MAY 9, 2024

TELUS reports operational and financial results for first quarter 2024

Total Mobile and Fixed customer growth of 209,000, up 46,000 over last year, and our strongest first quarter on record

Total Mobile and Fixed customer growth of 209,000, up 46,000 over last year, and
our strongest first quarter on record, driven by strong demand for our leading portfolio of Mobility and Fixed services

Robust Mobile Phone net additions of 45,000 and record first quarter Connected
Device net additions of 101,000; industry-leading postpaid mobile phone churn of 0.91 per cent

Record first quarter Fixed customer net additions of 63,000, including 30,000
internet customer additions, driven by TELUS’ PureFibre network and leading portfolio of bundled services across Mobile and Home

Industry-leading customer growth enabling Mobile Network Revenue and Fixed Data Services Revenue growth of 2.9 per cent and 2.7 per cent, respectively; TTech Adjusted EBITDA growth of 4.1 per cent and strong margin expansion of 160 basis points to 39.4 per cent reflecting cost savings from ongoing efficiency programs

Quarterly dividend raised to $0.3891, an increase of 7.0 per cent over the same period last year and our twenty-sixth increase since May 2011, representing a yield of approximately 7.0 per cent; Leading dividend growth program supported by Adjusted EBITDA growth outlook and strong annual free cash flow expansion

Reiterating our 2024 Financial Targets including TTech Operating Revenues and Adjusted EBITDA growth of 2 to 4 per cent and 5.5 to 7.5 per cent, respectively, Consolidated Capital Expenditures of approximately $2.6 billion and Free Cash Flow of approximately $2.3 billion

Vancouver, B.C. – TELUS Corporation today released its unaudited results for the first quarter of 2024.  Consolidated operating revenues and other income decreased by 0.6 per cent over the same period a year  ago to $4.9 billion. This decline was driven by lower service revenues in our two reportable segments:  TELUS technology solutions (TTech) and Digitally-led customer experiences – TELUS International (DLCX).  Within TTech, higher mobile network, residential internet and security revenues, largely driven by subscriber  growth, as well as growth in managed, unmanaged and other fixed data services to new and existing  business customers was offset by declines in TV and fixed legacy voice services revenues due to  technological substitution. The decline in DLCX operating revenues resulted from lower external revenues in  the DLCX segment across most of its industry verticals. See First Quarter 2024 Operating Highlights within  this news release for a discussion on TTech and DLCX results.  

"In the first quarter, our team once again delivered against our differentiated growth strategy, leveraging our  superior asset portfolio, consistent execution track record and proactive cost efficiency initiatives to deliver  industry-leading customer additions and solid financial results against the backdrop of a dynamic operating  environment,” said Darren Entwistle, President and CEO. “Our robust performance is underpinned by our  strategic focus on margin accretive customer growth, globally leading broadband networks and customer centric culture, which enabled our strongest first quarter on record, with total customer net additions of  209,000, up 28 per cent, year-over-year. This included strong mobile phone net additions of 45,000, and  record first quarter customer additions for both connected devices of 101,000 and total fixed net additions of  63,000. TELUS’ industry-leading growth reflects the consistent potency of our operational execution, and our  unmatched bundled product offerings across Mobile and Home. Our team’s passion for delivering customer  service excellence contributed to continued leading loyalty across our key product lines. Notably, postpaid  mobile phone churn was 0.91 per cent, as we begin the 11th consecutive year below the one per cent level.”  

“Within our global businesses, today, TELUS International (TI) also reported its first quarter results,  delivering robust profitability and cash flows amidst what remains a challenging global macroeconomic  operating environment, resulting in a difficult prior year comparable. Despite the near-term top line  challenges, our TI team has executed against significant cost efficiency programs over the past ten months,  positioning the business to achieve further EBITDA growth and incremental margin expansion, along with  strong cash flow generation, as we move through the course of the year. We remain highly confident in TI’s  strategy and investment thesis, which is amplified by meaningful opportunities in respect of digital  transformation – particularly with generative AI adoption – and the continuing critical importance of  differentiated digital customer experience solutions in the market, creating a vibrant tailwind for TI’s medium and long-term growth and profitability. In TELUS Health, we achieved first quarter revenues of $420 million,  alongside 28 per cent EBITDA contribution growth. This was supported by the achievement of $251 million  in combined annualized synergies, towards our overall objective of $427 million by the end of 2025.  Furthermore, we drove a seven per cent year-over-year increase in our global lives covered to nearly 72  million. We continue to make strong progress scaling TELUS Health and TELUS Agriculture & Consumer  Goods, where we remain focused on accelerating the significant growth profile these differentiated global  businesses represent by leveraging the expertise, experience, and high-performance culture and talent of  our entire team, inclusive of leveraging significant cross-sell synergies across all lines of our business.”  

“The record customer growth we continue to report is underpinned by our dedicated team who are  passionate about delivering superior service offerings and digital capabilities, over our world-leading wireless  and PureFibre broadband networks. In addition to driving extensive socio-economic benefits for Canadians  in communities from coast-to-coast, for decades to come, the significant broadband network investments we  have made enable the continued advancement of our financial and operational performance, and the long term sustainability of our industry-leading dividend growth program. Today, we are announcing a seven per  cent dividend increase, reflecting our unwavering commitment to delivering superior value to our  shareholders. Furthermore, it builds on our consistent track record of delivering on our multi-year dividend  growth program established in 2011, and most recently extended through 2025, targeting annual growth in  the range of seven to 10 per cent. Today’s increase represents our 26th over the last 14 years and reflects  our unwavering confidence in delivering leading operational and financial results on a sustained basis.  Importantly, our strong outlook includes our expectations for continued free cash flow expansion in the years  ahead, driven by ongoing strong EBITDA growth and moderating capital expenditure intensity, further  supporting the long-term sustainability and quality of our dividend growth program.” 

“Reflecting our team’s long-standing belief in the synergistic relationship between doing well in business and  doing good in our communities, May marks the official kick-off of our 19th annual TELUS Days of Giving,”  continued Darren. “This year, with the support of our extended TELUS family, I have every confidence that  we will exceed our goal of inspiring 80,000 volunteers supporting positive outcomes in communities across  the 32 countries in which we operate. It is thanks to this unparalleled level of caring and commitment that our  team members and retirees, globally, have contributed 2.2 million days of giving since 2000 – more than any  other company on the planet.”  

Doug French, Executive Vice-president and CFO said, “In the first quarter of 2024, our team navigated a  highly competitive environment across mobility and fixed to deliver healthy operational and financial results.  Within our global businesses, investments in our channel and distribution strength is starting to pay  dividends with good momentum on increased sales, however, in the short term, the challenging  macroeconomic climate continues to elongate sales cycles, impacting top line growth. We expect to see this  steadily improve over the coming quarters. Despite the revenue pressures however, we delivered robust  consolidated Adjusted EBITDA growth of 4.3 per cent and strong consolidated margin expansion of 170  basis points year over year to 37.6 per cent. Furthermore, within our TTech segment, Adjusted EBITDA was  higher by 4.1 per cent and margin of 39.4 per cent improved by 160 basis points over the same period a  year ago. This strong performance reflects our unrelenting focus on efficiency and effectiveness to drive  significant cost reductions on a permanent basis. As we move through the rest of the year, we remain  focused on driving towards achieving our financial targets for 2024, which we reiterated today.”  

“During the first quarter, our team advanced our leadership position in sustainability, issuing our sixth  sustainability-linked bond (SLB), linking our financing to the achievement of ambitious environmental  targets,” added Doug. “Furthermore, our latest SLB offering affirms TELUS as having the largest SLB program in the Canadian fixed income market and reinforces our sustainability commitments as a global  leader in ESG. At the end of the quarter, our average cost of long-term debt was 4.37 per cent, our average  term to maturity of long-term debt is nearly 11 years and our net debt to EBITDA ratio was 3.78 times. As we  progress through 2024 and into future years, we anticipate our leverage ratio to improve as we work back  towards our target ratio.”  

“Our leading growth profile, and robust balance sheet position, support our well-established dividend growth  program. Our commitment to deliver on this program is underpinned by our confidence in executing our  growth strategy and generating meaningful free cash flow on a sustained basis from our leading EBITDA  growth profile and low capital intensity. This is balanced against other capital allocation priorities, including  ongoing strategic investments along with maintaining a strong balance sheet to provide us ample flexibility to  further support our growth ambitions and shareholder capital returns,” concluded Doug.

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For more information, please contact:

Steve Beisswanger
Media Relations
[email protected]