MONTRÉAL, March 12, 2020 /PRNewswire/ - Quebecor Inc.
("Quebecor" or the "Corporation") today reported its consolidated
financial results for the fourth quarter and full year 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.
For the purposes of this press release, the Corporation has also
added the non-IFRS measure "Consolidated cash flows from
operations" to report the cash flows generated by all of its
business segments. See the definition of this new measure under
"Definition."
Highlights
2019 financial year and recent developments
- Revenues: $4.29 billion, up
$112.8 million (2.7%) from 2018.
- Adjusted EBITDA1: $1.88
billion, a $103.2 million
(5.8%) increase. Without restatement of comparative figures
following adoption of IFRS 16, adjusted EBITDA increased by
$147.4 million (8.5%).
- Net income attributable to shareholders: $652.8 million ($2.55 per basic share) in 2019, compared with
$403.7 million ($1.69 per basic share) in 2018, an increase of
$249.1 million ($0.86 per basic share). Without restatement of
comparative figures following adoption of IFRS 16, net income
attributable to shareholders increased by $251.5 million.
- Adjusted income from continuing operating
activities2: $581.0
million ($2.27 per basic
share) in 2019, compared with $469.8
million ($1.96 per basic
share) in 2018, an increase of $111.2
million ($0.31 per basic
share) or 23.7%.
- Consolidated cash flows from operations3:
$1.14 billion, up $131.9 million (13.0%).
- Quarterly dividend on the Corporation's Class A Multiple Voting
Shares ("Class A Shares") and Class B Subordinate Voting Shares
("Class B Shares") increased by 78% from $0.1125 to $0.20
per share, in line with the policy adopted by the Board of
Directors in 2018, aimed at gradually achieving a dividend target
of 30% to 50% of the Corporation's annual free cash flows.
- The Telecommunications segment grew its revenues by
$98.4 million (2.9%) and its adjusted
EBITDA by $87.8 million (5.1%) in
2019. Without restatement of comparative figures following adoption
of IFRS 16, the Telecommunications segment's adjusted EBITDA
increased $126.4 million (7.5%).
- Videotron Ltd. ("Videotron") posted strong increases in
revenues from mobile telephony ($66.3
million or 12.4%), customer equipment sales ($36.3 million or 15.5%) and Internet access
($35.0 million or 3.2%) in 2019.
- Videotron's total average billing per unit4 ("ABPU")
was $50.00 in 2019, compared with
$49.51 in 2018, a $0.49 (1.0%) increase. Mobile ABPU was
$52.56 in 2019 compared with
$53.62 in 2018, a $1.06 (‑2.0%) decrease due in part to the
popularity of bring your own device plans.
________________________________
1
|
See "Adjusted EBITDA"
under "Definitions."
|
2
|
See "Adjusted income
from continuing operating activities" under
"Definitions."
|
3
|
See "Consolidated
cash flows from operations" under "Definitions."
|
4
|
See "Key performance
indicators" under "Definitions."
|
- Videotron posted a net increase of 85,900 revenue‑generating
units1 ("RGU") (1.4%) in 2019, including 176,700
subscriber connections (15.3%) to the mobile telephony service, the
largest annual increase in the number of connections since the
launch of the mobile network in 2010; 38,500 subscribers (9.1%) to
the Club illico over‑the‑top video service ("Club illico"), and
22,800 subscribers (1.3%) to cable Internet access.
- On December 23, 2019, Videotron
announced the closing of the acquisition of Télédistribution Amos
inc. and its network in Abitibi‑Témiscamingue. The acquisition is
subject to approval from Innovation, Science and Economic
Development Canada ("ISED Canada") and to customary
conditions.
- On December 13, 2019, Videotron
announced that Samsung Electronics Co. Ltd. has been chosen as its
partner for the roll‑out of LTE‑A and 5G radio access technology in
Québec and in the Ottawa area. In
this phase, Videotron will accelerate construction of its new
generation network with a target of gradual commissioning beginning
in 2020.
- On October 8, 2019, Videotron
issued $800.0 million aggregate
principal amount of Senior Notes bearing interest at 4.50% and
maturing on January 15, 2030, both
the largest issue and lowest coupon rate for 10‑year notes ever on
the Canadian high‑yield note market. Videotron used the proceeds
mainly to pay down a portion of the amount due under the terms of
its secured renewable credit facility.
- On August 27, 2019, Videotron
launched Helix, the new technology platform that is revolutionizing
entertainment and home management with voice remote,
ultra‑intelligent Wi‑Fi, and, coming soon, support for home
automation, all tailored to customer needs and preferences. The
service already has more than 190,000 RGUs.
- 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 Eastern, Southern and Northern Québec, as well
as Outaouais and Eastern Ontario,
were acquired for $255.8
million.
- On April 1, 2019, TVA Group Inc.
("TVA Group") closed the acquisition of the companies in the
Incendo Media Inc. 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.
- On February 13, 2019, TVA Group
closed the acquisition of the companies in the Serdy Média Inc.
group, which owns and operates the Évasion and Zeste specialty
channels, along with the companies in the Serdy Video Inc. group,
for a total consideration of $23.5
million, net of acquired cash of $0.5
million.
- On January 24, 2019, Videotron
sold its 4Degrees Colocation Inc. ("4Degrees Colocation") data
centres for $261.6 million,
generating a gain on disposal of $97.2
million, net of income taxes of $18.5
million.
________________________________
1
|
See "Key performance
indicators" under "Definitions."
|
Fourth quarter 2019
- Revenues: $1.14 billion, up
$49.1 million (4.5%).
- Adjusted EBITDA: $494.5 million,
a $34.0 million (7.4%) increase.
Without restatement of comparative figures following adoption of
IFRS 16, adjusted EBITDA increased by $44.5
million (9.9%).
- Adjusted EBITDA increased $27.3
million (6.3%) in the Telecommunications segment. Without
restatement of comparative figures following adoption of IFRS 16,
the segment's adjusted EBITDA increased by $36.8 million (8.6%). Adjusted EBITDA increased
in the Media segment by $6.8 million
or 23.9%.
- Net income attributable to shareholders: $145.1 million ($0.57 per basic share) in the fourth quarter of
2019, compared with $117.5 million
($0.46 per basic share) in the same
period of 2018, a favourable variance of $27.6 million ($0.11 per basic share). Without restatement of
comparative figures following adoption of IFRS 16, net income
attributable to shareholders increased by $28.2 million in the fourth quarter of 2019.
- Adjusted income from continuing operating activities:
$159.6 million ($0.63 per basic share) in the fourth quarter of
2019, compared with $132.9 million
($0.52 per basic share) in the same
period of 2018, an increase of $26.7
million ($0.11 per basic
share) or 20.1%.
- RGUs: Net increase of 21,800 (0.4%) in the fourth quarter of
2019, including a 41,800 (3.2%) subscriber‑connection increase for
the mobile telephony service, the largest fourth‑quarter increase
in the number of connections since 2014, and a 15,800 (3.6%)
subscriber increase for Club illico.
"The 2019 financial year was remarkable for Quebecor in terms of
both financial profitability and technological advances," said
Pierre Karl Péladeau, President and Chief Executive Officer of
Quebecor. "The strong performance of Videotron and TVA Group
contributed to a 5.8% increase in Quebecor's adjusted EBITDA
in 2019 and a 23.7% increase in adjusted income from continuing
operating activities. The excellent results in the fourth quarter
of 2019 were also consistent with this trend; among other things,
adjusted EBITDA was up 7.4%.
"Our solid financial results and business model will allow us to
continue investing in promising projects and advanced technologies
to support further growth in our mobile telephony business. I am
very pleased with the 176,700 subscriber‑connection increase
in our mobile phone service registered in 2019, the largest annual
increase since the launch of our mobile network in 2010.
"Similarly, we continue to progress successfully through the
stages in the lead‑up to deployment of our LTE‑A and 5G access
networks. We are planning a gradual roll‑out beginning in 2020,
with the goal of offering our customers the best in
telecommunications services in the world," Mr. Péladeau added.
"Videotron has always been at the forefront of major
technological changes, and our ability to effectively market
advanced technologies that meet our customers' needs is a key
factor in our success," said Jean‑François Pruneau, President and
Chief Executive Officer of Videotron. "The successful launch in
August 2019 of our Helix home entertainment and management
platform, based on our partner Comcast Corporation's
Xfinity X1 platform, is a prime example. Already, Helix has
more than 190,000 RGUs. The success of Fizz and its
all‑digital experience, which contributed to the record increase in
our mobile subscriber connections in 2019, is another
example.
"As we work to reach more customers and expand our geographic
reach, we are excited about the planned acquisition of
Télédistribution Amos inc., which will end Bell Canada's
monopoly in wireline telephony in the Abitibi‑Témiscamingue region.
We will now be able to offer local residents alternative services
featuring attractive pricing and the best customer experience.
"Club illico continues to post strong customer growth, as
evidenced by a 9.1% increase in its subscriber base in 2019,
in the face of fierce competition from major international content
providers. Our vision and strategies are bearing fruit and we
continue to invest heavily in original content. For the current
season, we have decided to triple the number of original Québec
productions," Mr. Pruneau added.
"Thanks in no small part to our impressive internal talent pool,
Videotron was included on Mediacorp Canada Inc.'s list of
Montréal's Top Employers in 2020 for the second year in a row. We
are very proud of this honour, which is a tribute to our employees,
who are the foundation of our success," Mr. Pruneau concluded.
The Media segment's adjusted EBITDA increased $14.8 million (24.7%) in 2019, including a
$17.9 million (32.9%) increase
at TVA Group. "We are highly satisfied with the significant
increase in TVA Group's profitability in 2019, due primarily
to the successful integration of various acquisitions in recent
months, combined with the savings yielded by the budget cuts
announced in the second quarter. In addition, gains on
subscription fees for our specialty services also contributed to
the positive results," said France Lauzière, President and
Chief Executive Officer of TVA Group.
"We are pleased to report that we have renewed the majority of
our distribution agreements and that the cable operators have
recognized the fair market value of our specialty channels. Now
Bell Canada must recognize the fair
market value of TVA Sports and all of our other specialty
channels currently under negotiation. We continue making
representations on this issue to regulatory and government
authorities. We welcome the Canadian Radio‑television and
Telecommunications Commission decision in favour of TVA Group,
which found that Bell Canada had
given undue preference to its own sports channel. TVA Sports
and RDS are two comparable services and must be treated equitably
by Bell Canada in its most popular
package.
"It should also be noted that TVA Group's total market share
reached 36.8% in the fourth quarter of 2019 and TVA Network
grew its market share by 0.2 points," concluded Ms.
Lauzière.
In the Sports and Entertainment segment, the Videotron Centre
completed its fourth year of operations in September 2019.
During that year, the Videotron Centre hosted 97 sporting
events and concerts, a 6.6% increase from the previous year. In
December 2019, the trade magazine Pollstar ranked the
Videotron Centre 92nd in the world and 6th in Canada among arenas by 2019 ticket
sales.
The Corporation announces the resignation of Manon Brouillette from its Board of Directors.
As she is actively involved in investment funds, Ms. Brouillette
wants to take advantage of new opportunities, including joining
Boards of Directors on which she can serve as an independent
director and sit on committees such as the Governance, Human
Resources and Audit committees, which she cannot do on the
Corporation's Board. The Board has appointed Michèle Colpron as a
Director of Quebecor to fill the vacancy left by
Ms. Brouillette's resignation. "Michèle Colpron has more than
30 years of experience with financial institutions, including
12 years at the Caisse de dépôt et placement du Québec and
currently sits on the boards of the Fonds de solidarité FTQ,
the Canada Infrastructure Bank and the Investment Industry
Regulatory Organization of Canada (IIROC)," said the Right
Honourable Brian Mulroney, Chair of the Board of Quebecor and
Quebecor Media. "We are very pleased to be able to count on
Ms. Colpron's collaboration and expertise on the Quebecor
Board. On behalf of the Board's members, I would also like to thank
Ms. Brouillette for her contribution as a Director and
previously as President and Chief Executive Officer of
Videotron."
"The Corporation is monitoring the situation with the COVID-19
virus and taking necessary measures to prevent the spread of the
virus to its employees and the public. This situation is not
expected to have a material financial impact on the Corporation,
although our Sports and Entertainment segment could be impacted if
the situation worsens in Québec," Pierre Karl Péladeau
commented.
"As we embark on a new decade, we remain focused on our
strategic priorities and the efficiency of our operations while
continuing to invest in our growth sectors to create value for our
customers, our employees and our shareholders," concluded
Pierre Karl Péladeau.
Table
1 Quebecor financial highlights, 2015 to
2019 (in millions of Canadian dollars, except per share
data)
|
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
4,293.8
|
$
|
4,181.0
|
$
|
4,125.1
|
$
|
4,057.1
|
$
|
3,901.9
|
Adjusted
EBITDA
|
|
1,879.5
|
|
1,776.3
|
|
1,659.5
|
|
1,597.1
|
|
1,512.8
|
Income from
continuing operating activities
attributable to shareholders
|
|
555.3
|
|
400.2
|
|
375.9
|
|
233.1
|
|
183.8
|
Net income
attributable to shareholders
|
|
652.8
|
|
403.7
|
|
390.7
|
|
233.9
|
|
169.7
|
Adjusted income from
continuing operating
activities
|
|
581.0
|
|
469.8
|
|
348.2
|
|
343.9
|
|
258.1
|
Per basic
share:
|
|
|
|
|
|
|
|
|
|
|
Income from continuing
operating activities attributable
to shareholders
|
|
2.17
|
|
1.67
|
|
1.55
|
|
0.96
|
|
0.75
|
Net income
attributable to shareholders
|
|
2.55
|
|
1.69
|
|
1.62
|
|
0.96
|
|
0.69
|
Adjusted income from
continuing operating
activities
|
|
2.27
|
|
1.96
|
|
1.44
|
|
1.41
|
|
1.05
|
Discontinued operations
On January 24, 2019, Videotron
sold its 4Degrees Colocation 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's 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 operating lease charges were
recognized as operating expenses as they were incurred under the
previous standard, the adoption of IFRS 16 has changed
the timing of the recognition of these lease charges over the term
of each lease. It has also affected 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 consolidated financial statements for the 2019 financial
year and under "Changes in Accounting Policies" in Quebecor's
Management Discussion and Analysis for the same period.
Table 2 presents lease liabilities by segment at December 31, 2018 and 2017, calculated following
retrospective adoption of IFRS 16.
Table
2 Lease liabilities by segment (in millions
of Canadian dollars)
|
|
Dec. 31,
2019
|
|
Dec. 31,
2018
|
Dec. 31,
2017
|
|
|
|
|
|
|
|
Telecommunications
|
$
|
114.2
|
$
|
122.6
|
$
|
143.4
|
Media
|
|
13.5
|
|
13.7
|
|
16.6
|
Sports and
Entertainment
|
|
40.8
|
|
39.7
|
|
41.6
|
Head Office and
intersegment
|
|
(30.6)
|
|
(31.6)
|
|
(33.7)
|
Total
|
$
|
137.9
|
$
|
144.4
|
$
|
167.9
|
To explain the effect of choices made in applying a change in
accounting policies, Table 4 also provides a reconciliation of
adjusted EBITDA to net income, without restatement of comparative
figures following adoption of IFRS 16, as permitted under
International Financial Reporting Standards ("IFRS").
2019/2018 FINANCIAL YEAR COMPARISON
Revenues: $4.29 billion, a $112.8 million (2.7%) increase.
- Revenues increased in Telecommunications ($98.4 million or 2.9% of segment revenues),
Sports and Entertainment ($10.1 million or 5.5%) and Media
($9.4 million or 1.3%).
Adjusted EBITDA: $1.88 billion, a $103.2 million (5.8%) increase. Without
restatement of comparative figures following adoption
of IFRS 16, adjusted EBITDA increased by $147.4 million (8.5%).
- Adjusted EBITDA increased in Telecommunications ($87.8 million or 5.1% of segment adjusted
EBITDA). Without restatement of comparative figures following
adoption of IFRS 16, adjusted EBITDA increased by $126.4 million (7.5%).
- Adjusted EBITDA increased in Media ($14.8 million or 24.7%).
- There was a favourable variance at Head Office ($3.8 million), mainly due to lower
stock‑based compensation costs.
- Adjusted EBITDA decreased in Sports and Entertainment
($3.2 million or ‑30.5%).
- The change in the fair value of Quebecor Media stock options
resulted in a $7.4 million
favourable variance in the stock‑based compensation charge
in 2019 compared with 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 $1.6 million unfavourable variance in the
Corporation's stock‑based compensation charge in 2019.
Net income attributable to shareholders: $652.8 million ($2.55 per basic share) in 2019, compared with
$403.7 million ($1.69 per basic share) in 2018, an
increase of $249.1 million
($0.86 per basic share).
- The main favourable variances were:
-
- $103.2 million increase in
adjusted EBITDA;
- $93.7 million favourable
variance in income from discontinued operations;
- $54.8 million favourable
variance in losses on valuation and translation of financial
instruments, including $54.7 million without any tax
consequences;
- $32.6 million favourable
variance in non‑controlling interest.
- The unfavourable variance was mainly due to:
-
- $42.9 million increase in
the income tax expense.
Net income attributable to shareholders without
restatement of comparative figures following adoption
of IFRS 16 was $652.8 million in 2019,
compared with $401.3 million in
2018, a $251.5 million
increase.
Adjusted income from continuing operating activities:
$581.0 million ($2.27 per basic share) in 2019, compared
with $469.8 million ($1.96 per basic share) in 2018, an increase
of $111.2 million ($0.31 per basic share) or 23.7%.
2019/2018 fourth quarter comparison
Revenues: $1.14 billion, a $49.1 million (4.5%) increase.
- Revenues increased in Telecommunications ($42.5 million or 4.9% of segment revenues),
Media ($10.0 million or 5.1%), and Sports
and Entertainment ($1.2 million
or 2.2%).
Adjusted EBITDA: $494.5 million, a $34.0 million (7.4%) increase. Without
restatement of comparative figures following adoption
of IFRS 16, adjusted EBITDA increased by $44.5 million (9.9%).
- Adjusted EBITDA increased $27.3 million (6.3%) in the
Telecommunications segment. Without restatement of comparative
figures following adoption of IFRS 16, the segment's adjusted
EBITDA increased by $36.8 million (8.6%).
- Adjusted EBITDA increased in Media ($6.8 million or 23.9%).
- There was a favourable variance at Head Office ($0.6 million).
- Adjusted EBITDA decreased in Sports and Entertainment
($0.7 million or ‑21.2%).
- The change in the fair value of Quebecor Media stock options
resulted in a $2.1 million
favourable variance in the stock‑based compensation charge in the
fourth 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
$1.8 million unfavourable
variance in the Corporation's stock‑based compensation charge in
the fourth quarter of 2019.
Net income attributable to shareholders: $145.1 million ($0.57 per basic share) in the fourth quarter
of 2019, compared with $117.5 million ($0.46 per basic share) in the same period of
2018, a favourable variance of $27.6 million ($0.11 per basic share).
- The main favourable variances were:
-
- $34.0 million increase in
adjusted EBITDA;
- $5.4 million decrease in the
charge for restructuring of operations, litigation and other
items;
- $5.0 million decrease in
financial expenses;
- $4.1 million decrease in the
depreciation and amortization charge.
- The main unfavourable variances were:
-
- $13.7 million increase in
the income tax expense;
- $4.0 million unfavourable
variance in losses on valuation and translation of financial
instruments, including $1.6 million without any tax
consequences.
Net income attributable to shareholders without
restatement of comparative figures following adoption
of IFRS 16 was $145.1 million in the fourth
quarter of 2019, compared with $116.9 million in the same period of 2018, a
$28.2 million increase.
Adjusted income from continuing operating activities:
$159.6 million ($0.63 per basic share) in the fourth quarter
of 2019, compared with $132.9 million ($0.52 per basic share) in the same period of
2018, an increase of $26.7 million ($0.11 per basic share) or 20.1%.
Financial transactions
- On February 21, 2020, TVA Group
amended its secured revolving credit facility to extend its term
from February 2020 to February 2021, to reduce the amount
available for borrowing from $150.0
million to $75.0 million, and
to amend certain terms and conditions of the facility. On
February 13, 2019, TVA Group had
amended this secured revolving credit facility to extend its term
to February 2020 and to amend certain
terms and conditions of the facility.
- On October 8, 2019, Videotron
issued $800.0 million aggregate
principal amount of 4.50% Senior Notes maturing on January 15, 2030, for net proceeds of
$790.7 million, net of financing fees
of $9.3 million. Videotron used the
proceeds mainly to pay down a portion of the amount due under its
secured revolving credit facility.
- On July 15, 2019, Quebecor Media
prepaid the balance of its term loan "B" and settled the related
hedging contracts for a total cash consideration of $340.9 million.
- On February 15, 2019, Quebecor
Media amended its $300.0 million
secured revolving credit facility to extend its term to
July 2022 and to amend certain terms
and conditions of the facility.
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
licence auction. The licences, covering Eastern, Southern and
Northern Québec, as well as Outaouais and Eastern Ontario, were acquired for
$255.8 million.
Dividend
On March 11, 2020, the Board of
Directors of Quebecor declared a quarterly dividend of $0.20 per share on its Class A Shares
and Class B Shares, payable on April 21, 2020
to shareholders of record as of the record date of
March 27, 2020. This dividend is designated an eligible
dividend, as provided under subsection 89(14) of the Canadian
Income Tax Act and its provincial counterpart.
Normal course issuer bid
On August 7, 2019, the Board of
Directors of Quebecor filed a normal course issuer bid for a
maximum of 1,000,000 Class A Shares, representing
approximately 1.3% of issued and outstanding Class A Shares,
and for a maximum of 4,000,000 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 or other alternative trading systems. All repurchased
shares will be cancelled.
In 2019, the Corporation purchased and cancelled 3,107,356
Class B Shares for a total cash consideration of $94.6 million (11,390,300 Class B
Shares for a total cash consideration of $291.7 million in 2018). The $76.3 million excess of the purchase price
over the carrying value of the repurchased Class B Shares was
recorded as an increase in the deficit ($257.6 million reduction of retained
earnings in 2018.)
In 2019, 680,000 Class B Shares of Quebecor were issued
upon exercise of stock options for a cash consideration
of $8.3 million (100,000 Class B Shares for a
cash consideration of $1.3 million in 2018). Following this
transaction, the contributed surplus was increased
by $12.7 million ($1.2 million in 2018) and the stock option
plan liability was reduced by the same amount.
Detailed financial information
For a detailed analysis of Quebecor's fourth quarter and
full‑year 2019 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/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 fourth
quarter and full‑year 2019 results on March 12, 2020 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 March 12,
2020 to June 11, 2020 by dialling
1 877 293‑8133, access code for participants and
recording access code 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 service interruptions resulting from
equipment breakdown, network failure, the threat of natural
disaster, epidemics, pandemics and political instability in some
countries, 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, 2019.
The forward‑looking statements in this press release reflect
Quebecor's expectations as of March 12, 2020 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 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, 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 3 provides a reconciliation of adjusted EBITDA to net
income as disclosed in Quebecor's consolidated financial
statements. The consolidated financial information for the
three‑month periods ended December 31, 2019 and 2018
presented in Table 3 is drawn from the unaudited consolidated
statements of income.
Table
3
|
Reconciliation of
the adjusted EBITDA measure used in this press release to the net
income measure used in the consolidated financial
statements
|
(in millions of
Canadian dollars)
|
|
|
Years ended
December 31
|
Three months
ended
December 31
|
|
2019
|
2018
|
2019
|
2018
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(negative adjusted EBITDA):
|
|
|
|
|
|
|
|
|
Telecommunications
|
$
|
1,803.4
|
$
|
1,715.6
|
$
|
462.7
|
$
|
435.4
|
Media
|
|
74.8
|
|
60.0
|
|
35.3
|
|
28.5
|
Sports and
Entertainment
|
|
7.3
|
|
10.5
|
|
2.6
|
|
3.3
|
Head Office
|
|
(6.0)
|
|
(9.8)
|
|
(6.1)
|
|
(6.7)
|
|
|
1,879.5
|
|
1,776.3
|
|
494.5
|
|
460.5
|
Depreciation and
amortization
|
|
(750.4)
|
|
(753.1)
|
|
(186.3)
|
|
(190.4)
|
Financial
expenses
|
|
(327.5)
|
|
(332.0)
|
|
(81.4)
|
|
(86.4)
|
Loss on valuation and
translation of financial
instruments
|
|
(6.5)
|
|
(61.3)
|
|
(14.6)
|
|
(10.6)
|
Restructuring of
operations, litigation and other items
|
|
(28.6)
|
|
(29.1)
|
|
(1.6)
|
|
(7.0)
|
Income
taxes
|
|
(205.7)
|
|
(162.8)
|
|
(60.3)
|
|
(46.6)
|
Income from
discontinued operations
|
|
97.5
|
|
3.8
|
|
−
|
|
1.1
|
Net
income
|
$
|
658.3
|
$
|
441.8
|
$
|
150.3
|
$
|
120.6
|
Adjusted EBITDA without restatement of comparative
figures
Table 4 provides a reconciliation of adjusted EBITDA to net
income without restatement of comparative figures following
adoption of IFRS 16.
Table
4
|
Reconciliation of
the adjusted EBITDA measure used in this press release to the net
income measure used in the consolidated financial statements,
without restatement of comparative figures following the adoption
of IFRS 16
|
(in millions of
Canadian dollars)
|
|
|
Years ended
December 31
|
Three months
ended
December 31
|
|
2019
|
2018
|
2019
|
2018
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(negative adjusted EBITDA):
|
|
|
|
|
|
|
|
|
Telecommunications
|
$
|
1,803.4
|
$
|
1,677.0
|
$
|
462.7
|
$
|
425.9
|
Media
|
|
74.8
|
|
55.3
|
|
35.3
|
|
27.5
|
Sports and
Entertainment
|
|
7.3
|
|
5.0
|
|
2.6
|
|
1.9
|
Head Office
|
|
(6.0)
|
|
(5.2)
|
|
(6.1)
|
|
(5.3)
|
|
|
1,879.5
|
|
1,732.1
|
|
494.5
|
|
450.0
|
Depreciation and
amortization
|
|
(750.4)
|
|
(720.2)
|
|
(186.3)
|
|
(182.2)
|
Financial
expenses
|
|
(327.5)
|
|
(323.5)
|
|
(81.4)
|
|
(84.4)
|
Loss on valuation and
translation of financial
instruments
|
|
(6.5)
|
|
(61.3)
|
|
(14.6)
|
|
(10.6)
|
Restructuring of
operations, litigation and other items
|
|
(28.6)
|
|
(29.8)
|
|
(1.6)
|
|
(7.7)
|
Income
taxes
|
|
(205.7)
|
|
(161.9)
|
|
(60.3)
|
|
(46.4)
|
Income from
discontinued operations
|
|
97.5
|
|
3.8
|
|
−
|
|
1.1
|
Net
income
|
$
|
658.3
|
$
|
439.2
|
$
|
150.3
|
$
|
119.8
|
Consolidated cash flows from operations
Consolidated cash flows from operations represents adjusted
EBITDA, less additions to property, plant and equipment and to
intangible assets, including the amounts related to the current net
change in corresponding accounts payable but excluding licence
acquisitions and renewals. Consolidated cash flows from operations
represents total funds available for interest and income tax
payments, expenditures related to restructuring programs, business
acquisitions, licence acquisitions and renewals, payment of
dividends, repayment of long‑term debt and share repurchases.
Consolidated cash flows from operations is not a measure of
liquidity 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. Consolidated cash flows from operations is used by the
Corporation's management and Board of Directors to evaluate cash
flows generated by the operations of all of its segments. The
Corporation's definition of consolidated cash flows from operations
may not be identical to similarly titled measures reported by other
companies.
Table 5 provides a reconciliation of consolidated cash flows
from operations to cash flows provided by continuing operating
activities reported in Quebecor's consolidated financial
statements.
Table
5
|
Consolidated cash
flows from operations and cash flows provided by continuing
operating activities
|
(in millions of
Canadian dollars)
|
|
|
Years ended
December 31
|
|
2019
|
2018
|
|
|
|
|
|
Consolidated cash
flows from operations
|
|
|
|
|
Adjusted
EBITDA
|
$
|
1,879.5
|
$
|
1,776.3
|
Additions to property,
plant and equipment1
|
|
(486.2)
|
|
(552.7)
|
Additions to
intangible assets2.3
|
|
(249.1)
|
|
(211.3)
|
|
|
1,144.2
|
|
1,012.3
|
Plus
(minus)
|
|
|
|
|
Cash interest
expense
|
|
(319.4)
|
|
(324.9)
|
Cash portion related
to restructuring of operations, litigation and other
items
|
|
(9.8)
|
|
(14.2)
|
Current income
taxes
|
|
(107.9)
|
|
(154.9)
|
Other
|
|
(1.3)
|
|
(4.6)
|
Net change in
operating assets and liabilities
|
|
(229.3)
|
|
146.3
|
Additions to property,
plant and equipment1
|
|
486.2
|
|
552.7
|
Additions to
intangible assets2, 3
|
|
249.1
|
|
211.3
|
Cash flows
provided by continuing operating activities
|
$
|
1,211.8
|
$
|
1,424.0
|
|
|
1
|
Including a decrease
in additions to property, plant and equipment of $15.4 million in
2019 (increase of $3.2 million in 2018) related to the current
net change in corresponding accounts payable.
|
2
|
Including an increase
in additions to intangible assets of $8.0 million in 2019
($13.9 million in 2018) related to the current net change in
corresponding accounts payable.
|
3
|
Excluding spectrum
licence purchases in the amount of $255.8 million in 2019 (nil
in 2018).
|
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, 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 consolidated financial
statements. The consolidated financial information for the
three‑month periods ended December 31, 2019 and 2018
presented in Table 6 is drawn from the unaudited consolidated
statements of income.
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 consolidated financial
statements
|
(in millions of
Canadian dollars)
|
|
|
Years ended
December 31
|
Three months
ended
December 31
|
|
2019
|
2018
|
2019
|
2018
|
|
|
|
|
|
|
|
|
|
Adjusted income from
continuing operating activities
|
$
|
581.0
|
$
|
469.8
|
$
|
159.6
|
$
|
132.9
|
Loss on valuation and
translation of financial instruments
|
|
(6.5)
|
|
(61.3)
|
|
(14.6)
|
|
(10.6)
|
Restructuring of
operations, litigation and other items
|
|
(28.6)
|
|
(29.1)
|
|
(1.6)
|
|
(7.0)
|
Income taxes related
to adjustments1
|
|
8.0
|
|
19.0
|
|
1.4
|
|
1.1
|
Net income
attributable to non‑controlling interest related to
adjustments
|
|
1.4
|
|
1.8
|
|
0.3
|
|
−
|
Discontinued
operations
|
|
97.5
|
|
3.5
|
|
−
|
|
1.1
|
Net income
attributable to shareholders
|
$
|
652.8
|
$
|
403.7
|
$
|
145.1
|
$
|
117.5
|
|
|
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 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 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
|
|
Twelve months
ended
|
(unaudited)
|
December
31
|
|
December
31
|
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
(restated)
|
|
|
(restated)
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
1,136.2
|
$
|
1,087.1
|
|
$
|
4,293.8
|
$
|
4,181.0
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
184.2
|
|
174.4
|
|
|
700.8
|
|
700.5
|
Purchase of goods and
services
|
|
457.5
|
|
452.2
|
|
|
1,713.5
|
|
1,704.2
|
Depreciation and
amortization
|
|
186.3
|
|
190.4
|
|
|
750.4
|
|
753.1
|
Financial
expenses
|
|
81.4
|
|
86.4
|
|
|
327.5
|
|
332.0
|
Loss on valuation and
translation of financial instruments
|
|
14.6
|
|
10.6
|
|
|
6.5
|
|
61.3
|
Restructuring of
operations, litigation and other items
|
|
1.6
|
|
7.0
|
|
|
28.6
|
|
29.1
|
Income before
income taxes
|
|
210.6
|
|
166.1
|
|
|
766.5
|
|
600.8
|
|
|
|
|
|
|
|
|
|
|
Income taxes
(recovery):
|
|
|
|
|
|
|
|
|
|
Current
|
|
(7.2)
|
|
1.7
|
|
|
107.9
|
|
154.9
|
Deferred
|
|
67.5
|
|
44.9
|
|
|
97.8
|
|
7.9
|
|
|
60.3
|
|
46.6
|
|
|
205.7
|
|
162.8
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
150.3
|
|
119.5
|
|
|
560.8
|
|
438.0
|
Income from
discontinued operations
|
|
-
|
|
1.1
|
|
|
97.5
|
|
3.8
|
Net
income
|
$
|
150.3
|
$
|
120.6
|
|
$
|
658.3
|
$
|
441.8
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations attributable to
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
145.1
|
$
|
116.4
|
|
$
|
555.3
|
$
|
400.2
|
Non-controlling
interests
|
|
5.2
|
|
3.1
|
|
|
5.5
|
|
37.8
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
145.1
|
$
|
117.5
|
|
$
|
652.8
|
$
|
403.7
|
Non-controlling
interests
|
|
5.2
|
|
3.1
|
|
|
5.5
|
|
38.1
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to shareholders
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
From continuing
operations
|
$
|
0.57
|
$
|
0.45
|
|
$
|
2.17
|
$
|
1.67
|
From discontinued
operations
|
|
-
|
|
0.01
|
|
|
0.38
|
|
0.02
|
Net income
|
|
0.57
|
|
0.46
|
|
|
2.55
|
|
1.69
|
Diluted:
|
|
|
|
|
|
|
|
|
|
From continuing
operations
|
$
|
0.57
|
$
|
0.45
|
|
$
|
2.17
|
$
|
1.66
|
From discontinued
operations
|
|
-
|
|
0.01
|
|
|
0.38
|
|
0.02
|
Net income
|
|
0.57
|
|
0.46
|
|
|
2.55
|
|
1.68
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding (in millions)
|
|
254.8
|
|
255.1
|
|
|
255.6
|
|
239.3
|
Weighted average
number of diluted shares (in millions)
|
|
255.0
|
|
255.5
|
|
|
255.8
|
|
239.8
|
QUEBECOR
INC.
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
Three months
ended
|
|
Twelve months
ended
|
(unaudited)
|
December
31
|
|
December
31
|
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
(restated)
|
|
|
(restated)
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
150.3
|
$
|
119.5
|
|
$
|
560.8
|
$
|
438.0
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income (loss) from continuing operations:
|
|
|
|
|
|
|
|
|
Items that may be
reclassified to income:
|
|
|
|
|
|
|
|
|
|
Cash flow
hedges:
|
|
|
|
|
|
|
|
|
Gain (loss) on
valuation of derivative financial instruments
|
|
2.2
|
|
34.7
|
|
|
73.8
|
|
(10.1)
|
Deferred income
taxes
|
|
1.9
|
|
(10.8)
|
|
|
(2.8)
|
|
(5.7)
|
Items that will not
be reclassified to income:
|
|
|
|
|
|
|
|
|
|
Defined benefit
plans:
|
|
|
|
|
|
|
|
|
Re-measurement
loss
|
|
(70.1)
|
|
(6.1)
|
|
|
(70.1)
|
|
(6.1)
|
Deferred income
taxes
|
|
18.7
|
|
1.7
|
|
|
18.7
|
|
1.7
|
Reclassification to
income:
|
|
|
|
|
|
|
|
|
|
Gain related to cash
flow hedges
|
|
-
|
|
-
|
|
|
(1.1)
|
|
-
|
Deferred income
taxes
|
|
-
|
|
-
|
|
|
0.7
|
|
-
|
|
|
(47.3)
|
|
19.5
|
|
|
19.2
|
|
(20.2)
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income from continuing operations
|
|
103.0
|
|
139.0
|
|
|
580.0
|
|
417.8
|
|
|
|
|
|
|
|
|
|
|
Income from
discontinued operations
|
|
-
|
|
1.1
|
|
|
97.5
|
|
3.8
|
Comprehensive
income
|
$
|
103.0
|
$
|
140.1
|
|
$
|
677.5
|
$
|
421.6
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income from continuing operations attributable to
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
97.2
|
$
|
135.7
|
|
$
|
573.9
|
$
|
387.4
|
Non-controlling
interests
|
|
5.8
|
|
3.3
|
|
|
6.1
|
|
30.4
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income attributable to
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
97.2
|
$
|
136.8
|
|
$
|
671.4
|
$
|
390.9
|
Non-controlling
interests
|
|
5.8
|
|
3.3
|
|
|
6.1
|
|
30.7
|
QUEBECOR
INC.
|
|
|
|
|
|
SEGMENTED
INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sports
and
Entertainment
|
|
Head
office
and
Intersegments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications
|
|
Media
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
908.6
|
$
|
208.0
|
$
|
54.7
|
$
|
(35.1)
|
$
|
1,136.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
106.8
|
|
57.8
|
|
9.5
|
|
10.1
|
|
184.2
|
Purchase of goods and
services
|
|
339.1
|
|
114.9
|
|
42.6
|
|
(39.1)
|
|
457.5
|
Adjusted
EBITDA1
|
|
462.7
|
|
35.3
|
|
2.6
|
|
(6.1)
|
|
494.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
186.3
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
81.4
|
Loss on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
14.6
|
Restructuring of
operations, litigation and other items
|
|
|
|
|
|
|
|
|
|
1.6
|
Income before
income taxes
|
|
|
|
|
|
|
|
|
$
|
210.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
115.6
|
$
|
8.1
|
$
|
0.2
|
$
|
0.4
|
$
|
124.3
|
Additions to
intangible assets
|
|
65.7
|
|
5.7
|
|
0.6
|
|
0.4
|
|
72.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31, 2018
|
|
|
(restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sports
and
Entertainment
|
|
Head
office and
Intersegments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications
|
|
Media
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
866.1
|
$
|
198.0
|
$
|
53.5
|
$
|
(30.5)
|
$
|
1,087.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
95.4
|
|
57.5
|
|
9.3
|
|
12.2
|
|
174.4
|
Purchase of goods and
services
|
|
335.3
|
|
112.0
|
|
40.9
|
|
(36.0)
|
|
452.2
|
Adjusted
EBITDA1
|
|
435.4
|
|
28.5
|
|
3.3
|
|
(6.7)
|
|
460.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
190.4
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
86.4
|
Loss on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
10.6
|
Restructuring of
operations, litigation and other items
|
|
|
|
|
|
|
|
|
|
7.0
|
Income before income
taxes
|
|
|
|
|
|
|
|
|
$
|
166.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
123.9
|
$
|
9.9
|
$
|
0.8
|
$
|
-
|
$
|
134.6
|
Additions to
intangible assets
|
|
69.5
|
|
1.2
|
|
0.8
|
|
(1.4)
|
|
70.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months
ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sports
and
Entertainment
|
|
Head
office
and
Intersegments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications
|
|
Media
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
3,480.4
|
$
|
738.0
|
$
|
192.2
|
$
|
(116.8)
|
$
|
4,293.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
398.6
|
|
228.6
|
|
38.6
|
|
35.0
|
|
700.8
|
Purchase of goods and
services
|
|
1,278.4
|
|
434.6
|
|
146.3
|
|
(145.8)
|
|
1,713.5
|
Adjusted
EBITDA1
|
|
1,803.4
|
|
74.8
|
|
7.3
|
|
(6.0)
|
|
1,879.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
750.4
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
327.5
|
Loss on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
6.5
|
Restructuring of
operations, litigation and other items
|
|
|
|
|
|
|
|
|
|
28.6
|
Income before
income taxes
|
|
|
|
|
|
|
|
|
$
|
766.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
476.8
|
$
|
21.8
|
$
|
1.3
|
$
|
1.7
|
$
|
501.6
|
Additions to
intangible assets
|
|
468.0
|
|
24.8
|
|
3.5
|
|
0.6
|
|
496.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended
December 31, 2018
|
|
|
(restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications
|
|
Media
|
|
Sports
and
Entertainment
|
|
Head
office and
Intersegments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
3,382.0
|
$
|
728.6
|
$
|
182.1
|
$
|
(111.7)
|
$
|
4,181.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
387.1
|
|
234.4
|
|
38.8
|
|
40.2
|
|
700.5
|
Purchase of goods and
services
|
|
1,279.3
|
|
434.2
|
|
132.8
|
|
(142.1)
|
|
1,704.2
|
Adjusted
EBITDA1
|
|
1,715.6
|
|
60.0
|
|
10.5
|
|
(9.8)
|
|
1,776.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
753.1
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
332.0
|
Loss on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
61.3
|
Restructuring of
operations, litigation and other items
|
|
|
|
|
|
|
|
|
|
29.1
|
Income before income
taxes
|
|
|
|
|
|
|
|
|
$
|
600.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
513.2
|
$
|
28.7
|
$
|
1.5
|
$
|
6.1
|
$
|
549.5
|
Additions to
intangible assets
|
|
190.2
|
|
4.8
|
|
3.5
|
|
(1.1)
|
|
197.4
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 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
comprehensive
loss
|
|
|
|
|
|
|
|
|
|
Retained
earnings
(deficit)
|
|
|
|
|
|
|
Capital
stock
|
|
Contributed
surplus
|
|
|
|
|
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
|
|
-
|
|
-
|
|
403.7
|
|
-
|
|
38.1
|
|
441.8
|
Other comprehensive
loss
|
|
-
|
|
-
|
|
-
|
|
(12.8)
|
|
(7.4)
|
|
(20.2)
|
Issuance of Class B
Shares
|
|
786.1
|
|
1.2
|
|
-
|
|
-
|
|
-
|
|
787.3
|
Dividends
|
|
-
|
|
-
|
|
(46.3)
|
|
-
|
|
(9.4)
|
|
(55.7)
|
Repurchase of Class B
Shares
|
|
(34.1)
|
|
-
|
|
(257.6)
|
|
-
|
|
-
|
|
(291.7)
|
Non-controlling
interests acquisition
|
-
|
|
-
|
|
(1,202.4)
|
|
(19.2)
|
|
(468.4)
|
|
(1,690.0)
|
Balance as of
December 31, 2018
|
|
1,065.9
|
|
4.7
|
|
(507.9)
|
|
(82.7)
|
|
88.5
|
|
568.5
|
Net income
|
|
-
|
|
-
|
|
652.8
|
|
-
|
|
5.5
|
|
658.3
|
Other comprehensive
income
|
|
-
|
|
-
|
|
-
|
|
18.6
|
|
0.6
|
|
19.2
|
Issuance of Class B
Shares
|
|
8.3
|
|
12.7
|
|
-
|
|
-
|
|
-
|
|
21.0
|
Dividends
|
|
-
|
|
-
|
|
(100.3)
|
|
-
|
|
-
|
|
(100.3)
|
Repurchase of Class B
Shares
|
|
(18.3)
|
|
-
|
|
(76.3)
|
|
-
|
|
-
|
|
(94.6)
|
Balance as of
December 31, 2019
|
$
|
1,055.9
|
$
|
17.4
|
$
|
(31.7)
|
$
|
(64.1)
|
$
|
94.6
|
$
|
1,072.1
|
QUEBECOR
INC.
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
Three months
ended
|
|
Twelve months
ended
|
(unaudited)
|
December
31
|
|
December
31
|
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
(restated)
|
|
|
(restated)
|
|
|
|
|
|
|
|
|
|
|
Cash flows related
to operating activities
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
150.3
|
$
|
119.5
|
|
$
|
560.8
|
$
|
438.0
|
Adjustments
for:
|
|
|
|
|
|
|
|
|
|
Depreciation of
property, plant and equipment
|
|
148.0
|
|
153.5
|
|
|
598.2
|
|
611.2
|
Amortization of
intangible assets
|
|
29.6
|
|
27.8
|
|
|
116.7
|
|
105.5
|
Amortization of
right-of-use assets
|
|
8.7
|
|
9.1
|
|
|
35.5
|
|
36.4
|
Loss on valuation and
translation of financial instruments
|
|
14.6
|
|
10.6
|
|
|
6.5
|
|
61.3
|
Impairment of
assets
|
|
-
|
|
-
|
|
|
18.8
|
|
14.9
|
Amortization of
financing costs and long-term debt discount
|
|
2.0
|
|
1.8
|
|
|
8.1
|
|
7.1
|
Deferred income
taxes
|
|
67.5
|
|
44.9
|
|
|
97.8
|
|
7.9
|
Other
|
|
0.6
|
|
0.2
|
|
|
(1.3)
|
|
(4.6)
|
|
|
421.3
|
|
367.4
|
|
|
1,441.1
|
|
1,277.7
|
Net change in
non-cash balances related to operating activities
|
|
(58.2)
|
|
(43.0)
|
|
|
(229.3)
|
|
146.3
|
Cash flows provided
by continuing operating activities
|
|
363.1
|
|
324.4
|
|
|
1,211.8
|
|
1,424.0
|
Cash flows related
to investing activities
|
|
|
|
|
|
|
|
|
|
Business
acquisitions
|
|
-
|
|
(3.1)
|
|
|
(35.6)
|
|
(10.3)
|
Business
disposals
|
|
-
|
|
-
|
|
|
260.7
|
|
-
|
Additions to
property, plant and equipment
|
|
(124.3)
|
|
(134.6)
|
|
|
(501.6)
|
|
(549.5)
|
Additions to
intangible assets
|
|
(72.4)
|
|
(70.1)
|
|
|
(496.9)
|
|
(197.4)
|
Proceeds from
disposals of assets
|
|
1.0
|
|
3.0
|
|
|
4.2
|
|
9.4
|
Non-controlling
interests acquisition
|
|
-
|
|
-
|
|
|
-
|
|
(1,540.0)
|
Other
|
|
(5.6)
|
|
(10.1)
|
|
|
(30.6)
|
|
(11.3)
|
Cash flows used in by
continuing investing activities
|
|
(201.3)
|
|
(214.9)
|
|
|
(799.8)
|
|
(2,299.1)
|
Cash flows related
to financing activities
|
|
|
|
|
|
|
|
|
|
Net change in bank
indebtedness
|
|
1.1
|
|
2.6
|
|
|
5.1
|
|
23.5
|
Net change under
revolving facilities
|
|
(870.8)
|
|
19.5
|
|
|
(589.5)
|
|
565.8
|
Issuance of long-term
debt, net of financing fees
|
|
790.7
|
|
-
|
|
|
790.7
|
|
-
|
Repayment of
long-term debt
|
|
(45.2)
|
|
(4.1)
|
|
|
(488.6)
|
|
(20.5)
|
Repayment of lease
liabilities
|
|
(9.5)
|
|
(10.4)
|
|
|
(39.4)
|
|
(40.0)
|
Repayment of
convertible debentures
|
|
-
|
|
-
|
|
|
-
|
|
(158.4)
|
Settlement of hedging
contracts
|
|
(0.8)
|
|
(0.8)
|
|
|
90.0
|
|
(1.6)
|
Issuance of Class B
Shares
|
|
5.6
|
|
-
|
|
|
8.3
|
|
1.3
|
Repurchase of Class B
Shares
|
|
(14.1)
|
|
(105.4)
|
|
|
(94.6)
|
|
(291.7)
|
Dividends
|
|
(28.7)
|
|
(14.2)
|
|
|
(100.3)
|
|
(46.3)
|
Dividends or
distributions paid to non-controlling interests
|
|
-
|
|
-
|
|
|
-
|
|
(9.4)
|
Cash flows (used in)
provided by continuing financing activities
|
|
(171.7)
|
|
(112.8)
|
|
|
(418.3)
|
|
22.7
|
|
|
|
|
|
|
|
|
|
|
Net change in cash
and cash equivalents from continuing operations
|
|
(9.9)
|
|
(3.3)
|
|
|
(6.3)
|
|
(852.4)
|
|
|
|
|
|
|
|
|
|
|
Cash flows provided
by (used in) discontinued operations
|
|
-
|
|
1.4
|
|
|
(0.7)
|
|
8.5
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
|
23.9
|
|
22.9
|
|
|
21.0
|
|
864.9
|
Cash and cash
equivalents at end of period
|
$
|
14.0
|
$
|
21.0
|
|
$
|
14.0
|
$
|
21.0
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents consist of
|
|
|
|
|
|
|
|
|
|
Cash
|
$
|
5.1
|
$
|
20.2
|
|
$
|
5.1
|
$
|
20.2
|
Cash
equivalents
|
|
8.9
|
|
0.8
|
|
|
8.9
|
|
0.8
|
|
$
|
14.0
|
$
|
21.0
|
|
$
|
14.0
|
$
|
21.0
|
|
|
|
|
|
|
|
|
|
|
Interest and taxes
reflected as operating activities
|
|
|
|
|
|
|
|
|
|
Cash interest
payments
|
$
|
103.9
|
$
|
118.7
|
|
$
|
307.2
|
$
|
324.8
|
Cash income tax
payments (net of refunds)
|
|
3.0
|
|
5.6
|
|
|
238.0
|
|
18.0
|
QUEBECOR
INC.
|
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
|
|
|
|
|
|
(unaudited)
|
|
December
31
|
|
December
31
|
|
December
31
|
|
|
2019
|
|
2018
|
|
2017
|
|
|
|
|
(restated)
|
|
(restated)
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
14.0
|
$
|
21.0
|
$
|
864.9
|
Accounts
receivable
|
|
548.0
|
|
553.8
|
|
543.4
|
Contract
assets
|
|
168.3
|
|
144.4
|
|
132.8
|
Income
taxes
|
|
19.1
|
|
4.8
|
|
29.3
|
Inventories
|
|
240.4
|
|
203.1
|
|
199.3
|
Other current
assets
|
|
121.2
|
|
101.5
|
|
106.4
|
Assets held for
sale
|
|
-
|
|
95.0
|
|
-
|
|
|
1,111.0
|
|
1,123.6
|
|
1,876.1
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
3,415.9
|
|
3,467.3
|
|
3,610.1
|
Intangible
assets
|
|
1,444.0
|
|
1,135.3
|
|
983.1
|
Goodwill
|
|
2,692.9
|
|
2,678.3
|
|
2,695.8
|
Right-of-use
assets
|
|
110.4
|
|
112.6
|
|
133.5
|
Derivative financial
instruments
|
|
679.8
|
|
887.0
|
|
591.8
|
Deferred income
taxes
|
|
31.2
|
|
51.8
|
|
33.2
|
Other
assets
|
|
240.7
|
|
201.6
|
|
185.1
|
|
|
8,614.9
|
|
8,533.9
|
|
8,232.6
|
Total
assets
|
$
|
9,725.9
|
$
|
9,657.5
|
$
|
10,108.7
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Bank
indebtedness
|
$
|
29.4
|
$
|
24.3
|
$
|
0.8
|
Accounts payable,
accrued charges and provisions
|
|
809.6
|
|
830.8
|
|
762.7
|
Deferred
revenue
|
|
332.7
|
|
340.7
|
|
346.8
|
Income
taxes
|
|
4.2
|
|
119.2
|
|
13.3
|
Convertible
debentures
|
|
-
|
|
-
|
|
450.0
|
Embedded derivatives
related to convertible debentures
|
|
-
|
|
-
|
|
442.2
|
Current portion of
long-term debt
|
|
57.2
|
|
57.9
|
|
20.4
|
Current portion of
lease liabilities
|
|
31.3
|
|
36.0
|
|
39.8
|
Liabilities held for
sale
|
|
-
|
|
6.6
|
|
-
|
|
|
1,264.4
|
|
1,415.5
|
|
2,076.0
|
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
|
Long-term
debt
|
|
5,900.3
|
|
6,370.3
|
|
5,516.2
|
Derivative financial
instruments
|
|
2.1
|
|
-
|
|
34.1
|
Convertible
debentures
|
|
150.0
|
|
150.0
|
|
-
|
Lease
liabilities
|
|
106.6
|
|
108.4
|
|
128.1
|
Deferred income
taxes
|
|
859.2
|
|
775.9
|
|
744.9
|
Other
liabilities
|
|
371.2
|
|
268.9
|
|
212.4
|
|
|
7,389.4
|
|
7,673.5
|
|
6,635.7
|
Equity
|
|
|
|
|
|
|
Capital
stock
|
|
1,055.9
|
|
1,065.9
|
|
313.9
|
Contributed
surplus
|
|
17.4
|
|
4.7
|
|
3.5
|
(Deficit) retained
earnings
|
|
(31.7)
|
|
(507.9)
|
|
594.7
|
Accumulated other
comprehensive loss
|
|
(64.1)
|
|
(82.7)
|
|
(50.7)
|
Equity
attributable to shareholders
|
|
977.5
|
|
480.0
|
|
861.4
|
Non-controlling
interests
|
|
94.6
|
|
88.5
|
|
535.6
|
|
|
1,072.1
|
|
568.5
|
|
1,397.0
|
|
|
|
|
|
|
|
Total liabilities
and equity
|
$
|
9,725.9
|
$
|
9,657.5
|
$
|
10,108.7
|
View original
content:http://www.prnewswire.com/news-releases/quebecor-inc-announces-78-increase-in-quarterly-dividend-and-reports-consolidated-results-for-fourth-quarter-and-full-year-2019-301021927.html
SOURCE Quebecor