MONTRÉAL, Aug. 8, 2019 /CNW
Telbec/ - Quebecor Inc. ("Quebecor" or the "Corporation") today
reported its consolidated financial results for the second quarter
of 2019. Quebecor consolidates the financial results of
Quebecor Media Inc. ("Quebecor Media"), a wholly owned
subsidiary since June 22, 2018.
As described under "Changes in Accounting Policies" below, on
January 1, 2019 the Corporation
adopted on a fully retrospective basis the new rules in
IFRS 16 – Leases. Accordingly, comparative figures have
been restated to reflect the impact of the new rules.
Second quarter 2019 highlights
- Revenues: $1.06 billion in the
second quarter of 2019, up $18.2
million (1.8%) from the same period of 2018.
- Adjusted EBITDA1: $455.0
million, up $29.1 million
(6.8%). Without restatement of comparative figures following the
adoption of IFRS 16, adjusted EBITDA increased $40.8 million (9.9%).
- Net income attributable to shareholders: $140.2 million ($0.55 per basic share) in the second quarter of
2019, compared with $42.0 million
($0.18 per basic share) in the same
period of 2018, an increase of $98.2
million ($0.37 per basic
share). Without restatement of comparative figures following the
adoption of IFRS 16, net income attributable to shareholders was
$140.2 million in the second quarter
of 2019 compared with $41.3 million
in the same period of 2018, a $98.9
million increase.
- Adjusted income from continuing operating
activities2: $136.2
million ($0.53 per basic
share) in the second quarter of 2019, compared with $105.9 million ($0.45 per basic share) in the same period of
2018, an increase of $30.3 million
($0.08 per basic share) or
28.6%.
- The Telecommunications segment grew its revenues by
$12.0 million (1.4%) and its adjusted
EBITDA by $20.2 million (4.7%) in the
second quarter of 2019. Without restatement of comparative figures
following the adoption of IFRS 16, the Telecommunications segment's
adjusted EBITDA increased $30.3
million (7.2%).
- Videotron Ltd. ("Videotron") significantly increased its
revenues from mobile telephony ($15.6
million or 11.9%) and Internet access ($7.1 million or 2.6%) in the second quarter of
2019.
- Videotron's total average billing per unit3 ("ABPU")
was $50.20 in the second quarter of
2019, compared with $49.68 in the
same period of 2018, a $0.52 (1.0%)
increase. Mobile ABPU was $52.56 in
the second quarter of 2019 compared with $53.70 in the same period of 2018, a $1.14 (‑2.1%) decrease due in part to the
popularity of bring your own device plans.
- Subscriber connections to the mobile telephony service
increased by 38,300 in the second quarter of 2019 compared with an
increase of 31,900 in the same period of 2018.
- On June 5, 2019, TVA Group Inc.
("TVA Group") announced that, on account of significant viewing
changes related to the globalization of content and of the
proliferation of unregulated distribution vehicles, it needed to
make deep budget cuts to preserve its leading position in the
Québec market and protect the production of original
French‑language content in Québec. TVA Group's budget reduction
plan affects all its segments and regrettably entails the
elimination of 68 positions.
- On April 10, 2019, Videotron
acquired 10 blocks of low‑frequency spectrum in the 600 MHz band in
Innovation, Science and Economic Development Canada's ("ISED
Canada") commercial mobile spectrum auction. The licences, covering
the Eastern, Southern and Northern Québec, as well as the Outaouais
and Eastern Ontario regions, were
acquired for $255.8 million. Among
other things, they will support the roll‑out of 5G new‑generation
mobile capabilities.
- On April 1, 2019, TVA Group
closed the acquisition of the companies in the Incendo Media inc.
("Incendo Media") group, a Montréal‑based producer and distributor
of television programs for international markets, for a cash
consideration of $11.1 million (net
of cash acquired of $0.9 million) and
a balance payable at fair value of $6.8
million.
____________________________
|
1
|
See "Adjusted EBITDA"
under "Definitions."
|
2
|
See "Adjusted income
from continuing operating activities" under
"Definitions."
|
3
|
See "Key performance
indicators" under "Definitions."
|
"I am very satisfied with Quebecor's performance in the second
quarter of 2019," said Pierre Karl Péladeau, President and Chief
Executive Officer of Quebecor. "The Corporation's operating profits
continued to show strong growth, driven by Videotron. It
demonstrates our ability to deliver on our action plans, which
target promising investments for the Corporation's future."
"Videotron maintained its excellent performance, particularly in
mobile telephony, where subscriber connections increased
by 152,700 or 14.1% during the 12‑month period ended
June 30, 2019," commented
Jean‑François Pruneau, President and Chief Executive Officer of
Videotron. "Our constant goal is to strengthen that trend and
retain our leading position by innovating and investing in
state‑of‑the‑art technology. With our partners in the Open‑Air
Laboratory for Smart Living, we announced the creation of a first
new‑generation 5G site that will help lay the foundations for
the development of the next‑generation mobile network. We also
continued working on the upcoming launch of Helix, based on our
partner Comcast Corporation's Xfinity XI platform. Currently
in testing with a large group of employees, Helix will enable
convergence among all the technologies in a home. To enlarge our
geographic footprint, we also announced plans to expand into the
Abitibi‑Témiscamingue region, now served by a single wireline
provider, and offer our cable television, Internet and cable
telephone services there, in addition to our currently available
mobile telephony service.
"During the quarter, Fizz won the prestigious 'Tribeca
Disruptive Innovation Award,' awarded by the TM Forum to
recognize digital innovation," Mr. Pruneau added. "The TM
Forum is the telecommunications industry association that includes
digital service providers around the world. I am very proud of this
honour and also of Videotron's No. 1 ranking on the Top‑Rated
Workplaces: Best in Québec list, based on reviews left by employees
on Indeed, Canada's top job site."
"TVA Group posted a $6.6 million favourable variance in adjusted
EBITDA in the second quarter, largely because of the integration of
the Évasion and Zeste specialty channels and the improvement in TVA
Sports' negative adjusted EBITDA, combined with cost‑reduction
initiatives implemented during the quarter," said France Lauzière,
President and Chief Executive Officer of TVA Group.
"TVA Group's total television market share increased
0.3 points to 40.5%.1 TVA Network had 7 of the top
10 shows in Québec during the second quarter of 2019,
including La Voix, which held the top spot with an
average audience of more than 1.9 million."
"In the second quarter of 2019, TVA Group was forced to make
deep budget cuts in response to economic and competitive
environments that have been destabilizing the television industry
for years, combined with a regulatory framework that places Québec
and Canadian companies at a competitive disadvantage," Mr. Péladeau
commented. "For years, the television industry has been contending
with numerous inequities, which have been exacerbated by the lack
of decisive action by regulatory authorities to modernize the
Canadian system.
"Moreover, the announced acquisition of the conventional
television network V and its digital assets by Bell Media will
further undermine Québec's media ecosystem by allowing a dominant
player to become even more so. We have therefore been forced to
take action and we are making our case to the appropriate bodies in
order to protect the services available to consumers for the long
term. The business practices of Bell
Canada, which is both broadcaster and distributor, do not
recognize the fair market value of TVA Group's specialty channels,
including TVA Sports, and have forced us to sound the alarm to
alert regulatory authorities to the need to correct these major
flaws in the Canadian broadcasting system".
"In view of the CRTC's refusal to act and inability to
modernize, we intend to vigorously defend our rights in court, as
we have done successfully against Bell
Canada on several occasions," Mr. Péladeau added.
"We continue investing and diversifying our revenue streams by
broadening our range of products and services and expanding
geographically in order to give consumers a real choice. Building
on our successes, which have delivered attractive returns for our
shareholders and a stimulating work environment for our employees,
we are more firmly focused on the future than ever,"
Pierre Karl Péladeau concluded.
___________________________________________
|
1
|
Numeris – Québec
Franco, April 1 to June 30, 2019, Mo‑Su, 2a‑2a, t2+
|
Table 1
|
Quebecor second
quarter financial highlights, 2015 to 2019
|
(in millions of
Canadian dollars, except per share data)
|
|
2019
|
2018
|
2017
|
2016
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
1,056.9
|
$
|
1,038.7
|
$
|
1,034.0
|
$
|
1,001.0
|
$
|
969.7
|
Adjusted
EBITDA
|
|
455.0
|
|
425.9
|
|
412.0
|
|
384.5
|
|
370.3
|
Income from
continuing operating activities
attributable to shareholders
|
|
140.2
|
|
41.0
|
|
129.4
|
|
18.6
|
|
87.4
|
Net income
attributable to shareholders
|
|
140.2
|
|
42.0
|
|
137.1
|
|
18.5
|
|
77.9
|
Adjusted income from
continuing operating
activities
|
|
136.2
|
|
105.9
|
|
87.0
|
|
78.7
|
|
72.7
|
Per basic
share:
|
|
|
|
|
|
|
|
|
|
|
Income from continuing
operating activities
attributable to shareholders
|
|
0.55
|
|
0.17
|
|
0.53
|
|
0.08
|
|
0.35
|
Net income
attributable to shareholders
|
|
0.55
|
|
0.18
|
|
0.57
|
|
0.08
|
|
0.32
|
Adjusted income from
continuing operating
activities
|
|
0.53
|
|
0.45
|
|
0.36
|
|
0.32
|
|
0.29
|
Discontinued operations
On January 24, 2019, Videotron
sold its 4Degrees Colocation Inc. data centre operations for an
amount of $261.6 million, which
was fully paid in cash at the date of transaction. An amount of
$0.9 million relating to a
working capital adjustment was also paid by Videotron in the second
quarter of 2019. The determination of the final proceeds from the
sale is however subject to certain adjustments based on the
realization of future conditions over a period of up to
10 years. Accordingly, a gain on disposal
of $97.2 million, net of income taxes of $18.5 million, was accounted for in the
first quarter of 2019, while an amount of $53.1 million
from the proceeds received at the date of transaction was deferred
in connection with the estimated present value of the future
conditional adjustments. The results of operations and cash flows
of these businesses were reclassified as discontinued operations in
the consolidated statements of income and cash flows. In this press
release, only continuing operating activities of Quebecor Media are
included in the analysis of its segment operating results.
Changes in Accounting Policies
On January 1, 2019, the
Corporation adopted, on a fully retrospective basis, the new rules
under IFRS 16 which set out new principles for the
recognition, measurement, presentation and disclosure of leases for
both parties to a contract. The standard provides lessees with a
single accounting model for all leases, with certain exemptions. In
particular, lessees are required to report most leases on their
balance sheets by recognizing right‑of‑use assets and related
financial liabilities. Assets and liabilities arising from a lease
are initially measured on a present value basis. The adoption of
IFRS 16 had significant impacts on the consolidated financial
statements since all of the Corporation segments are engaged in
various long‑term leases relating to premises and equipment.
Under IFRS 16, most lease charges are now expensed as a
depreciation of the right‑of‑use asset, along with interest on the
related lease liability. Since under the former standard, operating
lease charges were recognized as operating expenses as they were
incurred, the adoption of IFRS 16 changes the timing of
the recognition of these lease charges over the term of each lease.
It also affects the classification of expenses in the consolidated
statements of income. Principal payments on the lease liability are
now presented as financing activities in the consolidated
statements of cash flows, whereas under the previous standard these
payments were presented as operating activities. 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 2019 and under "Changes in Accounting Policies" in Quebecor's
Management Discussion and Analysis for the same period.
Table 2 presents segmented adjusted EBITDA for the last eight
quarters, restated to reflect the retroactive application
of IFRS 16.
Table 2
|
Quebecor's
segmented adjusted EBITDA (negative adjusted EBITDA) for the past
eight quarters
|
(in millions of
Canadian dollars)
|
|
Q2‑2019
|
Q1‑2019
|
Q4‑2018
|
Q3‑2018
|
Q2‑2018
|
Q1‑2018
|
Q4‑2017
|
Q3‑2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications
|
$
|
450.0
|
$
|
423.0
|
$
|
435.4
|
$
|
433.2
|
$
|
429.8
|
$
|
417.2
|
$
|
403.7
|
$
|
396.6
|
Media
|
|
5.7
|
|
1.2
|
|
28.6
|
|
30.8
|
|
0.5
|
|
0.1
|
|
23.6
|
|
36.9
|
Sports and
Entertainment
|
|
(1.5)
|
|
(0.7)
|
|
3.3
|
|
8.5
|
|
(0.6)
|
|
(0.7)
|
|
3.7
|
|
9.7
|
Head
Office
|
|
0.8
|
|
(2.8)
|
|
(6.8)
|
|
1.5
|
|
(3.8)
|
|
(0.7)
|
|
(2.3)
|
|
(3.1)
|
Total
|
$
|
455.0
|
$
|
420.7
|
$
|
460.5
|
$
|
474.0
|
$
|
425.9
|
$
|
415.9
|
$
|
428.7
|
$
|
440.1
|
Table 3 presents lease liabilities by segment at
December 31, 2018 and 2017, calculated following the
retrospective adoption of IFRS 16.
Table 3
|
Lease liabilities
by segment
|
(in millions of
Canadian dollars)
|
|
June 30,
2019
|
Dec. 31,
2018
|
Dec.
31, 2017
|
|
|
|
|
|
|
|
Telecommunications
|
$
|
119.1
|
$
|
122.6
|
$
|
143.4
|
Media
|
|
15.7
|
|
13.7
|
|
16.6
|
Sports and
Entertainment
|
|
41.9
|
|
39.7
|
|
41.6
|
Head Office and
intersegment
|
|
(32.7)
|
|
(31.6)
|
|
(33.7)
|
Total
|
$
|
144.0
|
$
|
144.4
|
$
|
167.9
|
To explain the effect of choices made in applying a change in
accounting policies, Table 5 also provides a reconciliation of
adjusted EBITDA to net income, without restatement of comparative
figures following the adoption of IFRS 16, as permitted under
International Financial Reporting Standards ("IFRS").
2019/2018 second quarter comparison
Revenues: $1.06 billion, an $18.2 million (1.8%) increase.
- Revenues increased in Telecommunications ($12.0 million or 1.4% of segment revenues), Media
($3.6 million or 1.9%), and Sports
and Entertainment ($4.4 million or
11.9%).
Adjusted EBITDA: $455.0 million, a $29.1 million (6.8%) increase. Without
restatement of comparative figures following the adoption
of IFRS 16, adjusted EBITDA increased $40.8 million (9.9%).
- Adjusted EBITDA increased $20.2
million (4.7%) in the Telecommunications segment. Without
restatement of comparative figures following the adoption of IFRS
16, the segment's adjusted EBITDA increased by $30.3 million (7.2%).
- $5.2 million increase in adjusted
EBITDA in the Media segment.
- $0.9 million unfavorable variance
in negative adjusted EBITDA in the Sports and Entertainment
segment.
- $4.6 million favourable variance
at Head Office due to a decrease in the stock‑based compensation
charge.
- The change in the fair value of Quebecor Media stock options
resulted in a $3.4 million favourable
variance in the stock‑based compensation charge in the second
quarter of 2019 compared with the same period of 2018. The change
in the fair value of Quebecor stock options and in the value of
Quebecor stock‑price‑based share units resulted in a $3.3 million favourable variance in the
Corporation's stock‑based compensation charge in the second quarter
of 2019.
Net income attributable to shareholders: $140.2 million ($0.55 per basic share) in the second quarter
of 2019, compared with $42.0 million ($0.18 per basic share) in the same period of
2018, an increase of $98.2 million ($0.37 per basic share).
- The main favourable variances were:
-
- $92.0 million favourable variance
in gains on valuation and translation of financial instruments,
including $92.7 million without any
tax consequences;
- $29.1 million increase in
adjusted EBITDA;
- $13.5 million favourable variance
in non‑controlling interest.
- The main unfavourable variances were:
-
- $16.1 million increase in the
income tax expense;
- $15.3 million unfavourable
variance in the charge for restructuring of operations and other
items;
- $2.5 million increase in
financial expenses.
Net income attributable to shareholders, without
restatement of comparative figures following the adoption
of IFRS 16, was $140.2 million in the second quarter of 2019
compared with $41.3 million in
the same period of 2018, a $98.9 million increase.
Adjusted income from continuing operating activities:
$136.2 million ($0.53 per basic share) in the second quarter
of 2019, compared with $105.9 million ($0.45 per basic share) in the same period of
2018, an increase of $30.3 million ($0.08 per basic share) or 28.6%.
2019/2018 year‑to‑date comparison
Revenues: $2.08 billion, a $43.5 million (2.1%) increase.
- Revenues increased in Telecommunications ($34.0 million or 2.0% of segment revenues), Media
($3.1 million or 0.9%), and Sports
and Entertainment ($7.6 million or
10.3%).
Adjusted EBITDA: $875.7 million, a $33.9 million (4.0%) increase. Without
restatement of comparative figures following the adoption
of IFRS 16, adjusted EBITDA increased $56.7 million (6.9%).
- Adjusted EBITDA increased in the Telecommunications segment by
$26.0 million (3.1%) despite a
$10.9 million favourable retroactive
adjustment related to roaming fees following a Canadian
Radio‑television and Telecommunications Commission decision,
recognized in the first half of 2018 in the Telecommunications
segment (creating an unfavourable variance in the first half of
2019 compared with the same period of 2018). Without restatement of
comparative figures following the adoption of IFRS 16, the
segment's adjusted EBITDA increased by $45.4
million (5.5%).
- $6.3 million increase in adjusted
EBITDA in the Media segment.
- $0.9 million unfavorable variance
in negative adjusted EBITDA in the Sports and Entertainment
segment.
- $2.5 million favourable variance
at Head Office due to a decrease in the stock‑based compensation
charge.
- The change in the fair value of Quebecor Media stock options
resulted in a $5.4 million favourable
variance in the stock‑based compensation charge in the first half
of 2019 compared with the same period of 2018. The change in the
fair value of Quebecor stock options and in the value of Quebecor
stock‑price‑based share units resulted in a $1.0 million unfavourable variance in the
Corporation's stock‑based compensation charge in the first half of
2019.
Net income attributable to shareholders: $329.2 million ($1.29 per basic share) in the first half of 2019,
compared with $99.1 million
($0.42 per basic share) in the
same period of 2018, an increase of $230.1 million ($0.87 per basic share).
- The main favourable variances were:
-
- $107.3 million favourable
variance in the gain on valuation and translation of financial
instruments, consisting of a favourable variance, without any tax
consequences, in gains and losses on embedded derivatives related
to convertible debentures;
- $95.7 million favourable variance
in income from discontinued operations;
- $34.6 million favourable variance
in non‑controlling interest;
- $33.9 million increase in
adjusted EBITDA.
- The main unfavourable variances were:
-
- $17.3 million unfavourable
variance in the charge for restructuring of operations and other
items;
- $14.8 million increase in the
income tax expense;
- $6.1 million increase in
financial expenses;
- $3.2 million increase in the
depreciation and amortization charge.
Net income attributable to shareholders, without
restatement of comparative figures following the adoption
of IFRS 16, was $329.2 million in the first half of 2019
compared with $98.0 million in
the same period of 2018, a $231.2 million increase.
Adjusted income from continuing operating activities:
$247.6 million ($0.97 per basic share) in the first half
of 2019, compared with $195.4 million ($0.83 per basic share) in the same period of
2018, an increase of $52.2 million ($0.14 per basic share) or 26.7%.
Financial transactions
- On July 15, 2019, Quebecor Media
prepaid its term loan "B" and settled the related hedges for a
total cash consideration of $340.9
million.
600 MHz spectrum auction
On April 10, 2019, Videotron
purchased 10 blocks of low‑frequency spectrum in the 600 MHz
band in ISED Canada's latest commercial mobile spectrum
auction. The licences, covering the Eastern, Southern and Northern
Québec, as well as the Outaouais and Eastern Ontario regions, were acquired for
$255.8 million.
Board of Directors
The Right Honourable Brian Mulroney, Chairman of the Board of
the Corporation, welcomes Manon
Brouillette and Lise Croteau
as Directors of Quebecor, bringing the proportion of women on the
Board to 44%. The target of 40% women in 2020 has therefore been
reached one year ahead of schedule.
Normal course issuer bid
On August 7, 2019, 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
4,000,000 Class B Subordinate Voting Shares
("Class B Shares"), representing approximately 2.2% of
issued and outstanding Class B Shares as of August 1, 2019. The purchases can be made from
August 15, 2019 to August 14, 2020 at
prevailing market prices on the open market through the facilities
of the Toronto Stock Exchange ("TSX"), in accordance with the
requirements of that exchange, or other alternative trading
systems. All repurchased shares will be cancelled. As of
August 1, 2019, 77,246,744 Class A Shares and
178,670,253 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, 2019 and
July 31, 2019 on the TSX was 813 Class A Shares
and 634,171 Class B Shares. Consequently, the Corporation will be
authorized to purchase a maximum of 1,000 Class A Shares
and 158,542 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, 2018 and
July 31, 2019, of the 1,000,000 Class
A Shares and 7,800,000 Class B Shares it was authorized to
repurchase under its previous normal course issuer bid, the
Corporation repurchased no Class A Shares and
7,800,000 Class B Shares at a weighted average price of
$27.3398 per share on the open market
through the facilities of the TSX and alternative trading
systems.
In the first half of 2019, the Corporation purchased and
cancelled 1,319,600 Class B Shares for a total cash
consideration of $39.5 million
(4,909,900 Class B Shares for a total cash consideration
of $118.0 million in the first
half of 2018). The $31.7 million excess of the
purchase price over the carrying value of the repurchased
Class B Shares was recorded as an increase in the deficit
($108.6 million reduction
of retained earnings in the first half of 2018). On February 1, 2019, the maximum number of
Class B Shares that could be repurchased under the normal
course issuer bid authorized on August 8,
2018 had been reached.
In the first half of 2019, 180,000 Class B Shares of Quebecor
were issued upon exercise of stock options for a cash consideration
of $2.7 million (100,000 Class B Shares for a
cash consideration of $1.3 million in the first half of 2018).
Following this transaction, the contributed surplus was increased
by $3.0 million ($1.2 million in the first half of 2018) and
the stock option plan liability was reduced by the same amount.
Dividend
On August 7, 2019, the Board of
Directors of Quebecor declared a quarterly dividend of $0.1125 per share on its Class A Shares and
Class B Shares, payable on September
17, 2019 to shareholders of record at the close of business
on August 23, 2019. 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 2019
results, please refer to the Management Discussion and Analysis and
condensed consolidated financial statements of Quebecor, available
on the Corporation's website at
<www.quebecor.com/en/investors/financial‑documentation> 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 2019 results on August 8,
2019, at 11:00 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 8 to November 8,
2019 by dialling 1 877 293‑8133, conference
number 1247666, access code for participants 48006#. The
conference call will also be broadcast live on Quebecor's website
at
<www.quebecor.com/en/investors/conferences-and-annual-meeting>.
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, 2018.
The forward‑looking statements in this press release reflect
Quebecor's expectations as of August 8, 2019 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.
Quebecor (TSX: QBR.A, QBR.B) is headquartered in Québec and
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
Adjusted EBITDA
In its analysis of operating results, the Corporation defines
adjusted EBITDA, as reconciled to net income under the IFRS,
as net income before depreciation and amortization, financial
expenses, gain (loss) on valuation and translation of financial
instruments, restructuring of operations and other items, income
taxes 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 4 provides a reconciliation of adjusted EBITDA to net
income as disclosed in Quebecor's condensed consolidated financial
statements.
Table 4
|
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)
|
|
Three months
ended
June 30
|
Six months ended
June 30
|
|
2019
|
2018
|
2019
|
2018
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(negative adjusted EBITDA):
|
|
|
|
|
|
|
|
|
Telecommunications
|
$
|
450.0
|
$
|
429.8
|
$
|
873.0
|
$
|
847.0
|
Media
|
|
5.7
|
|
0.5
|
|
6.9
|
|
0.6
|
Sports and
Entertainment
|
|
(1.5)
|
|
(0.6)
|
|
(2.2)
|
|
(1.3)
|
Head Office
|
|
0.8
|
|
(3.8)
|
|
(2.0)
|
|
(4.5)
|
|
|
455.0
|
|
425.9
|
|
875.7
|
|
841.8
|
Depreciation and
amortization
|
|
(188.6)
|
|
(187.2)
|
|
(377.1)
|
|
(373.9)
|
Financial
expenses
|
|
(82.8)
|
|
(80.3)
|
|
(164.9)
|
|
(158.8)
|
Gain (loss) on
valuation and translation of financial instruments
|
|
16.4
|
|
(75.6)
|
|
2.1
|
|
(105.2)
|
Restructuring of
operations and other items
|
|
(17.3)
|
|
(2.0)
|
|
(25.8)
|
|
(8.5)
|
Income
taxes
|
|
(44.3)
|
|
(28.2)
|
|
(82.2)
|
|
(67.4)
|
Income from
discontinued operations
|
|
−
|
|
1.1
|
|
97.5
|
|
1.8
|
Net
income
|
$
|
138.4
|
$
|
53.7
|
$
|
325.3
|
$
|
129.8
|
Adjusted EBITDA without restatement of comparative
figures
Table 5 provides a reconciliation of adjusted EBITDA to net
income without restatement of comparative figures following the
adoption of IFRS 16.
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, without restatement of comparative figures following
the adoption of IFRS 16
|
(in millions of
Canadian dollars)
|
|
Three months
ended
June 30
|
Six months ended
June 30
|
|
2019
|
2018
|
2019
|
2018
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(negative adjusted EBITDA):
|
|
|
|
|
|
|
|
|
Telecommunications
|
$
|
450.0
|
$
|
419.7
|
$
|
873.0
|
$
|
827.6
|
Media
|
|
5.7
|
|
(0.7)
|
|
6.9
|
|
(1.8)
|
Sports and
Entertainment
|
|
(1.5)
|
|
(2.0)
|
|
(2.2)
|
|
(4.1)
|
Head Office
|
|
0.8
|
|
(2.8)
|
|
(2.0)
|
|
(2.7)
|
|
|
455.0
|
|
414.2
|
|
875.7
|
|
819.0
|
Depreciation and
amortization
|
|
(188.6)
|
|
(178.9)
|
|
(377.1)
|
|
(357.5)
|
Financial
expenses
|
|
(82.8)
|
|
(78.1)
|
|
(164.9)
|
|
(154.3)
|
Gain (loss) on
valuation and translation of financial instruments
|
|
16.4
|
|
(75.6)
|
|
2.1
|
|
(105.2)
|
Restructuring of
operations and other items
|
|
(17.3)
|
|
(2.0)
|
|
(25.8)
|
|
(8.5)
|
Income
taxes
|
|
(44.3)
|
|
(27.9)
|
|
(82.2)
|
|
(66.9)
|
Income from
discontinued operations
|
|
−
|
|
1.1
|
|
97.5
|
|
1.8
|
Net
income
|
$
|
138.4
|
$
|
52.8
|
$
|
325.3
|
$
|
128.4
|
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 gain (loss) on valuation and translation of
financial instruments, restructuring of operations and other items,
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)
|
|
Three months
ended
June 30
|
Six months ended
June 30
|
|
2019
|
2018
|
2019
|
2018
|
|
|
|
|
|
|
|
|
|
Adjusted income from
continuing operating activities
|
$
|
136.2
|
$
|
105.9
|
$
|
247.6
|
$
|
195.4
|
Gain (loss) on
valuation and translation of financial instruments
|
|
16.4
|
|
(75.6)
|
|
2.1
|
|
(105.2)
|
Restructuring of
operations and other items
|
|
(17.3)
|
|
(2.0)
|
|
(25.8)
|
|
(8.5)
|
Income taxes related
to adjustments1
|
|
4.6
|
|
12.4
|
|
6.7
|
|
14.5
|
Net income
attributable to non‑controlling interest related to
adjustments
|
|
0.3
|
|
0.3
|
|
1.1
|
|
1.4
|
Discontinued
operations
|
|
−
|
|
1.0
|
|
97.5
|
|
1.5
|
Net income
attributable to shareholders
|
$
|
140.2
|
$
|
42.0
|
$
|
329.2
|
$
|
99.1
|
|
1
|
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 revenue‑generating unit ("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 over‑the‑top video services
("Club illico"), 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 or published by public
authorities.
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
|
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
|
(restated)
|
|
|
|
|
(restated)
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
1,056.9
|
$
|
1,038.7
|
|
$
|
2,084.2
|
$
|
2,040.7
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
172.2
|
|
182.4
|
|
|
354.0
|
|
362.4
|
Purchase of goods and
services
|
|
429.7
|
|
430.4
|
|
|
854.5
|
|
836.5
|
Depreciation and
amortization
|
|
188.6
|
|
187.2
|
|
|
377.1
|
|
373.9
|
Financial
expenses
|
|
82.8
|
|
80.3
|
|
|
164.9
|
|
158.8
|
(Gain) loss on
valuation and translation of financial instruments
|
|
(16.4)
|
|
75.6
|
|
|
(2.1)
|
|
105.2
|
Restructuring of
operations and other items
|
|
17.3
|
|
2.0
|
|
|
25.8
|
|
8.5
|
Income before
income taxes
|
|
182.7
|
|
80.8
|
|
|
310.0
|
|
195.4
|
Income taxes
(recovery):
|
|
|
|
|
|
|
|
|
|
Current
|
|
39.8
|
|
42.9
|
|
|
85.4
|
|
102.7
|
Deferred
|
|
4.5
|
|
(14.7)
|
|
|
(3.2)
|
|
(35.3)
|
|
|
44.3
|
|
28.2
|
|
|
82.2
|
|
67.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
138.4
|
|
52.6
|
|
|
227.8
|
|
128.0
|
Income from
discontinued operations
|
|
-
|
|
1.1
|
|
|
97.5
|
|
1.8
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
$
|
138.4
|
$
|
53.7
|
|
$
|
325.3
|
$
|
129.8
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
140.2
|
$
|
41.0
|
|
$
|
231.7
|
$
|
97.6
|
Non-controlling
interests
|
|
(1.8)
|
|
11.6
|
|
|
(3.9)
|
|
30.4
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
140.2
|
$
|
42.0
|
|
$
|
329.2
|
$
|
99.1
|
Non-controlling
interests
|
|
(1.8)
|
|
11.7
|
|
|
(3.9)
|
|
30.7
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to shareholders
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
From
continuing operations
|
$
|
0.55
|
$
|
0.17
|
|
$
|
0.91
|
$
|
0.41
|
From
discontinued operations
|
|
-
|
|
0.01
|
|
|
0.38
|
|
0.01
|
Net
income
|
|
0.55
|
|
0.18
|
|
|
1.29
|
|
0.42
|
Diluted:
|
|
|
|
|
|
|
|
|
|
From
continuing operations
|
$
|
0.47
|
$
|
0.17
|
|
$
|
0.88
|
$
|
0.40
|
From
discontinued operations
|
|
-
|
|
0.01
|
|
|
0.37
|
|
0.01
|
Net
income
|
|
0.47
|
|
0.18
|
|
|
1.25
|
|
0.41
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding (in millions)
|
|
255.9
|
|
233.5
|
|
|
255.9
|
|
234.7
|
Weighted average
number of diluted shares (in millions)
|
|
262.1
|
|
239.4
|
|
|
262.1
|
|
240.6
|
QUEBECOR
INC.
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
Three months
ended
|
|
Six months
ended
|
(unaudited)
|
June 30
|
|
June 30
|
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
(restated)
|
|
|
|
(restated)
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
138.4
|
$
|
52.6
|
|
$
|
227.8
|
$
|
128.0
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
|
Items that may be
reclassified to income:
|
|
|
|
|
|
|
|
|
|
Cash flow
hedges:
|
|
|
|
|
|
|
|
|
|
Gain (loss) on
valuation of derivative financial instruments
|
|
49.5
|
|
(1.3)
|
|
|
30.2
|
|
(44.4)
|
Deferred income
taxes
|
|
(4.7)
|
|
(1.7)
|
|
|
1.8
|
|
2.1
|
|
|
44.8
|
|
(3.0)
|
|
|
32.0
|
|
(42.3)
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income from continuing operations
|
|
183.2
|
|
49.6
|
|
|
259.8
|
|
85.7
|
|
|
|
|
|
|
|
|
|
|
Income from
discontinued operations
|
|
-
|
|
1.1
|
|
|
97.5
|
|
1.8
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
$
|
183.2
|
$
|
50.7
|
|
$
|
357.3
|
$
|
87.5
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss) from continuing operations attributable
to
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
185.0
|
$
|
38.3
|
|
$
|
263.7
|
$
|
62.9
|
Non-controlling
interests
|
|
(1.8)
|
|
11.3
|
|
|
(3.9)
|
|
22.8
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss) attributable to
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
185.0
|
$
|
39.3
|
|
$
|
361.2
|
$
|
64.4
|
Non-controlling
interests
|
|
(1.8)
|
|
11.4
|
|
|
(3.9)
|
|
23.1
|
QUEBECOR
INC.
|
SEGMENTED
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommuni-
cations
|
|
Media
|
|
Sports
and
Enter-
tainment
|
|
Head
office
and
Inter-
segments
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
854.4
|
$
|
190.1
|
$
|
41.3
|
$
|
(28.9)
|
$
|
1,056.9
|
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
95.9
|
|
59.9
|
|
9.9
|
|
6.5
|
|
172.2
|
Purchase of goods and
services
|
|
308.5
|
|
124.5
|
|
32.9
|
|
(36.2)
|
|
429.7
|
Adjusted
EBITDA1
|
|
450.0
|
|
5.7
|
|
(1.5)
|
|
0.8
|
|
455.0
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
188.6
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
82.8
|
Gain on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
(16.4)
|
Restructuring of
operations and other items
|
|
|
|
|
|
|
|
|
|
17.3
|
Income before
income taxes
|
|
|
|
|
|
|
|
|
$
|
182.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
111.2
|
$
|
9.9
|
$
|
0.5
|
$
|
1.2
|
$
|
122.8
|
Additions to
intangible assets
|
|
296.5
|
|
1.1
|
|
1.1
|
|
0.3
|
|
299.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30, 2018
|
|
(restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommuni-
cations
|
|
Media
|
|
Sports
and
Enter-
tainment
|
|
Head
office
and Inter-
segments
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
842.4
|
$
|
186.5
|
$
|
36.9
|
$
|
(27.1)
|
$
|
1,038.7
|
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
97.6
|
|
62.9
|
|
9.8
|
|
12.1
|
|
182.4
|
Purchase of goods and
services
|
|
315.0
|
|
123.1
|
|
27.7
|
|
(35.4)
|
|
430.4
|
Adjusted
EBITDA1
|
|
429.8
|
|
0.5
|
|
(0.6)
|
|
(3.8)
|
|
425.9
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
187.2
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
80.3
|
Loss on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
75.6
|
Restructuring of
operations and other items
|
|
|
|
|
|
|
|
|
|
2.0
|
Income before income
taxes
|
|
|
|
|
|
|
|
|
$
|
80.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
121.7
|
$
|
5.5
|
$
|
0.2
|
$
|
5.1
|
$
|
132.5
|
Additions to
intangible assets
|
|
36.6
|
|
1.0
|
|
0.8
|
|
0.2
|
|
38.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommuni-
cations
|
|
Media
|
|
Sports
and
Enter-
tainment
|
|
Head
office
and
Inter-
segments
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
1,695.1
|
$
|
362.8
|
$
|
81.7
|
$
|
(55.4)
|
$
|
2,084.2
|
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
199.6
|
|
117.4
|
|
19.6
|
|
17.4
|
|
354.0
|
Purchase of goods and
services
|
|
622.5
|
|
238.5
|
|
64.3
|
|
(70.8)
|
|
854.5
|
Adjusted
EBITDA1
|
|
873.0
|
|
6.9
|
|
(2.2)
|
|
(2.0)
|
|
875.7
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
377.1
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
164.9
|
Gain on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
(2.1)
|
Restructuring of
operations and other items
|
|
|
|
|
|
|
|
|
|
25.8
|
Income before
income taxes
|
|
|
|
|
|
|
|
|
$
|
310.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
243.8
|
$
|
16.6
|
$
|
1.0
|
$
|
1.2
|
$
|
262.6
|
Additions to
intangible assets
|
|
345.1
|
|
2.7
|
|
2.1
|
|
0.3
|
|
350.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June
30, 2018
|
|
(restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommuni-
cations
|
|
Media
|
|
Sports
and
Enter-
tainment
|
|
Head
office
and Inter-
segments
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
1,661.1
|
$
|
359.7
|
$
|
74.1
|
$
|
(54.2)
|
$
|
2,040.7
|
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
199.8
|
|
122.2
|
|
19.5
|
|
20.9
|
|
362.4
|
Purchase of goods and
services
|
|
614.3
|
|
236.9
|
|
55.9
|
|
(70.6)
|
|
836.5
|
Adjusted
EBITDA1
|
|
847.0
|
|
0.6
|
|
(1.3)
|
|
(4.5)
|
|
841.8
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
373.9
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
158.8
|
Loss on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
105.2
|
Restructuring of
operations and other items
|
|
|
|
|
|
|
|
|
|
8.5
|
Income before income
taxes
|
|
|
|
|
|
|
|
|
$
|
195.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
260.6
|
$
|
10.5
|
$
|
0.4
|
$
|
5.5
|
$
|
277.0
|
Additions to
intangible assets
|
|
91.6
|
|
2.5
|
|
1.8
|
|
(0.4)
|
|
95.5
|
|
|
|
|
|
|
|
|
|
|
|
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, (gain) loss on valuation and
translation of financial instruments, restructuring of
operations and other items, income taxes and income from
discontinued operations.
|
QUEBECOR
INC.
|
CONSOLIDATED
STATEMENTS OF EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
attributable to shareholders
|
|
|
|
|
|
|
Capital
stock
|
|
Contributed surplus
|
|
Retained earnings
(deficit)
|
|
Accumulated
other
com-
prehensive
loss
|
|
Equity
attributable
to
non-
controlling
interests
|
|
Total
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
December 31, 2017 as previously reported
|
$
|
313.9
|
$
|
3.5
|
$
|
601.9
|
$
|
(50.7)
|
$
|
540.4
|
$
|
1,409.0
|
Changes in accounting
policies
|
|
-
|
|
-
|
|
(7.2)
|
|
-
|
|
(4.8)
|
|
(12.0)
|
Balance as of
December 31, 2017, as restated
|
|
313.9
|
|
3.5
|
|
594.7
|
|
(50.7)
|
|
535.6
|
|
1,397.0
|
Net income
|
|
-
|
|
-
|
|
99.1
|
|
-
|
|
30.7
|
|
129.8
|
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
|
|
-
|
|
-
|
|
(1,202.4)
|
|
(19.2)
|
|
(468.4)
|
|
(1,690.0)
|
Balance as of June
30, 2018
|
|
305.8
|
|
4.7
|
|
(636.5)
|
|
(104.6)
|
|
80.9
|
|
(349.7)
|
Net income
|
|
-
|
|
-
|
|
304.6
|
|
-
|
|
7.4
|
|
312.0
|
Other comprehensive
income
|
|
-
|
|
-
|
|
-
|
|
21.9
|
|
0.2
|
|
22.1
|
Issuance of Class B
Shares
|
|
784.8
|
|
-
|
|
-
|
|
-
|
|
-
|
|
784.8
|
Dividends or
distributions
|
|
-
|
|
-
|
|
(27.0)
|
|
-
|
|
-
|
|
(27.0)
|
Repurchase of Class B
Shares
|
|
(24.7)
|
|
-
|
|
(149.0)
|
|
-
|
|
-
|
|
(173.7)
|
Balance as of
December 31, 2018
|
|
1,065.9
|
|
4.7
|
|
(507.9)
|
|
(82.7)
|
|
88.5
|
|
568.5
|
Net income
(loss)
|
|
-
|
|
-
|
|
329.2
|
|
-
|
|
(3.9)
|
|
325.3
|
Other comprehensive
income
|
|
-
|
|
-
|
|
-
|
|
32.0
|
|
-
|
|
32.0
|
Issuance of Class B
Shares
|
|
2.7
|
|
3.0
|
|
-
|
|
-
|
|
-
|
|
5.7
|
Dividends or
distributions
|
|
-
|
|
-
|
|
(42.9)
|
|
-
|
|
-
|
|
(42.9)
|
Repurchase of Class B
Shares
|
|
(7.8)
|
|
-
|
|
(31.7)
|
|
-
|
|
-
|
|
(39.5)
|
Balance as of June
30, 2019
|
$
|
1,060.8
|
$
|
7.7
|
$
|
(253.3)
|
$
|
(50.7)
|
$
|
84.6
|
$
|
849.1
|
QUEBECOR
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
Three months
ended
|
|
Six months
ended
|
(unaudited)
|
June 30
|
|
June 30
|
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
|
(restated)
|
|
|
|
(restated)
|
|
|
|
|
|
|
|
|
Cash flows related
to operating activities
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
138.4
|
$
|
52.6
|
|
$
|
227.8
|
$
|
128.0
|
Adjustments
for:
|
|
|
|
|
|
|
|
|
|
Depreciation of
property, plant and equipment
|
|
150.7
|
|
152.9
|
|
|
301.8
|
|
304.4
|
Amortization of
intangible assets
|
|
28.8
|
|
25.2
|
|
|
57.4
|
|
51.4
|
Amortization of
right-of-use assets
|
|
9.1
|
|
9.1
|
|
|
17.9
|
|
18.1
|
(Gain) loss on
valuation and translation of financial instruments
|
|
(16.4)
|
|
75.6
|
|
|
(2.1)
|
|
105.2
|
Impairment of
assets
|
|
15.3
|
|
-
|
|
|
18.8
|
|
-
|
Amortization of
financing costs and long-term debt discount
|
|
2.0
|
|
1.7
|
|
|
4.0
|
|
3.5
|
Deferred income
taxes
|
|
4.5
|
|
(14.7)
|
|
|
(3.2)
|
|
(35.3)
|
Other
|
|
(0.4)
|
|
(1.0)
|
|
|
(2.1)
|
|
(2.1)
|
|
|
332.0
|
|
301.4
|
|
|
620.3
|
|
573.2
|
Net change in
non-cash balances related to operating activities
|
|
(42.8)
|
|
33.0
|
|
|
(150.6)
|
|
62.1
|
Cash flows provided
by continuing operating activities
|
|
289.2
|
|
334.4
|
|
|
469.7
|
|
635.3
|
Cash flows related
to investing activities
|
|
|
|
|
|
|
|
|
|
Business
acquisitions
|
|
(11.1)
|
|
1.3
|
|
|
(34.6)
|
|
(1.4)
|
Business
disposals
|
|
(0.9)
|
|
-
|
|
|
260.7
|
|
-
|
Additions to
property, plant and equipment
|
|
(122.8)
|
|
(132.5)
|
|
|
(262.6)
|
|
(277.0)
|
Additions to
intangible assets
|
|
(299.0)
|
|
(38.6)
|
|
|
(350.2)
|
|
(95.5)
|
Proceeds from
disposals of assets
|
|
0.1
|
|
1.3
|
|
|
2.7
|
|
1.7
|
Non-controlling
interests acquisition
|
|
-
|
|
(1,540.0)
|
|
|
-
|
|
(1,540.0)
|
Other
|
|
(5.9)
|
|
(0.4)
|
|
|
(7.2)
|
|
(1.0)
|
Cash flows used in
continuing investing activities
|
|
(439.6)
|
|
(1,708.9)
|
|
|
(391.2)
|
|
(1,913.2)
|
Cash flows related
to financing activities
|
|
|
|
|
|
|
|
|
|
Net change in bank
indebtedness
|
|
(6.0)
|
|
27.3
|
|
|
(2.9)
|
|
26.5
|
Net change under
revolving facilities
|
|
210.7
|
|
557.7
|
|
|
30.0
|
|
640.5
|
Repayment of
long-term debt
|
|
(4.1)
|
|
(9.1)
|
|
|
(8.0)
|
|
(12.8)
|
Repayment of
convertible debentures
|
|
-
|
|
(71.9)
|
|
|
-
|
|
(71.9)
|
Repayment of lease
liabilities
|
|
(10.6)
|
|
(10.5)
|
|
|
(20.5)
|
|
(19.8)
|
Settlement of hedging
contracts
|
|
(0.8)
|
|
(0.8)
|
|
|
(0.8)
|
|
(0.8)
|
Issuance of Class B
Shares
|
|
-
|
|
1.3
|
|
|
2.7
|
|
1.3
|
Repurchase of Class B
Shares
|
|
-
|
|
(19.3)
|
|
|
(39.5)
|
|
(118.0)
|
Dividends
|
|
(42.9)
|
|
(19.3)
|
|
|
(42.9)
|
|
(19.3)
|
Dividends or
distributions paid to non-controlling interests
|
|
-
|
|
(4.7)
|
|
|
-
|
|
(9.4)
|
Cash flows provided
by (used in) continuing financing activities
|
|
146.3
|
|
450.7
|
|
|
(81.9)
|
|
416.3
|
|
|
|
|
|
|
|
|
|
|
Net change in cash
and cash equivalents from continuing operations
|
|
(4.1)
|
|
(923.8)
|
|
|
(3.4)
|
|
(861.6)
|
|
|
|
|
|
|
|
|
|
|
Cash flows provided
by (used in) discontinued operations
|
|
1.6
|
|
2.7
|
|
|
(0.7)
|
|
4.9
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
|
19.7
|
|
929.3
|
|
|
21.3
|
|
864.9
|
Cash and cash
equivalents at end of period
|
$
|
17.2
|
$
|
8.2
|
|
$
|
17.2
|
$
|
8.2
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents consist of
|
|
|
|
|
|
|
|
|
|
Cash
|
$
|
5.7
|
$
|
7.8
|
|
$
|
5.7
|
$
|
7.8
|
Cash
equivalents
|
|
11.5
|
|
0.4
|
|
|
11.5
|
|
0.4
|
|
$
|
17.2
|
$
|
8.2
|
|
$
|
17.2
|
$
|
8.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and taxes
reflected as operating activities
|
|
|
|
|
|
|
|
|
|
Cash interest
payments
|
$
|
110.7
|
$
|
112.6
|
|
$
|
157.8
|
$
|
157.0
|
Cash income tax
payments (net of refunds)
|
|
42.1
|
|
2.8
|
|
|
180.8
|
|
17.0
|
QUEBECOR
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
|
|
|
|
|
|
(unaudited)
|
|
June
30
|
|
December
31
|
|
December
31
|
|
|
2019
|
|
2018
|
|
2017
|
|
|
|
|
(restated)
|
|
(restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
17.2
|
$
|
21.0
|
$
|
864.9
|
Accounts
receivable
|
|
545.0
|
|
553.8
|
|
543.4
|
Contract
assets
|
|
150.0
|
|
144.4
|
|
132.8
|
Income
taxes
|
|
13.7
|
|
4.8
|
|
29.3
|
Inventories
|
|
192.1
|
|
186.3
|
|
188.1
|
Other current
assets
|
|
140.0
|
|
118.3
|
|
117.6
|
Assets held for
sale
|
|
-
|
|
95.0
|
|
-
|
|
|
1,058.0
|
|
1,123.6
|
|
1,876.1
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
3,391.4
|
|
3,467.3
|
|
3,610.1
|
Intangible
assets
|
|
1,423.6
|
|
1,135.3
|
|
983.1
|
Goodwill
|
|
2,696.6
|
|
2,678.3
|
|
2,695.8
|
Right-of-use
assets
|
|
115.0
|
|
112.6
|
|
133.5
|
Derivative financial
instruments
|
|
756.1
|
|
887.0
|
|
591.8
|
Deferred income
taxes
|
|
31.3
|
|
51.8
|
|
33.2
|
Other
assets
|
|
211.2
|
|
201.6
|
|
185.1
|
|
|
8,625.2
|
|
8,533.9
|
|
8,232.6
|
Total
assets
|
$
|
9,683.2
|
$
|
9,657.5
|
$
|
10,108.7
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Bank
indebtedness
|
$
|
21.4
|
$
|
24.3
|
$
|
0.8
|
Accounts payable and
accrued charges
|
|
742.6
|
|
832.0
|
|
738.7
|
Provisions
|
|
25.1
|
|
32.0
|
|
24.0
|
Deferred
revenue
|
|
348.4
|
|
340.7
|
|
346.8
|
Income
taxes
|
|
34.1
|
|
119.2
|
|
13.3
|
Convertible
debentures
|
|
-
|
|
-
|
|
450.0
|
Embedded derivatives
related to convertible debentures
|
|
-
|
|
-
|
|
442.2
|
Current portion of
long-term debt
|
|
72.0
|
|
57.9
|
|
20.4
|
Current portion of
lease liabilities
|
|
34.4
|
|
36.0
|
|
39.8
|
Liabilities held for
sale
|
|
-
|
|
6.6
|
|
-
|
|
|
1,278.0
|
|
1,448.7
|
|
2,076.0
|
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
|
Long-term
debt
|
|
6,209.9
|
|
6,370.3
|
|
5,516.2
|
Derivative financial
instruments
|
|
11.0
|
|
-
|
|
34.1
|
Convertible
debentures
|
|
150.0
|
|
150.0
|
|
-
|
Lease
liabilities
|
|
109.6
|
|
108.4
|
|
128.1
|
Deferred income
taxes
|
|
773.8
|
|
775.9
|
|
744.9
|
Other
liabilities
|
|
301.8
|
|
235.7
|
|
212.4
|
|
|
7,556.1
|
|
7,640.3
|
|
6,635.7
|
Equity
|
|
|
|
|
|
|
Capital
stock
|
|
1,060.8
|
|
1,065.9
|
|
313.9
|
Contributed
surplus
|
|
7.7
|
|
4.7
|
|
3.5
|
(Deficit) retained
earnings
|
|
(253.3)
|
|
(507.9)
|
|
594.7
|
Accumulated other
comprehensive loss
|
|
(50.7)
|
|
(82.7)
|
|
(50.7)
|
Equity
attributable to shareholders
|
|
764.5
|
|
480.0
|
|
861.4
|
Non-controlling
interests
|
|
84.6
|
|
88.5
|
|
535.6
|
|
|
849.1
|
|
568.5
|
|
1,397.0
|
|
|
|
|
|
|
|
Total liabilities
and equity
|
$
|
9,683.2
|
$
|
9,657.5
|
$
|
10,108.7
|
View original
content:http://www.prnewswire.com/news-releases/quebecor-inc-reports-consolidated-results-for-second-quarter-2019-300898429.html
SOURCE Quebecor