Q1 2020 Earnings Call
Are robots inconsistent performance over the longer-term including strong financial and operating results coupled with the strength of our balance sheet and financial liquidity office positions as well to navigate the uncertainty caused by the global Health crisis and importantly for the anticipated Market opportunities thereafter.
As we've responded to this unprecedented emergency. Our Focus has been on taking care of our team members taking care of our customers and our communities whilst embracing our fiduciary responsibilities to you or shareholders.
No to believe.
We are leveraging our strong digital and work from home capabilities to safeguard team member and customer help and a support customer transactions to help offset the impact within our store and call center operations that have been impacted.
Looking Beyond this pandemic. We will continue to leverage our digital channels across the customer journey in order to meet evolving client needs as well as to harvest the resulting Effectiveness and efficiency benefits of doing so.
Myself in the leadership team at tell us continue to be inspired by the Telus team as they literally work around the clock to keep Canadians connected with glass physical distance. He measures in place our world-leading Broadband Services have never been more essential than what they are right now citizens are increasingly relying on this connectivity to stay in touch with loved ones and to access essential health and safety information the strength the speed and the consistency of our networks have bolstered our nation's productivity.
According to an independent Global study examining the impact of recent work from home measures Canadians are recorded a 170% increase in remote work since emergency measures began taking effect contributing to an overall increase in productivity of some 25% by comparison the same report found off the ship the remote work had the opposite effect in Europe and the United States or productivity has declined by 8. 2% and 72% respectively since isolation policies came into effect.
Our technology teams continue to focus relentlessly on maintaining robust reliability and world-leading performance across all of our critical Services should proactively managing record high traffic levels. Most notably record highs and voice and video calling messaging TV viewership and home Wi-Fi.
Our ongoing investments in technology and infrastructure have allowed us to effectively manage a 50% daily increase in voice traffic four times that occurred on Mother's Day last year and they've also enabled us to respond to a near doubling of our multi messaging service, which is currently twice a what we normally see on Christmas Day.
To put it all into perspective. Our team's efforts to sustain our networks throughout covid-19 is akin to supporting Superbowl level traffic off each and every day our in our out reflect, you know, significant efforts to ensure Network Excellence during this critical time open signal analyze for download speeds globally on a weekly basis from January through to the end of March 2020.
the reports
Shows that not only are Canada's Network's continuing to operate exceedingly wealthy through the covid-19 crisis. Canada is the fastest across 45 countries tested for 4G download speeds for mobile experience.
By contrast countries like Australia and the UK were challenged to support the added traffic and pressure at times experiencing download speeds up to 15% off 30% slower, respectively.
Complementing this acknowledgement tell us was recognized and to tell us Canada state of mobile networks report in April of 2024. Its Global Network leadership team winning three of the national awards for more consistent quality winning for download throughput and latency as well whilst tying for excellent consistent quality delivered by our Network furthermore GD power recognized Canada and tell us as having the top wireless network in Canada office in the sixth consecutive year that tell us is earned at JD power award for Network quality. I think that's terrific for our company and I think it's emblematic as it relates to quality of technology and infrastructure in our country and it's terrific to have that third-party validation from JD Power indeed these rankings build on the recognition wage.
Plus is consistently earned from pcmag and Ookla in addition to open signal to tell us and JD Power for 3 or more years mortgage over at Ellis's Wireline. Broadband network has performed exceedingly well through the covid-19. And this is in stark contrast to networks in many other countries around the globe where governments have had to step in and manage traffic volumes to help out.
As we navigate the current Health crisis and continue to expand our Innovative Health technology and services across the country are virtual class offerings have never been more important to Canadians with the production of virtual V codes by provincial governments across Canada to enable patient care tell us help launch virtual visit functionality integrated with tell us electronic medical records or EMR enabling the 26,000 Canadian doctors using our EMR solution to conduct virtual care with their patients.
Canadians continue to leverage our one-on-one virtual Health Solutions with Acura by tell us Health utilizing a combination of chat and secure video consultations for convenient on-demand access for patients looking to interface with a nurse practitioner Acura is helping more than 1,000 of Canada's largest employers support the health and well-being of their employees during this challenging time with our employer virtual care platform and every employer.
and tell
This is tantamount to this is thinking first and foremost about keeping their employees safe. And Acura is playing a huge role in making sure that that Axiom is a reality additionally we've experienced a tenfold surge in demand for our Babylon by tell us how virtual Care Service which is available and BC Alberta and Ontario with other provinces across Canada launching shortly, including the French version in Quebec.
It's provides patients with video access to a locally licensed doctor which helps keeps both the patient and the doctor safe leveraging off distancing with video consultations to deliver the best help out comes in a way that's safe for the dock and a way that's safe for the patient and delivers the Pareto Optimal Health outcome The Babylon service provide same-day appointments and continues to be rated four out of five by our page, which is by the way the same rating that patients are giving our Akira platform on the employer health-care front.
Importantly as it relates to our Babylon service. We are able to provide options to the 5 million Canadians that do not have a family doctor and the more than half of all Canadians that find it difficult to quickly access After Hours Medical Care without going to the clinic or the emergency department. This is also particularly pertinent for Canadians living in rural communities. We also continue to see tremendous adoption of our home monitoring solution which incorporates the covid-19 protocol into the software enabling hundreds of patients to be monitored by our acute care system.
This solution has been implemented by the BC Ministry of Health and adopted by Saskatchewan and Nova Scotia with other provinces coming on board quickly month. We've also seen a considerable increase in the demand for our living. Well companion service that is focused on helping our seniors live independently and caring for our seniors during this terrible time of the contagion and the disproportionate impact that it has on our Elder citizens is a responsibility would tell us takes particularly seriously are gps-enabled personal emergency response service with fall detection provides 24/7 access to care a train operator can assess the situation and contact loved ones and or alert emergency Personnel dispatch help right away, wherever and yep.
Ever they need it again.
Putting our most vulnerable citizens not just at the Forefront of our hearts and minds but in terms of leveraging our technology to take care of them. Let's check it out. I have a look at our q1 performance.
Tell us once again achieves strong financial and operational results in the first quarter characterized by our Hallmark of meaningful customer growth together with enhanced profitability in spite of the challenging circumstances. We face in the month of March if the last twenty years is proven anything team members are at their very best when things are at their very worst.
In q1 Consolidated revenue and even up 5% respectively combined with strong free cash flow of 545 million dollars notably had we not experienced the impacts of the pandemic on our business. We would have delivered Consolidated ebitda growth of six. 2%
These transient impacts included lower Wireless roaming revenue and the temporary closure of certain Telus International centers as well as tell us Health Medicine and copeman Clinics.
Our team delivered strong first-quarter customer growth of a hundred six thousand client net additions up 12,000 over the same period last year wage electing continued Broadband Network leadership and customer service excellence and these are industry-leading results.
Looking at Wireless first quarter Network Revenue expanded by 1% year-over-year driven by our consistent focus on profitable high-quality smartphone Centric subscriber Grill.
This was diluted by the impacts of the covid-19 pandemic and March primarily due to a reduction in roaming Revenue as well as our efforts to support our customers inclusive of waiving international roaming charges inclusive of deferred plan pricing increases and inclusive of offering customized payment arrangements. Am financially challenged tell us a Jeep year-over-year Wireless ebitda growth of 2. 6% with higher Network Revenue equipment margins as well as cost efficiency savings partly offset by the impact of the pandemic that I just discussed.
We once again led the industry by a considerable margin with our mobile phones sharing rate of 0% inclusive about postpaid and our prepaid results on our attraction here continues to be excellent and it's great to see the Hallmark of organization exemplified during the contagion June 8th basis point year-over-year Improvement is indeed reflective of the continued success of our customers first culture in action, and it's also emblematic of our leading Network quality on a global basis. It also reflects less switching activity as clearly customers reduced their physical shopping habits in the final week of March.
Minute Jim Cinco will provide further details on our strong performance in Wireless and provide further color in respect of our continued industry-leading loyalty app subscriber net additions on the wireless front.
Let's now turn and have a look at our Wireline results.
Tell us again delivered another quarter of industry-leading performance buttressed by our premium Diversified and evolving product portfolio over our Global fax Network, which is underpinned. Of course by our industry best customer service. What a duality that is between world-leading Network excellence and world-leading come back for service.
First quarter Wireline revenues increased by 17% and Wireline data Revenue grew by 18% which is a modern record for tell us in respect of group Revenue grow. This growth was driven by continued customer growth and high-speed internet and TV which came in at $26,000 and eight thousand net additions respectively. It was driven by growth from new and existing customers in Telus International including the acquisition of confidence dead center, and it was diluted a little bit by the covid-19 impacts that have been deluded to the overall Telus International results.
Our growth in respect of Wireline was driven by strong results in home and Business security with the inclusion of ATT Canada and our home and Business security that came in delivering net ads of $15,000 in the quarter, which I think is a leading result in all of North America as it relates to additions off on home and small business security.
This was partly offset by decreased revenue from our business customers as they've redeployed resources to answer the unique challenges that they are facing wage within their B2B environment.
Lower revenues and tell us Health resulting primarily from the closure of our medicines and Copeland clinics were partly offset by increased revenues from our hyperscale virtual Care Solutions Wireline even increased by 72% driven by growth and internet growth and security services and an increased contribution from t i despite the pandemic dilution.
They don't going to have an opportunity to provide further operating color on our Wireline performance in a few minutes.
Are strong and consistent Wireline financial and operating results clearly highlight the importance of our dedicated focus on delivering customer service Excellence over what is truly a world-leading fiber Network?
and this
During the first quarter. Our team expanded are pure fiber coverage to approximately 71% of our high-speed Broadband footprint on our way to 80%, coverage by the end of 2020 indeed the current environment underscores the efficacy the potency and the reliability of our tap fiber Network.
Pure fiber enables millions of Canadians to work to learn to access entertainment to transact online and to socialize virtually from home on a significantly intensify basis. All is we as a nation as Citizens as consumers and as businesses take a Quantum Leap into the Digital Society and digital economy that will endure and grow well beyond the current Global Health crisis.
It's hard to believe how fast time goes to think that we're only merely a few months away from our fiber footprint coverage 80% of our original Broadband topology.
Notably for 2019 speaking of the power of our Wireline Network tell us was recognized as Canada's number one Netflix streaming experience and is the country's best Wi-Fi provider tell us it's also recognized as Canada's best gaming internet service provider for major isps in 20-25 pcmag. These awards are a testament do this significant Investments that we've made in our leading Pura fiber Network and The Innovation and spirit of teamwork exemplified by the Telus team and putting customers first and every single thing that we do,
In addition to our Broadband growth engine our Wireline results continue to be supported by our unique tell us help and tell us International growth businesses.
Despite the impact and tell us Health resulting from the closure of our clinics. We've seen a transformational step up in the utility coverage and Adoption of digital Health Care Services in general and virtual care in particular. This will be a legacy of the current Health crisis and one which tells us it's extra ordinarily. Well positioned to leave looking at Telus International our team responded swiftly and thoughtful as a number of our service delivery centers closed in response to various government decisions and ensuing announcements.
Impressively we have now enabled 85% of our Telus international team to work and support their clients from home or a modified work location protecting the health and safety of our team members and that of their families and Society whilst enhancing the operating resiliency of the organization and providing continuity of service for our highly valued customers.
We entered the current Global Health Emergency in a position of strength quite clearly despite the impacts of covid-19. Tell us delivered solid first-quarter Financial results strong subscriber growth, its industry-leading leading customer churn and very robust free cash flow generation both for q1 and was waiting prospectively. We have a strong balance sheet further supported by our successful and indeed timely 1.5 billion dollar Equity offering in February month, and we ended the quarter with available liquidity in excess of three billion dollars this puts us in an enviable position to not only manage the page. Of uncertainty but to continue to grow our business adeptly and to prosper in the post covid-19 environment as we put some of our tuition off.
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I'll start with our first quarter now behind us and a new normal settling over our country. We have chosen to defer the updating of our annual Financial guidance in light of the evolving nature of the global covid-19 Health crisis.
We will look to provide updated annual guidance for 2020 when we report Q2 results at the end of July whilst we navigate this crisis. We are continuing to drive near-term efficiency.
Every crisis is accompanied by its opportunities and we've identified more than two hundred and fifty million dollars of cost reduction and margin accretion initiatives to date month and Counting and we intend to leverage those. This will allow us to mitigate the trends in impacts related to the current crisis manage through various stakeholder initiatives wage position our business for future opportunities and remain focused on driving free cash flow toward our original expectation that we set out for 2020.
The criticality of technology and infrastructure to the well-being and productivity of our economy and Society highlights the importance of continuing to invest smartly in the advancement of our world-leading Broadband networks and digital capabilities. In order to meet accelerating customer demands. These investments will clearly drive both near and longer-term revenue and operating efficiency benefits as well as sustainable cash flow and future dividend growth.
After the board has thoughtfully weighed the interests of our many stakeholders alongside. The critical initiatives that have been sown numerous that we've undertaken in response to the global Health crisis. We as a board made the decision to defer are scheduled dividend increase. This quarter back was planned as part of our ongoing rigorous multi-year dividend growth program our quarterly dividend declared today for our dividend payment in July remains unchanged changed from our April payment and represents a 3.6 per cent increase over the same period last year
Certainly our decision to defer our dividend increase.