TELUS reports operational and financial results for fourth quarter 2020; announces 2021 consolidated financial targets

Industry-leading fourth quarter customer growth of 253,000 net additions, driven by world leading customer experience and broadband network performance, complemented by strong digital capabilities, and superior product offerings

Leading wireline net additions of 78,000, representing our best fourth quarter wireline loading on record, inclusive of 44,000 high-quality internet net additions, powered by TELUS PureFibre and enhanced customer loyalty

Total wireless net additions of 175,000, including 87,000 mobile phone net additions, an increase of 17,000 on the prior year, and 88,000 mobile connected devices, up 28,000 on the prior year

Fourth quarter consolidated revenue growth of 5.2 per cent and EBITDA decline of 0.2 per cent, showcasing resiliency and operational excellence

Annual consolidated revenue and EBITDA growth of 5.5 and 0.2 per cent, reflective of strong execution throughout an unprecedented operating environment

Robust annual free cash flow of $1.435 billion, within range initially targeted in February 2020, building on excellent track record of delivering leading results

TELUS International realizes largest tech IPO in TSX history, establishing a market capitalization of over $10 billion, surpassing TELUS Corp valuation from 2000

Targeting 2021 consolidated revenue and EBITDA growth of up to 10 and 8 per cent, and free cash flow of approximately $1.5 billion

Vancouver, B.C. – TELUS Corporation today released its unaudited results for the fourth quarter of 2020. Consolidated operating revenues and other income increased by 5.2 per cent over the same period a year ago to $4.1 billion. Earnings before interest, income taxes, depreciation and amortization (EBITDA) decreased by 2.3 per cent to $1.3 billion while Adjusted EBITDA was down 0.2 per cent. This decline reflects multiple impacts from the COVID-19 pandemic, declines in wireline legacy voice and legacy data services and higher employee benefits and other costs, including support for business acquisitions. This was partly offset by growth in wireline data service margins resulting from business acquisitions, expanded services and customer growth; growth in our wireless subscriber base; increased organic and inorganic EBITDA contribution from TELUS International; and enhanced cost efficiency programs.

“Throughout 2020, TELUS achieved strong operational and financial results in both wireline and wireless” said Darren Entwistle, President and CEO. “This is a trend the TELUS team has demonstrated over the long-term and, in 2020, realized against the backdrop of an unprecedented operating environment. Our performance in the fourth quarter, and for the full year, was characterized by our hallmark combination of robust, high-quality and profitable customer growth, alongside strong financial results. The quarter concluded another year of industry-leading customer growth, with 777,000 total net customer additions, including an all-time record for annual wireline customer growth of 240,000. Notably, we achieved strong free cash flow for the year, within the range initially targeted in February 2020, and TELUS was the only telecom provider amongst its national peers to report positive EBITDA growth for the year. Our industry-leading customer growth was driven by our team’s passion for delivering outstanding customer experiences, which contributed to strong and enhanced client loyalty across our key product lines, including postpaid mobile phone, internet and TV churn all below one per cent in the fourth quarter. Indeed, 2020 represented our seventh consecutive year of industry-leading postpaid wireless churn below one per cent. This performance was backed by our highly engaged team, world-leading wireless and fibre broadband networks, strong digital capabilities, and superior service offerings.”  

“The efficacy of ongoing investments in our globally leading broadband networks continues to be evidenced by major, independent reports. In 2020, TELUS’ wireless network was recognized by UK-based Opensignal as the fastest in the world, and by U.S.-based Ookla as the fastest and most expansive on a national basis; both awards have now been received by TELUS for four consecutive years. In addition, for the second year in a row, Canadian-based Tutela placed TELUS first in respect of quality, latency and download throughput, for our wireless network, nationally. Our wireline broadband network was similarly recognized, with U.S.-based PCMag ranking our PureFibre network as Best for Gaming in 2020, and naming TELUS as the fastest internet service provider on a national basis. At a time when the speed, quality and expansiveness of our networks has become more important than ever, these recognitions are particularly resonant.” 

Darren further commented, “The TELUS team’s ability to consistently drive profitable growth over the long-term, provides us with confidence in delivering on the annual targets for 2021 that we have announced today. This includes expected industry-leading revenue and EBITDA growth of up to 10 and 8 per cent respectively, alongside free cash flow of approximately $1.5 billion. Furthermore, the unparalleled skill, innovation and grit of our team underpins our leading multi-year dividend growth program, now in its eleventh year. Notably, we have returned over $19 billion to shareholders since 2004 through our dividend and share purchase programs, representing $15 per share.” 

“Last week, TELUS International (TI) achieved a monumental milestone with its successful initial public offering (IPO), establishing a market capitalization of more than $10 billion. In Canada, this accomplishment makes TI’s IPO the largest technology IPO in TSX history, with total aggregate proceeds of $1.36 billion. Impressively, as TI embarked upon its next journey as a publicly traded company on both the Toronto and New York Stock Exchanges, TI’s market capitalization exceeded the $8 billion market capitalization of TELUS two decades ago when we first embarked on our national growth strategy. This significant value creation reflects TI’s steadfast focus on delivering leading customer experiences and strong financial results, in concert with an unparalleled dedication to giving back to their local communities; emulating the parameters of TELUS’ own success in growing from a western-based telecommunications company into a globally leading organization. TELUS International has evolved, over the last 15 years, into a digital customer experience innovator that harnesses the power of technology to provide outstanding customer and community experiences on a global basis. With TELUS retaining a controlling interest, and a 55 per cent economic stake, we remain excited for TI’s future as it continues to drive better business outcomes and grow value for all stakeholders. This success story reinforces the efficacy of our uniquely diversified and technology-oriented assets, including TELUS Health and TELUS Agriculture. Our integrated and broad portfolio of solutions within these growth verticals, combined with a strong financial growth profile, further enhances the differentiated value we are creating for our investors.” 

“In a year like no other, our TELUS team continued to support our communities and each other,” Darren expressed. “In this regard, we expanded our TELUS Health for Good program with the launch of seven new mobile health clinics in 2020, and an additional two clinics in January of 2021, bringing our total to 13 clinics nationwide. Throughout 2020, our mobile clinics supported 28,000 patient visits, including administering 12,700 COVID-19 assessments and tests. To further support public healthcare capacity and key health initiatives across Canada, the TELUS Friendly Future Foundation contributed $8.9 million to 597 charitable projects in 2020, including directing $2.4 million in emergency response grants. Overall, our TELUS family contributed $85 million and 1.25 million hours of volunteerism to charitable and community organizations throughout 2020. Our team's leadership in social capitalism was once again recognized on a global basis, with TELUS ranking 54th on the Corporate Knights 2021 Global 100 Most Sustainable Corporations Index for the 9th time. Impressively, TELUS is the highest ranking telco in North America.” 

Doug French, Executive Vice-president and CFO said, “TELUS’ impressive operational and financial results reflect the strength of our differentiated asset mix and our commitment to profitable customer growth. In 2020, we achieved healthy free cash flow growth of 54 per cent, reflective of positive year-over-year EBITDA growth, despite an unprecedented operating environment, and lower capital expenditures as planned.” 

Doug added, “Importantly, our results are underpinned by a strong balance sheet, which has provided the financial flexibility to pursue our exciting growth strategy, including through the global pandemic period. Clearly, our strategic acquisitions and thoughtful capital investments are paying off, as demonstrated by our consistent financial results and customer growth, and these investments will enhance our profitability and cash flow generation over the long-term. Our generational and superior fibre build is progressing towards completion, providing a solid foundation for the ongoing expansion of our world-leading wireless network with 5G, particularly as key 3500 MHz spectrum becomes available in 2021.”

“As evidenced by our consolidated 2021 financial targets announced today, we expect to deliver another year of strong financial and operational results, including continued robust cash flow generation alongside stable strategic capital investments. These financial targets support our leading dividend growth program where we continue to target seven to 10 per cent annual increases through 2022. This builds on our commitment and consistent track record with respect to our transparent dividend growth program over the past decade. With an unrivalled growth profile, we are committed to further advancing our proven strategy, while driving a collective focus on social capitalism, and delivering outstanding value for all TELUS stakeholders – not only in 2021, but for years to come” Doug concluded.

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