TELUS reports operational and financial results for third quarter 2021

Industry-leading total mobile and fixed customer growth of 320,000, up 43,000 over last year, marking TELUS’ highest quarter ever

Strong, high-quality mobile phone net additions of 135,000, a 24,000 increase over the prior year driven by industry-leading mobile phone churn; record connected device net additions of 110,000, up 23,000 year-over-year

Robust wireline customer net additions of 75,000, powered by world-leading customer loyalty in combination with TELUS’ PureFibre network, including sustained momentum on accretive copper-to-fibre migrations as TELUS continues to successfully execute on its accelerated broadband expansion plan

Continued strong operating momentum in TELUS International and TELUS Health, with double-double digit revenue growth driven by a combination of robust organic customer growth and acquisitions

Consolidated revenue and EBITDA growth of 6.8 and 7.1 per cent, respectively, alongside net income expansion of 11.5 per cent, demonstrating strong and consistent operational execution, powered by a leading asset mix, combined with superior product offerings and client service excellence

 Quarterly dividend increased to $0.3274 per share, up year-over-year by 5.2 per cent as TELUS continues to execute on its leading, multi-year dividend growth program, supported by healthy cash flow generation and our robust capital structure

Vancouver, B.C. – TELUS Corporation today released its unaudited results for the third quarter of 2021. Consolidated operating revenues and other income increased by 6.8 per cent over the same period a year ago to $4.3 billion. Earnings before interest, income taxes, depreciation and amortization (EBITDA) increased by 7.6 per cent to $1.5 billion while Adjusted EBITDA increased by 7.1 per cent to $1.6 billion. This growth reflects: (i) higher internet and third-wave data service margins, as well as other fixed data service margins, resulting from subscriber base growth and expanded services; (ii) growth in network revenue from increases in our mobile phone and connected devices subscriber bases; (iii) growth in mobile equipment margins; (iv) an increased contribution from our Digitally-led customer experiences – TELUS International (DLCX) segment from customer growth, including business acquisitions, and increased depth and breadth of services offered to its existing customers; and (v) lower bad debt expense. This growth was partly offset by lower legacy fixed voice and legacy fixed data services and higher employee benefits expense.

“Our team once again achieved strong operational and financial results in the third quarter,” said Darren Entwistle, President and CEO. “TELUS’ continued execution excellence was again characterized by the consistent combination of industry-leading and profitable customer growth, resulting in strong financial results across our business as evidenced by consolidated revenue and EBITDA both increasing 7 per cent. Our robust performance reflects the effectiveness of our globally leading customer-centric culture and broadband networks, underpinned by our highly engaged team and their passion for delivering outstanding connected experiences. This contributed to leading total customer net additions of 320,000, an all-time quarterly record for TELUS, underpinned by industry-best client loyalty across our key mobile and fixed product lines. Notably, blended mobile phone, PureFibre internet, Optik TV, Security and voice churn are all below one per cent year-to-date.”

“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 solid double-digit revenue growth, with increased profitability for the third quarter. These continued strong results demonstrate TI’s position as the partner of choice for premier digital customer experiences for clients around the world as they look to TI’s talented team to deliver end-to-end next-gen digital solutions and services powering a differentiated customer experience, including a unique and unparalleled mix of content moderation and artificial intelligence capabilities. At TELUS Health, our team drove double-digit year-over-year health services revenue growth in the quarter, while achieving important milestones as we continue to meaningfully scale our health operations, including reaching over 19 million lives covered, an increase of nearly 21 per cent on a year-over-year basis. Furthermore, we realized nearly 138 million digital health transactions during the quarter and earned close to one million new virtual healthcare members over the last 12 months, representing a 64 per cent increase over last year. We continue to 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 grow and integrate this unique business, we remain on track to generate double-digit revenue growth and annual revenues in agriculture of approximately $400 million in 2021, illustrative of the value we are creating as the globally-leading provider of agriculture technology solutions.”

“Our third quarter performance was backed by our strong digital capabilities and superior service offerings, over our world-leading wireless and fibre broadband networks,” added Darren. “At a time when the human connection continues to be more important than ever, TELUS has been named the fastest mobile operator in Canada by U.S.-based Ookla for the fifth year in a row in their Q3 Canada Market Report for 2021. In addition, our team earned the top spot in six of seven categories in U.K.-based Opensignal’s August 2021 Mobile Network Experience: Canada Report. Notably, Opensignal found TELUS’ wireless download speed of 73.9 Mbps to be 6 per cent faster than the second place finisher and close to 30 per cent faster than the third place finisher. This is the 10th time TELUS has received a top ranking from Opensignal, including being recognized as having the fastest mobile network in the world in 2020, a true reflection of the incredible expertise and dedication of our entire team. These awards reinforce TELUS’ leadership in terms of offering customers the fastest service in Canada across both our fibre and wireless broadband networks, as also confirmed by other independent, third-party organizations, including Canada-based Tutela and U.S.-based J.D. Power. Moreover, this recognition of the superiority of TELUS’ national broadband networks underscores the value of our significant investments in fibre and wireless technologies, including our ongoing accelerated broadband expansion program through 2022. These generational investments will fuel enhanced customer growth and operating efficiencies, and drive positive cash flow benefits as TELUS completes our expedited broadband build.”

“Importantly, our significant, ongoing broadband network investments will further enable the continued advancement of our financial and operational performance, strengthening our confidence in the robust outlook for our business, and the long-term sustainability of our industry-leading dividend growth program. The 5.2 per cent year-over-year dividend increase announced today represents the 21st since 2011, with our program now in its eleventh year. Since 2004, TELUS has returned more than $20 billion to shareholders, including over $15 billion in dividends, representing approximately $15 per share. Future dividend growth and affordability will be supported by EBITDA growth and value creation in our TI, Health and Agriculture businesses, as well as by lower future capital expenditures, consistent with the preliminary guidance we have provided for significantly reduced capital investments of $2.5 billion or less, beginning in 2023, and the meaningful resulting free cash flow expansion.”

“Our TELUS team members and retirees continue to demonstrate their unwavering support for the communities where we live, work and serve,” expressed Darren. “Reinforcing our long-standing dedication to working collaboratively with Indigenous communities, we introduced TELUS’ Reconciliation Commitment. Developed in partnership with, and in support of, Indigenous Peoples across the country, our commitment to Reconciliation acts as a cornerstone of our action plan and other related activities moving forward. By way of example, in October we launched our TELUS Mobility for Good for Indigenous Women at Risk program, through which we are providing free smartphones and data plans to Indigenous women at risk or surviving violence. Indeed, thanks to our customers and our TELUS team, our portfolio of For Good programs continues to deliver on our promise of a friendly future for all.”

Doug French, Executive Vice-president and CFO said, “In the third quarter, TELUS once again delivered strong operational and financial results, including healthy free cash flow growth, with year-to-date performance tracking to our annual financial targets established earlier this year and reaffirmed today. These results build on the strong operating momentum that our team has achieved over the long-term, enhancing our position of strength as we close out the final quarter of the year and move into 2022.”

Doug added, “During the quarter, our team continued to execute on our accelerated broadband build, connecting more homes and businesses directly to our leading TELUS PureFibre service and expanding our 5G network to 64 per cent of the Canadian population, and to be enhanced with the deployment of 3500MHz in the months ahead. These transformational investments are bolstering our competitive positioning, driving strong profitable customer growth and positive economic outcomes, as Canadian consumers and businesses continue to benefit from the superiority of our world-leading broadband networks and the experiences and societal benefits they enable. Furthermore, we continue to actively migrate copper customers to our PureFibre network, leading to a three percentage point decline in our copper subscriber base within our fibre footprint. As we move towards completing our copper-to-fibre migration program, we will see the benefits to our margin and cash flow profile through meaningful cost structure efficiencies and, over the longer term, real estate rationalization opportunities.” 

“Consistent with our long-standing, multi-year dividend growth program, today we announced a quarterly dividend increase to $0.3274 per share, or $1.3096 on an annualized basis. The dividend increase reflects our healthy balance sheet position, along with our confidence in executing on our growth strategy, leading to strong financial performance, including EBITDA growth and margin expansion. Furthermore, as we ramp down our accelerated broadband build at the end of next year, we expect a material reduction in our capital expenditure profile, beginning in 2023, to support sustainable cash flow generation. Looking forward, our team is excited to continue delivering on our track record of execution excellence and to further advance our unique growth strategy. Powered by our leading and diversified asset base, at home and around the globe, we are in a strong position to continue to deliver superior operating and financial outcomes, further buttressing our return of capital objectives along with an eye on maintaining a strong balance sheet to support long-term value creation for our investors,” concluded Doug. 

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