Montréal, Québec ‑ Quebecor Inc. (“Quebecor” or “the Corporation”) today reported its consolidated financial results for the first quarter of 2024.

First quarter 2024 highlights

• Quebecor recorded revenues of $1.36 billion, up $247.2 million (22.2%), adjusted EBITDA of $559.5 million, up $116.7 million (26.4%), and adjusted cash flows from operations of $419.0 million, up $73.0 million (21.1%) compared with the same period in 2023.

• The Telecommunications segment increased its revenues by $254.5 million (27.5%), its adjusted EBITDA by $101.3 million (21.4%), and its adjusted cash flows from operations by $63.1 million (16.6%) in the first quarter of 2024, reflecting, among other things, the contribution of the Freedom Mobile ("Freedom") acquisition on April 3, 2023.

• The Telecommunications segment increased its revenues from mobile services and equipment ($264.2 million or 95.7%) due to the impact of the Freedom acquisition, as well as its revenues from Internet access ($5.8 million or 1.8%).

• There was a net increase of 17,400 revenue‑generating units (“RGUs”) (0.2%) in the first quarter of 2024, including 60,200 connections (1.6%) to the mobile telephony service.

• TVA Group Inc. ("TVA Group") recorded a $6.9 million (‑5.1%) decrease in revenues and a $4.7 million favourable variance in adjusted EBITDA compared with the first quarter of 2023.

• The Sports and Entertainment segment’s revenues decreased by $1.8 million (‑3.7%) and its adjusted EBITDA increased by $0.5 million (14.7%) in the first quarter of 2024.

• Quebecor’s consolidated net income attributable to shareholders: $173.2 million ($0.75 per basic share), up $52.3 million ($0.23 per basic share) or 43.3%.

• Adjusted income from operating activities : $163.1 million ($0.71 per basic share), an increase of $27.1 million ($0.12 per basic share) or 19.9%.

• The consolidated net debt leverage ratio improved from 3.39x at December 31, 2023 to 3.31x at March 31, 2024.

• On April 10, 2024, Videotron Ltd. ("Videotron") announced that it would help improve wireless coverage in outlying regions of Québec by installing at least 37 new cell towers in Abitibi‑Témiscamingue and the Laurentians in partnership with the Québec government.

• On May 6, 2024, credit rating agency S&P Global Ratings (“S&P”) upgraded Videotron’s credit rating from BB+ to BBB-. S&P also raised Videotron's unsecured debt rating from BB+ to BBB-.

Comments by Pierre Karl Péladeau, President and Chief Executive Officer of Quebecor
 

2024 will be remembered as the year of the passing of our esteemed Chair of the Board, the Right Honourable Brian Mulroney. Mr. Mulroney had been a pillar of our Board of Directors from the beginning of the millennium and an exemplary Chair for the past 10 years. With his unique experience, deep wisdom and sound advice, he made a major contribution to Quebecor's current growth and success. We are immensely grateful to him. As an expression of our deep gratitude, we are honoured to posthumously name Mr. Mulroney a Director Emeritus of the Corporation to forever enshrine his contribution and his attachment to Quebecor.

One year after the successful acquisition of Freedom, it is with immense pride that we mark this milestone in the history of Quebecor, which has established itself as Canada's fourth major national wireless carrier. By offering Canadians the best wireless products, services and prices, we have transformed Canada's telecommunications industry, as indicated by the 26.2% drop in the wireless component of the Consumer Price Index (CPI) between March 2023 and March 2024.

Quebecor posted an excellent performance in the first quarter of 2024, growing its revenues by 22.2%, its adjusted EBITDA by 26.4% and its adjusted cash flows from operations by 21.1%. The financial leverage generated by the Freedom acquisition is also reflected in the 19.9% increase in adjusted income from continuing operations. In addition, through disciplined management of our operating costs, we were able to reduce our consolidated net debt by more than $140 million in the first quarter of 2024, which brought our consolidated net debt leverage ratio down by 0.08x during the quarter to 3.31x at March 31, 2024, the lowest in the Canadian telecom industry.

With its portfolio of complementary brands, which now consists of Videotron, Freedom and Fizz, our Telecommunications segment had a solid first quarter in 2024, increasing its revenues by 27.5%, its adjusted EBITDA by 21.4% and its adjusted cash flow from operations by 16.6%. Our line of competitively priced plans, with true nationwide coverage, drove customer base growth; we have added 264,100 lines (15.2%) to our mobile telephony services over the past 12 months. We also announced that, following a successful beta test, our Fizz brand will be stepping up its Canadian expansion and offering extremely attractive plans to the 26 million residents of Québec, Ontario, Manitoba, Alberta and British Columbia over the coming months. Demonstrating our ability to innovate while offering the best prices, Freedom announced the gradual roll‑out of its new wireline Internet and TV services, Freedom Home Internet and Freedom TV, to its existing customer base, becoming a true multiservice player and positioning itself to reach a new customer segment seeking bundled plans.

Under a new Québec government initiative to improve wireless coverage in outlying regions of Québec, Videotron was chosen to install at least 37 new cell towers in Abitibi‑Témiscamingue and the Laurentians. As we have been present in Abitibi‑Témiscamingue since 2019 and continue to invest in the region, we are pleased to help bring Videotron customers even more complete wireless coverage.

We take great pride in Videotron's customer service, which has earned another series of honours since the beginning of 2024. For example, Videotron was ranked the most respected telecommunications provider in Québec for the 18th time since 2006 in the 2024 Léger reputation survey. Videotron and its Fizz brand hit a double when Léger released its 2024 WOW Index. According to the study, Videotron was rated the telecommunications retailer with the best in‑store experience in Québec, while Fizz ranked first in Canada for online experience for the fifth year in a row. Videotron and Freedom also stood out from the competition in the mid‑year report released on April 25, 2024 by the Commission for Complaints for Telecom‑television Services. While the volume of complaints about the telecom industry as a whole rose by 43.1%, Videotron contrasted with the other major players with a significant drop of 11.4% and Freedom's proportion of total complaints fell from 6.5% to 4.7%.

We were disappointed by the arbitration decision rendered on April 22, 2024 by the Canadian Radio‑television and Telecommunications Commission (CRTC) regarding rates for access to the TELUS wireless network under the Mobile Virtual Network Operator ("MVNO") regime. This decision will considerably increase our operating costs in MVNO areas, forcing us to review our pricing and the launch of our services in some parts of Canada. The decision is out of sync with current wireless market realities and will have the effect of creating two classes of Canadians, preventing part of the population from getting access to better rates and innovative new plans. It is imperative that regulatory and governmental authorities keep pace with the rapidly evolving wireless industry, particularly characterized by the sharp increase in data consumption.

Although there was improvement in most of its lines of business, TVA Group continued to be affected by the industry‑wide decline in revenues. Its adjusted EBITDA for the first quarter of 2024 was negative $19.3 million.

2024 is a transitional year for TVA Group. Implementation of the reorganization plan announced on November 2, 2023 is under way. The purpose of the plan is to streamline TVA Group's activities: TVA Group's mission is being refocused on broadcasting and its operations and real estate assets are being optimized. These reorganization measures will generate significant recurring savings in the coming quarters. Despite the many challenges facing the industry, TVA Group continues to hold the highest market share in Québec at close to 41% in the first quarter of 2024. TVA Network was number 1 every day of the week. It had 7 of the top 10 shows in Québec and 8 programs that drew more than a million viewers. The TVA Nouvelles newscast was the leader in all its time slots with 4.1 million viewers per week.

In the Film Production & Audiovisual Services segment, our services were in high demand in the first quarter of 2024. Volume was up significantly for soundstage and equipment rentals. We were very pleased to welcome two major foreign productions from Apple and Skydance to our studios.

I welcome S&P's recent decision to upgrade Videotron's credit rating to investment grade, confirming Videotron's superior operating performance, rigorous financial discipline and strong balance sheet. S&P's BBB- rating will improve Videotron's access to capital markets and reduce its cost of borrowing.

In the lead‑up to Quebecor's Annual General Meeting today, I am pleased to announce the appointment of Sylvie Lalande as Chair of the Board of Quebecor, succeeding Mr. Mulroney, and the appointment of André P. Brosseau as Vice‑Chair of the Board. A member of the Board since 2011, Ms. Lalande has an exceptional track record in media, communications, marketing, telecommunications and governance. Ms. Lalande has been Vice‑Chair and Lead Director of the Corporation since 2018. Over the course of his career, Mr. Brosseau has acquired extensive experience in financing, complex mergers and acquisitions, digital transformation management and telecom infrastructure management. He has been a director of the Corporation since 2016.

Having firmly established itself as Canada's fourth major wireless carrier, Quebecor has a solid foundation from which to continue its expansion across the country and offer an ever‑increasing number of Canadians ultra‑competitive rates combined with exceptional customer service. Building on our track record of successful execution, we are maintaining our financial discipline and implementing a judicious, disciplined investment plan that will steadily reduce our debt leverage ratio. We are upbeat about the future, confident that we have the right strategy, the right objectives and the right team to continue generating long‑term value for all our stakeholders.

For more details and to consult definitions of "adjusted EBITDA", "adjusted income from operations", "adjusted cash flows from operations", "revenue-generating unit" and "consolidated net debt leverage ratio", please refer to the attached PDF file for the complete version of the press release.

Information :

Hugues Simard
Chief Financial Officer
Quebecor Inc. and Quebecor Media Inc.
hugues.simard@quebecor.com
514 380-7414
 

Communications department
Quebecor Inc. and Quebecor Media Inc.
medias@quebecor.com
514 380-4572