TELUS reports strong fourth quarter results, announces 2019 consolidated financial targets

Fourth quarter consolidated revenue and EBITDA growth of 6.3 and 4.3 per cent, respectively

Strong customer growth, including 164,000 new postpaid wireless, Internet and TV customer additions, reflecting our consistent broadband network leadership and customer service excellence; strongest fourth quarter result in four years

Postpaid wireless net additions of 112,000, combined with industry-leading wireless postpaid churn of 0.91 per cent

Strong Internet and TV customer growth of 52,000; best fourth quarter result in five years

Targeting 2019 consolidated revenue and EBITDA growth of up to 5 and 6 per cent respectively

VANCOUVER, B.C.- TELUS Corporation today released its unaudited results for the fourth quarter of 2018. For the quarter, consolidated operating revenue of $3.8 billion increased by 6.3 per cent over the same period a year ago. This growth was driven by higher wireless network revenue and wireline data services revenue growth, as well as higher wireless equipment revenue. Earnings before interest, income taxes, depreciation and amortization (EBITDA) increased by 1.1 per cent to $1.2 billion due to higher revenue growth and higher wireless equipment margins. This growth was partly offset by increased costs to support our growing customer base and incremental employee benefits expense due to recent business acquisitions. Adjusted EBITDA was up 4.3 per cent when excluding restructuring and other costs from both periods, as well as the MTS net recovery and non-recurring losses and equity losses related to real estate joint ventures in the fourth quarter of 2017.

“TELUS delivered strong fourth quarter operational and financial results, concluding another year of robust customer growth, while achieving our annual revenue and EBITDA growth targets for the eighth consecutive year”, said Darren Entwistle, President and CEO. “This continued performance is bolstered by the unwavering dedication of our TELUS team to execute on our longstanding strategy, despite a highly competitive environment. Moreover, our team’s unparalleled commitment to providing exceptional customer experiences contributed materially to TELUS achieving our fifth consecutive year of industry-leading wireless churn below one per cent.”

Mr. Entwistle added, “A key differentiator for our organisation is our leadership in network excellence. In January, Ookla once again recognized TELUS as having the fastest mobile network in Canada for the second half of 2018. TELUS continues to be ranked amongst the best on a global basis, as further evidenced by Ookla’s global speed index in December, which named Canada as having the third fastest network in the world. Impressively, Canada distinctly outperformed many developed countries, including the United States as well as historical leaders in Asia, such as South Korea and Singapore. These acknowledgements build on the consistent network accolades TELUS has earned from J.D. Power, PCMag, OpenSignal, as well as Ookla, over the past two years, and reinforce the superiority of our networks and the value of our capital investments in broadband technologies.”

Mr. Entwistle further commented, “Through the success of our broadband technology investments, in combination with our culture of putting our customers first, we have demonstrated our ability to consistently drive profitable growth. Our proven strategy, gives us confidence in our 2019 targets announced today, including revenue growth up to 5 per cent and EBITDA growth up to 6 per cent. Without question, it is the unparalleled execution by our talented team that enables our shareholder-friendly initiatives, notably our multi-year dividend growth programme, which is now in its ninth year. In 2018, we returned more than $1.2 billion to shareholders, building on the more than $16 billion TELUS has returned to shareholders since 2004, representing over $27 per share. Consistent with the 7 per cent dividend growth achieved in 2018 and 2017, and following six consecutive prior years of circa 10 per cent annual dividend growth, we continue to target an additional seven to 10 per cent increase in 2019.”

Doug French, TELUS’ Executive Vice-president and Chief Financial Officer, said, “TELUS’ fourth quarter results build on the consistent financial and operational results we delivered throughout 2018, and our operating momentum places our team in a position of strength as we enter 2019. As planned, our net debt to EBITDA ratio progressively moved towards the upper-end of our guideline and finished the year at 2.54-times, on the back of EBITDA growth of nearly five per cent. This solid growth reflects our strong asset mix focused on wireless and data, and the consistent execution of our long-term focused growth strategy, combined with an unrelenting focus on cost efficiency.”

Mr. French added, “For 2018, we delivered healthy free cash flow growth of 24 per cent, reflecting solid EBITDA growth and lower capital expenditures as planned. In 2019, we expect to generate robust free cash flow driven by continued profitable customer growth and lower capital expenditures before spectrum of $2.85 billion, despite an increase to cash taxes due to a one-time catch-up payment. Importantly, cash taxes are expected to decline to a lower level in 2020. Overall, our strong balance sheet positions us well as we look to continue investing in our world-leading advanced broadband network, further extending our leadership position and supporting our planned participation in the upcoming 600 MHz spectrum auction.”

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