February 10, 2022

TELUS reports operational and financial results for fourth quarter 2021; announces 2022 consolidated financial targets

Industry-leading fourth quarter total Mobile and Fixed customer growth of 272,000, our best fourth quarter on record and an increase of 19,000 over last year, driven by robust customer demand for our superior bundled offerings and leading customer loyalty results

Total mobile net additions of 193,000, including 112,000 Mobile Phone net additions, an increase of 25,000 over the prior year, and 81,000 Connected Devices

Robust wireline net additions of 79,000, our best fourth quarter wireline customer growth on record, including 40,000 Internet customer additions, powered by leading broadband customer experiences over our superior PureFibre network

Consolidated Revenue, Net Income, and Adjusted EBITDA grew 20 per cent, 145 per cent, and 7.6 per cent, respectively; excluding the recognized gain on sale of financial solutions business, Revenue and Net Income up 10 per cent and 16 per cent, respectively

Strong annual performance in line with guidance, driven by consistent operational execution, leading product offerings, and client service excellence, bolstered by continued strong operating momentum in TELUS International, TELUS Health and TELUS Agriculture

Full year consolidated Operating Revenue, Net Income, and Adjusted EBITDA up 9.8 per cent, 35 per cent, and 6.4 per cent, respectively, alongside record 960,000 net customer additions

Dividends declared in 2021 up 7.3 per cent; Quarterly dividend declared for April 2022 of $0.3274, up 5.2 per cent over the prior year 

Targeting 2022 Operating Revenue and Adjusted EBITDA to both increase by 8 to 10 per cent, and Free Cash Flow of $1.0 billion to $1.2 billion

Vancouver, B.C. – TELUS Corporation today released its unaudited results for the fourth quarter of 2021. Consolidated operating revenues and other income increased by 20 per cent over the same period a year ago to approximately $4.9 billion. In the fourth quarter, we recognized a $410 million pre-tax gain arising from the disposition of our financial solutions business, as reported in other income. Excluding the gain, operating revenues and other income increased by 9.9 per cent. 

“Throughout 2021, TELUS achieved strong operational and financial results across our business,” said Darren Entwistle, President and CEO. “This is a trend the TELUS team has demonstrated over the long-term and, in 2021, was once again successfully achieved 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 all-time record total net customer additions of 960,000, including another best-ever year for Fixed customer growth of 255,000 reflecting the potency of our expansive PureFibre network capabilities. Furthermore, over the last two years we have added over 1.7 million customer additions, demonstrating the significant economic value we are creating through the strong demand for our leading product portfolio. Notably, we achieved strong Free Cash Flow for the year, slightly ahead of our guidance as updated in May to reflect our accelerated broadband expansion program. Our industry-leading customer growth was driven by our team’s passion for delivering outstanding customer experiences, which once again contributed to strong client loyalty across our key product lines, including blended Mobile Phone, Internet, Optik TV, Security and Voice churn all below one per cent for the year. Indeed, 2021 represented our eighth consecutive year of industry-leading postpaid wireless churn below one per cent.”

“Our results are buttressed by our highly differentiated and potent asset mix geared towards high-growth, technology-oriented verticals,” continued Darren. “Earlier today,TELUS International (TI) announced strong double-digit revenue and profitability growth for the fourth quarter, concluding their first year as a public company with impressive financial results that surpassed their financial targets for 2021. TI’s continued robust results demonstrate its consistent execution, and position as a leading partner of choice for premier digital customer experiences and IT services for its over 600 clients around the world. TI’s enviable list of client partners rely on TI’s talented and engaged team, along with its deep end-to-end digital capabilities to deliver a superior customer experience, including a unique and unparalleled mix of content moderation and artificial intelligence (AI) capabilities. At TELUS Health, our team drove double-digit year-over-year health services revenue growth for both the quarter and the year, while achieving important milestones along the way as we continue to meaningfully scale our health operations. This includes our healthcare programs covering over 20 million lives, an increase of nearly 22 per cent on a year-over-year basis, along with realizing more than 550 million digital health transactions in 2021 and earning over one million new virtual healthcare members, representing a 65 per cent increase over the prior year. We continue to successfully leverage our leading position in healthcare technology solutions to deliver improved health outcomes for citizens through access to better health information, which has never been more critical. In TELUS Agriculture, through our team’s ongoing efforts to integrate and grow this unique business, we drove strong double-digit revenue growth across our three lines of business - agribusiness; food, beverage and consumer goods; and animal health - exceeding our annual revenue objective with revenues in agriculture, including telecom connectivity, of over $400 million in 2021. This is illustrative of the significant value we are creating as the globally-leading provider of agriculture technology solutions. We look forward to expanding disclosure with respect to agriculture in 2022 and beyond, which we are confident will further illustrate the value and asset of consequence we are creating in this important area.”

“Backing our consistently strong financial and operating performance is our highly engaged team who are committed to delivering superior service offerings and digital capabilities over our world-leading Wireless and PureFibre broadband networks. More than ever, Canadians value a fast, reliable connection, and the consistent recognition from independent, third-party organizations, such as U.S.-based Ookla, reinforces the superiority of TELUS’ world-leading mobile network. Ookla ranked TELUS’ mobile network as number one in North America, and fastest in Canada for the ninth consecutive time, as our team, including our engineers and network innovators, work passionately to keep Canadians connected to the people and information that matter most. TELUS intends to continue and extend this global leadership position as we advance the development, coverage and commercialization of our 5G network and its inherent functionalities. This aforementioned recognition comes on top of the multi-year recognition our world-leading Wireless and PureFibre networks have consistently earned for speed, reliability, user experience and expansiveness from numerous other independent network reports, including U.K.-based Opensignal, U.S.-based PCMag and J.D. Power, and Canada’s Tutela. We are proud of the many ways in which our Wireless and PureFibre networks, with their global-best speeds, reliability and reach are driving economic growth, innovation and job creation. Moreover, our world-leading broadband networks and technology are improving the lives of Canadians by enabling online healthcare, education and teleworking flexibility during the pandemic; accelerating Canada’s digital economy and society for heightened productivity, competitiveness and human welfare outcomes in the post-pandemic period. Finally, our broadband technology is supporting critical transformational change in respect of: remediating the environmental state of our planet by bridging time and distance through technology virtualization; advancing agriculture efficiency and effectiveness, and food quality production through data analytics; and bridging socio-economic and geographic divides so that every member of our society has access to the technology that yields the opportunity to realize their full potential. These aforementioned objectives for our economy and society reflect TELUS’ Technology for Good social purpose to progress the growth of skilled jobs, the physical and mental well-being of our citizens and the uplifting of marginalized constituencies as embodied in our brand promise, Let’s Make the Future Friendly.”

Darren further noted, “The TELUS team’s ability to consistently drive profitable growth over the long-term, on the back of our differentiated asset base, world-leading networks and unique growth drivers, provides us with confidence in delivering on the annual targets for 2022 that we have announced today. This includes anticipated industry-leading Operating Revenue and Adjusted EBITDA to both increase by 8 to 10 per cent, alongside Free Cash Flow of $1.0 billion to $1.2 billion, inclusive of the final year of our accelerated broadband investment program, ahead of our regular capital expenditures declining by approximately $1 billion in 2023 and beyond to a new annual run rate of $2.5 billion, or less. Notably, our Operating Revenue and Adjusted EBITDA targets for 2022, are higher by up to 27 per cent and 17 per cent, respectively, as compared to our pre-pandemic 2019 results. These industry-leading targets will be supported by the robust guidance for 2022 announced this morning by TI, targeting strong double-digit Revenue and Adjusted EBITDA growth as they continue to drive impressive operating momentum through end-to-end design, build and deliver capabilities, tapping into the accelerated need for premium digital customer experiences, digital transformation, content moderation and AI data solutions across its high growth target verticals on a global basis. Furthermore, the unparalleled skill, innovation and grit of our team underpins our leading multi-year dividend growth program, now in its twelfth year. Notably, since 2004, we have returned $21 billion to shareholders, including $15.7 billion in dividends and $5.2 billion in share repurchases, representing over $15 per share. We look forward to updating our dividend growth program for the next three-year period commencing in 2023 at our upcoming AGM in May.”

“Throughout the year, our TELUS team, once again, exemplified all that it means to put our customers and communities first,” expressed Darren. “Together, our team members and retirees, with the support of our customers, continued to give back to communities in Canada and across the globe, volunteering over 1.3 million hours in 2021 alone and gifting more than $8.7 million in grants through the TELUS Friendly Future Foundation to 500 charitable organizations, strengthening the health and well-being of our communities. In addition, our team contributed over $1.6 million to emergency response efforts in 2021, including more than $1 million to communities impacted by flooding, wildfires and tornadoes. Indeed, in a year unlike most we have shared together, thanks to our customers and our team, TELUS continues to lead the world in social capitalism.”

 

Doug French, Executive Vice-president and CFO said, “In the fourth quarter, the TELUS team delivered strong operating and financial results that met our financial targets. Our results continue to reflect our operational execution excellence, supported by our leading broadband networks and our high quality asset mix geared towards high growth verticals and the growing global economy. Throughout 2021, our team continued to deliver on our customers’ first promise, achieving nearly one million new customer additions along with leading loyalty results, reflecting our superior bundled offerings and strong customer retention efforts.”  

“During the quarter, our team continued to execute on our accelerated broadband build program, connecting more homes and businesses directly to our leading PureFibre network, finishing the year with more than 2.7 million premises enabled with fibre along with over 1.3 million customers connected to our world-leading PureFibre network,” Doug added. “Our 5G network now reaches 70 per cent of the Canadian population and, in the months ahead, we will continue enhancing the customer experience with the deployment of our recently acquired 3500 MHz spectrum. Furthermore, we continue to migrate copper customers to our PureFibre network, finishing 2021 with only 11 per cent of our TV and internet customer base within our fibre footprint on copper. Notably, we are well on our way to substantially completing all of our copper-to-fibre migrations by the end of this year, leading to improved customer experiences and cost efficiencies, benefiting margins and cash flow, along with offering ongoing real estate rationalization opportunities.”

“Our consolidated financial targets for 2022 build off our well established operating momentum strength and are supported by our healthy balance sheet, which provides us with the financial flexibility to further bolster our unrivaled growth profile, both through thoughtful organic investments, as well as targeted acquisitions. Our financial outlook reflects continued healthy growth within our core business, including profitable customer growth driven by continued demand for our superior bundled offerings over our leading broadband networks. Supporting our growth profile in 2022 are our unique and high growth businesses, including TELUS International, which today released its own set of strong financial targets for 2022, as well as TELUS Health and TELUS Agriculture, which are both increasingly becoming important contributors to revenue, profitability and cash flow.”

“Our Capital Expenditure target for 2022 of approximately $3.4 billion, slightly below our preliminary guidance and inclusive of our accelerated broadband capital investment program now in its final year, will further enhance our strong competitive positioning. Specifically, these generational investments are advancing our PureFibre network coverage, connecting more homes and businesses to world-leading network technology, accelerating our 5G deployment across urban and rural Canada, as well as progressing our digitization strategy to bolster the customer experience and drive further efficiencies within our business. Furthermore, as we ramp down our accelerated broadband build at the end of this year, our capital expenditure profile will decline materially going forward, beginning in 2023, supporting sustainable cash flow generation and our commitment to our transparent dividend growth program. Powered by our leading asset mix, we are well positioned to continue executing against our long-standing growth strategy, while driving a collective focus on social capitalism, and delivering outstanding value for all TELUS stakeholders for years to come, while at the same time achieving our ambitious environmental goals,” concluded Doug.

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