Montréal, Québec – 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 EBITDA of $2.24 billion, up $303.3 million (15.7%), and adjusted cash flows from operations 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 units (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 activities 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.
   

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 ratio 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.
 

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