MONTRÉAL, Aug. 6, 2020
/PRNewswire/ - Quebecor Inc. ("Quebecor" or the "Corporation")
today reported its consolidated financial results for the second
quarter of 2020. Quebecor consolidates the financial results
of its wholly owned Quebecor Media Inc. ("Quebecor Media")
subsidiary.
The Corporation reviewed the nature and definition of one of its
non‑standardized financial measures in the first quarter
of 2020. As a result, "cash flows from segment operations" has
been abandoned and replaced by the new "cash flows from operations"
metric. This metric will henceforth be used to measure the cash
flows generated by the operations of all the business segments, on
a consolidated basis, in addition to the cash flows from operations
generated by each segment. See the definition of this new measure
under "Definitions."
Second quarter 2020 highlights
- Revenues: $1.00 billion in
the second quarter of 2020, down $53.1 million (‑5.0%) from the same period
of 2019.
- Adjusted EBITDA:1 $475.7 million, up $20.7 million (4.5%).
- Net income attributable to shareholders: $174.9 million ($0.69 per basic share) in the second quarter
of 2020, compared with $140.2 million ($0.55 per basic share) in the same period of
2019, an increase of $34.7 million ($0.14 per basic share).
- Adjusted income from continuing operating
activities:2 $144.9 million ($0.57 per basic share) in the second quarter
of 2020, compared with $136.2 million ($0.53 per basic share) in the same period of
2019, an increase of $8.7 million ($0.04 per basic share) or 6.4%.
- Cash flows from operations:3 $326.1 million, up $51.2 million (18.6%).
- The Telecommunications segment grew its revenues by
$14.7 million (1.7%) and its
adjusted EBITDA by $13.6 million (3.0%) in the second
quarter of 2020.
- Videotron Ltd. ("Videotron") significantly increased its
revenues from customer equipment sales ($22.5 million or 43.8%) and mobile
telephony ($13.3 million or 9.1%) in the
second quarter of 2020.
- Videotron's total average billing per unit ("ABPU") was
$49.57 in the second quarter of 2020,
compared with $50.20 in the same period of 2019,
a $0.63 (‑1.3%) decrease. Mobile ABPU was $50.32 in the second quarter of 2020
compared with $52.56 in the same
period of 2019, a $2.24 (‑4.3%)
decrease due in part to the popularity of bring your own device
("BYOD") plans and the various measures taken to support customers
during the COVID‑19 pandemic.
- There was a net increase of 16,700 revenue‑generating units
("RGUs") (0.3%) in the second quarter of 2020, including
35,100 connections (2.6%) to the mobile telephony service and
17,200 subscriptions (1.0%) to the cable Internet access
service.
- The Media and Sports and Entertainment segments posted revenue
decreases of $57.4 million
(‑30.2%) and $15.4 million (‑37.3%) respectively and grew
their adjusted EBITDA by $1.9 million (33.3%) and $4.3 million respectively in the second
quarter of 2020.
___________________________________
|
1
|
See "Adjusted EBITDA"
under "Definitions."
|
2
|
See "Adjusted income
from continuing operating activities" under
"Definitions."
|
3
|
See "Cash flows from
operations" under "Definitions."
|
"In the difficult environment created by COVID‑19, Quebecor
again demonstrated the excellence of its operational and financial
management, with higher quarterly growth than the major national
industry players," commented Pierre Karl Péladeau, President and
Chief Executive Officer of Quebecor. "Despite substantial revenue
declines at some business units, the Corporation continued to grow
its customer base and increase its profitability while maintaining
its financial strength, as evidenced by increases of 4.5% in
adjusted EBITDA and 18.6% in cash flows from operations, combined
with available liquidity totalling $1.8 billion at the end of the quarter.
"As a provider of essential services and a leading corporate
citizen, we pursue a mission of connecting, informing and
entertaining the public that has never been more vital than in this
unprecedented health crisis. We have worked tirelessly to continue
providing essential telecommunications and news media services
throughout Québec, while prioritizing the health and safety of our
customers, the public and our employees. Quebecor also moved
quickly to implement temporary measures to help customers adjust to
this extraordinary and uncertain situation: we removed data caps on
all Internet plans, cancelled roaming charges for our customers
abroad and provided free access to our LCN all‑news channel. In
addition, to support employees who find themselves without work
during this crisis and protect their financial security, we are
providing them with financial benefits in addition to the
government assistance programs," added Pierre Karl
Péladeau.
"The much heavier‑than‑normal traffic on Videotron's network
over the past few months has shown its robustness and hence the
soundness of the investments made in recent years, demonstrating
the importance of a stable regulatory environment that promotes
investment," said Jean‑François Pruneau, President and Chief
Executive Officer of Videotron. "In pursuit of our goal of
connecting as many customers as possible to our network, we
continue innovating and building out new infrastructure, including
in the Charlevoix, Bas‑Saint‑Laurent, Memphrémagog and Montérégie
regions, where we will offer residents high‑speed Internet services
under the 'Régions branchées' component of the Ministry of the
Economy and Innovation's 'Québec haut débit' program.
Meanwhile, the soaring demand for Videotron services that we are
now seeing in Abitibi-Témiscamingue confirms the resounding success
of our regional service roll-out strategy.
"The popularity of our Helix home entertainment and management
platform also continues to grow, with more than 350,000 RGUs
since its launch in August 2019. As well, our mobile
telephony, Internet and Club illico subscription video‑on‑demand
("Club illico") services continued posting sustained growth,
with increases of 173,000, 46,200 and 41,200 RGUs respectively over
the past 12 months," said Jean‑François Pruneau.
"As anticipated, TVA Group Inc.'s ("TVA Group") second quarter
2020 results reflect the full‑quarter impact of the COVID‑19
pandemic, which hit our industry hard and forced us to
significantly scale back our operations in order to comply with
government directives," said France Lauzière, President and Chief
Executive Officer of TVA Group. "The impact of the health crisis
led to a significant decline in our advertising revenues, a large
reduction in the number of sporting events broadcast by
TVA Sports – including postponement of the National Hockey
League playoffs until the third quarter of 2020 – and the
suspension of most content-production activities.
"TVA Group's total market share continued to grow in the second
quarter of 2020, rising 1.8 points to 42.3%. Given the
unprecedented situation we are facing, I am particularly proud of
the 10.6% peak recorded by the LCN all‑news specialty channel,
which strengthened its position as Québec's most‑watched specialty
channel with an exceptional 5.1‑point increase in the second
quarter," added France Lauzière.
"The acquisition of the Théâtre Capitole in Québec City, a
unique, hundred‑year‑old, 1,300‑seat venue, which we announced on
June 17, 2020, will enhance the Québec City entertainment
scene. Expanding our complement of performance spaces positions us
to create a diversified ecosystem for the benefit of promoters,
artists and everyone who loves music and culture," explained
Martin Tremblay, Chief Operating
Officer of Quebecor's Sports and Entertainment Group.
"We also successfully launched the new QUB music streaming
platform, which showcases Québec artists, in May 2020.
Supporting Québec culture is in our DNA and backing Québec artists
during this health crisis is a priority for us," added Martin Tremblay.
"At this time, as activities gradually resume in Québec and the
economy is showing encouraging signs of recovery, we continue
monitoring the situation closely and adjusting our action plans
accordingly. In addition to enabling us to perform our role and
protect our assets, our solid financial position allows us to
properly evaluate, prioritize and continue prudently investing in
strategies that will be profitable over the long term, thereby
maintaining our position as an innovation leader. Finally, I want
to underscore again the outstanding work of our employees. Over the
past few months, they have valiantly risen to the challenges of the
pandemic and provided the public with the unparalleled customer
service for which we are known," concluded Pierre Karl
Péladeau.
COVID‑19 health crisis
The COVID‑19 pandemic continues to have a significant impact on
the economic environment in Canada
and around the world. On March 13, 2020, in order to
limit the spread of the virus, the Québec government imposed a
number of restrictions and special preventive measures, including
the suspension of business activities deemed non‑essential. Since
then, the Québec government has gradually announced the stages of
its reopening plan, which extends over a period of several months.
The health crisis curtailed the operations of many of Quebecor's
business partners and has led to a significant slowdown in some of
Quebecor's segments in the first half of 2020. Among other
impacts, the COVID‑19 virus and the measures to limit its spread
have led to a significant reduction in volume at Videotron retail
outlets and delays in client migration to its new Helix home
entertainment and management platform; lower advertising revenues,
a significant decrease in sporting events broadcast by the
TVA Sports channel, and reduced film production and
audiovisual content activity in the Media segment; and postponement
or cancellation of shows and events, and interruption of music and
book distribution activities in the Sports and Entertainment
segment. However, Quebecor has continued and will continue to
provide essential telecommunications and news services during this
health crisis, while safeguarding the health and safety of its
employees and the public. Videotron also took a number of important
initiatives to make life easier for its customers, such as
suspending data limits (overage charges) until June 30, 2020 on all residential and business
Internet plans, providing additional services, and temporarily
suspending certain fees. Furthermore, Videotron's network has been
able to handle the increase in traffic since the beginning of the
health crisis, demonstrating the soundness of its strategy of
continuously adding capacity ahead of the curve. As well,
TVA Group unscrambled the LCN all‑news channel until
June 30, 2020 to give Quebecers real‑time access to all
developments in the health crisis, and it also continues to
broadcast television content on its distribution channels. As a
result of the economic slowdown, approximately 10% of Quebecor's
workforce received benefits under the Corporation's support program
to compensate for being placed on stand‑by. During the health
crisis, this program provides financial assistance in addition to
the Canada Emergency Wage Subsidy
or the Canada Emergency Response
Benefit programs.
Financial tables
Table
1
|
Quebecor second
quarter financial highlights, 2016 to 2020
|
(in millions of
Canadian dollars, except per share data)
|
|
2020
|
2019
|
2018
|
2017
|
2016
|
|
|
|
|
|
|
Revenues
|
$
1,003.8
|
$ 1,056.9
|
$ 1,038.7
|
$ 1,034.0
|
$ 1,001.0
|
Adjusted
EBITDA
|
475.7
|
455.0
|
425.9
|
412.0
|
384.5
|
Income from
continuing operating activities attributable to shareholders
|
142.4
|
140.2
|
41.0
|
129.4
|
18.6
|
Net income
attributable to shareholders
|
174.9
|
140.2
|
42.0
|
137.1
|
18.5
|
Adjusted income from
continuing operating
activities
|
144.9
|
136.2
|
105.9
|
87.0
|
78.7
|
Per basic
share:
|
|
|
|
|
|
Income from continuing
operating activities
attributable to shareholders
|
0.56
|
0.55
|
0.17
|
0.53
|
0.08
|
Net income
attributable to shareholders
|
0.69
|
0.55
|
0.18
|
0.57
|
0.08
|
Adjusted income from
continuing operating
activities
|
0.57
|
0.53
|
0.45
|
0.36
|
0.32
|
Table
2
|
Cash flows from
operations for the past eight quarters
|
(in millions of
Canadian dollars)
|
|
Q2‑2020
|
Q1‑2020
|
Q4‑2019
|
Q3‑2019
|
Q2‑2019
|
Q1‑2019
|
Q4‑2018
|
Q3‑2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications
|
$
|
322.8
|
$
|
302.5
|
$
|
248.5
|
$
|
306.5
|
$
|
281.8
|
$
|
288.5
|
$
|
169.4
|
$
|
251.4
|
Media
|
|
−
|
|
(3.6)
|
|
16.9
|
|
17.8
|
|
(3.0)
|
|
(6.9)
|
|
14.5
|
|
21.2
|
Sports and
Entertainment
|
|
2.1
|
|
(4.7)
|
|
1.8
|
|
6.0
|
|
(3.1)
|
|
(2.3)
|
|
1.7
|
|
7.4
|
Head
Office
|
|
1.2
|
|
0.8
|
|
(6.7)
|
|
2.1
|
|
(0.8)
|
|
(3.0)
|
|
(5.3)
|
|
−
|
Total
|
$
|
326.1
|
$
|
295.0
|
$
|
260.5
|
$
|
332.4
|
$
|
274.9
|
$
|
276.3
|
$
|
180.3
|
$
|
280.0
|
2020/2019 second quarter comparison
Revenues: $1.00 billion, a $53.1 million (‑5.0%) decrease.
- Revenues decreased in Media ($57.4 million or ‑30.2% of segment revenues)
and in Sports and Entertainment ($15.4 million or ‑37.3%).
- Revenues increased in Telecommunications ($14.7 million or 1.7%).
Adjusted EBITDA: $475.7 million, a $20.7 million (4.5%) increase.
- Adjusted EBITDA increased in Telecommunications ($13.6 million or 3.0% of segment adjusted
EBITDA), Media ($1.9 million
or 33.3%), and Sports and Entertainment ($4.3 million).
Net income attributable to shareholders: $174.9 million ($0.69 per basic share) in the second quarter
of 2020, compared with $140.2 million ($0.55 per basic share) in the same period of
2019, an increase of $34.7 million ($0.14 per basic share).
- The main favourable variances were:
-
- $32.5 million increase in
income from discontinued operations due to a gain on business
disposal, net of income taxes, related to achievement of certain
future conditions attached to the sale by Videotron of the
operations of the 4Degrees Colocation Inc. data centres in the
first quarter of 2019;
- $20.7 million increase in
adjusted EBITDA;
- $7.0 million favourable
variance in the charge for restructuring of operations and other
items.
- The main unfavourable variances were:
-
- $12.2 million unfavourable
variance related to gains on valuation and translation of financial
instruments, including $11.7 million without any tax
consequences;
- $7.1 million increase in the
depreciation and amortization charge;
- $6.5 million increase in the
income tax expense.
Adjusted income from continuing operating activities:
$144.9 million ($0.57 per basic share) in the second quarter
of 2020, compared with $136.2 million ($0.53 per basic share) in the same period of
2019, an increase of $8.7 million ($0.04 per basic share) or 6.4%.
Cash flows from operations: $326.1 million, a $51.2 million (18.6%) increase caused mainly
by a $20.7 million increase in
adjusted EBITDA and a $29.0 million decrease in additions to
property, plant and equipment.
Cash flows from continuing operating activities:
$393.5 million, a $104.3 million increase due primarily to the
favourable net change in non‑cash balances related to operating
activities.
2020/2019 year‑to‑date comparison
Revenues: $2.06 billion, a $24.9 million (‑1.2%) decrease.
- Revenues decreased in Media ($55.3 million or ‑15.2% of segment revenues)
and in Sports and Entertainment ($21.0 million or ‑25.7%).
- Revenues increased in Telecommunications ($48.7 million or 2.9%).
Adjusted EBITDA: $912.4 million, a $36.7 million (4.2%) increase.
- Adjusted EBITDA increased in Telecommunications ($26.1 million or 3.0% of segment adjusted
EBITDA), Media ($4.8 million
or 69.6%), and Sports and Entertainment ($1.2 million or 54.5%).
- There was a favourable variance at Head Office ($4.6 million) due to a decrease in the
stock‑based compensation charge.
- The change in the fair value of Quebecor Media stock options
resulted in a $0.2 million
favourable variance in the stock‑based compensation charge in the
first half of 2020 compared with the same period of 2019. The
change in the fair value of Quebecor stock options and in the value
of Quebecor stock‑price‑based share units resulted in an
$8.1 million favourable variance
in the Corporation's stock‑based compensation charge in the first
half of 2020.
Net income attributable to shareholders: $306.5 million ($1.21 per basic share) in the first half of 2020,
compared with $329.2 million ($1.29 per basic share) in the same period of
2019, a decrease of $22.7 million ($0.08 per basic share).
- The main unfavourable variances were:
-
- $63.7 million decrease in
income from discontinued operations;
- $16.7 million increase in
the depreciation and amortization charge;
- $9.1 million increase in the
income tax expense;
- $4.1 million increase in
financial expenses.
- The main favourable variances were:
-
- $36.7 million increase in
adjusted EBITDA;
- $25.4 million favourable
variance related to gains on valuation and translation of financial
instruments, including $24.4 million without any tax
consequences;
- $11.6 million favourable
variance in the charge for restructuring of operations and other
items.
Adjusted income from continuing operating activities:
$256.4 million ($1.01 per basic share) in the first half
of 2020, compared with $247.6 million ($0.97 per basic share) in the same period of
2019, an increase of $8.8 million ($0.04 per basic share) or 3.6%.
Cash flows from operations: $621.1 million, a $69.9 million (12.7%) increase caused mainly
by a $36.7 million increase in
adjusted EBITDA and a $39.4 million decrease in additions to
property, plant and equipment.
Cash flows from continuing operating activities:
$715.1 million, a $245.4 million increase due primarily to the
favourable net change in non‑cash balances related to operating
activities.
Financial transactions
- Quebecor's $50.0 million
revolving credit facility expired on July
15, 2020 and was not renewed.
Normal course issuer bid
On August 5, 2020, the Corporation
authorized a 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
6,000,000 Class B Subordinate Voting Shares ("Class B
Shares"), representing approximately 3.5% of issued and outstanding
Class B Shares as of July 31, 2020. The purchases
can be made from August 15, 2020 to
August 14, 2021, at prevailing market prices on the open
market through the facilities of the Toronto Stock Exchange ("TSX")
or other alternative trading systems. All shares purchased under
the bid will be cancelled. As of July 31, 2020,
77,211,134 Class A Shares and 173,422,307 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, 2020 and
July 31, 2020 on the TSX was 2,162 Class A
Shares and 509,188 Class B Shares. Consequently, the
Corporation will be authorized to purchase a maximum of 1,000
Class A Shares and 127,297 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.
The Corporation also announced that on or around August 7, 2020 it will enter into an automatic
securities purchase plan ("the plan") with a designated broker
whereby shares may be repurchased under the plan at times when such
purchases would otherwise be prohibited pursuant to regulatory
restrictions or self‑imposed blackout periods. The plan received
prior approval from the TSX. It will come into effect on
August 15, 2020 and terminate on the same date as the
normal course issuer bid.
Under the plan, before entering a self‑imposed blackout period,
the Corporation may, but is not required to, ask the designated
broker to make purchases under the normal course issuer bid. Such
purchases shall be made at the discretion of the designated broker,
within parameters established by the Corporation prior to the
blackout periods. Outside the blackout periods, purchases will be
made at the discretion of the Corporation's management.
Between August 15, 2019 and July 31, 2020, of the 1,000,000 Class A
Shares and 6,000,000 Class B Shares it was authorized to
repurchase under its previous normal course issuer bid, the
Corporation repurchased no Class A Shares and 5,783,556 Class B
Shares at a weighted average price of $30.29539 per share on the open market
through the facilities of the TSX and alternative trading
systems.
In the first half of 2020, the Corporation purchased and
cancelled 3,143,300 Class B Shares for a total cash
consideration of $95.6 million
(1,319,600 Class B Shares for a total cash consideration
of $39.5 million in the same
period of 2019). The $77.0 million excess of the
purchase price over the carrying value of the repurchased
Class B Shares was recorded as a reduction in retained
earnings ($31.7 million increase
in the deficit in the same period of 2019).
In the first half of 2019, 180,000 Class B Shares were issued
upon exercise of stock options for a cash consideration
of $2.7 million. Following this transaction, the
contributed surplus was increased by $3.0 million and the stock option plan
liability was reduced by the same amount.
Dividend
On August 5, 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 September 15, 2020 to
shareholders of record at the close of business on
August 21, 2020. This dividend is designated an eligible
dividend, as provided under subsection 89(14) of the Canadian
Income Tax Act and its provincial counterpart.
Convertible debentures
In accordance with the terms of the trust indenture governing
the convertible debentures, the quarterly dividend declared on
March 11, 2020 on Quebecor Class B Shares triggered
an adjustment to the floor price and ceiling price then in effect.
Accordingly, effective March 26, 2020, the conversion
features of the convertible debentures are subject to an adjusted
floor price of approximately $26.57 per share (that is, a maximum number
of approximately 5,644,430 Class B Shares corresponding to a
ratio of $150.0 million to the adjusted floor price) and
an adjusted ceiling price of approximately $33.22 per share (that is, a minimum number of
approximately 4,515,544 Class B Shares corresponding to a
ratio of $150.0 million to the
adjusted ceiling price).
Detailed financial information
For a detailed analysis of Quebecor's second quarter 2020
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 2020 results on August 6,
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 August 6 to
November 6, 2020 by dialling 1 877 293‑8133,
conference number and 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 service interruptions resulting from
equipment breakdown, network failure, the threat of natural
disaster, epidemics, pandemics or other public health crises,
including the COVID‑19 pandemic, political instability is some
countries, risks associated with emergency measures implemented by
various governments, 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, and the "Risks and Uncertainties
Update" section of Quebecor's Management Discussion and Analysis
for the period ended June 30, 2020.
The forward‑looking statements in this press release reflect
Quebecor's expectations as of August 6, 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 International
Financial Reporting Standards ("IFRS"), as net income before
depreciation and amortization, financial expenses, gain 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 operations and free cash flows
from continuing operating activities. 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 condensed consolidated financial
statements.
Table
3
|
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
|
|
2020
|
2019
|
2020
|
2019
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(negative adjusted EBITDA):
|
|
|
|
|
|
|
|
|
Telecommunications
|
$
|
463.6
|
$
|
450.0
|
$
|
899.1
|
$
|
873.0
|
Media
|
|
7.6
|
|
5.7
|
|
11.7
|
|
6.9
|
Sports and
Entertainment
|
|
2.8
|
|
(1.5)
|
|
(1.0)
|
|
(2.2)
|
Head Office
|
|
1.7
|
|
0.8
|
|
2.6
|
|
(2.0)
|
|
|
475.7
|
|
455.0
|
|
912.4
|
|
875.7
|
Depreciation and
amortization
|
|
(195.7)
|
|
(188.6)
|
|
(393.8)
|
|
(377.1)
|
Financial
expenses
|
|
(81.6)
|
|
(82.8)
|
|
(169.0)
|
|
(164.9)
|
Gain on valuation and
translation of financial instruments
|
|
4.2
|
|
16.4
|
|
27.5
|
|
2.1
|
Restructuring of
operations and other items
|
|
(10.3)
|
|
(17.3)
|
|
(14.2)
|
|
(25.8)
|
Income
taxes
|
|
(50.8)
|
|
(44.3)
|
|
(91.3)
|
|
(82.2)
|
Income from
discontinued operations
|
|
32.5
|
|
−
|
|
33.8
|
|
97.5
|
Net
income
|
$
|
174.0
|
$
|
138.4
|
$
|
305.4
|
$
|
325.3
|
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 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 4 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
4
|
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
|
|
2020
|
2019
|
2020
|
2019
|
|
|
|
|
|
|
|
|
|
Adjusted income from
continuing operating activities
|
$
|
144.9
|
$
|
136.2
|
$
|
256.4
|
$
|
247.6
|
Gain on valuation and
translation of financial instruments
|
|
4.2
|
|
16.4
|
|
27.5
|
|
2.1
|
Restructuring of
operations and other items
|
|
(10.3)
|
|
(17.3)
|
|
(14.2)
|
|
(25.8)
|
Income taxes related
to adjustments1
|
|
3.1
|
|
4.6
|
|
2.5
|
|
6.7
|
Net income
attributable to non‑controlling interest related
to adjustments
|
|
0.5
|
|
0.3
|
|
0.5
|
|
1.1
|
Discontinued
operations
|
|
32.5
|
|
−
|
|
33.8
|
|
97.5
|
Net income
attributable to shareholders
|
$
|
174.9
|
$
|
140.2
|
$
|
306.5
|
$
|
329.2
|
1
|
Includes impact of
fluctuations in income tax applicable to adjusted items, either for
statutory reasons or in connection with tax
transactions.
|
Cash flows from operations and free cash flows from
continuing operating activities
Cash flows from operations
Cash flows from operations represents adjusted EBITDA, less
additions to property, plant and equipment and to intangible assets
(excluding licence acquisitions and renewals). Cash flows from
operations represents 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. 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. 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 cash flows
from operations may not be identical to similarly titled measures
reported by other companies.
Free cash flows from continuing operating activities
Free cash flows from continuing operating activities represents
cash flows provided by continuing operating activities calculated
in accordance with IFRS, less cash flows used for additions to
property, plant and equipment and to intangible assets (excluding
expenditures related to licence acquisitions and renewals), plus
proceeds from disposal of assets. Free cash flows from continuing
operating activities is used by the Corporation's management and
Board of Directors to evaluate cash flows generated by the
Corporation's operations. Free cash flows from continuing operating
activities represents available funds for business acquisitions,
licence acquisitions and renewals, payment of dividends, repayment
of long‑term debt and share repurchases. Free cash flows from
continuing operating activities 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. The
Corporation's definition of free cash flows from continuing
operating activities may not be identical to similarly titled
measures reported by other companies.
Tables 5 and 6 provide a reconciliation of cash flows from
operations and free cash flows from continuing operating activities
to cash flows provided by continuing operating activities reported
in the condensed consolidated financial statements.
Table
5
|
Cash flows from
operations
|
(in millions of
Canadian dollars)
|
|
Three months ended
June 30
|
Six months ended
June 30
|
|
2020
|
2019
|
2020
|
2019
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(negative adjusted EBITDA)
|
|
|
|
|
|
|
|
|
Telecommunications
|
$
|
463.6
|
$
|
450.0
|
$
|
899.1
|
$
|
873.0
|
Media
|
|
7.6
|
|
5.7
|
|
11.7
|
|
6.9
|
Sports and
Entertainment
|
|
2.8
|
|
(1.5)
|
|
(1.0)
|
|
(2.2)
|
Head Office
|
|
1.7
|
|
0.8
|
|
2.6
|
|
(2.0)
|
|
|
475.7
|
|
455.0
|
|
912.4
|
|
875.7
|
Minus
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment:1
|
|
|
|
|
|
|
|
|
Telecommunications
|
|
(93.6)
|
|
(122.9)
|
|
(182.5)
|
|
(217.2)
|
Media
|
|
(1.6)
|
|
−
|
|
(3.5)
|
|
(6.6)
|
Sports and
Entertainment
|
|
−
|
|
(0.5)
|
|
(0.1)
|
|
(1.0)
|
Head Office
|
|
(0.4)
|
|
(1.2)
|
|
(0.5)
|
|
(1.2)
|
|
|
(95.6)
|
|
(124.6)
|
|
(186.6)
|
|
(226.0)
|
Additions to
intangible assets:2
|
|
|
|
|
|
|
|
|
Telecommunications
|
|
(47.2)
|
|
(45.3)
|
|
(91.3)
|
|
(85.5)
|
Media
|
|
(6.0)
|
|
(8.7)
|
|
(11.8)
|
|
(10.2)
|
Sports and
Entertainment
|
|
(0.7)
|
|
(1.1)
|
|
(1.5)
|
|
(2.2)
|
Head Office
|
|
(0.1)
|
|
(0.4)
|
|
(0.1)
|
|
(0.6)
|
|
|
(54.0)
|
|
(55.5)
|
|
(104.7)
|
|
(98.5)
|
Cash flows from
operations
|
|
|
|
|
|
|
|
|
Telecommunications
|
|
322.8
|
|
281.8
|
|
625.3
|
|
570.3
|
Media
|
|
−
|
|
(3.0)
|
|
(3.6)
|
|
(9.9)
|
Sports and
Entertainment
|
|
2.1
|
|
(3.1)
|
|
(2.6)
|
|
(5.4)
|
Head Office
|
|
1.2
|
|
(0.8)
|
|
2.0
|
|
(3.8)
|
|
$
|
326.1
|
$
|
274.9
|
$
|
621.1
|
$
|
551.2
|
|
|
|
1
Reconciliation to cash flows used for additions to property,
plant and equipment as per condensed consolidated financial
statements:
|
Three months ended
June 30
|
Six months ended
June 30
|
2020
|
2019
|
2020
|
2019
|
Additions to property,
plant and equipment
|
$
|
(95.6)
|
$
|
(124.6)
|
$
|
(186.6)
|
$
|
(226.0)
|
Net (decrease)
increase in current accounts payable related to additions to
property, plant and equipment
|
|
(11.1)
|
|
9.7
|
|
(0.1)
|
|
(28.7)
|
Cash flows used for
additions to property, plant and equipment
|
$
|
(106.7)
|
$
|
(114.9)
|
$
|
(186.7)
|
$
|
(254.7)
|
2
Reconciliation to cash flows used for additions to intangible
assets as per condensed consolidated financial
statements:
|
Three months ended
June 30
|
Six months ended
June 30
|
2020
|
2019
|
2020
|
2019
|
Additions to
intangible assets
|
$
|
(54.0)
|
$
|
(55.5)
|
$
|
(104.7)
|
$
|
(98.5)
|
Net increase
(decrease) in current accounts payable related to additions to intangible assets
|
|
6.0
|
|
4.4
|
|
(46.1)
|
|
(3.8)
|
Disbursements for
licence acquisitions
|
|
−
|
|
(255.8)
|
|
−
|
|
(255.8)
|
Cash flows used for
additions to intangible assets
|
$
|
(48.0)
|
$
|
(306.9)
|
$
|
(150.8)
|
$
|
(358.1)
|
Table
6
|
Free cash flows
from continuing operating activities and cash flows provided by
continuing operating activities reported in the condensed
consolidated financial statements.
|
(in millions of
Canadian dollars)
|
|
Three months ended
June 30
|
Six months ended
June 30
|
|
2020
|
2019
|
2020
|
2019
|
|
|
|
|
|
Cash flows from
operations from Table 5
|
$
326.1
|
$ 274.9
|
$
621.1
|
$ 551.2
|
Plus
(minus)
|
|
|
|
|
Cash portion of
financial expenses
|
(79.5)
|
(80.8)
|
(164.9)
|
(160.9)
|
Cash portion related
to restructuring of operations and other items
|
(10.3)
|
(2.0)
|
(14.2)
|
(7.0)
|
Current income
taxes
|
(59.3)
|
(39.8)
|
(120.3)
|
(85.4)
|
Other
|
(1.7)
|
(0.3)
|
2.4
|
0.6
|
Net change in non‑cash
balances related to operating activities
|
69.3
|
(42.8)
|
101.9
|
(150.6)
|
Net (decrease)
increase in current accounts payable related to additions to property, plant and
equipment
|
(11.1)
|
9.7
|
(0.1)
|
(28.7)
|
Net increase
(decrease) in current accounts payable related to additions to intangible assets
|
6.0
|
4.4
|
(46.1)
|
(3.8)
|
Free cash flows
from continuing operating activities
|
239.5
|
123.3
|
379.8
|
115.4
|
Plus
(minus)
|
|
|
|
|
Cash flows used for
additions to property, plant and equipment
|
106.7
|
114.9
|
186.7
|
254.7
|
Cash flows used for
additions to intangible assets (excluding licence acquisitions and
renewals)
|
48.0
|
51.1
|
150.8
|
102.3
|
Proceeds from disposal
of assets
|
(0.7)
|
(0.1)
|
(2.2)
|
(2.7)
|
Cash flows
provided by continuing operating activities
|
$
393.5
|
$ 289.2
|
$
715.1
|
$ 469.7
|
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
|
|
Six months
ended
|
(unaudited)
|
June 30
|
|
June 30
|
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
1,003.8
|
$
|
1,056.9
|
|
$
|
2,059.3
|
$
|
2,084.2
|
|
|
|
|
|
|
|
|
|
|
Employee
costs
|
|
136.7
|
|
172.2
|
|
|
314.7
|
|
354.0
|
Purchase of goods and
services
|
|
391.4
|
|
429.7
|
|
|
832.2
|
|
854.5
|
Depreciation and
amortization
|
|
195.7
|
|
188.6
|
|
|
393.8
|
|
377.1
|
Financial
expenses
|
|
81.6
|
|
82.8
|
|
|
169.0
|
|
164.9
|
Gain on valuation and
translation of financial instruments
|
|
(4.2)
|
|
(16.4)
|
|
|
(27.5)
|
|
(2.1)
|
Restructuring of
operations and other items
|
|
10.3
|
|
17.3
|
|
|
14.2
|
|
25.8
|
Income before
income taxes
|
|
192.3
|
|
182.7
|
|
|
362.9
|
|
310.0
|
|
|
|
|
|
|
|
|
|
|
Income taxes
(recovery):
|
|
|
|
|
|
|
|
|
|
Current
|
|
59.3
|
|
39.8
|
|
|
120.3
|
|
85.4
|
Deferred
|
|
(8.5)
|
|
4.5
|
|
|
(29.0)
|
|
(3.2)
|
|
|
50.8
|
|
44.3
|
|
|
91.3
|
|
82.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
141.5
|
|
138.4
|
|
|
271.6
|
|
227.8
|
Income from
discontinued operations
|
|
32.5
|
|
-
|
|
|
33.8
|
|
97.5
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
$
|
174.0
|
$
|
138.4
|
|
$
|
305.4
|
$
|
325.3
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations attributable to
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
142.4
|
$
|
140.2
|
|
$
|
272.7
|
$
|
231.7
|
Non-controlling
interests
|
|
(0.9)
|
|
(1.8)
|
|
|
(1.1)
|
|
(3.9)
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
174.9
|
$
|
140.2
|
|
$
|
306.5
|
$
|
329.2
|
Non-controlling
interests
|
|
(0.9)
|
|
(1.8)
|
|
|
(1.1)
|
|
(3.9)
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to shareholders
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
From continuing
operations
|
$
|
0.56
|
$
|
0.55
|
|
$
|
1.08
|
$
|
0.91
|
From discontinued
operations
|
|
0.13
|
|
-
|
|
|
0.13
|
|
0.38
|
Net income
|
|
0.69
|
|
0.55
|
|
|
1.21
|
|
1.29
|
Diluted:
|
|
|
|
|
|
|
|
|
|
From continuing
operations
|
|
0.54
|
|
0.47
|
|
|
0.96
|
|
0.88
|
From discontinued
operations
|
|
0.12
|
|
-
|
|
|
0.13
|
|
0.37
|
Net income
|
|
0.66
|
|
0.47
|
|
|
1.09
|
|
1.25
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding (in millions)
|
|
252.8
|
|
255.9
|
|
|
253.4
|
|
255.9
|
Weighted average
number of diluted shares (in millions)
|
|
258.6
|
|
262.1
|
|
|
259.2
|
|
262.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QUEBECOR
INC.
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
Three months
ended
|
|
Six months
ended
|
(unaudited)
|
June 30
|
|
June 30
|
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
141.5
|
$
|
138.4
|
|
$
|
271.6
|
$
|
227.8
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
(loss) income from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items that may be
reclassified to income:
|
|
|
|
|
|
|
|
|
|
Cash flow
hedges:
|
|
|
|
|
|
|
|
|
|
(Loss) gain on
valuation of derivative financial instruments
|
|
(19.0)
|
|
49.5
|
|
|
43.9
|
|
30.2
|
Deferred income
taxes
|
|
6.4
|
|
(4.7)
|
|
|
(8.6)
|
|
1.8
|
|
|
|
|
|
|
|
|
|
|
Items that will not
be reclassified to income:
|
|
|
|
|
|
|
|
|
|
Defined benefit
plans:
|
|
|
|
|
|
|
|
|
|
Re-measurement
loss
|
|
(62.0)
|
|
-
|
|
|
(62.0)
|
|
-
|
Deferred income
taxes
|
|
16.0
|
|
-
|
|
|
16.0
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
(58.6)
|
|
44.8
|
|
|
(10.7)
|
|
32.0
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income from continuing operations
|
|
82.9
|
|
183.2
|
|
|
260.9
|
|
259.8
|
|
|
|
|
|
|
|
|
|
|
Income from
discontinued operations
|
|
32.5
|
|
-
|
|
|
33.8
|
|
97.5
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
$
|
115.4
|
$
|
183.2
|
|
$
|
294.7
|
$
|
357.3
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss) from continuing operations attributable
to
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
87.3
|
$
|
185.0
|
|
$
|
265.5
|
$
|
263.7
|
Non-controlling
interests
|
|
(4.4)
|
|
(1.8)
|
|
|
(4.6)
|
|
(3.9)
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss) attributable to
|
|
|
|
|
|
|
|
|
|
Shareholders
|
$
|
119.8
|
$
|
185.0
|
|
$
|
299.3
|
$
|
361.2
|
Non-controlling
interests
|
|
(4.4)
|
|
(1.8)
|
|
|
(4.6)
|
|
(3.9)
|
QUEBECOR
INC.
|
SEGMENTED
INFORMATION
|
|
(in millions of
Canadian dollars)
|
(unaudited)
|
|
|
|
Three months ended
June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sports
|
Head
|
|
|
|
|
|
|
|
and
|
office
|
|
|
|
Telecommuni-
|
|
Enter-
|
and
Inter-
|
|
|
|
cations
|
Media
|
tainment
|
segments
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
869.1
|
$
|
132.7
|
$
|
25.9
|
$
|
(23.9)
|
$
|
1,003.8
|
Employee
costs
|
|
100.7
|
|
26.2
|
|
4.1
|
|
5.7
|
|
136.7
|
Purchase of goods and
services
|
|
304.8
|
|
98.9
|
|
19.0
|
|
(31.3)
|
|
391.4
|
Adjusted
EBITDA1
|
|
463.6
|
|
7.6
|
|
2.8
|
|
1.7
|
|
475.7
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
195.7
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
81.6
|
Gain on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
(4.2)
|
Restructuring of
operations and other items
|
|
|
|
|
|
|
|
|
|
10.3
|
Income before
income taxes
|
|
|
|
|
|
|
|
|
$
|
192.3
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows used
for:
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
104.8
|
$
|
1.6
|
$
|
-
|
$
|
0.3
|
$
|
106.7
|
Additions to
intangible assets
|
|
41.0
|
|
6.2
|
|
0.7
|
|
0.1
|
|
48.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sports
|
Head
|
|
|
|
|
|
|
|
and
|
office
|
|
|
|
Telecommuni-
|
|
Enter-
|
and Inter-
|
|
|
|
cations
|
Media
|
tainment
|
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
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows used
for:
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
111.2
|
$
|
2.0
|
$
|
0.5
|
$
|
1.2
|
$
|
114.9
|
Additions to
intangible assets
|
|
296.5
|
|
9.0
|
|
1.1
|
|
0.3
|
|
306.9
|
|
|
|
Six months ended
June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sports
|
Head
|
|
|
|
|
|
|
|
and
|
office
|
|
|
|
Telecommuni-
|
|
Enter-
|
and
Inter-
|
|
|
|
cations
|
Media
|
tainment
|
segments
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
1,743.8
|
$
|
307.5
|
$
|
60.7
|
$
|
(52.7)
|
$
|
2,059.3
|
Employee
costs
|
|
203.6
|
|
85.9
|
|
14.1
|
|
11.1
|
|
314.7
|
Purchase of goods and
services
|
|
641.1
|
|
209.9
|
|
47.6
|
|
(66.4)
|
|
832.2
|
Adjusted
EBITDA1
|
|
899.1
|
|
11.7
|
|
(1.0)
|
|
2.6
|
|
912.4
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
393.8
|
Financial
expenses
|
|
|
|
|
|
|
|
|
|
169.0
|
Gain on valuation and
translation of financial instruments
|
|
|
|
|
|
|
|
|
|
(27.5)
|
Restructuring of
operations and other items
|
|
|
|
|
|
|
|
|
|
14.2
|
Income before
income taxes
|
|
|
|
|
|
|
|
|
$
|
362.9
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows used
for:
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
178.4
|
$
|
7.8
|
$
|
0.1
|
$
|
0.4
|
$
|
186.7
|
Additions to
intangible assets
|
|
136.1
|
|
13.1
|
|
1.5
|
|
0.1
|
|
150.8
|
|
|
|
Six months ended June
30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sports
|
|
Head
|
|
|
|
|
|
|
|
|
and
|
|
office
|
|
|
|
|
Telecommuni-
|
|
|
|
Enter-
|
|
and Inter-
|
|
|
|
|
cations
|
|
Media
|
|
tainment
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows used
for:
|
|
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
$
|
243.8
|
$
|
8.7
|
$
|
1.0
|
$
|
1.2
|
$
|
254.7
|
Additions to
intangible assets
|
|
345.1
|
|
10.6
|
|
2.1
|
|
0.3
|
|
358.1
|
1
|
The Chief Executive
Officer uses adjusted EBITDA as the measure of profit to assess the
performance of each segment. Adjusted EBITDA is referred as a
non-IFRS measure and is defined as net income before depreciation
and amortization, financial expenses, gain 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
|
|
Equity
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
attributable
|
|
|
|
|
|
|
|
|
Retained
|
|
other
com-
|
|
to
non-
|
|
|
|
|
Capital
|
|
Contributed
|
|
earnings
|
|
prehensive
|
|
controlling
|
|
Total
|
|
|
stock
|
|
surplus
|
|
(deficit)
|
|
loss
|
|
interests
|
|
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
-
|
|
-
|
|
(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
|
Net income
|
|
-
|
|
-
|
|
323.6
|
|
-
|
|
9.4
|
|
333.0
|
Other comprehensive
(loss) income
|
|
-
|
|
-
|
|
-
|
|
(13.4)
|
|
0.6
|
|
(12.8)
|
Dividends
|
|
-
|
|
-
|
|
(57.4)
|
|
-
|
|
-
|
|
(57.4)
|
Issuance of Class B
Shares
|
|
5.6
|
|
9.7
|
|
-
|
|
-
|
|
-
|
|
15.3
|
Repurchase of Class B
Shares
|
|
(10.5)
|
|
-
|
|
(44.6)
|
|
-
|
|
-
|
|
(55.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
December 31, 2019
|
|
1,055.9
|
|
17.4
|
|
(31.7)
|
|
(64.1)
|
|
94.6
|
|
1,072.1
|
Net income
(loss)
|
|
-
|
|
-
|
|
306.5
|
|
-
|
|
(1.1)
|
|
305.4
|
Other comprehensive
loss
|
|
-
|
|
-
|
|
-
|
|
(7.2)
|
|
(3.5)
|
|
(10.7)
|
Dividends
|
|
-
|
|
-
|
|
(101.2)
|
|
-
|
|
(0.2)
|
|
(101.4)
|
Repurchase of Class B
Shares
|
|
(18.6)
|
|
-
|
|
(77.0)
|
|
-
|
|
-
|
|
(95.6)
|
Balance as of June
30, 2020
|
$
|
1,037.3
|
$
|
17.4
|
$
|
96.6
|
$
|
(71.3)
|
$
|
89.8
|
$
|
1,169.8
|
QUEBECOR
INC.
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
Three months
ended
|
|
Six months
ended
|
(unaudited)
|
June 30
|
|
June 30
|
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows related
to operating activities
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
141.5
|
$
|
138.4
|
|
$
|
271.6
|
$
|
227.8
|
Adjustments
for:
|
|
|
|
|
|
|
|
|
|
Depreciation of
property, plant and equipment
|
|
152.7
|
|
150.7
|
|
|
305.8
|
|
301.8
|
Amortization of
intangible assets
|
|
34.3
|
|
28.8
|
|
|
70.2
|
|
57.4
|
Amortization of
right-of-use assets
|
|
8.7
|
|
9.1
|
|
|
17.8
|
|
17.9
|
Gain on valuation and
translation of financial instruments
|
|
(4.2)
|
|
(16.4)
|
|
|
(27.5)
|
|
(2.1)
|
Impairment of
assets
|
|
-
|
|
15.3
|
|
|
-
|
|
18.8
|
Amortization of
financing costs and long-term debt discount
|
|
2.1
|
|
2.0
|
|
|
4.1
|
|
4.0
|
Deferred income
taxes
|
|
(8.5)
|
|
4.5
|
|
|
(29.0)
|
|
(3.2)
|
Other
|
|
(2.4)
|
|
(0.4)
|
|
|
0.2
|
|
(2.1)
|
|
|
324.2
|
|
332.0
|
|
|
613.2
|
|
620.3
|
Net change in
non-cash balances related to operating activities
|
|
69.3
|
|
(42.8)
|
|
|
101.9
|
|
(150.6)
|
Cash flows provided
by continuing operating activities
|
|
393.5
|
|
289.2
|
|
|
715.1
|
|
469.7
|
Cash flows related
to investing activities
|
|
|
|
|
|
|
|
|
|
Business
acquisitions
|
|
(10.8)
|
|
(11.1)
|
|
|
(10.8)
|
|
(34.6)
|
Business
disposals
|
|
-
|
|
(0.9)
|
|
|
-
|
|
260.7
|
Additions to
property, plant and equipment
|
|
(106.7)
|
|
(114.9)
|
|
|
(186.7)
|
|
(254.7)
|
Additions to
intangible assets
|
|
(48.0)
|
|
(306.9)
|
|
|
(150.8)
|
|
(358.1)
|
Proceeds from
disposals of assets
|
|
0.7
|
|
0.1
|
|
|
2.2
|
|
2.7
|
Other
|
|
(2.3)
|
|
(5.9)
|
|
|
(2.9)
|
|
(7.2)
|
Cash flows used in
continuing investing activities
|
|
(167.1)
|
|
(439.6)
|
|
|
(349.0)
|
|
(391.2)
|
Cash flows related
to financing activities
|
|
|
|
|
|
|
|
|
|
Net change in bank
indebtedness
|
|
4.0
|
|
(6.0)
|
|
|
(8.8)
|
|
(2.9)
|
Net change under
revolving facilities
|
|
(82.3)
|
|
210.7
|
|
|
(135.2)
|
|
30.0
|
Repayment of
long-term debt
|
|
(0.3)
|
|
(4.1)
|
|
|
(0.6)
|
|
(8.0)
|
Repayment of lease
liabilities
|
|
(10.9)
|
|
(10.6)
|
|
|
(20.5)
|
|
(20.5)
|
Settlement of hedging
contracts
|
|
(0.8)
|
|
(0.8)
|
|
|
(0.8)
|
|
(0.8)
|
Issuance of Class B
Shares
|
|
-
|
|
-
|
|
|
-
|
|
2.7
|
Repurchase of Class B
Shares
|
|
(61.5)
|
|
-
|
|
|
(95.6)
|
|
(39.5)
|
Dividends
|
|
(101.2)
|
|
(42.9)
|
|
|
(101.2)
|
|
(42.9)
|
Dividends paid to
non-controlling interests
|
|
-
|
|
-
|
|
|
(0.2)
|
|
-
|
Cash flows (used in)
provided by continuing financing activities
|
|
(253.0)
|
|
146.3
|
|
|
(362.9)
|
|
(81.9)
|
|
|
|
|
|
|
|
|
|
|
Cash flows (used in)
provided by continuing operations
|
|
(26.6)
|
|
(4.1)
|
|
|
3.2
|
|
(3.4)
|
|
|
|
|
|
|
|
|
|
|
Cash flows provided
by (used in) discontinued operations
|
|
7.8
|
|
1.6
|
|
|
7.8
|
|
(0.7)
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
|
43.8
|
|
19.7
|
|
|
14.0
|
|
21.3
|
Cash and cash
equivalents at end of period
|
$
|
25.0
|
$
|
17.2
|
|
$
|
25.0
|
$
|
17.2
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents consist of
|
|
|
|
|
|
|
|
|
|
Cash
|
$
|
20.3
|
$
|
5.7
|
|
$
|
20.3
|
$
|
5.7
|
Cash equivalents
|
|
4.7
|
|
11.5
|
|
|
4.7
|
|
11.5
|
|
$
|
25.0
|
$
|
17.2
|
|
$
|
25.0
|
$
|
17.2
|
|
|
|
|
|
|
|
|
|
|
Interest and taxes
reflected as operating activities
|
|
|
|
|
|
|
|
|
|
Cash interest
payments
|
$
|
118.3
|
$
|
110.7
|
|
$
|
157.2
|
$
|
157.8
|
Cash income tax
payments (net of refunds)
|
|
(0.1)
|
|
42.1
|
|
|
22.9
|
|
180.8
|
QUEBECOR
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
(in millions of
Canadian dollars)
|
|
|
|
|
|
(unaudited)
|
June
30
|
|
December
31
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
25.0
|
|
$
|
14.0
|
Accounts
receivable
|
|
552.5
|
|
|
548.0
|
Contract
assets
|
|
156.2
|
|
|
160.3
|
Income
taxes
|
|
7.8
|
|
|
19.1
|
Inventories
|
|
215.5
|
|
|
240.4
|
Other current
assets
|
|
119.8
|
|
|
121.2
|
|
|
1,076.8
|
|
|
1,103.0
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
Property, plant and
equipment
|
|
3,309.2
|
|
|
3,415.9
|
Intangible
assets
|
|
1,472.0
|
|
|
1,444.0
|
Goodwill
|
|
2,692.9
|
|
|
2,692.9
|
Right-of-use
assets
|
|
132.3
|
|
|
110.4
|
Derivative financial
instruments
|
|
902.9
|
|
|
679.8
|
Deferred income
taxes
|
|
37.6
|
|
|
31.2
|
Other
assets
|
|
264.2
|
|
|
248.7
|
|
|
8,811.1
|
|
|
8,622.9
|
Total
assets
|
$
|
9,887.9
|
|
$
|
9,725.9
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Bank
indebtedness
|
$
|
20.6
|
|
$
|
29.4
|
Accounts payable,
accrued charges and provisions
|
|
747.4
|
|
|
809.6
|
Deferred
revenue
|
|
337.0
|
|
|
332.7
|
Income
taxes
|
|
91.3
|
|
|
4.2
|
Current portion of
long-term debt
|
|
5.4
|
|
|
57.2
|
Current portion of
lease liabilities
|
|
32.0
|
|
|
31.3
|
|
|
1,233.7
|
|
|
1,264.4
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
Long-term
debt
|
|
6,000.5
|
|
|
5,900.3
|
Derivative financial
instruments
|
|
-
|
|
|
2.1
|
Convertible
debentures
|
|
150.0
|
|
|
150.0
|
Lease
liabilities
|
|
125.1
|
|
|
106.6
|
Deferred income
taxes
|
|
833.9
|
|
|
859.2
|
Other
liabilities
|
|
374.9
|
|
|
371.2
|
|
|
7,484.4
|
|
|
7,389.4
|
Equity
|
|
|
|
|
|
Capital
stock
|
|
1,037.3
|
|
|
1,055.9
|
Contributed
surplus
|
|
17.4
|
|
|
17.4
|
Retained earnings
(deficit)
|
|
96.6
|
|
|
(31.7)
|
Accumulated other
comprehensive loss
|
|
(71.3)
|
|
|
(64.1)
|
Equity
attributable to shareholders
|
|
1,080.0
|
|
|
977.5
|
Non-controlling
interests
|
|
89.8
|
|
|
94.6
|
|
|
1,169.8
|
|
|
1,072.1
|
|
|
|
|
|
|
Total liabilities
and equity
|
$
|
9,887.9
|
|
$
|
9,725.9
|
View original
content:http://www.prnewswire.com/news-releases/quebecor-inc-reports-consolidated-results-for-the-second-quarter-2020-301107167.html
SOURCE Quebecor