TELUS Corporation

Good day. Welcome to TELUS 2024 Q4 Earnings Conference Call. I'd like to introduce your speaker, Mr. Robert Mitchell. Please go ahead.

Hello, everyone. Thank you for joining us today. Our fourth quarter of 2024 results, news release, MD&A, financial statements, and detailed supplemental investor information were posted to our website earlier this morning. Our call today will begin with remarks by Darren and Doug. For the Q&A portion, we will be joined by Zainal, Naveen, Jason, and Tobias. Briefly, prepared remarks, slides, and answers to questions contained forward-looking statements. Actual results could vary from these statements. The assumptions on which they are based and the material risks that could cause them to differ are outlined in our public filings to securities commissions in Canada and the U.S., including fourth quarter and annual 2024 MD&A. With that, over to you, Darren.

Thanks, Ragnar. Hello, everyone. And in the fourth quarter, and for 2024, our team's relentless pursuit of operational excellence continue to differentiate the Telus organization, driving significant customer growth and robust financial results. Through our premier asset portfolio and unwavering commitment to cost efficiency, we delivered strong, profitable growth to close out 2024, momentum that we intend to build upon in 2025 and beyond. Our focus on margin-accretive customer expansion, globally leading broadband networks, and a customer-centric culture culminated in our third consecutive year of surpassing 1 million mobility and fixed customer additions. Once again, Telus led the industry with more than 1.2 million telecom net new customer additions in 2024. This performance is a testament to our unmatched bundled product offerings across mobile and home. Our team's passion for delivering customer service excellence again contributed to continued strong loyalty across our key product lines. Notably, post-paid mobile phone churn of 0.99% for the full year marks the 11th consecutive year at less than 1%. Despite a challenging competitive, regulatory, and macroeconomic landscape, Telus drove 5.5% T-Tech EBITDA growth for 2024, meeting the target range that we set at the beginning of 2024. This included strong T-Tech EBITDA growth of 7% in the fourth quarter. Our team once again achieved industry-best total customer telecom net additions of 328,000 for the quarter. In mobile, we drove leading total net additions of 264,000, including healthy mobile phone net additions of 70,000 and strong connected device net additions of 194,000. This was supported by our ongoing intense focus on economic margin accretive customer growth, which is evidenced by our consistent industry-leading lifetime revenue, buttress by our industry-best churn, and superior customer experience. Let's turn now and take a look at our wireline business. Telus delivered another quarter of industry-leading total wireline customer growth, including industry-best fourth quarter intranet net additions of 37,000. Notably, this drove industry-leading fixed data services revenue growth of 3.5%. Furthermore, in the fourth quarter, we drove continued strong momentum in our unique and highly differentiated data-centric growth businesses. Our TELUS Health team achieved accelerated revenue growth in the quarter of 10%, alongside 20% growth in its EBITDA contribution. Since acquiring LifeWorks in 2022, we've achieved $355 million in combined annualized synergies including $294 million in cost synergies and $61 million in cross-selling. Importantly, we remain on track to deliver our goal of $427 million by year end. Moreover, we drove a 10% year-over-year increase in global lives covered to over 76 million, a 16% increase in virtual care members, and a 7% increase in digital health transactions. Likewise, our team achieved robust performance in TELUS agriculture and consumer goods, with revenue growth of 16% on the back of eight consecutive quarters of record sales performance, driving increasing profitability and margin contributions. We look forward to continuing the momentum in these emerging growth areas in 2025 and beyond. The strategic investments that we've made in our leading broadband networks alongside our customer experience leadership underpin the continued advancement and sustainability of our strong financial and operational performance. This gives us confidence in the robust outlook for consistent long-term profitable growth and our ability to deliver on the annual targets that we've set out for 2025. These include industry-leading T-TECH operating revenue and adjusted EBITDA growth of up to 4% and 5%, respectively, and consolidated free cash flow of approximately $2.15 billion, supported by continued moderated capital expenditures of approximately $2.5 billion, representing an industry-best capital intensity. Our team's track record for execution excellence alongside an attractive long-term free cash flow growth outlook underpin our sustainable and leading multi-year dividend growth program now in its 15th year. Needless to say, we remain disappointed in our share price performance over the past year. in spite of significantly outperforming the majority of our national and global peers across a wide range of operational and financial metrics. This is frustrating for our management team in the context of our robust and profitable customer growth which drove leading fourth quarter telecom EBITDA growth of 7% and 5.5% for the year, not to mention our dividend yield of 8%, coupled with TELUS's potent defensive characteristics in a volatile macroeconomic environment. Furthermore, our leading and differentiated asset mix underpins the significant value that we have created, including our pervasive pure fiber network with world-best KPIs as reflected in recent U.S. fiber transactions. It includes our differentiated TELUS health and TELUS agriculture and consumer goods businesses with their attractive growth and valuation multiple characteristics. And it includes the best telecom asset in the business, with a reliable execution track record. Going forward, this management team remains laser-focused on building on the strong operational and financial performance momentum with which we exited 2024. We remain focused on achieving our robust targets for 2025, and we remain focused on delivering sustainable free cash flow expansion year in and year out for the foreseeable future. This is buttressed by one of the lowest capital intensity ratios globally, alongside compelling monetization opportunities that we anticipate supporting meaningful deleveraging, also a key area of focus for 2025 and beyond. TELUS is targeting to achieve a net debt to EBITDA ratio of approximately three times in 2027 in conjunction with the contemporaneous removal of the discounted dividend reinvestment plan preceded by a ratcheting down of the plan in 2026. In May, per our established cycle, we will provide an update on our dividend growth program for 2026 through 2028 and more generally for the return of capital to our shareholders. In closing, I'd like to express my gratitude to our team for their efforts, their expertise, and frankly in the environment, their grit in executing on our consistent winning strategy to meet our commitments to all of our stakeholders. And on that note, let me turn the call over now to Uncle Doug.