demonstrated continued execution excellence, characterized by the consistent combination of industry-leading customer growth, resulting in strong operational and financial results across our business," said Darren Entwistle, President and CEO. “Our robust performance reflects the potency of our globally leading broadband networks and customer-centric culture, which enabled record second quarter total customer additions of 247,000. This included strong mobile phone net additions of 93,000, our best second quarter result since 2011, and industry-leading total fixed net additions of 62,000, an all-time second quarter record for TELUS. Our leading customer growth is underpinned by our consistent, industry-best client loyalty across our mobile and fixed product lines. Notably, again this quarter, blended mobile phone, PureFibre internet, Optik TV, security and voice churn were all below one per cent. Moreover, our industry-leading postpaid mobile phone churn of 0.64 per cent was unchanged over the prior year period, and represents the seventh quarter out of the last 10 below 0.80 per cent.”

“Our results are backed by our highly differentiated and powerful asset mix geared towards high-growth, technology-oriented verticals,” continued Darren. “Earlier today, TELUS International (TI) once again announced strong double-digit revenue growth, coupled with leading profitability and strong cash flow in the second quarter. TI’s continued robust results demonstrate its consistent execution, attractive end-to-end digital capabilities, and position TI as a leading partner of choice for premier digital customer experiences and IT services for its enviable list of clients around the world. At TELUS Health, our team drove attractive year-over-year health services revenue growth, while continuing to meaningfully scale our health operations as we improve health outcomes for citizens through access to better health information. This includes our healthcare programs covering more than 22 million lives, an increase of 24 per cent on a year-over-year basis, along with executing 145 million digital health transactions during the quarter, up 6 per cent over last year, and earning 1.4 million new virtual healthcare members in the last 12 months, increasing our virtual healthcare members to 3.6 million, up 64 per cent over the prior year. At TELUS Agriculture & Consumer Goods, our team drove agriculture and consumer goods services revenue growth of 40 per cent over the same period last year, as a result of our team’s ongoing efforts to integrate and grow this compelling global business. This result is illustrative of the significant value we are creating as the leading provider of agriculture and consumer goods technology solutions around the world, where we are advancing the sector’s efficiency and effectiveness, including food quality production and waste reduction, through data analytics.”

“Our consistently strong operating and financial performance is buttressed by our highly engaged team who are passionate about delivering superior service offerings and digital capabilities over our world-leading wireless and PureFibre broadband networks,” Darren further commented. “More than ever before, Canadians value fast, reliable connections, and the consistent recognition from a range of independent organizations reinforces the superiority of TELUS’ world-leading networks. Notably, in June, TELUS was once again named the fastest internet service provider in Canada by U.S.-based PCMag, for the third consecutive year. In addition, U.S.-based Ookla once again named TELUS the fastest mobile service provider in Canada for the tenth consecutive time. These acknowledgements, alongside the numerous other third-party network awards our skilled and dedicated team has earned, reinforces TELUS’ leadership in terms of offering customers the fastest, most expansive and reliable service in Canada across both our wireless and PureFibre networks. Moreover, this recognition of the leadership of TELUS’ national broadband networks underscores the value of our significant generational investments in world-leading network technologies, including our ongoing accelerated broadband expansion program through the end of 2022, which will continue to drive extensive socio-economic benefits to Canadians from coast-to-coast.”

“Our acquisition of LifeWorks, announced in June and approved yesterday by Lifeworks’ shareholders, will enable us to combine the respective skills and capabilities of LifeWorks and TELUS Health, creating a globally leading, end-to-end, digital-first employee primary and preventative healthcare, mental health and wellness platform covering more than 50 million lives in Canada and beyond. Customers will benefit from our team’s steadfast focus on providing exceptional customer experiences over our world-leading broadband networks, our consolidated engineering talent that will incorporate best-in-class data platform technologies to positively impact health outcomes for employees and their families, and our significantly expanded economies of scope and scale. This includes complementing LifeWorks’ international relationships with TI’s proven expertise in digital transformation and client service excellence, as well as their expansive client base and delivery teams spanning 28 countries, to extend our offerings to customers well beyond Canada. Our combined organizations, guided by a shared set of values, will provide employers with simple, convenient and effective, data-driven primary and preventive care solutions for employees and their families to proactively manage their health and wellness, including their mental health, so that they can lead their healthiest and most productive professional and personal lives. Following LifeWorks’ shareholder approval, we remain highly confident in receiving the appropriate regulatory approvals and, in turn, closing this transaction on or about the fourth quarter of 2022, and look forward to welcoming LifeWorks’ employees and customers into our TELUS Health family,” said Darren.

“Our TELUS team continues to bring our Give Where We Live philosophy to life, day-in and day-out,” concluded Darren. “By way of example, thus far in 2022, 65,000 TELUS team members, retirees and their families have volunteered for our 17th annual TELUS Days of Giving, now celebrated in 20 countries globally. It is thanks to our passionate and dedicated team that TELUS is the most giving company in the world and well on our way to achieving our goal of contributing 1.4 million hours of volunteerism in 2022 to improve outcomes for people in-need across the globe.”

Doug French, Executive Vice-president and CFO said, “Our second quarter results showcase our consistent execution excellence and leading asset mix across our telecom and technology-oriented verticals. Indeed, these strong financial and operating results are powered by our leading customers first culture along with a longstanding focus on operational efficiency and effectiveness. In that regard, consolidated EBITDA margin expanded by 90 basis points over the same quarter a year ago, or by 70 basis points on an Adjusted EBITDA basis. This margin expansion is driven by higher margins in our two reportable segments, benefitting from our ongoing investments in simplification and digitization which are both enhancing the customer experience, while improving our cost structure on a permanent basis. Furthermore, consolidated Adjusted EBITDA growth in the second quarter of 2022 demonstrated strong sequential growth as we progress as planned towards our annual target of 8 to 10 per cent.”

“During the second quarter, we continued to execute against our accelerated capital expenditure program, now in the final year before capital expenditures decline significantly beginning in 2023 to an anticipated annual run-rate of approximately $2.5 billion,” commented Doug. “Our capital expenditures were up year-over-year given the increased momentum of the program, and we expect a similar level of investment in the third quarter before it begins to taper off in the fourth quarter as we advance toward the lower run-rate in 2023. We continue to expand our PureFibre network, which now reaches over 2.8 million premises, along with advancing our 5G network coverage to 78 per cent of Canadians, including investments to operationalize our 3500 MHz spectrum holdings. Furthermore, we are making steady progress on our copper-to-fibre migration program, with only approximately 7 per cent of our TV and internet customers within our PureFibre footprint currently serviced by copper, down from 10 per cent at the end of the first quarter of 2022. These investments significantly advance our leading customer experiences and network leadership position as well as enhancing our competitive positioning to drive strong profitable customer growth on a consistent basis. Indeed, since the beginning of 2020, we have added over 2.1 million new mobility and fixed customer connections, supporting our positive outlook for 2022 and beyond. This includes our expectations for continued strong Adjusted EBITDA growth and significant future cash flow expansion beginning in 2023, underpinning our long-standing dividend growth program, with our October quarterly dividend payment up 7.1 per cent on a year-over-year basis.”

“As part of our commitment to reduce our carbon footprint, supporting a greener and brighter future, we have entered into virtual power purchase agreements with renewable energy projects that develop solar and wind power facilities in Alberta. These projects became operational as of the second quarter of 2022 and demonstrate our ESG leadership by enabling additional renewable-sourced electricity to the Alberta electricity grid and the renewable energy certificates received will help us achieve our scope 1 and scope 2 science-based greenhouse gas reduction targets along with reaching our goal to be net carbon neutral in our operations by 2030. By participating in renewable energy projects, TELUS is demonstrating what a committed organization can do to transition to a low-carbon future,” concluded Doug.

To view the full release in PDF format, please download here