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August 8, 2008

Q2 2008 TELUS Investor conference call August 8, 2008 TELUS forward looking statements

Renfred
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August 8, 2008

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  1. Q2 2008 TELUS Investor conference call August 8, 2008

  2. TELUS forward looking statements This session and answers to questions contain forward-looking statements that require assumptions about expected future events and financial and operating results that are subject to inherent risks and uncertainties. There is significant risk that assumptions, predictions and other forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed. Except as required by law, TELUS disclaims any intention or obligation to update or revise forward-looking statements, and reserves the right to change, at any time at its sole discretion, its current practice of updating annual guidance. Factors that could cause actual results to differ materially include, but are not limited to: competition (including more active price competition and the likelihood of new wireless competitors beginning to offer services in 2009 following the AWS spectrum auction); economic growth and fluctuations (including pension performance, funding and expenses); capital expenditure levels (increased in 2008 by purchases of wireless spectrum in the AWS auction); financing and debt requirements (including share repurchases and debt financings); tax matters (including acceleration or deferral of required payments of significant amounts of cash taxes); human resource developments; business integrations and internal reorganizations (including post-acquisition integration of Emergis); technology (including reliance on systems and information technology, evolving wireline broadband and wireless next generation technology options and the possible need for prospective wireless sharing arrangements to achieve cost efficienciesand reduce deployment risks); regulatory approvals and developments (including interpretation and application of tower sharing and roaming rules, the design and impact of future spectrum auctions, the new media proceeding and possible changes to foreign ownership restrictions); process risks (including conversion of legacy systems and billing system integrations); health, safety and environmental developments; litigation and legal matters; business continuity events (including manmade and natural threats); any prospective acquisitions or divestitures; and other risk factors discussed herein and listed from time to time in TELUS’ reports and public disclosure documents including its annual report, annual information form, and other filings with securities commissions in Canada (on www.sedar.com) and filings in the United States including Form 40-F (on EDGAR at www.sec.gov). For further information, see Section 10: Risks and risk management in TELUS’ annual 2007 Management discussion and analysis, as well as updates reported in section 10 of TELUS’ 2008 quarterly Management’s discussion and analysis.

  3. Q2 2008 TELUS Investor conference call Darren Entwistle President & Chief Executive Officer

  4. Satisfactory progress and accomplishments • 176,000 wireless net additions for Q2 • 7% decrease in total cost of acquisition • Year-over-year improvement in churn to 1.43% • Solid wireline revenues growth, driven by data • Resilient long distance revenue and small improvement in access line losses • 70% increase in high-speed Internet net additions • Successful conversion of 1 million B.C. customers to integrated IT system 4

  5. Challenges • Decrease in wireless ARPU • Competitive voice pricing more than offsetting strong data growth • Not yet gaining full traction in continuing efficiency initiatives 5

  6. Looking ahead Focusing on corporate priorities • Focus on data and wireless • Build scale in chosen vertical markets • Extract productivity gains from efficiency initiatives • To meet endemic challenges of wireline industry and J curve economics of new business Evaluating future technology • Successful track record of executing technology evolutions • Complex deliberations are ongoing Advancing our national growth strategy 6

  7. Q2 2008 TELUS Investor conference call Robert McFarlane EVP & Chief Financial Officer

  8. Wireless Q2 highlights • Strong wireless results – record Q2 additions with low COA • Postpaid value oriented brand launch going well • Encouraged by recent trend in churn • Strong growth in data as smartphone adoption accelerates • Orderly iDEN to PCS migration for non-PTT users continues Revised guidance reflects positive trends in data and loading 8

  9. Wireless segment – Q2 2008 financial results     1 EBITDA (as adjusted) excludes net-cash settlement feature expense (recovery) of $1M and $1.8M, respectively, in the second quarter of 2008 and 2007. Continued strong growth with EBITDA reflecting record loading 9

  10. Wireless subscriber results net additions wireless subscribers prepaid 1.1M 176K Prepaid 20% postpaid 128K 90% Postpaid 80% 77% 4.7M Q2-08 Q2-07 5.8 million total Excellent net adds with high proportion postpaid 10

  11. Wireless ARPU Data $63.65 $62.73 Voice 6.58 9.17 57.07 53.56 Q2-07 Q2-08 Wireless data revenue of $159M, up 54% with data representing 15% of ARPU 11

  12. Wireless marketing     Excellent marketing efficiency driven in part by value brand launch 12

  13. Most smartphones on Canada’s largest high-speed network TELUS a leader in consumer smartphone adoption 13

  14. 2008 guidance* - wireless segment revised *See forward looking statement caution Wireless revenue narrowed to high end of range with expenses reflecting strong subscriber and data growth 14

  15. Wireline Q2 highlights • Solid revenue growth driven by data growth including acquisitions • Encouraging high-speed Internet net adds • Continued moderate NAL losses • Conversion of residential customers in B.C. to new integrated wireline billing and client care system • Expenses impacted by large enterprise implementations in Central Canada and strong Internet and TV loading 15

  16. Wireline segment - revenue profile      Reported revenue growth led by strong data growth and inclusion of Emergis results in 2008 16

  17. Long distance and data revenue normalized • Reported long distance revenue increased 4.2% • Down 3.5%, excluding one time impact of AB billing conversion in Q2 2007 • Reported data revenue increased 20% • Increased approx. 7% when normalized for acquisitions 17

  18. Wireline segment – Q2 2008 financial results     1 EBITDA (as adjusted) excludes net-cash settlement feature expenses (recovery) of $(1.3)M and nil, respectively, in the second quarter of 2008 and 2007. EBITDA impacted by COA associated with broadband services, and large complex deals 18

  19. Emergis integration update • Post-merger integration going well • Focusing on cross selling opportunities • Updated three-year plan for healthcare and financial services • Business units aligned including: • Finance • Human Resources • Marketing • IT/IS TELUS recognized leader in health care vertical in Canada 19

  20. Internet subscribers Internet subscribers High-speed Internet net additions 142K Dial-up 12% 24K 14K High-speed 88% 1.1M Q2-07 Q2-08 1.2 million total Regaining momentum in BC and AB 20

  21. Moderate Network Access Line losses vs. peers 1 Other -3.1% -3.4% -3.9% -4.8% -6.7% Q2 2007 Q2 2008 -7.8% -8.1% -8.5% 1 Includes a weighted average of Bell, MTS and Bell Aliant. MTS percentage based on analyst estimate TELUS compares favourably to North American peers 21

  22. Billing and client care system update • TELUS continues to migrate residential subscribers in B.C. to new converged wireline billing and client care system • Converted more than 1 million B.C. residential customers • First time ever B.C. and AB systems converged • Initial indications that mid-July BC cutover went well with no order entry difficulties or extra costs • Expected benefits include: • Streamlined and standardized processes • Elimination of multiple legacy systems over time Positive early experience with implementation in B.C. 22

  23. 2008 guidance* - wireline segment revised *See forward looking statement caution Wireline revenue and EBITDA tightened to high end of range 23

  24. TELUS total customer connections 11.4 10.9 10.4 (millions) Res NALs Bus NALs Dial-up Internet High-speed Internet Wireless Q2-06 Q2-07 Q2-08 Wireless and Internet represent 62% of total connections 24

  25. Consolidated – Q2 2008 financial results      1 EBITDA (as adjusted) excludes net-cash settlement feature expenses (recovery) of $(0.3)M and $1.8M, respectively, in Q2-08 and Q2-07. Solid revenue and EPS growth with higher operating expenses and depreciation 25

  26. EPS continuity $0.83 $0.03 $0.03 $0.02 $0.04 $0.06 $0.76 $ 0.07 $ 0.04 EBITDA1 Lower shares o/s Q2-08 reported Dep’n & Amort Financing expenses COA & COR 2007 Amp’d write-down Q2-07 reported 2007 IT system impact 1 Normalized to exclude billing system, Amp’d Mobile impacts, acquisition and retention, and reassessments. Lower financing costs & shares o/s offset by higher depreciation and COA / COR 26

  27. Share buy backs – Normal Course Issuer Bid    • Quarterly dividend payment of $144M Shares outstanding down 3.6% year-over-year and 11% since NCIB inception 27

  28. 2008 guidance* - consolidated revised *See forward looking statement caution Guidance revised to reflect year-to-date performance. Increasing revenue guidance and narrowing earnings ranges 28

  29. AWS spectrum auction completed Two month AWS auction closed July 21 Total gov’t proceeds of $4.25 billion after 331 rounds Cost of spectrum nearly 3X initial estimates 282 licenses conditionally assigned to 15 companies TELUS total bid $880 million Spectrum cost to be recorded in Q3 2008 Acquired valued national spectrum - avg. 16.2 MHz Expected to provide capacity for future 4G services TELUS well positioned for eventual rollout of 4G services 29

  30. Financing update • Increasing commercial paper (CP) program by $400M to $1.2B • DBRS confirmed CP rating August 7th • 100% back stopped by TELUS’ $2B syndicated bank facility • CP represents lowest cost source of funds available for TELUS • Expect to be used in large part to fund spectrum acquisition costs Commercial paper provides TELUS with cash management flexibility and lower cost of funds 30

  31. Summary Solid consolidated revenue growth Encouraging wireless trends including loading, churn & data Acquired valuable spectrum nationally in recent AWS auction Initial success of migrating B.C. residential subscribers to new integrated billing and client care system Positive momentum with internet & TV loading; NAL losses moderate & stabilizing Minor revisions to 2008 guidance to reflect year to date operating results Cost control is a key focus for remainder of 2008 Increased CP program by 50% to $1.2 billion Good quarter of operational execution, record loading, and successful IT system implementation reinforcing guidance 31

  32. questions? investor relations 1-800-667-4871 telus.com ir@telus.com

  33. Appendix – Free cash flow 2007 2008 C$ millions Q2 Q2 EBITDA 884.6 917.6 Capex (481.8) (435.6) Interest expense paid (includes income tax interest income) (212.9) (175.1) Cash income taxes; and other (2.9) (5.9) Add back option & RSU expense less RSU cash paid (8.9) 10.1 Restructuring payments (net of expense) (7.3) (1.5) Donations and securitization fees included in other expense (9.1) (7.3) 302.3 Free Cash Flow 161.7 Issues (redemptions) of common shares, net 0.2 0.1 Purchase of shares for cancellation (NCIB) (169.5) (76.7) Dividends (125.0) (289.4) Acquisitions - (1.1) Working Capital and Other 66.8 73.0 Funds Available for debt redemption (65.8) 8.2 A/R Securitization 350.0 (350.0) Net debt issuance / (repayment) (815.9) 338.4 Increase (Decrease) in cash (531.7) (3.4)

  34. Appendix - definitions • EBITDA: Earnings, after restructuring and workforce reduction costs, before interest, taxes, depreciation and amortization • Capital intensity: capex divided by total revenue • Cash flow: EBITDA less capex • Free cash flow: EBITDA, adding Restructuring and workforce reduction costs, cash interest received and excess of share compensation expense over share compensation payments, subtracting cash interest paid, cash taxes, capital expenditures, cash restructuring payments, and cash related to Other expenses such as charitable donations and securitization fees • Cost of retention (COR): total costs to retain existing subscribers, often presented as a percentage of network revenue TELUS definitions for non-GAAP measures

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