TELUS Corporation Q1 FY2024 earnings call

Darren Entwistle noted that TELUS delivered resilient EBITDA growth of 4.3% and margin expansion of 170 basis points in the first quarter. TTech mobile had its strongest first quarter on record with customer growth. TTech fixed's industry-leading wireline customer growth was driven by Internet, TV, and security net additions. TBS continued to show strong growth across core telecom capabilities and industry solutions. TELUS Health made progress on sales, bookings, and cost synergies, with globalized coverage and digital health transactions increasing. TI reported robust cash flow generation despite a challenging macroeconomic environment and executed cost efficiency programs. TELUS also officially kicked off its 19th annual TELUS Days of Giving.

In the first quarter, TELUS achieved industry-leading total customer net additions of 209,000, up 28% year-over-year. For TTech mobile, TELUS realized a first quarter customer growth of 146,000 net additions, with 45,000 mobile phone net additions and 101,000 record first quarter connected device net additions. TTech fixed delivered industry-best total wireline customer growth, with 30,000 Internet net additions, 19,000 TV net additions, and 22,000 security net additions, totaling 63,000 external fixed net additions. TELUS Business Solutions (TBS) achieved 4% EBITDA growth and 9% cash flow contribution growth. TELUS Health had first quarter revenues of $420 million alongside 28% EBITDA contribution growth, with globalized coverage reaching nearly 72 million people and 160 million digital health transactions. TELUS International (TI) had operating revenues decline by 4.6% year-over-year, but adjusted EBITDA was up 11%.

TTech is targeted to have operating growth of 2% to 4% and adjusted EBITDA growth of 5.5% to 7.5%. Consolidated capital expenditures, excluding circa $100 million earmarked for real estate development, are still targeted to remain approximately $2.6 billion. Consolidated free cash flow for 2024 is forecasted to be approximately $2.3 billion. There is anticipation of improvement from TELUS International, TELUS Health, and TELUS Agriculture and Consumer Goods, particularly in the second half of the year.

Intense competition, especially in device financing subsidies, is putting pressure on ARPU. The challenging global macroeconomic environment impacts TELUS International. Competitive intensity in the market, such as with device financing, can be dilutive.

Q: Vince Valentini asked about TTech EBITDA growth, AMPU, and the effective lease principal in free cash flow.

A: Doug French and Darren Entwistle provided responses.

Q: Jerome Dubreuil inquired about CapEx objective and timeline.

A: Doug French responded.

Q: Drew McReynolds asked about the relevance of wireless ARPU as a KPI and leverage target.

A: Darren Entwistle, Zainul Mawji, and Doug French responded.

Q: Maher Yaghi asked about fixed data services revenue growth and Internet ARPU.

A: Zainul Mawji and Darren Entwistle responded.

Q: Matt asked about TTech margin expansion and churn measures.

A: Darren Entwistle, Doug French, and Zainul Mawji responded.

Q: Stephanie Price asked about competition in device financing.

A: Doug French and Zainul Mawji responded.

Q: Sebastiano Petti asked about demand drivers for TI and Health.

A: Doug French, Jeff Puritt, Navin Arora, and Zainul Mawji responded.

Q: Simon Flannery asked about fixed wireless for business.

A: Navin Arora responded