TELUS reports strong results for first quarter 2019

May 9, 2019 6:45 AM

Consolidated revenue, EBITDA and net income growth of 3.8, 8.6 and 6.1 per cent, respectively (including impact of IFRS 16 in 2019)

Strong customer growth, including 99,000 new customer additions, reflecting 11,000 mobile phone, 49,000 connected wireless devices, 22,000 Internet and 17,000 TV net additions, up 50 per cent over last year, and supported by expanding PureFibre network now covering 63 per cent of our high-speed broadband footprint and world leading wireless network

Mobile phone churn of 1.02 per cent; 8 basis-point improvement and first quarter record low for TELUS

Quarterly dividend increased to $0.5625 per share, our 17th dividend increase since 2011

Extending industry-best dividend growth program for additional three years targeting 7 to 10 per cent annual growth for 2020 through 2022

VANCOUVER, British Columbia, May 09, 2019 (GLOBE NEWSWIRE) -- TELUS Corporation today released its unaudited results for the first quarter of 2019. For the quarter, consolidated operating revenue of $3.5 billion increased by 3.8 per cent over the same period a year ago. This growth was driven by higher wireless and wireline data services revenue growth. Earnings before interest, income taxes, depreciation and amortization (EBITDA) increased by 8.7 per cent to $1.4 billion due to higher revenue growth and wireless equipment margins, growth in wireline data service margins, the implementation of IFRS 16 on certain expenses, as well as EBITDA contribution from our customer care and business services (CCBS) and TELUS Health businesses. This growth was partly offset by declines in wireline legacy voice and legacy data services and a decline in the EBITDA contribution from our business services. When excluding restructuring and other costs, Adjusted EBITDA was up 8.6 per cent. Applying a retrospective IFRS 16 simulation to fiscal 2018 results, pro forma Adjusted EBITDA growth was approximately 4.4 per cent.

For the quarter, net income of $437 million increased by 6.1 per cent over the same period a year ago as EBITDA growth was partly offset by higher depreciation and amortization due to growth in our asset base, resulting from investments in our broadband technologies and from business acquisitions, as well as increased financing costs. Additionally, $48 million of the increase in depreciation and $15 million of the increase in financing costs resulted from the application of IFRS 16 as we did not retrospectively adjust amounts reported for periods prior to fiscal 2019. Basic earnings per share (EPS) of $0.71 rose by 2.9 per cent over the same period last year. When excluding restructuring and other costs, Adjusted net income of $453 million increased by 4.1 per cent over the same period a year ago, while adjusted basic EPS of $0.75 rose by 2.7 per cent.

“TELUS achieved strong financial and operational results in the first quarter, including high quality smartphone-centric mobile phone net additions and vigorous connected device growth in wireless, alongside ongoing robust wireline customer growth”, said Darren Entwistle, President and CEO. “Without question, our continued strong performance is owing in no small part to our team’s unparalleled dedication to providing exceptional customer experiences. TELUS, once again, achieved industry-leading wireless loyalty, with a record first quarter low mobile phone churn of 1.02 per cent. This unrelenting commitment to our Customers First promise is buttressed by our meaningfully differentiated product offerings, as well as the ongoing significant investments we are making synergistically in our world-leading broadband network and technologies across both our wireless and wireline operations.”Mr. Entwistle added, “Our acquisition of important 600 MHz spectrum licences in the recent spectrum auction will further support TELUS in delivering enhanced mobile broadband connectivity to our customers in both urban and rural communities, which is critical as the demand for wireless data continues to grow. Indeed, today Canadians enjoy the second fastest networks in the world, and TELUS has been recognized in Ookla’s analysis of Speedtest Intelligence data as having the fastest network in Canada. Importantly, the acquisition and deployment of this spectrum will ensure we continue to provide citizens from coast to coast with globally leading network quality, speed and coverage, while bolstering the advancement of our national 5G growth strategy.”

“Today, we are pleased to announce the extension of our multi-year dividend growth program from 2020 through 2022, targeting annual growth of 7 to 10 per cent. This extension reflects TELUS’ confidence in future market opportunities stemming from our longstanding and successful growth strategy. This range will enable TELUS to continue to simultaneously make the critical strategic investments in our advanced broadband network and quality customer growth that underpin our ongoing profitability and free cash flow expansion which, in turn, support the return of cash to shareholders. We have established an enviable track record in respect of an attractive balance sheet and strong operational performance, which enable us to successfully undertake and extend our consistent, transparent and industry-leading shareholder-friendly program. Furthermore, today’s dividend increase represents the 17th semi-annual increase over the course of our multi-year dividend growth program, originally introduced in May 2011. Indeed, between 2004 and April 2019, TELUS has returned $16.7 billion to shareholders, including $11.5 billion in dividends, representing $28 per share,” Mr. Entwistle added.

“As a company that believes in the profound connection between the success of our business and the welfare of our communities, our TELUS team has volunteered 1.3 million days of caring and gifted $682 million in philanthropy since 2000 to create stronger, healthier communities where we live, work and serve. Moreover, TELUS has contributed more than $39 billion in total tax and spectrum remittances to our federal, provincial and municipal governments since 2000, supporting economic, educational, cultural, environmental and health opportunities for Canadians,” Mr. Entwistle concluded.

Doug French, Executive Vice-president and Chief Financial Officer, said, “For the first quarter of 2019, TELUS delivered healthy results across wireless and wireline, in-line with our 2019 targets. The strategic investments we are making in our leading broadband technologies, including our valuable investment in 600 MHz wireless spectrum, continue to advance our network leadership position and support profitable, economically accretive customer growth.”

Mr. French added, “Our consistent execution, healthy balance sheet and strong cash flow outlook, including our expectations for moderating capital expenditures, provides our team with the confidence to extend our multi-year dividend growth program through 2022. Our capital return program continues to be balanced with making the right strategic investments to further advance our growth strategy, and our commitment to maintain investment-grade credit ratings.”

“Beginning with our first quarter of 2019, TELUS has modernized our corporate reporting as it relates to our wireless subscriber results, aligning with notable, large global peers. Specifically, we have made the strategic decision to begin disclosing mobile phones and mobile connected devices as separate subscriber bases and net additions. We will continue to report on a blended basis, mobile phone average revenue per subscriber unit per month (ARPU) and mobile phone average billing per subscriber unit per month (ABPU), as well as mobile phone churn, which will be reflective of the mix of postpaid and prepaid within our mobile phones subscriber base. Importantly, we have adjusted certain 2018 quarterly metrics where applicable to ensure comparability. Our updated disclosure is consistent with how we look at value creation of overall customer loading, and the associated margin and economics in terms of lifetime value and EBITDA growth, and further enhances the transparency of our disclosure on customer loading. Notably, first quarter mobile phone customer growth was substantially all driven by higher-value, smartphone-centric loading,” concluded Mr. French.

In wireless, external revenue increased by 1.8 per cent, reflecting network and equipment and other service revenue growth of 1.4 per cent and 3.9 per cent respectively. Network revenue growth was driven by a 4.9 per cent increase in our subscriber base, partly offset by lower mobile phone ARPU from declining chargeable data usage, the competitive environment putting pressure on base rate plan prices including larger data buckets and the changing customer mix.

In wireline, external revenue increased by 6.4 per cent driven by data services revenue growth of 12 per cent, reflecting higher customer care and business services (CCBS) revenues due to increased business volumes from organic growth and business acquisitions, increased Internet and enhanced data service revenues from higher revenue per customer and continued Internet subscriber growth, increased TELUS Health revenues driven by business acquisitions and organic growth, revenues from our home and business smart technology (including security) service offerings and increased TELUS TV revenues from subscriber growth. In the quarter, we added 99,000 new wireless, Internet and TELUS TV customers, up 33,000 or 50 per cent over the same quarter a year ago. The higher net additions included 11,000 mobile phones, 49,000 mobile connected devices, 22,000 Internet subscribers and 17,000 TELUS TV customers. Our total wireless subscriber base of 9.7 million is up 4.9 per cent over the last twelve months, reflecting a 3.1 per cent increase in our mobile phones subscriber base to 8.5 million and a 19 per cent increase to our connected devices subscriber base to 1.3 million. Our Internet connections of 1.9 million are up 7.4 per cent and our TELUS TV subscriber base stands at 1.1 million.

Consolidated capital expenditures of $646 million declined by 0.6 per cent. At the end of the quarter, approximately 1.94 million premises, or 63 per cent of our high-speed broadband footprint of more than 3.1 million premises, were covered by TELUS PureFibre. This is an increase of approximately 400,000 PureFibre premises over the last twelve months.

Free cash flow of $153 million decreased by 66 per cent over the same period a year ago as EBITDA growth was offset by higher cash income taxes paid as expected, including a one-time cash tax catch-up payment of $270 million, increased restructuring and other costs disbursements, and increased interest paid. Free cash flow before income taxes increased slightly by 1.0 per cent to $504 million.


C$ millions, except per share amountsThree months ended March 31(1)Per cent
Operating revenues3,5063,3773.8
Operating expenses before depreciation and amortization2,1272,1080.9
Adjusted EBITDA(2)(3)1,4151,3038.6
Net income4374126.1
Adjusted net income(4)4534354.1
Net income attributable to common shares4284104.4
Basic EPS0.710.692.9
Adjusted basic EPS(4)0.750.732.7
Capital expenditures(5)646650(0.6)
Free cash flow before income taxes(6)5044991.0
Free cash flow(6) 153443(65.5)
Total subscriber connections(7)(8) (thousands)13,97913,4314.1
  1. Our results for 2019 reflect the application of IFRS 16, Leases. Our results for periods prior to fiscal 2019 have not been retrospectively adjusted.
  2. EBITDA is a non-GAAP measure and does not have any standardized meaning prescribed by IFRS-IASB. We issue guidance on and report EBITDA because it is a key measure used to evaluate performance. For further definition and explanation of this measure, see ‘Non-GAAP and other financial measures’ in this news release.
  3. Adjusted EBITDA for the first quarters of 2019 and 2018 excludes restructuring and other costs of $36 million and $34 million respectively.
  4. Adjusted net income and adjusted basic EPS are non-GAAP measures and do not have any standardized meaning prescribed by IFRS-IASB. These terms are defined in this news release as excluding from net income attributable to common shares and basic EPS (after income taxes), restructuring and other costs. For further analysis of adjusted net income and adjusted basic EPS, see ‘Non-GAAP and other financial measures’ in this news release.
  5. Capital expenditures include assets purchased, excluding right-of-use lease assets, but not yet paid for, and consequently differ from Cash payments for capital assets, excluding spectrum licences, as reported in the interim consolidated financial statements. Refer to Note 31 of the interim consolidated financial statements for further information.
  6. Free cash flow is a non-GAAP measure and does not have any standardized meaning prescribed by IFRS-IASB. For further definition and explanation of this measure, see ‘Non-GAAP and other financial measures’ in this news release.
  7. The sum of active mobile phone subscribers, mobile connected device subscribers, Internet access subscribers, residential voice subscribers and TELUS TV subscribers, measured at the end of the respective periods based on information in billing and other systems. Effective April 1, 2018, and on a prospective basis, we have adjusted cumulative subscriber connections to remove approximately 68,000 TELUS TV subscribers as we have ceased marketing our Satellite TV product. Fourth quarter of 2018 opening mobile phone subscriber connections have been adjusted to exclude an estimated 23,000 subscribers impacted by the CRTC’s final pro-rating ruling in June 2018, which was effective October 1, 2018. During the first quarter of 2019, we adjusted cumulative Internet subscriber connections to add approximately 16,000 subscribers from acquisitions undertaken during the quarter.
  8. Effective for the first quarter of 2019, with retrospective application, we have revised our definition of a wireless subscriber unit and now report mobile phone units and mobile connected device units as separate subscriber bases. As a result of the change, total subscribers and associated operating statistics (gross additions, net additions, churn, ABPU and ARPU) have been adjusted to reflect (i) the movement of certain subscriber units from the mobile phones subscriber base to the newly created mobile connected devices subscriber base, and (ii) the inclusion of previously undisclosed Internet of Things and mobile health subscriber units in our mobile connected devices subscriber base. For additional information on our subscriber definitions, see Section 11.2 Operating indicators in our first quarter 2019 Management’s discussion and analysis (MD&A).

First Quarter 2019 Operating Highlights

TELUS wireless

TELUS wireline

Dividend Declaration The TELUS Board of Directors has declared a quarterly dividend of $0.5625 per share on the issued and outstanding Common Shares of the Company payable on July 2, 2019 to holders of record at the close of business on June 10, 2019.

TELUS announces intention to extend multi-year dividend growth programTELUS announced its intention to target ongoing semi-annual dividend increases, with the annual increase in the range of 7 to 10 per cent from 2020 through to the end of 2022. This announcement further extends TELUS’ multi-year dividend growth program originally announced in May 2011 and extended for three additional years in each of May 2013 and May 2016. This program provides investors with ongoing clarity with respect to TELUS’ dividend growth model.

Notwithstanding this target, dividend decisions will continue to be subject to our Board’s assessment and the determination of our financial situation and outlook on a quarterly basis. Our dividend payout ratio guideline in 2019 is 65 to 75 per cent of net earnings per share. So as to be consistent with the way we manage our business, we have revised our target guideline, effective January 1, 2020, to be calculated as 60 to 75 per cent of free cash flow on a prospective basis. There can be no assurance that we will maintain a dividend growth program through 2022.

Corporate Highlights TELUS makes significant contributions and investments in the communities where team members live, work and serve and to the Canadian economy on behalf of customers, shareholders and team members. These include:

Access to Quarterly results informationInterested investors, the media and others may review this quarterly earnings news release, management’s discussion and analysis, quarterly results slides, audio and transcript of the investor webcast call, supplementary financial information at

TELUS’ first quarter 2019 conference call is scheduled for Thursday, May 9, 2019 at 1:30pm ET (10:30am PT) and will feature a presentation followed by a question and answer period with investment analysts. Interested parties can access the webcast at An audio recording will be available on May 9 until June 15, 2019 at 1-855-201-2300. Please use reference number 1244890# and access code 77377#. An archive of the webcast will also be available at and a transcript will be posted on the website within a few business days. The TELUS annual general meeting will also be held on Thursday, May 9, 2019 at 11:30am ET (8:30am PT) and will be webcast live from

Caution regarding forward-looking statementsThis news release contains forward-looking statements about expected events and the financial and operating performance of TELUS Corporation. The terms TELUS, we, us and our refer to TELUS Corporation and, where the context of the narrative permits or requires, its subsidiaries.

Forward-looking statements include any statements that do not refer to historical facts. They include, but are not limited to, statements relating to our objectives and our strategies to achieve those objectives, our outlook, updates, capital expenditure targets, and our multi-year dividend growth program. Forward-looking statements are typically identified by the words assumption, goal, guidance, objective, outlook, strategy, target and other similar expressions, or future or conditional verbs such as aim, anticipate, believe, could, expect, intend, may, plan, predict, seek, should, strive and will.

By their nature, forward-looking statements are subject to inherent risks and uncertainties and are based on assumptions, including assumptions about future economic conditions and courses of action. These assumptions may ultimately prove to have been inaccurate and, as a result, our actual results or events may differ materially from our expectations expressed in or implied by the forward-looking statements.

The assumptions for our 2019 outlook, as described in Section 9 General trends, outlook and assumptions, and regulatory developments and proceedings of our 2018 annual MD&A, remain the same, except for the following updates:

The extent to which these economic growth estimates affect us and the timing of their impact will depend upon the actual experience of specific sectors of the Canadian economy.

Risks and uncertainties that could cause actual performance or events to differ materially from the forward-looking statements made herein and in other TELUS filings include, but are not limited to, the following:

These risks are described in additional detail in Section 9 General trends, outlook and assumptions, and regulatory developments and proceedings and Section 10 Risks and risk management in our 2018 annual MD&A. Those descriptions are incorporated by reference in this cautionary statement but are not intended to be a complete list of the risks that could affect TELUS.

Many of these factors are beyond our control or our current expectations or knowledge. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also have a material adverse effect on our financial position, financial performance, cash flows, business or reputation. Except as otherwise indicated in this document, the forward-looking statements made herein do not reflect the potential impact of any non-recurring or special items or any mergers, acquisitions, dispositions or other business combinations or transactions that may be announced or that may occur after the date of this document.

Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements in this document describe our expectations and are based on our assumptions as at the date of this document and are subject to change after this date. Except as required by law, we disclaim any intention or obligation to update or revise any forward-looking statements. The forward-looking statements in this news release are presented for the purpose of assisting our investors and others in understanding certain key elements of our expected 2019 financial results as well as our objectives, strategic priorities and business outlook. Such information may not be appropriate for other purposes.

This cautionary statement qualifies all of the forward-looking statements in this document.

Non-GAAP and other financial measuresWe have issued guidance on and report certain non-GAAP measures that are used to evaluate the performance of TELUS, as well as to determine compliance with debt covenants and to manage our capital structure. As non-GAAP measures generally do not have a standardized meaning, they may not be comparable to similar measures presented by other issuers. Securities regulations require such measures to be clearly defined, qualified and reconciled with their nearest GAAP measure.

Adjusted Net income and adjusted basic earnings per share: These measures are used to evaluate performance at a consolidated level and exclude items that may obscure the underlying trends in business performance. These measures should not be considered alternatives to Net income and basic earnings per share in measuring TELUS’ performance. Items that may, in management’s view, obscure the underlying trends in business performance include significant gains or losses associated with real estate development partnerships, gains on exchange of wireless spectrum licences, restructuring and other costs, long-term debt prepayment premiums (when applicable), income tax-related adjustments, asset retirements related to restructuring activities and gains arising from business combinations.

Reconciliation of adjusted Net income

Three months ended March 31
C$ and in millions20192018Change
Net income attributable to Common Shares42841018
Restructuring and other costs, after income taxes2525
Adjusted Net income45343518

Reconciliation of adjusted basic EPS

Three months ended March 31
C$, per share amounts20192018Change
Basic EPS0.710.690.02
Restructuring and other costs, after income taxes, per share0.040.04
Adjusted basic EPS0.750.730.02

EBITDA (earnings before interest, income taxes, depreciation and amortization): We have issued guidance on and report EBITDA because it is a key measure used to evaluate performance at a consolidated level. EBITDA is commonly reported and widely used by investors and lending institutions as an indicator of a company’s operating performance and ability to incur and service debt, and as a valuation metric. EBITDA should not be considered an alternative to Net income in measuring TELUS’ performance, nor should it be used as an exclusive measure of cash flow. EBITDA as calculated by TELUS is equivalent to Operating revenues less the total of Goods and services purchased expense and Employee benefits expense.

We also calculate Adjusted EBITDA to exclude items of an unusual nature that do not reflect our ongoing operations and should not, in our opinion, be considered in a valuation metric, or should not be included in an assessment of our ability to service or incur debt.

Reconciliation of Adjusted EBITDA

Three months ended March 31
C$ and in millions20192018
Net income 437412
Financing costs168156
Income taxes157151
Amortization of intangible assets147139
Add restructuring and other costs included in EBITDA3634
Adjusted EBITDA1,4151,303

Free cash flow: We report this measure as a supplementary indicator of our operating performance. It should not be considered an alternative to the measures in the condensed interim consolidated statements of cash flows. Free cash flow excludes certain working capital changes (such as trade receivables and trade payables), proceeds from divested assets and other sources and uses of cash, as found in the condensed interim consolidated statements of cash flows. It provides an indication of how much cash generated by operations is available after capital expenditures (excluding purchases of spectrum licences) that may be used to, among other things, pay dividends, repay debt, purchase shares or make other investments. Free cash flow may be supplemented from time to time by proceeds from divested assets or financing activities.

Calculation of free cash flow

Three months ended March 31
C$ and in millions20192018
EBITDA1,379 1,269
Deduct non-cash gains from the sale of property, plant and equipment(5)(8)
Restructuring and other costs, net of disbursements(33)(4)
Effects of contract asset, acquisition and fulfilment (IFRS 15)38 18
Effects of lease principal (IFRS 16)(88)
Leases formerly accounted for as finance leases13
Items from the condensed interim consolidated statements of cash flows:
Share-based compensation, net19 18
Net employee defined benefit plans expense20 25
Employer contributions to employee defined benefit plans(16)(21)
Interest paid(1)(179)(150)
Interest received2 2
Capital expenditures (excluding spectrum licences)(2)(646)(650)
Free cash flow before income taxes504 499
Income taxes paid, net of refunds received(351)(56)
Free cash flow153 443
  1. Includes $15 million interest paid on lease liabilities.
  2. Refer to Note 31 of the interim consolidated financial statements for further information.

About TELUS TELUS (TSX: T, NYSE: TU) is one of Canada’s largest telecommunications companies, with $14.5 billion of annual revenue and 14.0 million subscriber connections, including 9.7 million wireless subscribers, 1.9 million Internet subscribers, 1.2 million residential voice and 1.1 million TELUS TV customers. TELUS provides a wide range of communications products and services, including wireless, data, Internet protocol (IP), voice, television, entertainment, video and home and business security. TELUS is also Canada's largest healthcare IT provider, and TELUS International delivers business process solutions around the globe.

In support of our philosophy to give where we live, TELUS, our team members and retirees have contributed over $650 million to charitable and not-for-profit organizations and volunteered more than 1.21 million days of service to local communities since 2000. Created in 2005 by President and CEO Darren Entwistle, TELUS’ 13 Canadian community boards and five International boards have led the Company’s support of grassroots charities and have contributed $72 million in support of 7,000 local charitable projects, enriching the lives of more than 2 million children and youth, annually. TELUS was honoured to be named the most outstanding philanthropic corporation globally for 2010 by the Association of Fundraising Professionals, becoming the first Canadian company to receive this prestigious international recognition.

For more information about TELUS, please visit

Investor RelationsRobert Mitchell (647)

Media relationsFrancois Gaboury(438)


Source: TELUS Communications Inc


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