MONTRÉAL, Aug. 9, 2018
/PRNewswire/ - Quebecor Inc. ("Quebecor" or the "Corporation")
today reported its consolidated financial results for the second
quarter of 2018. Quebecor consolidates the financial results
of Quebecor Media Inc. ("Quebecor Media"), a subsidiary it has
wholly owned since June 22, 2018.
On May 11 and June 22, 2018, Quebecor Media repurchased a total
of 16,064,215 of its Common Shares held by CDP Capital d'Amérique
Investissements inc. ("CDP Capital"), a subsidiary of the
Caisse de dépôt et placement du Québec, for a total aggregate
purchase price of $1.54 billion, paid in cash. On
June 22, 2018, Quebecor purchased
1,564,696 Common Shares of Quebecor Media held by
CDP Capital in consideration of the issuance of convertible
debentures in the principal amount of $150.0 million, convertible into
Class B Subordinate Voting Shares ("Class B Shares") of
Quebecor. Upon completion of these transactions, the Corporation's
interest in Quebecor Media increased from 81.53% to 100.0%.
Second quarter 2018 highlights
- Revenues: $1.04 billion, up
$4.9 million (0.5%) from the second
quarter of 2017.
- Adjusted EBITDA1 $417.1 million, up $12.8
million (3.2%). Excluding the impact of IFRS 15, adjusted
EBITDA was $414.2 million in the
second quarter of 2018, an $18.9
million (4.8%) increase.
- Net income attributable to shareholders: $41.3 million ($0.18 per basic share) in the second quarter of
2018, compared with $137.8 million
($0.57 per basic share) in the same
period of 2017, an unfavourable variance of $96.5 million ($0.39 per basic share), including the
$123.4 million combined unfavourable
impact of the gain on the sale of a spectrum licence recorded in
the second quarter of 2017 and the variance in losses on embedded
derivatives related to convertible debentures.
- Adjusted income from continuing operating
activities2 $106.2 million
($0.45 per basic share) in the second
quarter of 2018, compared with $88.6
million ($0.37 per basic
share) in the same period of 2017, an increase of $17.6 million ($0.08 per basic share) or 19.9%. Excluding the
impact of IFRS 15, adjusted income from continuing operating
activities was $104.3 million, a
$21.1 million (25.4%) increase.
- The Telecommunications segment grew its revenues by
$20.6 million (2.5%) and its adjusted
EBITDA by $24.8 million (6.2%) in the
second quarter of 2018. Excluding the impact of IFRS 15, segment
adjusted EBITDA was up $30.9 million
(7.9%).
- Videotron Ltd. ("Videotron") significantly increased its
revenues from mobile telephony ($14.9
million or 12.9%), Internet access ($14.9 million or 5.8%) and the Club illico
over-the-top video service ("Club illico") ($1.8 million or 18.4%) in the second quarter of
2018.
- Videotron's total average billing per unit ("ABPU")3
was $49.68 in the second quarter of
2018, compared with $48.12 in the
same period of 2017, a $1.56 (3.2%)
increase. Mobile ABPU was $53.70 in
the second quarter of 2018, compared with $53.32 in the same period of 2017, a $0.38 (0.7%) increase.
- Subscriber connections to the mobile telephony service
increased by 31,900 (3.0%) and Club illico memberships increased by
8,500 (2.2%) in the second quarter of 2018.
_____________________________
|
1
|
See "Adjusted EBITDA"
under "Definitions."
|
2
|
See "Adjusted income
from continuing operating activities" under
"Definitions."
|
3
|
See "Key performance
indicators" under "Definitions."
|
"Quebecor achieved a major milestone in its history in the
second quarter of 2018 by completing the repurchase of all the
shares of Quebecor Media held by CDP Capital, concluding the
process begun in 2012," noted Pierre Karl Péladeau, President and
Chief Executive Officer of Quebecor. "Quebecor therefore became the
sole owner of Quebecor Media in the second quarter. With access to
all the cash flows generated by the subsidiary, the Corporation
will now be better equipped to seize business opportunities as they
arise, to achieve its objectives with respect to its dividend
payment policy, and to take full control of its development
projects. Over the past 18 years, CDP Capital has been a
top-notch financial partner that has steadfastly supported the
Corporation through every stage of its development. I thank the
people at the Caisse de dépôt et placement du Québec for their
effective support and counsel over the years, and its presidents,
Jean Claude Scraire and Michael Sabia.
"On the financial front, Quebecor's revenues and adjusted EBITDA
increased again in the second quarter of 2018, strongly
stimulated by Videotron's performance. Quebecor also posted an
increase of $17.6 million or
19.9% in its adjusted income from continuing operating activities,
reflecting the improvement in its operating profitability as
expressed by adjusted EBITDA, combined with the favourable leverage
effect on results produced by the repurchase of shares previously
held by CDP Capital," said Mr. Péladeau.
"Once again, Videotron's growth was driven by its flagship
products, including mobile telephony and Internet access,"
commented Manon Brouillette,
President and Chief Executive Officer of Videotron. "During the
12-month period ended June 30, 2018, the number of
subscriber connections to the mobile telephony service increased by
125,900 or 13.2%. 'Bring-your-own-device' plans accounted for more
than 35% of new mobile activations during the period, which
helped reduce customer acquisition costs and boost the
profitability of mobile services, despite slower ABPU growth
resulting from those plans. Videotron has also added
54,300 subscribers (16.1%) to Club illico over the past
12 months. Club illico's exclusive series have earned
recognition in the industry for their originality and quality,
picking up 16 nominations for Gémeaux awards this year. The
awards ceremony will be held in September
2018 and four original series broadcast on Club illico
and developed in collaboration with Quebecor Content are in the
running: L'Académie, Blue Moon, La
Dérape, and Pablo Escobar
raconté par son fils.
"Regarding business development, Videotron continued investing
in its Internet Protocol Television project, based on our partner
Comcast Corporation's XFINITY X1 platform. Ultimately, it will
enable us to deliver the best available television experience to
our customers. In the business services segment, Videotron recently
launched its new Cloud Communications service, which combines the
power of landlines and mobile through a unified offering. We are
confident that this complementary service will enable us to expand
our business customer base and retain existing customers,"
Manon Brouillette concluded.
"In the Media segment, despite strong ratings for the National
Hockey League playoffs on TVA Sports, the Montréal Canadiens'
failure to qualify for the playoffs did lead to reduced revenues,"
commented France Lauzière, President and Chief Executive Officer of
TVA Group Inc. "TVA Network's financial performance also
declined as a result of the decrease in advertising revenues. We
have responded with measures to cut operating expenses, which have
not yet yielded their full expected effects. TVA Network's
market share was stable at 23.8% (Source: Numeris – French Quebec,
April 1 to June 30, 2018, Mon-Sun,
2 a.m.– 2 a.m., t2+) while the combined market share of
the specialty channels increased by 0.5 points. The 24-hour news
channel LCN was up 1.2 points or 26.7%."
"At a time when we are seeing a proliferation of transactions
between telecoms, media organizations and content providers around
the world, demonstrating the necessity and success of the
convergence strategy Quebecor embraced as far back as the early
2000s, the Corporation remains very strongly positioned for growth
and profitability," Pierre Karl Péladeau added.
Table
1
|
Quebecor second
quarter financial highlights, 2014 to 2018
|
(in millions of
Canadian dollars, except per share data)
|
|
2018
|
2017
|
2016
|
2015
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
1,043.5
|
$
|
1,038.6
|
$
|
1,003.5
|
$
|
969.8
|
$
|
898.3
|
Adjusted
EBITDA
|
|
417.1
|
|
404.3
|
|
374.9
|
|
359.8
|
|
365.5
|
Income from
continuing operating activities attributable to
shareholders
|
|
41.3
|
|
131.0
|
|
18.5
|
|
87.0
|
|
56.1
|
Net income (loss)
attributable to shareholders
|
|
41.3
|
|
137.8
|
|
18.5
|
|
77.9
|
|
(51.7)
|
Adjusted income from
continuing operating activities
|
|
106.2
|
|
88.6
|
|
78.6
|
|
72.3
|
|
59.0
|
Per basic
share:
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operating activities attributable to
shareholders
|
|
0.18
|
|
0.54
|
|
0.08
|
|
0.35
|
|
0.22
|
|
Net income (loss)
attributable to shareholders
|
|
0.18
|
|
0.57
|
|
0.08
|
|
0.32
|
|
(0.22)
|
|
Adjusted income from
continuing operating activities
|
|
0.45
|
|
0.37
|
|
0.32
|
|
0.29
|
|
0.24
|
Changes in Accounting Policies
On January 1, 2018, the
Corporation adopted on a fully retroactive basis the new rules
under IFRS 15, Revenue from Contracts with Customers,
which specify how and when an entity should recognize revenue. The
adoption of IFRS 15 had significant impacts on the
consolidated financial statements, mainly in the Telecommunications
segment, with regards to the timing of the recognition of its
revenues, the classification of its revenues, as well as the
capitalization of costs. Among other impacts, the adoption of
IFRS 15 resulted in an increase in the revenue from the device
sale and in a decrease in the mobile service revenue recognized
over the contract term. As well, costs to obtain a contract and
connection costs are now fully amortized as operating expenses over
the contract term or over the period of time the customer is
expected to maintain its service. A description of the new rules
and details of the retroactive adjustments to comparative data are
provided in note 2 to Quebecor's condensed consolidated financial
statements for the second quarter of 2018 and under "Changes
in Accounting Policies" in Quebecor's Management Discussion and
Analysis for the same period. As well, to clarify the impact of
IFRS 15 on non-IFRS measures, columns presenting the non-IFRS
measures without application of IFRS 15 have been added to the
tables showing the calculation and reconciliation of non-IFRS
measures, as presented under "Definitions" below.
Tables 2 and 3 below present segmented revenues and adjusted
EBITDA for the last eight quarters, restated to reflect retroactive
application of IFRS 15.
Table
2
|
Quebecor's
segmented revenues for the past eight quarters
|
(in millions of
Canadian dollars)
|
|
|
Q2-2018
|
Q1-2018
|
Q4-2017
|
Q3-2017
|
Q2-2017
|
Q1-2017
|
Q4-2016
|
Q3-2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications
|
$
|
847.2
|
$
|
823.4
|
$
|
846.3
|
$
|
829.6
|
$
|
826.6
|
$
|
805.0
|
$
|
822.4
|
$
|
813.1
|
Media
|
|
186.5
|
|
173.2
|
|
199.5
|
|
186.8
|
|
199.5
|
|
184.1
|
|
222.2
|
|
178.9
|
Sports and
Entertainment
|
|
36.9
|
|
37.2
|
|
50.3
|
|
56.6
|
|
36.0
|
|
38.3
|
|
54.1
|
|
51.0
|
Head Office and
intersegment
|
|
(27.1)
|
|
(27.1)
|
|
(32.0)
|
|
(32.4)
|
|
(23.5)
|
|
(25.9)
|
|
(31.1)
|
|
(25.3)
|
Total
|
$
|
1,043.5
|
$
|
1,006.7
|
$
|
1,064.1
|
$
|
1,040.6
|
$
|
1,038.6
|
$
|
1,001.5
|
$
|
1,067.6
|
$
|
1,017.7
|
|
Table
3
|
Quebecor's
segmented adjusted EBITDA (negative adjusted EBITDA) for the past
eight quarters
|
(in millions of
Canadian dollars)
|
|
|
Q2-2018
|
Q1-2018
|
Q4-2017
|
Q3-2017
|
Q2-2017
|
Q1-2017
|
Q4-2016
|
Q3-2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications
|
$
|
422.6
|
$
|
410.5
|
$
|
396.9
|
$
|
390.2
|
$
|
397.8
|
$
|
383.9
|
$
|
385.9
|
$
|
388.9
|
Media
|
|
(0.7)
|
|
(1.1)
|
|
22.4
|
|
35.7
|
|
13.4
|
|
(2.2)
|
|
25.0
|
|
24.4
|
Sports and
Entertainment
|
|
(2.0)
|
|
(2.1)
|
|
2.3
|
|
8.3
|
|
(3.6)
|
|
(0.8)
|
|
(1.3)
|
|
8.8
|
Head
Office
|
|
(2.8)
|
|
0.1
|
|
(1.6)
|
|
(2.2)
|
|
(3.3)
|
|
(9.0)
|
|
1.0
|
|
(7.0)
|
Total
|
$
|
417.1
|
$
|
407.4
|
$
|
420.0
|
$
|
432.0
|
$
|
404.3
|
$
|
371.9
|
$
|
410.6
|
$
|
415.1
|
Changes to key performance indicators
Following adoption of IFRS 15, and to reflect changes in
its activities and services, including the growth of its mobile
telephony business, the Corporation reviewed the nature and
definition of its key performance indicators. Accordingly, average
monthly revenue per user ("ARPU") has been abandoned and replaced
by a new metric, ABPU. ABPU will be used henceforth to measure the
performance of mobile activities and the performance of all
activities combined. The definition of the new ABPU metric is
provided under "Key Performance Indicators" below. The definition
of revenue-generating unit ("RGU") has also been added in the same
section; the nature and calculation of the metric are
unchanged.
Table 4 presents the new ABPU metric for mobile activities and
all activities combined for the last eight quarters.
Table
4
|
Videotron's ABPU
for the past eight quarters
|
(in Canadian
dollars)
|
|
|
Q2-2018
|
|
Q1-2018
|
|
Q4-2017
|
|
Q3-2017
|
|
Q2-2017
|
|
Q1-2017
|
|
Q4-2016
|
|
Q3-2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mobile
ABPU
|
$
|
53.70
|
$
|
53.25
|
$
|
53.56
|
$
|
53.34
|
$
|
53.32
|
$
|
52.64
|
$
|
51.96
|
$
|
52.61
|
Total ABPU
|
$
|
49.68
|
$
|
48.82
|
$
|
48.90
|
$
|
48.50
|
$
|
48.12
|
$
|
47.41
|
$
|
47.49
|
$
|
47.03
|
2018/2017 second quarter comparison
Revenues: $1.04 billion, a $4.9 million (0.5%) increase.
- Revenues increased in Telecommunications ($20.6 million or 2.5% of segment revenues) and in
Sports and Entertainment ($0.9
million or 2.5%).
- Revenues decreased in Media ($13.0
million or -6.5%).
Adjusted EBITDA: $417.1 million, a $12.8 million (3.2%) increase.
- Adjusted EBITDA increased in Telecommunications ($24.8 million or 6.2% of segment adjusted
EBITDA). There were favourable variances in Sports and
Entertainment ($1.6 million or 44.4%)
and at Head Office ($0.5
million).
- There was an unfavourable variance in Media ($14.1 million).
- The change in the fair value of Quebecor Media stock options
resulted in a $1.8 million favourable
variance in the stock‑based compensation charge in the second
quarter of 2018 compared with the same period of 2017. The change
in the fair value of Quebecor stock options and in the value of
Quebecor stock-price-based share units resulted in a $2.2 million unfavourable variance in the
Corporation's stock-based compensation charge in the second quarter
of 2018.
Net income attributable to shareholders: $41.3 million ($0.18 per basic share) in the second quarter
of 2018, compared with $137.8 million ($0.57 per basic share) in the same period of
2017, an unfavourable variance of $96.5 million
($0.39 per basic share).
- The main unfavourable variances were:
-
- $87.8 million gain on the sale of
a spectrum licence recognized in the second quarter of 2017,
including $43.9 million without any
tax consequences;
- $36.5 million unfavourable
variance in gains and losses on valuation and translation of
financial instruments, including $38.4
million without any tax consequences;
- $13.3 million increase in the
income tax expense;
- $8.4 million unfavourable
variance in income from discontinued operations;
- $6.9 million increase in the
depreciation and amortization charge.
- The main favourable variances were:
-
- $33.0 million favourable variance
in non-controlling interest;
- $12.8 million increase in
adjusted EBITDA;
- $9.8 million favourable variance
in the charge for restructuring of operations, litigation and other
items.
Adjusted income from continuing operating activities:
$106.2 million ($0.45 per basic share) in the second quarter
of 2018, compared with $88.6 million ($0.37 per basic share) in the same period of
2017, an increase of $17.6 million ($0.08 per basic share) or 19.9%.
2018/2017 year-to-date comparison
Revenues: $2.05 billion, a $10.1 million (0.5%) increase.
- Revenues increased in Telecommunications ($39.0 million or 2.4% of segment revenues).
- Revenues decreased in Media ($23.9
million or -6.2%) and in Sports and Entertainment
($0.2 million or ‑0.3%).
Adjusted EBITDA: $824.5 million, a $48.3 million (6.2%) increase.
- Adjusted EBITDA increased in Telecommunications ($51.4 million or 6.6% of segment adjusted
EBITDA). There were favourable variances in Sports and
Entertainment ($0.3 million) and at
Head Office ($9.6 million). The
change at Head Office was mainly due to lower compensation
costs.
- There was an unfavourable variance in Media ($13.0 million).
- The change in the fair value of Quebecor Media stock options
resulted in a $1.0 million favourable
variance in the stock‑based compensation charge in the first half
of 2018 compared with the same period of 2017. The change in the
fair value of Quebecor stock options and in the value of Quebecor
stock-price-based share units resulted in a $1.1 million favourable variance in the
Corporation's stock‑based compensation charge in the first half of
2018.
Net income attributable to shareholders: $98.0 million ($0.42 per basic share) in the first half of 2018,
compared with $141.7 million ($0.58 per basic share) in the same period of
2017, a decrease of $43.7 million ($0.16 per basic share).
- The main unfavourable variances were:
-
- $87.8 million gain on the sale of
a spectrum licence recognized in the first half of 2017, including
$43.9 million without any tax
consequences;
- $25.3 million increase in the
income tax expense;
- $17.0 million increase in the
depreciation and amortization charge;
- $8.4 million unfavourable
variance in income from discontinued operations;
- $7.6 million unfavourable
variance in the charge for restructuring of operations, litigation
and other items.
- The main favourable variances were:
-
- $48.3 million increase in
adjusted EBITDA;
- $30.9 million favourable variance
in non-controlling interest;
- $15.6 million favourable variance
in the loss on debt refinancing;
- $6.3 million favourable variance
in losses on valuation and translation of financial instruments,
including $6.1 million without any
tax consequences.
Adjusted income from continuing operating activities:
$195.8 million ($0.83 per basic share) in the first half
of 2018, compared with $163.5 million ($0.68 per basic share) in the same period of
2017, an increase of $32.3 million ($0.15 per basic share) or 19.8%.
Financial transactions
- In the second quarter of 2018, the Corporation increased its
interest in Quebecor Media from 81.5% to 100.0% by means of the
following transactions:
-
- On May 11 and June 22, 2018, Quebecor Media repurchased for
cancellation a total of 16,064,215 of its Common Shares held by CDP
Capital for a total aggregate purchase price of $1.54 billion, paid in cash. Available cash and
drawings on Videotron's revolving credit facility were used to
finance the transaction.
- On June 22, 2018, Quebecor
purchased 1,564,696 Common Shares of Quebecor Media held by CDP
Capital in consideration of the issuance of $150.0 million aggregate principal amount of
convertible debentures of Quebecor to CDP Capital. The debentures
bear interest at an annual rate of 4.00% and mature in June 2024. The convertible debentures are
convertible into Class B Shares in accordance with the terms of the
trust indenture, subject to a floor price of $26.85 per share (that is, a maximum number of
approximately 5,586,592 Class B Shares of Quebecor corresponding to
a ratio of $150.0 million to the
floor price) and a ceiling price of $33.5625 per share (that is, a minimum number of
approximately 4,469,274 Class B Shares of Quebecor corresponding to
a ratio of $150.0 million to the
ceiling price), subject to adjustments in accordance with the terms
of the trust indenture. The other terms and conditions of the
convertible debentures are substantially consistent with the terms
of the convertible debentures issued under the Corporation's trust
agreement dated October 11, 2012, as
amended.
- During the first half of 2018, the Corporation issued a notice
regarding the redemption of convertible debentures in the aggregate
principal amount of $87.5 million.
The redemption price was paid upon redemption of the
debentures.
Normal course issuer bid
On August 8, 2018, the Board of
Directors of Quebecor authorized the renewal of its normal course
issuer bid for a maximum of 1,000,000 Class A Multiple Voting
Shares ("Class A Shares"), representing approximately 1.3% of
issued and outstanding Class A Shares, and for a maximum of
7,800,000 Class B Shares, representing approximately 5.0%
of issued and outstanding Class B Shares as of
August 1, 2018. The purchases can be made from
August 15, 2018 to August 14, 2019 at prevailing market prices on
the open market through the facilities of the Toronto Stock
Exchange ("TSX") or other alternative trading systems. All shares
purchased under the bid will be cancelled. As of August 1, 2018, 77,289,444 Class A Shares and
156,117,684 Class B Shares were issued and outstanding.
The average daily trading volume of the Class A Shares and Class
B Shares of the Corporation between February
1, 2018 and July 31, 2018 on the Toronto Stock
Exchange was 776 Class A Shares and 401,419 Class B Shares.
Consequently, the Corporation will be authorized to purchase a
maximum of 1,000 Class A Shares and 100,354 Class B Shares during
the same trading day, pursuant to its normal course issuer bid.
The Corporation believes that the repurchase of these shares
under this normal course issuer bid is in the best interests of the
Corporation and its shareholders.
Between August 15, 2017 and
July 31, 2018, of the 1,000,000 Class
A Shares and 8,400,000 Class B Shares it was authorized to
repurchase under its previous normal course issuer bid, the
Corporation repurchased no Class A Shares and 8,400,000
Class B Shares at a weighted average price of $24.02452 per share on the open market through
the facilities of the Toronto Stock Exchange or other alternative
trading systems.
On August 9, 2018, the Corporation
announced that on or around August 10,
2018 it will enter into an automatic securities purchase
plan ("the plan") with a designated broker under its normal course
issuer bid, whereby shares may be repurchased under the plan at
times when such purchases would otherwise be prohibited pursuant to
regulatory restrictions or self-imposed blackout periods. The plan
received prior approval from the TSX. It will come into effect on
August 15, 2018 and terminate on the
same date as the normal course issuer bid.
Under the plan, before entering a self-imposed blackout period,
the Corporation may, but is not required to, ask the designated
broker to make purchases under the normal course issuer bid. Such
purchases shall be made at the discretion of the designated broker,
within parameters established by the Corporation prior to the
blackout periods. Outside the blackout periods, purchases will be
made at the discretion of the Corporation's management.
In the first half of 2018, the Corporation purchased and
cancelled 4,909,900 Class B Shares for a total cash
consideration of $118.0 million
(1,441,600 Class B Shares for a total cash consideration
of $29.3 million in the first
half of 2017). The $108.6 million excess of the
purchase price over the carrying value of the repurchased
Class B Shares was recorded as a reduction in retained
earnings ($26.6 million in the
first half of 2017).
In the second quarter of 2018, 100,000 Class B Shares were
issued upon exercise of stock options for a cash consideration of
$1.3 million. As a result of
this transaction, contributed surplus was increased by $1.2 million and the stock-based
compensation liability was reduced by the same amount.
Dividend
On August 8, 2018, the Board of
Directors of Quebecor declared a quarterly dividend of $0.055 per share on its Class A and
Class B Shares, payable on September 18, 2018 to
shareholders of record at the close of business on
August 24, 2018. This dividend is designated an eligible
dividend, as provided under subsection 89(14) of the Canadian
Income Tax Act and its provincial counterpart.
Detailed financial information
For a detailed analysis of Quebecor's second quarter 2018
results, please refer to the Management Discussion and Analysis and
consolidated financial statements of Quebecor, available on the
Corporation's website at
www.quebecor.com/en/quarterly_doc_quebecor_inc or from the SEDAR
filing service at www.sedar.com.
Conference call for investors and webcast
Quebecor will hold a conference call to discuss its second
quarter 2018 results on August 9,
2018, at 9:30 a.m. EDT. There will be a question
period reserved for financial analysts. To access the conference
call, please dial 1 877 293‑8052, access code for
participants 48006#. A tape recording of the call will be
available from August 9 to
November 9, 2018 by dialling 1 877 293‑8133,
conference number 1229124, access code for participants
48006#. The conference call will also be broadcast live on
Quebecor's website at www.quebecor.com/en/content/conference-call.
It is advisable to ensure the appropriate software is installed
before accessing the call. Instructions and links to free player
downloads are available at the Internet address shown above.
Cautionary statement regarding forward-looking
statements
The statements in this press release that are not historical
facts are forward-looking statements and are subject to significant
known and unknown risks, uncertainties and assumptions that could
cause the Corporation's actual results for future periods to differ
materially from those set forth in the forward-looking statements.
Forward-looking statements may be identified by the use of the
conditional or by forward-looking terminology such as the terms
"plans," "expects," "may," "anticipates," "intends," "estimates,"
"projects," "seeks," "believes," or similar terms, variations of
such terms or the negative of such terms. Certain factors that may
cause actual results to differ from current expectations include
seasonality (including seasonal fluctuations in customer orders),
operating risk (including fluctuations in demand for Quebecor's
products and pricing actions by competitors), new competition and
Quebecor's ability to retain its current customers and attract new
ones, risks related to fragmentation of the advertising market,
insurance risk, risks associated with capital investments
(including risks related to technological development and equipment
availability and breakdown), environmental risks, risks associated
with cybersecurity and the protection of personal information,
risks associated with labour agreements, credit risk, financial
risks, debt risks, risks related to interest rate fluctuations,
foreign exchange risks, risks associated with government acts and
regulations, risks related to changes in tax legislation, and
changes in the general political and economic environment.
Investors and others are cautioned that the foregoing list of
factors that may affect future results is not exhaustive and that
undue reliance should not be placed on any forward-looking
statements. For more information on the risks, uncertainties and
assumptions that could cause Quebecor's actual results to differ
from current expectations, please refer to Quebecor's public
filings, available at www.sedar.com and www.quebecor.com,
including, in particular, the "Risks and Uncertainties" section of
Quebecor's Management Discussion and Analysis for the year ended
December 31, 2017.
The forward-looking statements in this press release reflect
Quebecor's expectations as of August 9, 2018, and are
subject to change after that date. Quebecor expressly disclaims any
obligation or intention to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by applicable securities laws.
About Quebecor
Quebecor, a Canadian leader in telecommunications,
entertainment, news media and culture, is one of the
best‑performing integrated communications companies in the
industry. Driven by their determination to deliver the best
possible customer experience, all of Quebecor's subsidiaries and
brands are differentiated by their high-quality, multiplatform,
convergent products and services.
Québec-based Quebecor (TSX: QBR.A, QBR.B) employs more than
10,000 people in Canada.
A family business founded in 1950, Quebecor is strongly
committed to the community. Every year, it actively supports more
than 400 organizations in the vital fields of culture, health,
education, the environment, and entrepreneurship.
Visit our website: www.quebecor.com
Follow us on Twitter: www.twitter.com/Quebecor
DEFINITIONS
On a transitional basis and to clarify the impact of retroactive
adoption of IFRS 15, as described under "Changes in Accounting
Policies," columns have been added to the calculation and
reconciliation tables for non-International Financial Reporting
Standards ("IFRS") financial measures. Accordingly, those tables
also show the calculation and reconciliation of non-IFRS measures
in 2018 and 2017 based on the former accounting policies with
respect to revenue recognition, i.e. without the adjustments
required by adoption of IFRS 15.
Adjusted EBITDA (formerly "Adjusted operating
income")
In its analysis of operating results, the Corporation defines
adjusted EBITDA, as reconciled to net income under IFRS, as net
income before depreciation and amortization, financial expenses,
loss on valuation and translation of financial instruments,
restructuring of operations, litigation and other items, gain on
sale of spectrum licences, loss on debt refinancing, income tax,
and income from discontinued operations. Adjusted EBITDA as defined
above is not a measure of results that is consistent
with IFRS. It is not intended to be regarded as an alternative
to other financial operating performance measures or to the
statement of cash flows as a measure of liquidity. It should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. The Corporation
uses adjusted EBITDA in order to assess the performance of its
investment in Quebecor Media. The Corporation's management and
Board of Directors use this measure in evaluating its consolidated
results as well as the results of the Corporation's operating
segments. This measure eliminates the significant level of
impairment and depreciation/amortization of tangible and intangible
assets and is unaffected by the capital structure or investment
activities of the Corporation and its business segments. Adjusted
EBITDA is also relevant because it is a significant component of
the Corporation's annual incentive compensation programs. A
limitation of this measure, however, is that it does not reflect
the periodic costs of tangible and intangible assets used in
generating revenues in the Corporation's segments. The Corporation
also uses other measures that do reflect such costs, such as cash
flows from segment operations and free cash flows from continuing
operating activities of the Quebecor Media subsidiary. The
Corporation's definition of adjusted EBITDA may not be the same as
similarly titled measures reported by other companies.
Table 5 below provides a reconciliation of adjusted EBITDA to
net income as disclosed in Quebecor's condensed consolidated
financial statements.
Table
5
|
Reconciliation of
the adjusted EBITDA measure used in this press release to the net
income measure used in the condensed consolidated financial
statements
|
(in millions of
Canadian dollars)
|
|
With adoption of
IFRS 151
|
Without
IFRS 152
|
|
Three months
ended
June 30
|
Six months ended
June 30
|
Three months
ended
June 30
|
Six months ended
June 30
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Adjusted EBITDA
(negative adjusted EBITDA):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications
|
$
|
422.6
|
$
|
397.8
|
$
|
833.1
|
$
|
781.7
|
$
|
419.7
|
$
|
388.8
|
$
|
837.6
|
$
|
765.9
|
|
Media
|
|
(0.7)
|
|
13.4
|
|
(1.8)
|
|
11.2
|
|
(0.7)
|
|
13.4
|
|
(1.8)
|
|
11.2
|
|
Sports and
Entertainment
|
|
(2.0)
|
|
(3.6)
|
|
(4.1)
|
|
(4.4)
|
|
(2.0)
|
|
(3.6)
|
|
(4.1)
|
|
(4.4)
|
|
Head
Office
|
|
(2.8)
|
|
(3.3)
|
|
(2.7)
|
|
(12.3)
|
|
(2.8)
|
|
(3.3)
|
|
(2.7)
|
|
(12.3)
|
|
|
417.1
|
|
404.3
|
|
824.5
|
|
776.2
|
|
414.2
|
|
395.3
|
|
829.0
|
|
760.4
|
Depreciation and
amortization
|
|
(180.2)
|
|
(173.3)
|
|
(360.1)
|
|
(343.1)
|
|
(180.2)
|
|
(173.3)
|
|
(360.1)
|
|
(343.1)
|
Financial
expenses
|
|
(78.1)
|
|
(78.9)
|
|
(154.7)
|
|
(156.0)
|
|
(78.1)
|
|
(78.9)
|
|
(154.7)
|
|
(156.0)
|
Loss on valuation and
translation of financial instruments
|
|
(75.6)
|
|
(39.1)
|
|
(105.2)
|
|
(111.5)
|
|
(75.6)
|
|
(39.1)
|
|
(105.2)
|
|
(111.5)
|
Restructuring of
operations, litigation and other items
|
|
(2.0)
|
|
(11.8)
|
|
(8.5)
|
|
(0.9)
|
|
(2.0)
|
|
(11.8)
|
|
(8.5)
|
|
(0.9)
|
Gain on sale of
spectrum licences
|
|
̶
|
|
87.8
|
|
̶
|
|
87.8
|
|
̶
|
|
87.8
|
|
̶
|
|
87.8
|
Loss on debt
refinancing
|
|
̶
|
|
̶
|
|
̶
|
|
(15.6)
|
|
̶
|
|
̶
|
|
̶
|
|
(15.6)
|
Income
taxes
|
|
(28.4)
|
|
(15.1)
|
|
(67.6)
|
|
(42.3)
|
|
(28.4)
|
|
(15.1)
|
|
(67.6)
|
|
(42.3)
|
Income from
discontinued operations
|
|
̶
|
|
8.4
|
|
̶
|
|
8.4
|
|
̶
|
|
8.4
|
|
̶
|
|
8.4
|
Impact of
IFRS 15
|
|
̶
|
|
̶
|
|
̶
|
|
̶
|
|
2.9
|
|
9.0
|
|
(4.5)
|
|
15.8
|
Net
income
|
$
|
52.8
|
$
|
182.3
|
$
|
128.4
|
$
|
203.0
|
$
|
52.8
|
$
|
182.3
|
$
|
128.4
|
$
|
203.0
|
|
|
1
|
Non-IFRS measures
presented in these columns are calculated based on new IFRS 15
rules adopted by the Corporation on a retroactive basis and
described under "Changes in Accounting Policies."
|
2
|
Non-IFRS measures
presented in these columns are calculated based on the
Corporation's former accounting policies with respect to revenue
recognition, i.e. without the impact of IFRS 15
adoption.
|
Adjusted income from continuing operating activities
The Corporation defines adjusted income from continuing
operating activities, as reconciled to net income attributable to
shareholders under IFRS, as net income attributable to
shareholders before loss on valuation and translation of financial
instruments, restructuring of operations, litigation and other
items, gain on sale of spectrum licences, loss on debt refinancing,
net of income tax related to adjustments and net income
attributable to non-controlling interest related to adjustments,
and before the income from discontinued operations attributable to
shareholders. Adjusted income from continuing operating activities,
as defined above, is not a measure of results that is consistent
with IFRS. It should not be considered in isolation or as a
substitute for measures of performance prepared in accordance
with IFRS. The Corporation uses adjusted income from
continuing operating activities to analyze trends in the
performance of its businesses. The above-listed items are excluded
from the calculation of this measure because they impair the
comparability of financial results. Adjusted income from continuing
operating activities is more representative for forecasting income.
The Corporation's definition of adjusted income from continuing
operating activities may not be identical to similarly titled
measures reported by other companies.
Table 6 provides a reconciliation of adjusted income from
continuing operating activities to the net income attributable to
shareholders' measure used in Quebecor's condensed consolidated
financial statements.
Table
6
|
Reconciliation of
the adjusted income from continuing operating activities measure
used in this press release to the net income attributable to
shareholders' measure used in the condensed consolidated financial
statements
|
(in millions of
Canadian dollars)
|
|
With adoption of
IFRS 151
|
Without
IFRS 152
|
|
Three months
ended
June 30
|
Six months ended
June 30
|
Three months
ended
June 30
|
Six months ended
June 30
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income from
continuing operating activities
|
$
|
106.2
|
$
|
88.6
|
$
|
195.8
|
$
|
163.5
|
$
|
104.3
|
$
|
83.2
|
$
|
198.3
|
$
|
154.0
|
Loss on valuation and
translation of financial instruments
|
|
(75.6)
|
|
(39.1)
|
|
(105.2)
|
|
(111.5)
|
|
(75.6)
|
|
(39.1)
|
|
(105.2)
|
|
(111.5)
|
Restructuring of
operations, litigation and other items
|
|
(2.0)
|
|
(11.8)
|
|
(8.5)
|
|
(0.9)
|
|
(2.0)
|
|
(11.8)
|
|
(8.5)
|
|
(0.9)
|
Gain on sale of
spectrum licences
|
|
̶
|
|
87.8
|
|
̶
|
|
87.8
|
|
̶
|
|
87.8
|
|
̶
|
|
87.8
|
Loss on debt
refinancing
|
|
̶
|
|
̶
|
|
̶
|
|
(15.6)
|
|
̶
|
|
̶
|
|
̶
|
|
(15.6)
|
Income taxes related
to adjustments3
|
|
12.4
|
|
26.3
|
|
14.5
|
|
32.4
|
|
12.4
|
|
26.3
|
|
14.5
|
|
32.4
|
Net income
attributable to non‑controlling interest related to
adjustments
|
|
0.3
|
|
(20.8)
|
|
1.4
|
|
(20.8)
|
|
0.3
|
|
(20.8)
|
|
1.4
|
|
(20.8)
|
Discontinued
operations
|
|
̶
|
|
6.8
|
|
̶
|
|
6.8
|
|
̶
|
|
6.8
|
|
̶
|
|
6.8
|
Impact of
IFRS 15
|
|
̶
|
|
̶
|
|
̶
|
|
̶
|
|
1.9
|
|
5.4
|
|
(2.5)
|
|
9.5
|
Net income
attributable to shareholders
|
$
|
41.3
|
$
|
137.8
|
$
|
98.0
|
$
|
141.7
|
$
|
41.3
|
$
|
137.8
|
$
|
98.0
|
$
|
141.7
|
|
|
1
|
Non-IFRS measures
presented in these columns are calculated based on new IFRS 15
rules adopted by the Corporation on a retroactive basis and
described under "Changes in Accounting Policies."
|
2
|
Non-IFRS measures
presented in these columns are calculated based on the
Corporation's former accounting policies with respect to revenue
recognition, i.e. without the impact of IFRS 15
adoption.
|
3
|
Includes impact of
fluctuations in income tax applicable to adjusted items, either for
statutory reasons or in connection with tax
transactions.
|
KEY PERFORMANCE INDICATORS
Revenue-generating unit
The Corporation uses RGU, an industry metric, as a key
performance indicator. An RGU represents, as the case may be,
subscriptions to the cable Internet, cable television and Club
illico services, and subscriber connections to the mobile telephony
and cable telephony services. RGU is not a measurement that is
consistent with IFRS and the Corporation's definition and
calculation of RGU may not be the same as identically titled
measurements reported by other companies.
Average billing per unit
The Corporation uses ABPU, an industry metric, as a key
performance indicator. This indicator is used to measure monthly
average subscription billing per RGU. ABPU is not a
measurement that is consistent with IFRS and the Corporation's
definition and calculation of ABPU may not be the same as
identically titled measurements reported by other companies.
Mobile ABPU is calculated by dividing the average subscription
billing for mobile telephony services by the average number of
mobile RGUs during the applicable period, and then dividing the
resulting amount by the number of months in the applicable
period.
Total ABPU is calculated by dividing the combined average
subscription billing for cable Internet, cable television, Club
illico, mobile telephony and cable telephony services by the total
average number of RGUs from cable Internet, cable television,
mobile telephony and cable telephony services during the applicable
period, and then dividing the resulting amount by the number of
months in the applicable period.
QUEBECOR
INC.
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars, except for earnings per share
data)
|
Three months
ended
|
|
Six months
ended
|
(unaudited)
|
June 30
|
|
June 30
|
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|
|
(restated)
|
|
(restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
1,043.5
|
$
|
1,038.6
|
|
$
|
2,050.2
|
$
|
2,040.1
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
182.4
|
|
182.0
|
|
|
362.4
|
|
369.1
|
Purchase of goods and
services
|
|
444.0
|
|
452.3
|
|
|
863.3
|
|
894.8
|
Depreciation and
amortization
|
|
180.2
|
|
173.3
|
|
|
360.1
|
|
343.1
|
Financial
expenses
|
|
78.1
|
|
78.9
|
|
|
154.7
|
|
156.0
|
Loss on valuation and
translation of financial instruments
|
|
75.6
|
|
39.1
|
|
|
105.2
|
|
111.5
|
Restructuring of
operations, litigation and other items
|
|
2.0
|
|
11.8
|
|
|
8.5
|
|
0.9
|
Gain on sale of
spectrum licences
|
|
-
|
|
(87.8)
|
|
|
-
|
|
(87.8)
|
Loss on debt
refinancing
|
|
-
|
|
-
|
|
|
-
|
|
15.6
|
|
|
|
|
|
|
|
|
|
|
Income before
income taxes
|
|
81.2
|
|
189.0
|
|
|
196.0
|
|
236.9
|
|
|
|
|
|
|
|
|
|
|
Income taxes
(recovery):
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
42.9
|
|
8.7
|
|
|
102.7
|
|
12.1
|
|
Deferred
|
|
(14.5)
|
|
6.4
|
|
|
(35.1)
|
|
30.2
|
|
|
28.4
|
|
15.1
|
|
|
67.6
|
|
42.3
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
52.8
|
|
173.9
|
|
|
128.4
|
|
194.6
|
Income from
discontinued operations
|
|
-
|
|
8.4
|
|
|
-
|
|
8.4
|
Net
income
|
$
|
52.8
|
$
|
182.3
|
|
$
|
128.4
|
$
|
203.0
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations attributable to
|
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
41.3
|
$
|
131.0
|
|
$
|
98.0
|
$
|
134.9
|
|
Non-controlling
interests
|
|
11.5
|
|
42.9
|
|
|
30.4
|
|
59.7
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to
|
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
41.3
|
$
|
137.8
|
|
$
|
98.0
|
$
|
141.7
|
|
Non-controlling
interests
|
|
11.5
|
|
44.5
|
|
|
30.4
|
|
61.3
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to shareholders
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
From continuing
operations
|
$
|
0.18
|
$
|
0.54
|
|
$
|
0.42
|
$
|
0.55
|
|
|
From discontinued
operations
|
|
-
|
|
0.03
|
|
|
-
|
|
0.03
|
|
|
Net income
|
|
0.18
|
|
0.57
|
|
|
0.42
|
|
0.58
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
From continuing
operations
|
$
|
0.18
|
$
|
0.54
|
|
$
|
0.41
|
$
|
0.55
|
|
|
From discontinued
operations
|
|
-
|
|
0.03
|
|
|
-
|
|
0.03
|
|
|
Net income
|
|
0.18
|
|
0.57
|
|
|
0.41
|
|
0.58
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding (in millions)
|
|
233.5
|
|
242.8
|
|
|
234.7
|
|
243.0
|
Weighted average
number of diluted shares (in millions)
|
|
239.4
|
|
243.2
|
|
|
240.6
|
|
243.4
|
|
|
|
|
|
|
|
|
|
|
QUEBECOR
INC.
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
Three months
ended
|
|
Six months
ended
|
(unaudited)
|
June 30
|
|
June 30
|
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|
|
(restated)
|
|
(restated)
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
52.8
|
$
|
173.9
|
|
$
|
128.4
|
$
|
194.6
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
(loss) income from continuing operations:
|
|
|
|
|
|
|
|
|
|
Items that may be
reclassified to income:
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow
hedges:
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) gain on
valuation of derivative financial instruments
|
|
(1.3)
|
|
40.3
|
|
|
(44.4)
|
|
28.0
|
|
|
|
Deferred income
taxes
|
|
(1.7)
|
|
21.2
|
|
|
2.1
|
|
25.0
|
|
|
(3.0)
|
|
61.5
|
|
|
(42.3)
|
|
53.0
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income from continuing operations
|
|
49.8
|
|
235.4
|
|
|
86.1
|
|
247.6
|
|
|
|
|
|
|
|
|
|
|
Income from
discontinued operations
|
|
-
|
|
8.4
|
|
|
-
|
|
8.4
|
Comprehensive
income
|
$
|
49.8
|
$
|
243.8
|
|
$
|
86.1
|
$
|
256.0
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income from continuing operations attributable to
|
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
38.6
|
$
|
181.0
|
|
$
|
63.3
|
$
|
178.0
|
|
Non-controlling
interests
|
|
11.2
|
|
54.4
|
|
|
22.8
|
|
69.6
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income attributable to
|
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
38.6
|
$
|
187.8
|
|
$
|
63.3
|
$
|
184.8
|
|
Non-controlling
interests
|
|
11.2
|
|
56.0
|
|
|
22.8
|
|
71.2
|
QUEBECOR
INC.
|
|
|
|
|
|
SEGMENTED
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sports
|
|
Head
|
|
|
|
|
|
|
|
|
and
|
|
office
|
|
|
|
|
Telecommuni-
|
|
|
|
Enter-
|
|
and
Inter-
|
|
|
|
|
cations
|
|
Media
|
|
tainment
|
|
segments
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
847.2
|
$
|
186.5
|
$
|
36.9
|
$
|
(27.1)
|
$
|
1,043.5
|
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
97.6
|
|
62.9
|
|
9.7
|
|
12.2
|
|
182.4
|
Purchase of goods and
services
|
|
327.0
|
|
124.3
|
|
29.2
|
|
(36.5)
|
|
444.0
|
Adjusted
EBITDA1
|
|
422.6
|
|
(0.7)
|
|
(2.0)
|
|
(2.8)
|
|
417.1
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
180.2
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
78.1
|
Loss on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
75.6
|
Restructuring of
operations, litigation and other items
|
|
|
|
|
|
|
|
|
|
2.0
|
Income before
income taxes
|
|
|
|
|
|
|
|
|
$
|
81.2
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
122.7
|
$
|
5.6
|
$
|
0.3
|
$
|
5.0
|
$
|
133.6
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
intangible assets
|
|
36.6
|
|
1.0
|
|
0.8
|
|
0.2
|
|
38.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30, 2017
|
|
|
|
|
|
|
(restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sports
|
|
Head
|
|
|
|
|
|
|
|
|
and
|
|
office
|
|
|
|
|
Telecommuni-
|
|
|
|
Enter-
|
|
and Inter-
|
|
|
|
|
cations
|
|
Media
|
|
tainment
|
|
segments
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
826.6
|
$
|
199.5
|
$
|
36.0
|
$
|
(23.5)
|
$
|
1,038.6
|
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
98.3
|
|
63.0
|
|
9.5
|
|
11.2
|
|
182.0
|
Purchase of goods and
services
|
|
330.5
|
|
123.1
|
|
30.1
|
|
(31.4)
|
|
452.3
|
Adjusted
EBITDA1
|
|
397.8
|
|
13.4
|
|
(3.6)
|
|
(3.3)
|
|
404.3
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
173.3
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
78.9
|
Loss on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
39.1
|
Restructuring of
operations, litigation and other items
|
|
|
|
|
|
|
|
|
|
11.8
|
Gain on sale of
spectrum licences
|
|
|
|
|
|
|
|
|
|
(87.8)
|
Income before income
taxes
|
|
|
|
|
|
|
|
|
$
|
189.0
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
147.2
|
$
|
6.7
|
$
|
0.5
|
$
|
-
|
$
|
154.4
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
intangible assets
|
|
24.8
|
|
1.4
|
|
1.2
|
|
0.6
|
|
28.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sports
|
|
Head
|
|
|
|
|
|
|
|
|
and
|
|
office
|
|
|
|
|
Telecommuni-
|
|
|
|
Enter-
|
|
and
Inter-
|
|
|
|
|
cations
|
|
Media
|
|
tainment
|
|
segments
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
1,670.6
|
$
|
359.7
|
$
|
74.1
|
$
|
(54.2)
|
$
|
2,050.2
|
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
199.8
|
|
122.2
|
|
19.4
|
|
21.0
|
|
362.4
|
Purchase of goods and
services
|
|
637.7
|
|
239.3
|
|
58.8
|
|
(72.5)
|
|
863.3
|
Adjusted
EBITDA1
|
|
833.1
|
|
(1.8)
|
|
(4.1)
|
|
(2.7)
|
|
824.5
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
360.1
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
154.7
|
Loss on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
105.2
|
Restructuring of
operations, litigation and other items
|
|
|
|
|
|
|
|
|
|
8.5
|
Income before
income taxes
|
|
|
|
|
|
|
|
|
$
|
196.0
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
262.5
|
$
|
10.6
|
$
|
0.5
|
$
|
5.4
|
$
|
279.0
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
intangible assets
|
|
91.6
|
|
2.5
|
|
1.8
|
|
(0.4)
|
|
95.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June
30, 2017
|
|
|
|
|
|
|
|
|
|
|
(restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sports
|
|
Head
|
|
|
|
|
|
|
|
|
and
|
|
office
|
|
|
|
|
Telecommuni-
|
|
|
|
Enter-
|
|
and Inter-
|
|
|
|
|
cations
|
|
Media
|
|
tainment
|
|
segments
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
1,631.6
|
$
|
383.6
|
$
|
74.3
|
$
|
(49.4)
|
$
|
2,040.1
|
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
198.9
|
|
120.8
|
|
18.7
|
|
30.7
|
|
369.1
|
Purchase of goods and
services
|
|
651.0
|
|
251.6
|
|
60.0
|
|
(67.8)
|
|
894.8
|
Adjusted
EBITDA1
|
|
781.7
|
|
11.2
|
|
(4.4)
|
|
(12.3)
|
|
776.2
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
343.1
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
156.0
|
Loss on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
111.5
|
Restructuring of
operations, litigation and other items
|
|
|
|
|
|
|
|
|
|
0.9
|
Gain on sale of
spectrum licences
|
|
|
|
|
|
|
|
|
|
(87.8)
|
Loss on debt
refinancing
|
|
|
|
|
|
|
|
|
|
15.6
|
Income before income
taxes
|
|
|
|
|
|
|
|
|
$
|
236.9
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
309.0
|
$
|
12.7
|
$
|
0.6
|
$
|
0.4
|
$
|
322.7
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
intangible assets
|
|
58.4
|
|
2.1
|
|
1.6
|
|
1.0
|
|
63.1
|
|
|
1
|
The Chief Executive
Officer uses adjusted EBITDA as the measure of profit to assess the
performance of each segment. Adjusted EBITDA is referred as a
non-IFRS measure and is defined as net income before depreciation
and amortization, financial expenses, loss on valuation and
translation of financial instruments, restructuring of operations,
litigation and other items, gain on sale of spectrum licences, loss
on debt refinancing, income taxes and income from discontinued
operations.
|
|
|
|
QUEBECOR
INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
attributable to shareholders
|
|
Equity
attributable
to non-controlling
interests
|
|
|
|
|
|
|
|
|
|
Accumulated
other
com-
prehensive
loss
|
|
|
|
|
|
|
|
|
|
Retained
earnings
(deficit)
|
|
|
|
|
|
|
Capital
stock
|
|
Contributed
surplus
|
|
|
|
|
Total
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
December 31, 2016, as previously reported
|
$
|
323.3
|
$
|
2.3
|
$
|
235.7
|
$
|
(106.1)
|
$
|
392.0
|
$
|
847.2
|
Changes in accounting
policies
|
|
-
|
|
-
|
|
143.7
|
|
-
|
|
33.6
|
|
177.3
|
Balance as of
December 31, 2016, as restated
|
|
323.3
|
|
2.3
|
|
379.4
|
|
(106.1)
|
|
425.6
|
|
1,024.5
|
Net income
|
|
-
|
|
-
|
|
141.7
|
|
-
|
|
61.3
|
|
203.0
|
Other comprehensive
income
|
|
-
|
|
-
|
|
-
|
|
43.1
|
|
9.9
|
|
53.0
|
Dividends or
distributions
|
|
-
|
|
-
|
|
(12.1)
|
|
-
|
|
(9.5)
|
|
(21.6)
|
Repurchase of Class B
Shares
|
|
(2.7)
|
|
-
|
|
(26.6)
|
|
-
|
|
-
|
|
(29.3)
|
Non-controlling
interests acquisition
|
-
|
|
-
|
|
(25.7)
|
|
(0.4)
|
|
(17.8)
|
|
(43.9)
|
Balance as of June
30, 2017
|
|
320.6
|
|
2.3
|
|
456.7
|
|
(63.4)
|
|
469.5
|
|
1,185.7
|
Net income
|
|
-
|
|
-
|
|
248.8
|
|
-
|
|
76.9
|
|
325.7
|
Other comprehensive
income
|
|
-
|
|
-
|
|
-
|
|
12.7
|
|
3.2
|
|
15.9
|
Issuance of Class B
Shares
|
|
1.1
|
|
1.2
|
|
-
|
|
-
|
|
-
|
|
2.3
|
Dividends or
distributions
|
|
-
|
|
-
|
|
(13.2)
|
|
-
|
|
(9.2)
|
|
(22.4)
|
Repurchase of Class B
Shares
|
|
(7.8)
|
|
-
|
|
(90.4)
|
|
-
|
|
-
|
|
(98.2)
|
Balance as of
December 31, 2017
|
|
313.9
|
|
3.5
|
|
601.9
|
|
(50.7)
|
|
540.4
|
|
1,409.0
|
Net income
|
|
-
|
|
-
|
|
98.0
|
|
-
|
|
30.4
|
|
128.4
|
Other comprehensive
loss
|
|
-
|
|
-
|
|
-
|
|
(34.7)
|
|
(7.6)
|
|
(42.3)
|
Issuance of Class B
Shares
|
|
1.3
|
|
1.2
|
|
-
|
|
-
|
|
-
|
|
2.5
|
Dividends or
distributions
|
|
-
|
|
-
|
|
(19.3)
|
|
-
|
|
(9.4)
|
|
(28.7)
|
Repurchase of Class B
Shares
|
|
(9.4)
|
|
-
|
|
(108.6)
|
|
-
|
|
-
|
|
(118.0)
|
Non-controlling
interests acquisition
|
-
|
|
-
|
|
(1,198.2)
|
|
(19.2)
|
|
(472.6)
|
|
(1,690.0)
|
Balance as of June
30, 2018
|
$
|
305.8
|
$
|
4.7
|
$
|
(626.2)
|
$
|
(104.6)
|
$
|
81.2
|
$
|
(339.1)
|
QUEBECOR
INC.
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
Three months
ended
|
|
Six months
ended
|
(unaudited)
|
June 30
|
|
June 30
|
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|
(restated)
|
|
|
(restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows related
to operating activities
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
52.8
|
$
|
173.9
|
|
$
|
128.4
|
$
|
194.6
|
|
Adjustments
for:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of
property, plant and equipment
|
|
154.7
|
|
147.4
|
|
|
308.2
|
|
292.0
|
|
|
Amortization of
intangible assets
|
|
25.5
|
|
25.9
|
|
|
51.9
|
|
51.1
|
|
|
Loss on valuation and
translation of financial instruments
|
|
75.6
|
|
39.1
|
|
|
105.2
|
|
111.5
|
|
|
Gain on sale of
spectrum licences
|
|
-
|
|
(87.8)
|
|
|
-
|
|
(87.8)
|
|
|
Loss on debt
refinancing
|
|
-
|
|
-
|
|
|
-
|
|
15.6
|
|
|
Amortization of
financing costs and long-term debt discount
|
|
1.7
|
|
1.7
|
|
|
3.5
|
|
3.5
|
|
|
Deferred income
taxes
|
|
(14.5)
|
|
6.4
|
|
|
(35.1)
|
|
30.2
|
|
|
Other
|
|
(1.1)
|
|
1.9
|
|
|
(1.6)
|
|
3.2
|
|
|
294.7
|
|
308.5
|
|
|
560.5
|
|
613.9
|
|
Net change in
non-cash balances related to operating activities
|
|
33.0
|
|
24.4
|
|
|
61.9
|
|
(133.7)
|
Cash flows provided
by continuing operating activities
|
|
327.7
|
|
332.9
|
|
|
622.4
|
|
480.2
|
Cash flows related
to investing activities
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests acquisition
|
|
(1,540.0)
|
|
-
|
|
|
(1,540.0)
|
|
-
|
|
Business
acquisitions
|
|
1.3
|
|
(0.2)
|
|
|
(1.4)
|
|
(5.8)
|
|
Additions to
property, plant and equipment
|
|
(133.6)
|
|
(154.4)
|
|
|
(279.0)
|
|
(322.7)
|
|
Additions to
intangible assets
|
|
(38.6)
|
|
(28.0)
|
|
|
(95.5)
|
|
(63.1)
|
|
Proceeds from
disposals of assets
|
|
1.3
|
|
184.9
|
|
|
1.7
|
|
185.3
|
|
Other
|
|
(0.4)
|
|
(0.2)
|
|
|
(1.0)
|
|
(0.2)
|
Cash flows (used in)
provided by continuing investing activities
|
|
(1,710.0)
|
|
2.1
|
|
|
(1,915.2)
|
|
(206.5)
|
Cash flows related
to financing activities
|
|
|
|
|
|
|
|
|
|
|
Net change in bank
indebtedness
|
|
27.3
|
|
(60.0)
|
|
|
26.5
|
|
(11.4)
|
|
Net change under
revolving facilities
|
|
557.7
|
|
(380.9)
|
|
|
640.5
|
|
(183.5)
|
|
Issuance of long-term
debt, net of financing fees
|
|
-
|
|
794.5
|
|
|
-
|
|
794.5
|
|
Repayment of
long-term debt
|
|
(9.1)
|
|
(470.1)
|
|
|
(12.8)
|
|
(653.8)
|
|
Repayment of
convertible debentures
|
|
(71.9)
|
|
-
|
|
|
(71.9)
|
|
-
|
|
Settlement of hedging
contracts
|
|
(0.8)
|
|
(3.1)
|
|
|
(0.8)
|
|
(3.2)
|
|
Issuance of Class B
Shares
|
|
1.3
|
|
-
|
|
|
1.3
|
|
-
|
|
Repurchase of Class B
Shares
|
|
(19.3)
|
|
(16.5)
|
|
|
(118.0)
|
|
(29.3)
|
|
Dividends
|
|
(19.3)
|
|
(12.1)
|
|
|
(19.3)
|
|
(12.1)
|
|
Dividends or
distributions paid to non-controlling interests
|
|
(4.7)
|
|
(4.8)
|
|
|
(9.4)
|
|
(9.5)
|
Cash flows provided
by (used in) continuing financing activities
|
|
461.2
|
|
(153.0)
|
|
|
436.1
|
|
(108.3)
|
|
|
|
|
|
|
|
|
|
|
Net change in cash
and cash equivalents from continuing operations
|
|
(921.1)
|
|
182.0
|
|
|
(856.7)
|
|
165.4
|
|
|
|
|
|
|
|
|
|
|
Cash flows used in
discontinued operations
|
|
-
|
|
(0.3)
|
|
|
-
|
|
(0.3)
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
|
929.3
|
|
5.7
|
|
|
864.9
|
|
22.3
|
Cash and cash
equivalents at end of period
|
$
|
8.2
|
$
|
187.4
|
|
$
|
8.2
|
$
|
187.4
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents consist of
|
|
|
|
|
|
|
|
|
|
|
Cash
|
$
|
7.8
|
$
|
186.0
|
|
$
|
7.8
|
$
|
186.0
|
|
Cash
equivalents
|
|
0.4
|
|
1.4
|
|
|
0.4
|
|
1.4
|
|
$
|
8.2
|
$
|
187.4
|
|
$
|
8.2
|
$
|
187.4
|
|
|
|
|
|
|
|
|
|
|
Interest and taxes
reflected as operating activities
|
|
|
|
|
|
|
|
|
|
|
Cash interest
payments
|
$
|
110.4
|
$
|
100.9
|
|
$
|
152.5
|
$
|
143.2
|
|
Cash income tax
payments (net of refunds)
|
|
2.8
|
|
5.2
|
|
|
17.0
|
|
56.4
|
QUEBECOR
INC.
|
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
|
|
|
|
|
|
(unaudited)
|
|
June
30
|
|
December
31
|
|
December
31
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
|
|
(restated)
|
|
(restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
8.2
|
$
|
864.9
|
$
|
22.3
|
|
Accounts
receivable
|
|
536.2
|
|
543.4
|
|
525.4
|
|
Contract
assets
|
|
131.8
|
|
132.8
|
|
106.6
|
|
Income
taxes
|
|
10.8
|
|
29.3
|
|
6.9
|
|
Inventories
|
|
160.2
|
|
188.1
|
|
183.3
|
|
Other current
assets
|
|
136.4
|
|
119.8
|
|
102.4
|
|
|
983.6
|
|
1,878.3
|
|
946.9
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
3,530.6
|
|
3,594.6
|
|
3,605.1
|
|
Intangible
assets
|
|
1,012.4
|
|
983.1
|
|
1,224.0
|
|
Goodwill
|
|
2,695.1
|
|
2,695.8
|
|
2,725.4
|
|
Derivative financial
instruments
|
|
698.6
|
|
591.8
|
|
809.0
|
|
Deferred income
taxes
|
|
37.1
|
|
33.2
|
|
16.0
|
|
Other
assets
|
|
185.1
|
|
185.1
|
|
177.1
|
|
|
8,158.9
|
|
8,083.6
|
|
8,556.6
|
Total
assets
|
$
|
9,142.5
|
$
|
9,961.9
|
$
|
9,503.5
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Bank
indebtedness
|
$
|
27.3
|
$
|
0.8
|
$
|
18.9
|
|
Accounts payable and
accrued charges
|
|
627.0
|
|
738.7
|
|
705.9
|
|
Provisions
|
|
27.8
|
|
25.4
|
|
69.3
|
|
Deferred
revenue
|
|
354.3
|
|
346.8
|
|
339.7
|
|
Income
taxes
|
|
83.8
|
|
13.3
|
|
35.2
|
|
Convertible
debentures
|
|
412.5
|
|
450.0
|
|
-
|
|
Embedded derivatives
related to convertible debentures
|
|
511.5
|
|
442.2
|
|
-
|
|
Current portion of
long-term debt
|
|
15.7
|
|
20.4
|
|
51.8
|
|
|
2,059.9
|
|
2,037.6
|
|
1,220.8
|
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
|
|
Long-term
debt
|
|
6,320.8
|
|
5,516.2
|
|
5,616.9
|
|
Derivative financial
instruments
|
|
17.1
|
|
34.1
|
|
0.3
|
|
Convertible
debentures
|
|
150.0
|
|
-
|
|
500.0
|
|
Other
liabilities
|
|
217.9
|
|
215.8
|
|
516.2
|
|
Deferred income
taxes
|
|
715.9
|
|
749.2
|
|
624.8
|
|
|
7,421.7
|
|
6,515.3
|
|
7,258.2
|
Equity
|
|
|
|
|
|
|
|
Capital
stock
|
|
305.8
|
|
313.9
|
|
323.3
|
|
Contributed
surplus
|
|
4.7
|
|
3.5
|
|
2.3
|
|
Retained
earnings
|
|
(626.2)
|
|
601.9
|
|
379.4
|
|
Accumulated other
comprehensive loss
|
|
(104.6)
|
|
(50.7)
|
|
(106.1)
|
|
Equity
attributable to shareholders
|
|
(420.3)
|
|
868.6
|
|
598.9
|
|
Non-controlling
interests
|
|
81.2
|
|
540.4
|
|
425.6
|
|
|
(339.1)
|
|
1,409.0
|
|
1,024.5
|
|
|
|
|
|
|
|
Total liabilities
and equity
|
$
|
9,142.5
|
$
|
9,961.9
|
$
|
9,503.5
|
View original
content:http://www.prnewswire.com/news-releases/quebecor-inc-reports-consolidated-results-for-second-quarter-2018-300694423.html
SOURCE Quebecor