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August 7, 2009

Q2 2009 TELUS investor conference call. Robert McFarlane EVP & Chief Financial Officer Darren Entwistle President & CEO. August 7, 2009. TELUS forward looking statements.

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August 7, 2009

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  1. Q2 2009 TELUS investor conference call Robert McFarlane EVP & Chief Financial Officer Darren Entwistle President & CEO August 7, 2009

  2. TELUS forward looking statements Today's session and our answers to questions contain statements about expected future events and financial and operating results of TELUS that are forward-looking. By their nature, forward-looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that the 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 and events to differ materially from those expressed in the forward-looking statements. Accordingly our comments are subject to the disclaimer and qualified by the assumptions (including assumptions for 2009 guidance), qualifications and risk factors (including those associated with the shared build, operation and deployment of the national high-speed packet access network) referred to in the Management’s discussion and analysis in the 2008 annual report, and in the 2009 first and second quarter reports. 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 targets and guidance.

  3. Agenda • Wireless and wireline segment review • Consolidated financial review • Updates • TELUS TV • Operating Efficiency Program • Financing • 2009 guidance • Questions and Answers 3

  4. Wireless segment – Q2 2009 financial results      Data revenue & subscriber growth offset by voice ARPU erosion Capex reflects investments in HSPA network build 4

  5. Wireless subscriber results Net additions Wireless subscribers prepaid 1.2M Prepaid 20% postpaid 176K 89% 111K 88K Postpaid 80% 86% 48K 82% 5.1M 92% Q1-08 Q1-09 Q2-08 Q2-09 6.3 million total Sequential improvement in net adds but less than Q2-08 due to Koodo launch and recession 5

  6. Wireless ARPU Data Voice % of ARPU $62.73 $58.61 9.17 15% 20% 11.56 53.56 47.05 Q2-08 Q2-09 Q2-08 Q2-09 Good data growth offset by 12% voice ARPU erosion 6

  7. Wireless data revenue $217M $159M $103M Q2-08 Q2-07 Q2-09 BlackBerry Tour Strong 37% annualized data growth driven by continued smartphone adoption 7

  8. Wireless marketing and retention      Note: Measurement of costs of acquisition and retention have been refined in 2009. Prior year comparisons have been restated. COA lower due to lower marketing expenses and commissions Investments in retention focused on smartphones 8

  9. Wireless guidance update Projecting flat wireless revenue and EBITDA in weak Canadian economy 9 * See forward looking statement caution

  10. Wireline segment – Q2 2009 financial results      EBITDA impacted by restructuring and pension costs Continued higher capex to support broadband expansion 10

  11. Wireline segment – EBITDA normalized   Underlying EBITDA up nearly 5% when excluding restructuring and DB pension costs 11

  12. Internet subscribers High-speed Internet net additions Internet subscribers 105K Dial-up 9% 24K High-speed 91% 1.1M 3K 1.2 million total Q2-08 Q2-09 High-speed Internet net adds slowed substantially due to economic weakness and market share loss 12

  13. TELUS TV subscribers TELUS TV net additions TELUS TV subscribers 115K 51K 17K 10K Q2-08 Q2-09 Q2-08 Q2-09 Good subscriber growth with net adds up 70% to 17K Total subscriber base up 125% to 115K 13

  14. TELUS Satellite TV update • TELUS Satellite TV successfully launched in B.C. and Alberta, end of June • Increases TELUS TV home bundle footprint to >90% • Enhances TELUS’ competitive position • Provides TELUS with capex flexibility in future years • Permits expansion in previously uneconomic areas • Improves mass advertising efficiency TELUS Satellite TV complements existing TELUS TV over broadband service/entertainment portfolio 14

  15. Moderate Network Access Line losses vs. peers 1 Other -3.4% -4.2% -4.7% -7.6% -8.1% Q2 2008 -8.6% -9.9% Q2 2009 -10.1% 1 Weighted average of reported NALs for Bell and Bell Aliant and an estimate for MTS for Q2/09. TELUS continues to compare favourably to North American peers 15

  16. Stabilized residential NAL losses Q4-08 Q1-09 Q4-07 Q1-08 Q2-09 Q2-08 -41K -41K -42K -47K -48K -51K 3rd consecutive quarter of YoY residential line loss stabilizing due to winbacks and bundling 16

  17. Wireline guidance update (unchanged) 1 Underlying EBITDA growth would be 3 to 6% adjusted for wireline restructuring costs of $51M and approx. $135M in 2008 and 2009E respectively, and a $110M increase in 2009 wireline defined benefit pension expense Expected underlying EBITDA growth of 3 to 6% excluding restructuring and pension costs 17 * See forward looking statement caution

  18. Consolidated – Q2 2009 financial results       Consolidated results impacted by economic softness and increased restructuring and pension costs 18

  19. Consolidated – EBITDA normalized   Normalized EBITDA up nearly 4% when excluding restructuring and DB pension costs 19

  20. EPS continuity $0.83 $0.77 $0.02  $0.07 ($0.10) ($0.06) ($0.04) ($0.01) $0.71 Excl. Tax Adj. Q2-09 Reported Q2-08 Reported Dep’n and Amort & other Restr. costs Pension costs Lower shares o/s & lower tax rates Financing EBITDA (excl pension & restr. costs) EPS up 5% excluding restructuring & pension costs and six cents of tax adjustments 20

  21. Consolidated guidance update (unchanged) 1 Underlying EBITDA growth would be 1 to 3% adjusted for restructuring of $59M and approx. $150M in 2008 and 2009E respectively, and a $118M increase in 2009 defined benefit pension expense Expect underlying EBITDA growth of up to 3% excluding restructuring and DB pension costs 21 * See forward looking statement caution

  22. Investing in operational efficiency Total restructuring costs ($M) approx. $150 81 59 53 38 28 10 7 4 Q1-08 Q4-08 Q2-08 Q1-09 Q2-09 2008A 2009E* Q3-08 Acceleration of operational efficiency initiatives driving increased restructuring costs 22 * See forward looking statement caution

  23. Underlying EBITDA margin improvement EBITDA margin (excl. restructuring costs) wireless wireline 43.1% 42.2% 34.0% 33.9% Q2-08 Q2-09 Q2-08 Q2-09 Operating expense control leads to improved margins 23

  24. Analysis of full time equivalent employees    • 2009 YTD permanent domestic FTE reduction is 900 and balance is seasonality • TELUS International YTD decline not necessarily indicative of full year trend Making significant progress towards YE target of >1500* reduction in domestic FTEs 24 * See forward looking statement caution

  25. TELUS funding position • In May, successfully closed $700M senior unsecured debt offering • 4.95% five year notes, maturing May 2014 • Paid down 2012 credit facility and reduced commercial paper • >70 new and existing buyers • Amended & extended 364-day credit facility to end of 2010 • Now $300 million (undrawn), down from $700 million • Strong position with sustainable cash flows and >$1B liquidity • 2009 cash taxes outlook reduced to $270-$310 million* • 1.9x net debt to EBITDA within 1.5 to 2.0x long-term guideline • Strong investment grade ratings (BBB+/A-) stable outlook TELUS has strong financial position, liquidity, and access to capital markets 25 * See forward looking statement caution

  26. Wireless and wireline results impacted by recession and competitive intensity Company executing on improved cost efficiency Encouraging TELUS TV growth Making continued strategic investments in wireless and wireline broadband, and success based enterprise contracts Strong balance sheet and long-standing adherence to financial policies Summary Investing to strengthen future operational and competitive position 26

  27. Questions? investor relations 1-800-667-4871 telus.com ir@telus.com

  28. Appendix – free cash flow C$ millions 2008 Q2 2009 Q2 918 873 EBITDA (435) (557) Capex (25) 5 Net Employee Defined Benefit Plans Expense (Recovery) (24) (51) Employer Contributions to Employee Defined Benefit Plans (175) (149) Interest expense paid (includes income tax interest income) (6) (8) Cash Income Taxes and Other 14 15 Non-cash portion of share-based compensation (2) 31 Restructuring payments (net of expense) (7) (11) Donations and securitization fees included in other expense 258 148 Free Cash Flow (before share-based compensation payment) (4) (4) Share Based Compensation Paid 254 144 Free Cash Flow (per current public guidance methodology) (77) - Purchase of shares for cancellation (NCIB) (289) (151) Dividends (Note: Q1/08 dividend paid in Q2/08; Q2/08 dividend remitted June 30, 2008) (4) - Acquisitions 125 52 Working Capital and Other 9 45 Funds Available for debt redemption (350) 100 A/R Securitization 338 (184) Net Issuance (Repayment) of debt (3) (39) Increase (Decrease) in cash 28

  29. Appendix - 2009E Free cash flow* Appendix – 2009E Free cash flow 2009E ($M) EBITDA (after restructuring) $3,600 to 3,700 ~(2,050) Capex Net Cash Interest ~(410) (270) to (310) Net cash tax payment ~0 Other Free Cash Flow 850 to 950 ~(175) Cash pension contribution (in excess of expense) Free Cash Flow1(incl. cash pension contribution) 675 to 775 1 see Free Cash flow definition on Appendix slide 29 * See forward looking statement caution

  30. 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, net employee defined benefit plans expense, cash interest received and excess of share compensation expense over share compensation payments, subtracting cash interest paid, cash taxes, capital expenditures, cash restructuring payments, employer contributions to employee defined benefit plans, 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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