MONTRÉAL, Feb. 22, 2024 /CNW/ - Quebecor Inc. ("Quebecor" or the "Corporation") today reported its consolidated financial results for the fourth quarter and full year of 2023. Quebecor consolidates the financial results of its wholly owned Quebecor Media Inc. ("Quebecor Media") subsidiary.
Highlights
2023 financial year and recent developments
- In 2023, Quebecor recorded revenues of $5.43 billion, up $902.4 million (19.9%), adjusted EBITDA1 of $2.24 billion, up $303.3 million (15.7%), and adjusted cash flows from operations2 of $1.68 billion, up $239.8 million (16.7%) compared with 2022.
- The Telecommunications segment increased its revenues by $935.8 million (25.2%), its adjusted EBITDA by $317.4 million (16.6%), and its adjusted cash flows from operations by $237.8 million (16.3%) in 2023, reflecting, among other things, the contribution of the Freedom Mobile ("Freedom") acquisition.
- The Telecommunications segment increased its revenues from mobile services and equipment by $931.7 million (84.5%) due to the impact of the Freedom acquisition and growth at Videotron Ltd. ("Videotron"), and its revenues from Internet access services increased by $45.7 million (3.7%).
- The acquisition of Freedom was significantly accretive to the Telecommunications segment's revenue generating units3 (RGUs), immediately adding 1,824,400 subscriber connections to the mobile telephony service and 20,000 subscriptions to the Internet access service. Organic growth added 138,000 RGUs (2.5%) in 2023, including 230,100 subscriber connections (13.5%) in mobile telephony and 24,900 Internet access subscriptions (1.5%).
- TVA Group Inc. ("TVA Group") reported declines of $49.2 million (‑8.3%) in revenues and $24.8 million (‑128.5%) in adjusted EBITDA in 2023 compared with 2022.
- The Sports and Entertainment segment grew its revenues by $22.8 million (12.0%) and its adjusted EBITDA by $3.6 million (18.6%) in 2023.
- Quebecor's consolidated net income attributable to shareholders was up $50.8 million ($0.27 per basic share) or 8.5% to $650.5 million ($2.82 per basic share).
- Adjusted income from operating activities4 was $688.1 million ($2.98 per basic share), up $63.3 million ($0.32 per basic share) or 10.1%.
- The quarterly dividend on the Corporation's Class A Multiple Voting Shares ("Class A Shares") and Class B Subordinate Voting Shares ("Class B Shares") was increased from $0.30 to $0.325.
- On April 3, 2023, Videotron acquired Freedom from Shaw Communications Inc. ("Shaw"). Videotron paid $2.07 billion in cash and assumed certain liabilities, mainly lease obligations. The acquisition includes Freedom brand's entire wireless and Internet customer base, as well as its owned infrastructure, spectrum and retail outlets. It also includes a long‑term undertaking by Shaw and Rogers Communications Inc. ("Rogers") to provide Videotron with transport services (including backhaul and backbone), roaming services and wholesale Internet services.
- On April 3, 2023, Videotron entered into a new $2.10 billion secured term credit facility with a syndicate of financial institutions to finance the acquisition of Freedom. The term credit facility consists of three tranches of equal size maturing in October 2024, April 2026 and April 2027, bearing interest at floating rates. On April 10, 2023, Videotron entered into a floating‑to‑fixed interest rate swap agreement in connection with the $700.0 million tranche maturing in April 2027.
- On November 30, 2023, Quebecor announced an investment of $298.9 million in the acquisition by Videotron of 305 blocks of spectrum in the 3800 MHz band across Canada. Approximately 61% of these 305 blocks of spectrum are located outside Québec, mainly in southern Ontario, Alberta and British Columbia.
- On October 12, 2023, Quebecor announced the launch of its Mobile Virtual Network Operator ("MVNO") service and the expansion of the service territory of its Videotron, Fizz and Freedom brands.
- On January 25, 2024, Videotron and its Fizz brand hit a double when Léger released its 2024 WOW Index. According to the study, Videotron was the telecommunications provider with the best in‑store experience in Québec, while Fizz ranked first in Canada for online experience for the fifth year in a row.
- In a survey conducted by Léger between August 1 and 7, 2023, Videotron was picked as the telecommunications company with the best customer service in Québec by more than twice as many respondents as its nearest rival. Léger's 2023 Reputation survey, released on April 5, 2023, also ranked Videotron as the most respected telecommunications company in Québec for the 17th time since 2006.
- On January 17, 2023, Quebecor Media redeemed at maturity its Senior Notes in aggregate principal amount of US$850.0 million, bearing interest at 5.75%, and unwound the related hedging contracts for a total cash consideration of $830.9 million.
- On November 2, 2023, following the announcement of major changes to its organizational structure against the backdrop of a global crisis in media industries, TVA Group launched a reorganization plan that will refocus its mission on broadcasting, restructure its news division and optimize its real estate assets. The plan to reduce operating costs will result in a workforce reduction of 547 employees.
____________________________ |
1 See "Adjusted EBITDA" under "Definitions." |
2 See "Adjusted cash flows from operations" under "Definitions." |
3 See "Key performance indicator" under "Definitions." |
4 See "Adjusted income from operations" under "Definitions." |
Fourth quarter 2023
- In the fourth quarter of 2023, Quebecor recorded revenues of $1.50 billion, up $319.8 million (27.0%), adjusted EBITDA of $565.4 million, up $82.4 million (17.1%), and adjusted cash flows from operations of $395.7 million, up $36.3 million (10.1%) compared with the same period in 2022.
- The Telecommunications segment increased its revenues by $337.7 million (35.2%), its adjusted EBITDA by $83.1 million (17.5%), and its adjusted cash flows from operations by $38.4 million (10.7%), reflecting, among other things, the contribution of the Freedom acquisition.
- The Telecommunications segment increased its revenues from mobile services and equipment (by $343.4 million or more than 100%) due to the impact of the Freedom acquisition and growth at Videotron, as well as increased revenues from Internet access ($4.4 million or 1.4%).
- There was a net increase of 48,300 RGUs (0.6%) in the fourth quarter of 2023, including 66,100 connections (1.8%) to the mobile telephony service and 6,300 subscriptions (0.4%) to Internet access services.
- Quebecor's consolidated net income attributable to shareholders was up $3.7 million ($0.01 per basic share) to $146.2 million ($0.63 per basic share).
- Adjusted income from operating activities: $167.5 million ($0.73 per basic share), an increase of $8.1 million ($0.04 per basic share) or 5.1%.
Comments by Pierre Karl Péladeau, President and Chief Executive Officer of Quebecor
2023 was a watershed year for Quebecor with the acquisition of Freedom in April 2023, which made the Corporation Canada's fourth largest national wireless carrier. We are proud to have rapidly implemented competitive and innovative strategies to deliver on our promise to lower telecommunications prices across the country and honour our commitments to Canadians and to Innovation, Science and Economic Development Canada ("ISED Canada").
Our Telecommunications segment significantly increased its market share in Canada with the acquisition of Freedom, and we didn't stop there. We heightened competition across Canada and significantly increased customer growth with 230,100 (13.5%) new mobile lines in 2023, more than double the growth of 2022, leveraging our brand portfolio now composed of Videotron, Freedom and Fizz. In the fourth quarter of 2023, we added 66,100 lines, five times more than in the same quarter of 2022. We also continued investing in Freedom's wireless network to make it one of the most reliable and powerful in the country. And we continue to innovate, as demonstrated by the recent launch of Freedom's Roam Beyond and Videotron's Canada‑International mobile plans, which offer mobile coverage across Canada and in dozens of destinations around the world, allowing our customers to travel without roaming charges.
The number of Canadians reached by our mobile networks increased in 2023 from 7.5 million (or 20% of Canada's population) to more than 26 million (or 70% of Canada's population), thereby significantly increasing our addressable market. Entering new markets as an MVNO will enable us to further expand our reach. We are now in a position to gradually roll out our attractive, advantageously priced plans to millions of additional consumers across Canada. We've recently enhanced our offering with the launch of Fizz outside Québec. It will gradually be rolled out across the country in 2024.
To strengthen our nationwide footprint and support the roll‑out of our 5G network, we announced in November 2023 the acquisition of 305 blocks of spectrum in the 3800 MHz band for $298.9 million. More than 60% of these blocks are outside Québec. This strategic addition to our wireless spectrum portfolio brings Quebecor's total investment in the 3500 MHz and 3800 MHz bands to over $1.1 billion.
Quebecor posted an excellent financial performance in 2023, growing its revenues by 19.9%, its adjusted EBITDA by 15.7% and its adjusted cash flows from operations by 16.7%. The Telecommunications segment increased its revenues by 25.2%, its adjusted EBITDA by 16.6%, and its adjusted cash flows from operations by 16.3% in 2023 as a result of the Freedom acquisition and organic growth. As we continue to successfully integrate Freedom, the 10.1% increase in Quebecor's adjusted income from operating activities in 2023 demonstrates the considerable leverage created by this acquisition as well as our disciplined management of operating costs, as evidenced by our profit margin, still one of the highest in the telecoms industry. Quebecor also had an outstanding fourth quarter, with increases of 27.0% in revenues, 17.1% in adjusted EBITDA and 10.1% in adjusted cash flows from operations.
Since acquiring Freedom in April 2023, we have successfully repaid more than $400 million in net debt. We have reduced our consolidated net debt leverage ratio1 from 3.6x on the date of the Freedom acquisition to 3.4x at December 31, 2023, one of the lowest in Canada's telecom services industry. This sets the stage for us to achieve our objective of sustaining a leverage ratio in the low 3x area. With net available liquidity of $1.91 billion at December 31, 2023, we have a solid financial position that enables us to remain focused on our strategic priorities, while managing our capital investments in a disciplined manner.
As excellent customer experience is at the heart of our business model, we were proud to receive a string of distinctions in 2023 that confirmed our status as the leader in customer service, including telecom with the best in‑store experience in Québec according to Léger's WOW index, best online experience in Canada for Fizz, telecom with the best customer service in Québec, and most respected telecom in Québec for the 17th time since 2006.
TVA Group posted negative adjusted EBITDA of $5.4 million in 2023, an unfavourable variance of $24.8 million compared with the previous year, as revenues and adjusted EBITDA declined significantly in all its lines of business. The Broadcasting segment saw another large drop in advertising revenues. This business continues to be hard‑hit by the proliferation of online video streaming platforms, competition from the web giants and unfair competition from Radio‑Canada, which receives massive government subsidies. The weak results were also due to the activities of the Film Production & Audiovisual Services segment, which were strongly affected by the shutdown of foreign productions because of the screenwriters' and actors' strikes in the U.S. during the year.
Faced with an unprecedented global crisis in the media industry, TVA Group was forced to launch a reorganization plan to address its unsustainable money‑losing situation. The measures announced on November 2, 2023 included the difficult but necessary decision to eliminate 547 positions in order to restore TVA Group's financial situation and ensure its survival. Implementation of this plan will enable TVA Group to pursue its mission by broadcasting the best original homegrown content produced in Québec, providing reliable, high‑quality news coverage throughout Québec and carrying major sporting events live.
To protect its market share, TVA Group continued to invest in content for the TVA Network and its specialty channels. The family show Chanteurs masqués, which drew an average audience of over 1.8 million viewers, the shows La Voix, Sortez‑moi d'ici! and the daily program Indéfendable, with more than 1.5 million viewers each, and TVA Nouvelles, which drew 4.3 million viewers per week and was the most‑watched newscast in every time slot (noon, 6 p.m. and 10 p.m.), all contributed strongly to the TVA Network's high ratings. TVA Group increased its market share to 41.0% as of December 31, 2023, 0.2 percentage points higher than in 2022. TVA Group's audience statistics speak for themselves: it has more than twice the market share of its competitors.
Guided by its determination to pursue its Canadian expansion by offering the best products, the best service and the best prices, Quebecor continues to execute rigorously on its strategies while maintaining tight financial discipline. Clearly, our successes of the past year were attributable to our people, who demonstrated agility, outside‑the‑box thinking and teamwork on a daily basis while providing our customers with outstanding service. Building on our successes and on the solid foundations for long‑term growth we laid in 2023, we look to the future with confidence, fully committed to creating sustainable value for all our stakeholders.
_________________________ |
1 See "Consolidated net debt leverage ratio" under "Definitions." |
Non‑IFRS financial measures
The Corporation uses financial measures not standardized under International Financial Reporting Standards ("IFRS"), such as adjusted EBITDA, adjusted income from operating activities, adjusted cash flows from operations, free cash flows from operating activities and consolidated net debt leverage ratio, and key performance indicators, including RGUs. Beginning in the first quarter of 2023, the Corporation has elected to exclude subscriptions to OTT video services and customers of third‑party Internet access ("TPIA") providers from its RGUs, as they are not highly representative for the purpose of assessing the Corporation's performance. Definitions of the non‑IFRS measures and key performance indicator used by the Corporation in this press release are provided in the "Definitions" section.
Financial tables
Table 1
Consolidated summary of income, cash flows and balance sheet
(in millions of Canadian dollars, except per basic share data)
Years ended |
Three months ended |
||||||||||
2023 |
2022 |
2021 |
2023 |
2022 |
|||||||
Income |
|||||||||||
Revenues: |
|||||||||||
Telecommunications |
$ |
4,654.0 |
$ |
3,718.2 |
$ |
3,735.0 |
$ |
1,297.7 |
$ |
960.0 |
|
Media |
721.9 |
755.4 |
776.0 |
204.8 |
215.4 |
||||||
Sports and Entertainment |
213.4 |
190.6 |
167.0 |
56.4 |
54.1 |
||||||
Inter‑segment |
(155.0) |
(132.3) |
(123.6) |
(54.1) |
(44.5) |
||||||
5,434.3 |
4,531.9 |
4,554.4 |
1,504.8 |
1,185.0 |
|||||||
Adjusted EBITDA (negative adjusted EBITDA): |
|||||||||||
Telecommunications |
2,230.3 |
1,912.9 |
1,875.7 |
559.0 |
475.9 |
||||||
Media |
7.7 |
25.0 |
83.4 |
13.6 |
14.8 |
||||||
Sports and Entertainment |
23.0 |
19.4 |
20.4 |
2.2 |
2.6 |
||||||
Head Office |
(23.2) |
(22.8) |
(6.3) |
(9.4) |
(10.3) |
||||||
2,237.8 |
1,934.5 |
1,973.2 |
565.4 |
483.0 |
|||||||
Depreciation and amortization |
(909.0) |
(767.7) |
(783.8) |
(231.1) |
(189.9) |
||||||
Financial expenses |
(408.4) |
(323.0) |
(333.4) |
(107.0) |
(79.4) |
||||||
(Loss) gain on valuation and translation of financial instruments |
(5.0) |
(19.2) |
14.4 |
(8.7) |
(16.5) |
||||||
Restructuring, acquisition costs and other |
(52.4) |
(14.5) |
(4.1) |
(23.5) |
(5.2) |
||||||
Loss on debt refinancing |
– |
– |
(80.9) |
– |
– |
||||||
Income taxes |
(227.9) |
(213.4) |
(197.0) |
(53.9) |
(49.5) |
||||||
Net income |
$ |
635.1 |
$ |
596.7 |
$ |
588.4 |
$ |
141.2 |
$ |
142.5 |
|
Net income attributable to shareholders |
$ |
650.5 |
$ |
599.7 |
$ |
578.4 |
$ |
146.2 |
$ |
142.5 |
|
Adjusted income from operating activities |
688.1 |
624.8 |
621.9 |
167.5 |
159.4 |
||||||
Per basic share: |
|||||||||||
Net income attributable to shareholders |
2.82 |
2.55 |
2.38 |
0.63 |
0.62 |
||||||
Adjusted income from operating activities |
2.98 |
2.66 |
2.55 |
0.73 |
0.69 |
||||||
Table 1 (continued) |
Years ended |
Three months ended |
||||||||
2023 |
2022 |
2021 |
2023 |
2022 |
||||||
Additions to property, plant and equipment and to intangible assets: |
||||||||||
Telecommunications |
$ 536.7 |
$ |
457.1 |
$ |
537.1 |
$ |
160.4 |
$ |
115.7 |
|
Media |
12.9 |
32.0 |
44.9 |
6.2 |
6.2 |
|||||
Sports and Entertainment |
7.7 |
3.9 |
4.3 |
2.9 |
1.3 |
|||||
Head Office |
1.1 |
1.9 |
4.8 |
0.2 |
0.4 |
|||||
558.4 |
494.9 |
591.1 |
169.7 |
123.6 |
||||||
Acquisition of spectrum licences |
9.9 |
– |
830.0 |
– |
– |
|||||
Cash flows: |
||||||||||
Adjusted cash flows from operations: |
||||||||||
Telecommunications |
1,693.6 |
1,455.8 |
1,338.6 |
398.6 |
360.2 |
|||||
Media |
(5.2) |
(7.0) |
38.5 |
7.4 |
8.6 |
|||||
Sports and Entertainment |
15.3 |
15.5 |
16.1 |
(0.7) |
1.3 |
|||||
Head Office |
(24.3) |
(24.7) |
(11.1) |
(9.6) |
(10.7) |
|||||
1,679.4 |
1,439.6 |
1,382.1 |
395.7 |
359.4 |
||||||
Free cash flows from operating activities1 |
910.5 |
783.2 |
572.3 |
184.4 |
223.6 |
|||||
Cash flows provided by operating activities |
1,462.2 |
1,262.7 |
1,182.6 |
335.7 |
325.5 |
|||||
Dividends declared |
277.1 |
282.1 |
267.6 |
69.3 |
69.4 |
|||||
Dividends declared per basic share |
1.20 |
1.20 |
1.10 |
0.30 |
0.30 |
|||||
Balance sheet: |
||||||||||
Cash and cash equivalents |
$ 11.1 |
$ |
6.6 |
$ |
64.7 |
|||||
Working capital |
(1,125.6) |
(724.7) |
50.4 |
|||||||
Net assets related to derivative financial instruments |
110.8 |
520.3 |
382.3 |
|||||||
Total assets |
12,741.3 |
10,625.3 |
10,763.0 |
|||||||
Total long‑term debt (including current portion) |
7,668.2 |
6,517.7 |
6,554.0 |
|||||||
Lease liabilities (current and long term) |
376.2 |
186.2 |
183.2 |
|||||||
Convertible debentures, including embedded derivatives |
165.5 |
160.0 |
141.6 |
|||||||
Equity attributable to shareholders |
1,726.9 |
1,357.3 |
1,255.6 |
|||||||
Equity |
1,837.7 |
1,483.5 |
1,378.8 |
|||||||
Consolidated net debt leverage ratio |
3.39x |
3.20x |
3.19x |
|||||||
______________________ |
1 See "Free cash flows from operating activities" under "Definitions." |
2023/2022 financial year comparison
Revenues: $5.43 billion, a $902.4 million (19.9%) increase.
- Revenues increased in Telecommunications ($935.8 million or 25.2% of segment revenues), due to the impact of the Freedom acquisition and growth in mobile services and equipment and Internet access services, and in Sports and Entertainment ($22.8 million or 12.0%).
- Revenues decreased in Media ($33.5 million or ‑4.4%).
Adjusted EBITDA: $2.24 billion, a $303.3 million (15.7%) increase.
- Adjusted EBITDA increased in Telecommunications ($317.4 million or 16.6% of segment adjusted EBITDA), due primarily to Freedom's contribution and also to the increased profitability of Videotron's other activities, and in Sports and Entertainment ($3.6 million or 18.6%).
- Adjusted EBITDA decreased in Media ($17.3 million).
- The change in the fair value of Quebecor stock options and stock‑price‑based share units resulted in a $2.8 million unfavourable variance in the Corporation's stock‑based compensation charge in 2023 compared with 2022.
Net income attributable to shareholders: $650.5 million ($2.82 per basic share) in 2023, compared with $599.7 million ($2.55 per basic share) in 2022, an increase of $50.8 million ($0.27 per basic share) or 8.5%.
- The favourable variances were:
- $303.3 million increase in adjusted EBITDA;
- $14.2 million favourable variance in gains and losses on valuation and translation of financial instruments, including $13.0 million without any tax consequences;
- $12.4 million favourable variance in non‑controlling interest.
- The unfavourable variances were:
- $141.3 million increase in the depreciation and amortization charge;
- $85.4 million increase related to financial expenses;
- $37.9 million unfavourable variance in the charge for restructuring, acquisition costs and other;
- $14.5 million increase in the income tax expense.
Adjusted income from operating activities: $688.1 million ($2.98 per basic share) in 2023, compared with $624.8 million ($2.66 per basic share) in 2022, an increase of $63.3 million ($0.32 per basic share) or 10.1%.
Adjusted cash flows from operations: $1.68 billion, a $239.8 million (16.7%) increase due primarily to the $303.3 million increase in adjusted EBITDA, partially offset by a $67.8 million increase in additions to intangible assets.
Cash flows provided by operating activities: $1.46 billion, a $199.5 million (15.8%) increase due primarily to the increase in adjusted EBITDA and the decrease in current income taxes, partially offset by the increase in the cash portion of financial expenses, the unfavourable net change in non‑cash balances related to operating activities, and the unfavourable variance in the cash portion of restructuring, acquisition costs and other.
2023/2022 fourth quarter comparison
Revenues: $1.50 billion, a $319.8 million (27.0%) increase.
- Revenues increased in Telecommunications ($337.7 million or 35.2% of segment revenues), due to the impact of the Freedom acquisition and growth in mobile services and equipment and Internet access services, and in Sports and Entertainment ($2.3 million or 4.3%).
- Revenues decreased in Media ($10.6 million or ‑4.9%).
Adjusted EBITDA: $565.4 million, an $82.4 million (17.1%) increase.
- Adjusted EBITDA increased in Telecommunications ($83.1 million or 17.5% of segment adjusted EBITDA), including Freedom's contribution.
- Adjusted EBITDA decreased in Media ($1.2 million or ‑8.1%) and in Sports and Entertainment ($0.4 million or ‑15.4%).
- The change in the fair value of Quebecor stock options and stock‑price‑based share units resulted in a $0.2 million favourable variance in the Corporation's stock‑based compensation charge in the fourth quarter of 2023 compared with the same period of 2022.
Net income attributable to shareholders: $146.2 million ($0.63 per basic share) in the fourth quarter of 2023, compared with $142.5 million ($0.62 per basic share) in the same period of 2022, an increase of $3.7 million ($0.01 per basic share).
- The favourable variances were:
- $82.4 million increase in adjusted EBITDA;
- $7.8 million favourable variance in gains and losses on valuation and translation of financial instruments, including $7.7 million without any tax consequences.
- $5.0 million favourable variance in non‑controlling interest.
- The unfavourable variances were:
- $41.2 million increase in the depreciation and amortization charge;
- $27.6 million increase related to financial expenses;
- $18.3 million unfavourable variance in the charge for restructuring, acquisition costs and other;
- $4.4 million increase in the income tax expense.
Adjusted income from operating activities: $167.5 million ($0.73 per basic share) in the fourth quarter of 2023, compared with $159.4 million ($0.69 per basic share) in the same period of 2022, an increase of $8.1 million ($0.04 per basic share) or 5.1%.
Adjusted cash flows from operations: $395.7 million, a $36.3 million (10.1%) increase due primarily to the $82.4 million increase in adjusted EBITDA, partially offset by a $32.1 million increase in additions to intangible assets and a $14.0 million increase in additions to property, plant and equipment.
Cash flows provided by operating activities: $335.7 million, a $10.2 million (3.1%) increase due primarily to the increase in adjusted EBITDA and the decrease in current income taxes, partially offset by the unfavourable net change in non‑cash balances related to operating activities, the increase in the cash portion of financial expenses and the unfavourable variance in the cash portion of restructuring, acquisition costs and other.
Investing and financing operations
- On June 28, 2023, TVA Group terminated its secured revolving credit facility in the amount of $75.0 million.
- On April 3, 2023, Videotron entered into a new $2.10 billion secured term credit facility with a syndicate of financial institutions to finance the acquisition of Freedom. The term credit facility consists of three tranches of equal size maturing in October 2024, April 2026 and April 2027, bearing interest at Bankers' acceptance rate, Secured Overnight Financing Rate ("SOFR"), Canadian prime rate or U.S. prime rate, plus a premium determined by Videotron's leverage ratio. On April 10, 2023, Videotron entered into a floating‑to‑fixed interest rate swap agreement in connection with the $700.0 million tranche maturing in April 2027, fixing the interest rate at 5.203% based on Videotron's leverage ratio at that time. The swap became effective on May 4, 2023 and matures on April 3, 2027.
- On January 17, 2023, Quebecor Media redeemed at maturity its Senior Notes in aggregate principal amount of US$850.0 million, bearing interest at 5.75%, and unwound the related hedging contracts for a total cash consideration of $830.9 million. Drawings from the Videotron secured revolving credit facility were used to finance this redemption.
- On January 13, 2023, Videotron's secured revolving credit facility was amended to increase it from $1.50 billion to $2.00 billion. Certain terms and conditions of this credit facility were also amended.
Capital stock
On August 9, 2023, the Board of Directors of the Corporation authorized 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 2,000,000 Class B Shares representing approximately 1.3% of issued and outstanding Class B Shares as of August 1, 2023. The purchases can be made from August 15, 2023 to August 14, 2024, at prevailing market prices on the open market through the facilities of the Toronto Stock Exchange or other alternative trading systems in Canada. All shares purchased under the bid will be cancelled.
On August 11, 2023, the Corporation entered 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 Toronto Stock Exchange. It came into effect on August 15, 2023 and will terminate on the same date as the normal course issuer bid.
Under the plan, before entering a self‑imposed blackout period, the Corporation may, but is not required to, ask the designated broker to make purchases under the normal course issuer bid. Such purchases shall be made at the discretion of the designated broker, within parameters established by the Corporation prior to the blackout periods. Outside the blackout periods, purchases will be made at the discretion of the Corporation's management.
In 2023, the Corporation purchased and cancelled 260,500 Class B Shares for a total cash consideration of $7.8 million (8,321,451 Class B Shares for a total cash consideration of $237.0 million in 2022). The excess of $6.2 million of the purchase price over the carrying value of Class B Shares repurchased was recorded as a reduction of retained earnings in 2023 ($188.0 million in 2022).
Dividends
On February 21, 2024, the Board of Directors of Quebecor declared a quarterly dividend of $0.325 per share on its Class A Shares and Class B Shares, payable on April 2, 2024 to shareholders of record at the close of business on March 8, 2024. This dividend is designated an eligible dividend, as provided under subsection 89(14) of the Canadian Income Tax Act and its provincial counterpart.
Acquisition of Freedom
On April 3, 2023, Videotron acquired all the issued shares of Freedom from Shaw. Videotron paid $2.07 billion in cash, net of cash acquired of $103.2 million. As part of the transaction, Videotron assumed certain liabilities, mainly lease obligations. The consideration paid is subject to certain post‑closing adjustments. Videotron's acquisition of Freedom includes the Freedom Mobile brand's entire wireless and Internet customer base, as well as its owned infrastructure, spectrum and retail outlets. The transaction also includes a long‑term undertaking by Shaw and Rogers to provide Videotron with transport services (including backhaul and backbone), roaming services and wholesale Internet services. Videotron has also made certain commercial commitments to the Minister of Innovation, Science and Industry. Through the acquisition of Freedom, Videotron has entered the British Columbia and Alberta telecommunications markets and strengthened its position in the Ontario market.
On April 3, 2023, Videotron entered into a new $2.10 billion secured term credit facility with a syndicate of financial institutions to finance the acquisition of Freedom. The term credit facility consists of three tranches of equal size maturing in October 2024, April 2026 and April 2027, bearing interest at Bankers' acceptance rate, SOFR, Canadian prime rate or U.S. prime rate, plus a premium determined by Videotron's leverage ratio. On April 10, 2023, Videotron entered into a floating‑to‑fixed interest rate swap agreement in connection with the $700.0 million tranche maturing in April 2027, fixing the interest rate at 5.203% based on Videotron's leverage ratio at that time. The swap became effective on May 4, 2023 and matures on April 3, 2027.
600 MHz, 3500 MHz and 3800 MHz spectrum auction
On November 30, 2023, Quebecor announced an investment of $298.9 million in the acquisition by Videotron of 305 blocks of spectrum in the 3800 MHz band across Canada in the latest spectrum auction held by ISED Canada. Approximately 61% of these 305 blocks of spectrum are located outside Québec, mainly in southern Ontario, Alberta and British Columbia. Videotron made an initial deposit of $59.8 million on January 17, 2024 and the balance of $239.1 million will be paid in May 2024. On January 26, 2023, Quebecor also announced a $9.9 million investment by Videotron in the acquisition of spectrum licences in the 600 MHz band in Manitoba and in the 3500 MHz band in Québec.
Convertible debentures
In accordance with the terms of the trust indenture governing the convertible debentures, the quarterly dividend declared on November 8, 2023 on Quebecor Class B Shares triggered an adjustment to the floor price and ceiling price then in effect. Accordingly, effective November 23, 2023, the conversion features of the convertible debentures are subject to an adjusted floor price of approximately $23.87 per share (that is, a maximum number of approximately 6.283,314 Class B Shares corresponding to a ratio of $150.0 million to the adjusted floor price) and an adjusted ceiling price of approximately $29.84 per share (that is, a minimum number of approximately 5,026,651 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 fourth quarter and full‑year 2023 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 and the SEDAR+ website at www.sedarplus.ca.
Conference call for investors and webcast
Quebecor will hold a conference call to discuss its fourth‑quarter and full‑year 2023 results on February 22, 2024 at 10:00 a.m. EST. 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 96614#. 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. Anyone unable to attend the conference call will be able to listen to a recording by dialing 1‑877‑293‑8133, access code 96614#, recording access code 0114269#. The recording will be available until May 22, 2024.
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 the possibility that the Corporation is unable to successfully carry out its business strategies, including but not limited to the geographic expansion of its telecommunications activities and the reorganization of TVA Group, seasonality (including seasonal fluctuations in customer orders), operating risk (including fluctuations in demand for Quebecor's products and the pricing of competitors' products and services), new competition and Quebecor's ability to retain its current customers and attract new ones, Quebecor's ability to penetrate new, highly competitive markets and the accuracy of estimates of the size of potential markets, 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, political instability in some countries, risks associated with emergency measures implemented by various governments, credit risk, financial risks, debt risks, risks related to interest rate fluctuations, foreign exchange risks, risks associated with government acts and regulations, risks linked to an unfavorable judgment or settlement of a dispute, risks associated with labour agreements, risks related to changes in tax legislation, and changes in the general political and economic environment.
In addition, there are risks associated with the acquisition of Freedom and the strategy for expansion outside Québec, including Quebecor's ability to successfully integrate Freedom's operations following the acquisition and to realize synergies, and potential unknown liabilities or costs associated with the acquisition of Freedom. As well, the anticipated benefits and effects of the acquisition of Freedom may not be realized in a timely manner or at all, and future operating costs and capital expenditures could be different than anticipated. In addition, unanticipated litigation or other regulatory proceedings associated with the acquisition of Freedom could result in changes to the parameters of the transaction. Finally, the impacts of the significant and recurring investments that will be required in the new markets of Freedom and Videotron, operating as an MVNO or otherwise, for development and expansion and to compete effectively with the ILECs and other current or potential competitors in these markets, including the fact that the post–acquisition Videotron business will continue to face the same risks that Videotron currently faces, but will also face increased risks relating to new geographies and markets.
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.sedarplus.ca and www.quebecor.com, including, in particular, the "Risks and Uncertainties" section of the Corporation's Management Discussion and Analysis for the year ended December 31, 2023.
The forward‑looking statements in this press release reflect the Corporation's expectations as of November 9, 2023 and are subject to change after this date. The Corporation 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 X: www.x.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) gain on valuation and translation of financial instruments, restructuring, acquisition costs and other, loss on debt refinancing and income taxes. 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 IFRS financial 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'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 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 adjusted cash flows from operations and free cash flows from operating activities. The Corporation's definition of adjusted EBITDA may not be the same as similarly titled measures reported by other companies.
Table 2 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, 2023 and 2022 presented in Table 2 below is drawn from the Corporation's unaudited quarterly consolidated financial statements.
Table 2
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 |
Three months ended |
||||||||||
2023 |
2022 |
2021 |
2023 |
2022 |
|||||||
Adjusted EBITDA (negative adjusted EBITDA): |
|||||||||||
Telecommunications |
$ |
2,230.3 |
$ |
1,912.9 |
$ |
1,875.7 |
$ |
559.0 |
$ |
475.9 |
|
Media |
7.7 |
25.0 |
83.4 |
13.6 |
14.8 |
||||||
Sports and Entertainment |
23.0 |
19.4 |
20.4 |
2.2 |
2.6 |
||||||
Head Office |
(23.2) |
(22.8) |
(6.3) |
(9.4) |
(10.3) |
||||||
2,237.8 |
1,934.5 |
1,973.2 |
565.4 |
483.0 |
|||||||
Depreciation and amortization |
(909.0) |
(767.7) |
(783.8) |
(231.1) |
(189.9) |
||||||
Financial expenses |
(408.4) |
(323.0) |
(333.4) |
(107.0) |
(79.4) |
||||||
(Loss) gain on valuation and translation of financial instruments |
(5.0) |
(19.2) |
14.4 |
(8.7) |
(16.5) |
||||||
Restructuring, acquisition costs and other |
(52.4) |
(14.5) |
(4.1) |
(23.5) |
(5.2) |
||||||
Loss on debt refinancing |
– |
– |
(80.9) |
– |
– |
||||||
Income taxes |
(227.9) |
(213.4) |
(197.0) |
(53.9) |
(49.5) |
||||||
Net income |
$ |
635.1 |
$ |
596.7 |
$ |
588.4 |
$ |
141.2 |
$ |
142.5 |
|
Adjusted income from operating activities
The Corporation defines adjusted income from operating activities, as reconciled to net income attributable to shareholders under IFRS, as net income attributable to shareholders before (loss) gain on valuation and translation of financial instruments, restructuring, acquisition costs and other, and loss on debt refinancing, net of income tax related to adjustments and net income attributable to non‑controlling interest related to adjustments. Adjusted income from 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 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 operating activities is more representative for forecasting income. The Corporation's definition of adjusted income from operating activities may not be identical to similarly titled measures reported by other companies.
Table 3 provides a reconciliation of adjusted income from 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, 2023 and 2022 presented in Table 3 below is drawn from the Corporation's unaudited quarterly consolidated financial statements.
Table 3
Reconciliation of the adjusted income from 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 |
Three months ended |
||||||||||
2023 |
2022 |
2021 |
2023 |
2022 |
|||||||
Adjusted income from operating activities |
$ |
688.1 |
$ |
624.8 |
$ |
621.9 |
$ |
167.5 |
$ |
159.4 |
|
(Loss) gain on valuation and translation of financial instruments |
(5.0) |
(19.2) |
14.4 |
(8.7) |
(16.5) |
||||||
Restructuring, acquisition costs and other |
(52.4) |
(14.5) |
(4.1) |
(23.5) |
(5.2) |
||||||
Loss on debt refinancing |
– |
– |
(80.9) |
– |
– |
||||||
Income taxes related to adjustments1 |
12.7 |
8.6 |
26.1 |
6.3 |
4.8 |
||||||
Non‑controlling interest related to adjustments |
7.1 |
– |
1.0 |
4.6 |
– |
||||||
Net income attributable to shareholders |
$ |
650.5 |
$ |
599.7 |
$ |
578.4 |
$ |
146.2 |
$ |
142.5 |
|
1 Includes impact of fluctuations in income tax applicable to adjusted items, either for statutory reasons or in connection with tax transactions. |
Adjusted cash flows from operations and free cash flows from operating activities
Adjusted cash flows from operations
Adjusted cash flows from operations represents adjusted EBITDA, less additions to property, plant and equipment and to intangible assets (excluding licence acquisitions and renewals). Adjusted 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 lease liabilities, and share repurchases. Adjusted 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 IFRS financial performance measures or to the statement of cash flows as a measure of liquidity. Adjusted cash flows from operations is used by the Corporation's management and Board of Directors to evaluate the cash flows generated by the operations of all of its segments, on a consolidated basis, in addition to the operating cash flows generated by each segment. Adjusted cash flows from operations is also relevant because it is a component of the Corporation's annual incentive compensation programs. The Corporation's definition of adjusted cash flows from operations may not be identical to similarly titled measures reported by other companies.
Free cash flows from operating activities
Free cash flows from operating activities represents cash flows provided by 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 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 operating activities represents available funds for business acquisitions, licence acquisitions and renewals, payment of dividends, repayment of long‑term debt and lease liabilities, and share repurchases. Free cash flows from operating activities is not a measure of liquidity that is consistent with IFRS. It is not intended to be regarded as an alternative to IFRS financial performance measures or to the statement of cash flows as a measure of liquidity. The Corporation's definition of free cash flows from operating activities may not be identical to similarly titled measures reported by other companies.
Tables 4 and 5 provide a reconciliation of adjusted cash flows from operations and free cash flows from operating activities to cash flows provided by operating activities reported in the consolidated financial statements. The consolidated financial information for the three‑month periods ended December 31, 2023 and 2022 presented in tables 4 and 5 is drawn from the Corporation's unaudited quarterly consolidated financial statements.
Table 4
Adjusted cash flows from operations
(in millions of Canadian dollars)
Years ended |
Three months ended |
||||||||||||||||||||||||||||||||||||||||||||
2023 |
2022 |
2021 |
2023 |
2022 |
|||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA (negative adjusted EBITDA): |
|||||||||||||||||||||||||||||||||||||||||||||
Telecommunications |
$ |
2,230.3 |
$ |
1,912.9 |
$ |
1,875.7 |
$ |
559.0 |
$ |
475.9 |
|||||||||||||||||||||||||||||||||||
Media |
7.7 |
25.0 |
83.4 |
13.6 |
14.8 |
||||||||||||||||||||||||||||||||||||||||
Sports and Entertainment |
23.0 |
19.4 |
20.4 |
2.2 |
2.6 |
||||||||||||||||||||||||||||||||||||||||
Head Office |
(23.2) |
(22.8) |
(6.3) |
(9.4) |
(10.3) |
||||||||||||||||||||||||||||||||||||||||
2,237.8 |
1,934.5 |
1,973.2 |
565.4 |
483.0 |
|||||||||||||||||||||||||||||||||||||||||
Minus |
|||||||||||||||||||||||||||||||||||||||||||||
Additions to property, plant and equipment:1 |
|||||||||||||||||||||||||||||||||||||||||||||
Telecommunications |
(388.8) |
(378.9) |
(391.5) |
(109.6) |
(96.9) |
||||||||||||||||||||||||||||||||||||||||
Media |
(7.1) |
(21.8) |
(20.3) |
(4.9) |
(4.7) |
||||||||||||||||||||||||||||||||||||||||
Sports and Entertainment |
(2.1) |
(1.0) |
(0.8) |
(1.5) |
(0.4) |
||||||||||||||||||||||||||||||||||||||||
Head Office |
(0.2) |
(0.8) |
(1.5) |
(0.1) |
(0.1) |
||||||||||||||||||||||||||||||||||||||||
(398.2) |
(402.5) |
(414.1) |
(116.1) |
(102.1) |
|||||||||||||||||||||||||||||||||||||||||
Additions to intangible assets:2 |
|||||||||||||||||||||||||||||||||||||||||||||
Telecommunications |
(147.9) |
(78.2) |
(145.6) |
(50.8) |
(18.8) |
||||||||||||||||||||||||||||||||||||||||
Media |
(5.8) |
(10.2) |
(24.6) |
(1.3) |
(1.5) |
||||||||||||||||||||||||||||||||||||||||
Sports and Entertainment |
(5.6) |
(2.9) |
(3.5) |
(1.4) |
(0.9) |
||||||||||||||||||||||||||||||||||||||||
Head Office |
(0.9) |
(1.1) |
(3.3) |
(0.1) |
(0.3) |
||||||||||||||||||||||||||||||||||||||||
(160.2) |
(92.4) |
(177.0) |
(53.6) |
(21.5) |
|||||||||||||||||||||||||||||||||||||||||
Adjusted cash flows from operations |
|||||||||||||||||||||||||||||||||||||||||||||
Telecommunications |
1,693.6 |
1,455.8 |
1,338.6 |
398.6 |
360.2 |
||||||||||||||||||||||||||||||||||||||||
Media |
(5.2) |
(7.0) |
38.5 |
7.4 |
8.6 |
||||||||||||||||||||||||||||||||||||||||
Sports and Entertainment |
15.3 |
15.5 |
16.1 |
(0.7) |
1.3 |
||||||||||||||||||||||||||||||||||||||||
Head Office |
(24.3) |
(24.7) |
(11.1) |
(9.6) |
(10.7) |
||||||||||||||||||||||||||||||||||||||||
$ |
1,679.4 |
$ |
1,439.6 |
$ |
1,382.1 |
$ |
395.7 |
$ |
359.4 |
||||||||||||||||||||||||||||||||||||
Years ended |
Three months ended |
|||||||||||||||||||||||||||||||||||||||||
1 Reconciliation to cash flows used for additions to |
2023 |
2022 |
2021 |
2023 |
2022 |
|||||||||||||||||||||||||||||||||||||
Additions to property, plant and equipment |
$ |
(398.2) |
$ |
(402.5) |
$ |
(414.1) |
$ |
(116.1) |
$ |
(102.1) |
||||||||||||||||||||||||||||||||
Net variance in current operating items related to additions to |
1.2 |
7.4 |
(15.2) |
3.4 |
21.7 |
|||||||||||||||||||||||||||||||||||||
Cash flows used for additions to property, plant and equipment |
$ |
(397.0) |
$ |
(395.1) |
$ |
(429.3) |
$ |
(112.7) |
$ |
(80.4) |
||||||||||||||||||||||||||||||||
Years ended |
Three months ended |
|||||||||||||||||||||||||||||||||||||||||
2 Reconciliation to cash flows used for additions to |
2023 |
2022 |
2021 |
2023 |
2022 |
|||||||||||||||||||||||||||||||||||||
Additions to intangible assets |
$ |
(160.2) |
$ |
(92.4) |
$ |
(177.0) |
$ |
(53.6) |
$ |
(21.5) |
||||||||||||||||||||||||||||||||
Net variance in current operating items related to additions to |
3.8 |
1.0 |
(11.7) |
14.1 |
(0.5) |
|||||||||||||||||||||||||||||||||||||
Cash flows used for licence acquisitions |
(9.9) |
– |
(830.0) |
– |
– |
|||||||||||||||||||||||||||||||||||||
Cash flows used for additions to intangible assets |
$ |
(166.3) |
$ |
(91.4) |
$ |
(1,018.7) |
$ |
(39.5) |
$ |
(22.0) |
||||||||||||||||||||||||||||||||
Table 5
Free cash flows from operating activities and cash flows provided by operating activities reported in the consolidated financial statements
(in millions of Canadian dollars)
Years ended |
Three months ended |
|||||||||
2023 |
2022 |
2021 |
2023 |
2022 |
||||||
Adjusted cash flows from operations from Table 4 |
$ 1,679.4 |
$ |
1,439.6 |
$ |
1,382.1 |
$ |
395.7 |
$ |
359.4 |
|
Plus (minus) |
||||||||||
Cash portion of financial expenses |
(400.0) |
(315.7) |
(325.5) |
(104.8) |
(77.5) |
|||||
Cash portion of restructuring, acquisition costs and other |
(46.0) |
(10.3) |
(22.0) |
(24.3) |
(4.4) |
|||||
Current income taxes |
(221.2) |
(276.7) |
(256.9) |
(40.4) |
(60.1) |
|||||
Other |
2.4 |
1.0 |
8.6 |
(1.6) |
(4.8) |
|||||
Net change in non‑cash balances related to operating |
(109.1) |
(63.1) |
(187.1) |
(57.7) |
(10.2) |
|||||
Net variance in current operating items related to additions |
1.2 |
7.4 |
(15.2) |
3.4 |
21.7 |
|||||
Net variance in current operating items related to additions |
3.8 |
1.0 |
(11.7) |
14.1 |
(0.5) |
|||||
Free cash flows from operating activities |
910.5 |
783.2 |
572.3 |
184.4 |
223.6 |
|||||
Plus (minus) |
||||||||||
Cash flows used for additions to property, plant and |
397.0 |
395.1 |
429.3 |
112.7 |
80.4 |
|||||
Cash flows used for additions to intangible assets |
156.4 |
91.4 |
188.7 |
39.5 |
22.0 |
|||||
Proceeds from disposal of assets |
(1.7) |
(7.0) |
(7.7) |
(0.9) |
(0.5) |
|||||
Cash flows provided by operating activities |
$ 1,462.2 |
$ |
1,262.7 |
$ |
1,182.6 |
$ |
335.7 |
$ |
325.5 |
|
Consolidated net debt leverage ratio
The consolidated net debt leverage ratio represents consolidated net debt, excluding convertible debentures, divided by the trailing 12‑month adjusted EBITDA. Consolidated net debt, excluding convertible debentures, represents total long‑term debt plus bank indebtedness, lease liabilities, the current portion of lease liabilities and liabilities related to derivative financial instruments, less assets related to derivative financial instruments and cash and cash equivalents. The consolidated net debt leverage ratio serves to evaluate the Corporation's financial leverage and is used by management and the Board of Directors in its decisions on the Corporation's capital structure, including its financing strategy, and in managing debt maturity risks. The consolidated net debt leverage ratio excludes convertible debentures because, subject to certain conditions, those debentures can be repurchased at the Corporation's discretion by issuing Quebecor Class B Shares. Consolidated net debt leverage ratio is not a measure established in accordance with IFRS. It is not intended to be used as an alternative to IFRS measures or the balance sheet to evaluate the Corporation's financial position. The Corporation's definition of consolidated net debt leverage ratio may not be identical to similarly titled measures reported by other companies.
Table 6 provides the calculation of consolidated net debt leverage ratio and the reconciliation to balance sheet items reported in Quebecor's consolidated financial statements.
Table 6
Consolidated net debt leverage ratio
(in millions of Canadian dollars)
Dec. 31, |
Dec. 31, |
Dec. 31, |
||||||
Total long‑term debt1 |
$ 7,668.2 |
$ 6,517.7 |
$ 6,554.0 |
|||||
Plus (minus) |
||||||||
Lease liabilities2 |
376.2 |
186.2 |
183.2 |
|||||
Bank indebtedness |
9.6 |
10.1 |
− |
|||||
Derivative financial instruments3 |
(110.8) |
(520.3) |
(382.3) |
|||||
Cash and cash equivalents |
(11.1) |
(6.6) |
(64.7) |
|||||
Consolidated net debt excluding convertible debentures |
7,932.1 |
6,187.1 |
6,290.2 |
|||||
Divided by: |
||||||||
Trailing 12‑month adjusted EBITDA4 |
$ 2,337.1 |
$ 1,934.5 |
$ 1,973.2 |
|||||
Consolidated net debt leverage ratio4 |
3.39x |
3.20x |
3.19x |
|||||
1 Excluding changes in the fair value of long‑term debt related to hedged interest rate risk and financing costs. |
2 Current and long‑term liabilities |
3 Current and long‑term assets less long‑term liabilities. |
4 On a pro forma basis as at December 31, 2023, using Freedom's trailing 12‑month adjusted EBITDA. |
Key performance indicator
Revenue‑generating unit
The Corporation uses RGU, an industry metric, as a key performance indicator. An RGU represents, as the case may be, subscriber connections to the mobile and wireline telephony services and subscriptions to the Internet access and television 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.
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 |
||||||||
2023 |
2022 |
2023 |
2022 |
|||||||
Revenues |
$ |
1,504.8 |
$ |
1,185.0 |
$ |
5,434.3 |
$ |
4,531.9 |
||
Employee costs |
198.2 |
181.6 |
755.5 |
696.9 |
||||||
Purchase of goods and services |
741.2 |
520.4 |
2,441.0 |
1,900.5 |
||||||
Depreciation and amortization |
231.1 |
189.9 |
909.0 |
767.7 |
||||||
Financial expenses |
107.0 |
79.4 |
408.4 |
323.0 |
||||||
Loss on valuation and translation of financial instruments |
8.7 |
16.5 |
5.0 |
19.2 |
||||||
Restructuring, acquisition costs and other |
23.5 |
5.2 |
52.4 |
14.5 |
||||||
Income before income taxes |
195.1 |
192.0 |
863.0 |
810.1 |
||||||
Income taxes (recovery): |
||||||||||
Current |
40.4 |
60.1 |
221.2 |
276.7 |
||||||
Deferred |
13.5 |
(10.6) |
6.7 |
(63.3) |
||||||
53.9 |
49.5 |
227.9 |
213.4 |
|||||||
Net income |
$ |
141.2 |
$ |
142.5 |
$ |
635.1 |
$ |
596.7 |
||
Net income (loss) attributable to |
||||||||||
Shareholders |
$ |
146.2 |
$ |
142.5 |
$ |
650.5 |
$ |
599.7 |
||
Non-controlling interests |
(5.0) |
- |
(15.4) |
(3.0) |
||||||
Earnings per share attributable to shareholders |
||||||||||
Basic |
$ |
0.63 |
$ |
0.62 |
$ |
2.82 |
$ |
2.55 |
||
Diluted |
0.63 |
0.62 |
2.80 |
2.55 |
||||||
Weighted average number of shares outstanding (in millions) |
230.7 |
231.4 |
230.9 |
235.2 |
||||||
Weighted average number of diluted shares (in millions) |
230.9 |
231.5 |
236.2 |
235.2 |
||||||
QUEBECOR INC. |
||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
||||||||||
(in millions of Canadian dollars) |
Three months ended |
Twelve months ended |
||||||||
(unaudited) |
December 31 |
December 31 |
||||||||
2023 |
2022 |
2023 |
2022 |
|||||||
Net income |
$ |
141.2 |
$ |
142.5 |
$ |
635.1 |
$ |
596.7 |
||
Other comprehensive (loss) income: |
||||||||||
Items that may be reclassified to income: |
||||||||||
Cash flow hedges: |
||||||||||
(Loss) gain on valuation of derivative financial instruments |
(42.4) |
(0.1) |
5.4 |
(67.6) |
||||||
Deferred income taxes |
10.4 |
1.6 |
0.5 |
8.5 |
||||||
(Loss) gain on translation of investments in foreign associates |
(1.4) |
0.9 |
(11.3) |
(5.8) |
||||||
Items that will not be reclassified to income: |
||||||||||
Defined benefit plans: |
||||||||||
Re-measurement gain (loss) |
16.9 |
(81.2) |
16.9 |
141.3 |
||||||
Deferred income taxes |
(4.5) |
21.8 |
(4.5) |
(37.4) |
||||||
Equity investment: |
||||||||||
Loss on revaluation of an equity investment |
(2.8) |
(6.5) |
(2.7) |
(12.2) |
||||||
Deferred income taxes |
0.3 |
0.9 |
0.3 |
1.6 |
||||||
(23.5) |
(62.6) |
4.6 |
28.4 |
|||||||
Comprehensive income |
$ |
117.7 |
$ |
79.9 |
$ |
639.7 |
$ |
625.1 |
||
Comprehensive income (loss) attributable to |
||||||||||
Shareholders |
$ |
122.1 |
$ |
79.6 |
$ |
654.5 |
$ |
620.8 |
||
Non-controlling interests |
(4.4) |
0.3 |
(14.8) |
4.3 |
||||||
QUEBECOR INC. |
||||||||||||
SEGMENTED INFORMATION |
||||||||||||
(in millions of Canadian dollars) |
||||||||||||
(unaudited) |
||||||||||||
Three months ended December 31, 2023 |
||||||||||||
Sports |
Head |
|||||||||||
and |
office |
|||||||||||
Telecommuni- |
Enter- |
and Inter- |
||||||||||
cations |
Media |
tainment |
segments |
Total |
||||||||
Revenues |
$ |
1,297.7 |
$ |
204.8 |
$ |
56.4 |
$ |
(54.1) |
$ |
1,504.8 |
||
Employee costs |
125.1 |
50.6 |
11.4 |
11.1 |
198.2 |
|||||||
Purchase of goods and services |
613.6 |
140.6 |
42.8 |
(55.8) |
741.2 |
|||||||
Adjusted EBITDA1 |
559.0 |
13.6 |
2.2 |
(9.4) |
565.4 |
|||||||
Depreciation and amortization |
231.1 |
|||||||||||
Financial expenses |
107.0 |
|||||||||||
Loss on valuation and translation of financial instruments |
8.7 |
|||||||||||
Restructuring, acquisition costs and other |
23.5 |
|||||||||||
Income before income taxes |
$ |
195.1 |
||||||||||
Cash flows used for |
||||||||||||
Additions to property, plant and equipment2 |
$ |
110.1 |
$ |
1.2 |
$ |
1.4 |
$ |
- |
$ |
112.7 |
||
Additions to intangible assets |
36.6 |
1.4 |
1.4 |
0.1 |
39.5 |
|||||||
Three months ended December 31, 2022 |
||||||||||||
Sports |
Head |
|||||||||||
and |
office |
|||||||||||
Telecommuni- |
Enter- |
and Inter- |
||||||||||
cations |
Media |
tainment |
segments |
Total |
||||||||
Revenues |
$ |
960.0 |
$ |
215.4 |
$ |
54.1 |
$ |
(44.5) |
$ |
1,185.0 |
||
Employee costs |
102.7 |
56.5 |
11.2 |
11.2 |
181.6 |
|||||||
Purchase of goods and services |
381.4 |
144.1 |
40.3 |
(45.4) |
520.4 |
|||||||
Adjusted EBITDA1 |
475.9 |
14.8 |
2.6 |
(10.3) |
483.0 |
|||||||
Depreciation and amortization |
189.9 |
|||||||||||
Financial expenses |
79.4 |
|||||||||||
Loss on valuation and translation of financial instruments |
16.5 |
|||||||||||
Restructuring, acquisition costs and other |
5.2 |
|||||||||||
Income before income taxes |
$ |
192.0 |
||||||||||
Cash flows used for |
||||||||||||
Additions to property, plant and equipment2 |
$ |
74.4 |
$ |
5.5 |
$ |
0.4 |
$ |
0.1 |
$ |
80.4 |
||
Additions to intangible assets |
17.3 |
3.5 |
0.9 |
0.3 |
22.0 |
|||||||
QUEBECOR INC. |
||||||||||||
SEGMENTED INFORMATION (continued) |
||||||||||||
(in millions of Canadian dollars) |
||||||||||||
(unaudited) |
||||||||||||
Twelve months ended December 31, 2023 |
||||||||||||
Sports |
Head |
|||||||||||
and |
office |
|||||||||||
Telecommuni- |
Enter- |
and Inter- |
||||||||||
cations |
Media |
tainment |
segments |
Total |
||||||||
Revenues |
$ |
4,654.0 |
$ |
721.9 |
$ |
213.4 |
$ |
(155.0) |
$ |
5,434.3 |
||
Employee costs |
472.3 |
206.0 |
44.5 |
32.7 |
755.5 |
|||||||
Purchase of goods and services |
1,951.4 |
508.2 |
145.9 |
(164.5) |
2,441.0 |
|||||||
Adjusted EBITDA1 |
2,230.3 |
7.7 |
23.0 |
(23.2) |
2,237.8 |
|||||||
Depreciation and amortization |
909.0 |
|||||||||||
Financial expenses |
408.4 |
|||||||||||
Loss on valuation and translation of financial instruments |
5.0 |
|||||||||||
Restructuring, acquisition costs and other |
52.4 |
|||||||||||
Income before income taxes |
$ |
863.0 |
||||||||||
Cash flows used for |
||||||||||||
Additions to property, plant and equipment2 |
$ |
389.3 |
$ |
5.6 |
$ |
2.0 |
$ |
0.1 |
$ |
397.0 |
||
Additions to intangible assets |
156.6 |
3.8 |
5.3 |
0.6 |
166.3 |
|||||||
Twelve months ended December 31, 2022 |
||||||||||||
Sports |
Head |
|||||||||||
and |
office |
|||||||||||
Telecommuni- |
Enter- |
and Inter- |
||||||||||
cations |
Media |
tainment |
segments |
Total |
||||||||
Revenues |
$ |
3,718.2 |
$ |
755.4 |
$ |
190.6 |
$ |
(132.3) |
$ |
4,531.9 |
||
Employee costs |
397.7 |
228.5 |
42.0 |
28.7 |
696.9 |
|||||||
Purchase of goods and services |
1,407.6 |
501.9 |
129.2 |
(138.2) |
1,900.5 |
|||||||
Adjusted EBITDA1 |
1,912.9 |
25.0 |
19.4 |
(22.8) |
1,934.5 |
|||||||
Depreciation and amortization |
767.7 |
|||||||||||
Financial expenses |
323.0 |
|||||||||||
Loss on valuation and translation of financial instruments |
19.2 |
|||||||||||
Restructuring, acquisition costs and other |
14.5 |
|||||||||||
Income before income taxes |
$ |
810.1 |
||||||||||
Cash flows used for |
||||||||||||
Additions to property, plant and equipment2 |
$ |
369.7 |
$ |
23.5 |
$ |
1.0 |
$ |
0.9 |
$ |
395.1 |
||
Additions to intangible assets |
75.1 |
12.2 |
2.9 |
1.2 |
91.4 |
|||||||
1 |
The Chief Executive Officer uses adjusted EBITDA as the measure of profit to assess the performance of each segment. Adjusted EBITDA is a non-IFRS |
2 |
Subsidies of $39.3 million in the twelve-month period ended December 31, 2023 ($18.9 million and $123.1 million in the respective three-month and twelve-
|
QUEBECOR INC. |
||||||||||||
CONSOLIDATED STATEMENTS OF EQUITY |
||||||||||||
(in millions of Canadian dollars) |
||||||||||||
(unaudited) |
||||||||||||
Equity attributable to shareholders |
Equity |
|||||||||||
Accumulated |
attributable |
|||||||||||
other com- |
to non- |
|||||||||||
Capital |
Contributed |
Retained |
prehensive |
controlling |
Total |
|||||||
stock |
surplus |
earnings |
(loss) income |
interests |
equity |
|||||||
Balance as of December 31, 2021 |
$ |
965.2 |
$ |
17.4 |
$ |
292.3 |
$ |
(19.3) |
$ |
123.2 |
$ |
1,378.8 |
Net income (loss) |
- |
- |
599.7 |
- |
(3.0) |
596.7 |
||||||
Other comprehensive income |
- |
- |
- |
21.1 |
7.3 |
28.4 |
||||||
Dividends |
- |
- |
(282.1) |
- |
(1.3) |
(283.4) |
||||||
Repurchase of Class B Shares |
(49.0) |
- |
(188.0) |
- |
- |
(237.0) |
||||||
Balance as of December 31, 2022 |
916.2 |
17.4 |
421.9 |
1.8 |
126.2 |
1,483.5 |
||||||
Net income (loss) |
- |
- |
650.5 |
- |
(15.4) |
635.1 |
||||||
Other comprehensive income |
- |
- |
- |
4.0 |
0.6 |
4.6 |
||||||
Dividends |
- |
- |
(277.1) |
- |
(0.2) |
(277.3) |
||||||
Repurchase of Class B Shares |
(1.6) |
- |
(6.2) |
- |
- |
(7.8) |
||||||
Business disposal |
- |
- |
- |
- |
(0.4) |
(0.4) |
||||||
Balance as of December 31, 2023 |
$ |
914.6 |
$ |
17.4 |
$ |
789.1 |
$ |
5.8 |
$ |
110.8 |
$ |
1,837.7 |
QUEBECOR INC. |
||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||||
(in millions of Canadian dollars) |
Three months ended |
Twelve months ended |
||||||||
(unaudited) |
December 31 |
December 31 |
||||||||
2023 |
2022 |
2023 |
2022 |
|||||||
Cash flows related to operating activities |
||||||||||
Net income |
$ |
141.2 |
$ |
142.5 |
$ |
635.1 |
$ |
596.7 |
||
Adjustments for: |
||||||||||
Depreciation of property, plant and equipment |
141.2 |
134.2 |
582.2 |
548.5 |
||||||
Amortization of intangible assets |
60.5 |
44.9 |
226.7 |
176.5 |
||||||
Depreciation of right-of-use assets |
29.4 |
10.8 |
100.1 |
42.7 |
||||||
Loss on valuation and translation of financial instruments |
8.7 |
16.5 |
5.0 |
19.2 |
||||||
(Gain) loss on disposal of other assets |
(0.4) |
(0.1) |
(2.9) |
0.5 |
||||||
Impairment of assets |
0.5 |
0.9 |
8.5 |
3.7 |
||||||
Amortization of financing costs |
2.2 |
1.9 |
8.4 |
7.3 |
||||||
Deferred income taxes |
13.5 |
(10.6) |
6.7 |
(63.3) |
||||||
Other |
(3.4) |
(5.3) |
1.5 |
(6.0) |
||||||
393.4 |
335.7 |
1,571.3 |
1,325.8 |
|||||||
Net change in non-cash balances related to operating activities |
(57.7) |
(10.2) |
(109.1) |
(63.1) |
||||||
Cash flows provided by operating activities |
335.7 |
325.5 |
1,462.2 |
1,262.7 |
||||||
Cash flows related to investing activities |
||||||||||
Additions to property, plant and equipment |
(112.7) |
(80.4) |
(397.0) |
(395.1) |
||||||
Deferred subsidies used to finance additions to property, |
||||||||||
plant and equipment |
- |
(18.9) |
(39.3) |
(123.1) |
||||||
(112.7) |
(99.3) |
(436.3) |
(518.2) |
|||||||
Additions to intangible assets |
(39.5) |
(22.0) |
(166.3) |
(91.4) |
||||||
Business acquisitions |
- |
- |
(2,069.6) |
(22.1) |
||||||
Proceeds from disposals of assets |
0.9 |
0.5 |
1.7 |
7.0 |
||||||
Acquisitions of investments and other |
(0.3) |
0.2 |
(7.0) |
(6.6) |
||||||
Cash flows used in investing activities |
(151.6) |
(120.6) |
(2,677.5) |
(631.3) |
||||||
Cash flows related to financing activities |
||||||||||
Net change in bank indebtedness |
(13.0) |
(4.3) |
(0.5) |
10.1 |
||||||
Net change under revolving facilities, net of financing costs |
(84.0) |
(92.5) |
299.0 |
(213.3) |
||||||
Issuance of long-term debt, net of financing costs |
- |
- |
2,092.5 |
- |
||||||
Repayment of long-term debt |
- |
(43.5) |
(1,138.1) |
(44.6) |
||||||
Repayment of lease liabilities |
(31.1) |
(11.0) |
(94.5) |
(42.8) |
||||||
Settlement of hedging contracts |
- |
(0.8) |
307.2 |
(1.6) |
||||||
Repurchase of Class B Shares |
(0.7) |
(33.2) |
(7.8) |
(237.0) |
||||||
Dividends |
(69.3) |
(69.4) |
(277.1) |
(282.1) |
||||||
Dividends paid to non-controlling interests |
- |
- |
(0.2) |
(1.3) |
||||||
Cash flows (used in) provided by financing activities |
(198.1) |
(254.7) |
1,180.5 |
(812.6) |
||||||
Net change in cash, cash equivalents and restricted cash |
(14.0) |
(49.8) |
(34.8) |
(181.2) |
||||||
Cash, cash equivalents and restricted cash at beginning of period |
25.1 |
95.7 |
45.9 |
227.1 |
||||||
Cash, cash equivalents and restricted cash at end of period |
$ |
11.1 |
$ |
45.9 |
$ |
11.1 |
$ |
45.9 |
||
Cash, cash equivalents and restricted cash consist of |
||||||||||
Cash |
$ |
10.8 |
$ |
6.2 |
$ |
10.8 |
$ |
6.2 |
||
Cash equivalents |
0.3 |
0.4 |
0.3 |
0.4 |
||||||
Restricted cash |
- |
39.3 |
- |
39.3 |
||||||
$ |
11.1 |
$ |
45.9 |
$ |
11.1 |
$ |
45.9 |
|||
Interest and taxes reflected as operating activities |
||||||||||
Cash interest payments |
$ |
144.2 |
$ |
130.5 |
$ |
389.9 |
$ |
311.3 |
||
Cash income tax payments (net of refunds) |
37.3 |
59.5 |
285.4 |
282.4 |
||||||
QUEBECOR INC. CONSOLIDATED BALANCE SHEETS |
|||||||
(in millions of Canadian dollars) |
|||||||
(unaudited) |
December 31 |
December 31 |
|||||
| 2023 |
2022 |
||||||
Assets |
|||||||
Current assets |
|||||||
Cash and cash equivalents |
$ |
11.1 |
$ |
6.6 |
|||
Restricted cash |
- |
39.3 |
|||||
Accounts receivable |
1,175.1 |
840.7 |
|||||
Contract assets |
125.4 |
50.2 |
|||||
Income taxes |
49.0 |
10.8 |
|||||
Inventories |
512.1 |
406.2 |
|||||
Derivative financial instruments |
129.3 |
320.8 |
|||||
Other current assets |
192.3 |
135.5 |
|||||
2,194.3 |
1,810.1 |
||||||
Non-current assets |
|||||||
Property, plant and equipment |
3,417.9 |
2,897.6 |
|||||
Intangible assets |
3,385.1 |
2,275.0 |
|||||
Right-of-use assets |
340.8 |
155.4 |
|||||
Goodwill |
2,721.2 |
2,726.0 |
|||||
Derivative financial instruments |
35.8 |
199.5 |
|||||
Deferred income taxes |
23.4 |
22.0 |
|||||
Other assets |
622.8 |
539.7 |
|||||
10,547.0 |
8,815.2 |
||||||
Total assets |
$ |
12,741.3 |
$ |
10,625.3 |
|||
Liabilities and equity |
|||||||
Current liabilities |
|||||||
Bank indebtedness |
$ |
9.6 |
$ |
10.1 |
|||
Accounts payable, accrued charges and provisions |
1,185.9 |
950.3 |
|||||
Deferred revenue |
370.6 |
305.8 |
|||||
Deferred subsidies |
- |
39.3 |
|||||
Income taxes |
24.7 |
31.2 |
|||||
Convertible debentures |
150.0 |
- |
|||||
Current portion of long-term debt |
1,480.6 |
1,161.1 |
|||||
Current portion of lease liabilities |
98.5 |
37.0 |
|||||
3,319.9 |
2,534.8 |
||||||
Non-current liabilities |
|||||||
Long-term debt |
6,151.8 |
5,317.7 |
|||||
Convertible debentures |
- |
150.0 |
|||||
Lease liabilities |
277.7 |
149.2 |
|||||
Derivative financial instruments |
54.3 |
- |
|||||
Deferred income taxes |
809.7 |
780.3 |
|||||
Other liabilities |
290.2 |
209.8 |
|||||
7,583.7 |
6,607.0 |
||||||
Equity |
|||||||
Capital stock |
914.6 |
916.2 |
|||||
Contributed surplus |
17.4 |
17.4 |
|||||
Retained earnings |
789.1 |
421.9 |
|||||
Accumulated other comprehensive income |
5.8 |
1.8 |
|||||
Equity attributable to shareholders |
1,726.9 |
1,357.3 |
|||||
Non-controlling interests |
110.8 |
126.2 |
|||||
1,837.7 |
1,483.5 |
||||||
Total liabilities and equity |
$ |
12,741.3 |
$ |
10,625.3 |
|||
SOURCE Quebecor
Source: Hugues Simard, Chief Financial Officer, Quebecor Inc. and Quebecor Media Inc., [email protected], 514 380 7414; Information: Communications Department, Quebecor Inc. and Quebecor Media Inc., [email protected], 514 380 4572
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