Quebecor Inc. Reports Fourth Quarter and Full-Year 2012 Consolidated Results
(firmenpresse) - MONTREAL, QUEBEC -- (Marketwire) -- 03/14/13 -- Quebecor Inc. ("Quebecor" or the "Corporation") (TSX: QBR.A)(TSX: QBR.B) today reported its fourth quarter and full-year consolidated financial results for 2012. Quebecor consolidates the financial results of its Quebecor Media Inc. ("Quebecor Media") subsidiary. The Corporation's interest in Quebecor Media increased from 54.7% to 75.4% on October 11, 2012 as a result of the repurchase of part of the interest held by CDP Capital d'Amerique Investissement inc. ("CDP Capital"), a subsidiary of Caisse de depot et placement du Quebec.
Highlights
2012 financial year
Fourth quarter 2012
"Quebecor's results for the 2012 financial year reflect the reliability of the investment strategy we have been pursuing in recent years, primarily entailing capital expenditures for mobile telephony, modernizing Videotron's network, and developing attractive new products, including illico TV new generation, which was launched in 2012," said Pierre Karl Peladeau, President and Chief Executive Officer of Quebecor. "Despite continuing strong competition in most of its lines of business, the Corporation ended 2012 with a revenue increase of 3.5% compared with 2011, and an operating income increase of 4.6%. The Telecommunications segment continued to be a powerful driver of growth."
"Videotron had a solid year in 2012," said Robert Depatie, President and Chief Executive Officer of Videotron. "Revenues were up for all of our main services, generating overall revenue growth of 8.4% in the segment. Operating income grew by $126.2 million, an 11.5% increase over the previous year. Videotron recorded a net increase of 221,800 revenue generating units and an $8.29 or 8.0% increase in average monthly revenue per user, compared with 2011. Subscriber additions to the mobile network launched in September 2010, which totalled 154,500 in 2011 and 112,000 in 2012, contributed to the customer growth and the increase in profitability. Meanwhile, the cable Internet access and cable telephony services added 55,200 and 59,600 customers respectively in 2012, and the illico TV new generation service passed the half-million subscriber mark, reflecting the success of our business strategy based on marketing bundled services and satisfying customer needs with respect to product development and service quality.
"Also, at the end of February 2013, Videotron launched illico Club Unlimited, a new subscription video on demand service that carries the largest selection of unlimited on-demand French-language titles in Canada. It is a product developed by Quebecers to meet customer needs, in keeping with Videotron's commitment to continuously improve the customer experience it provides."
"The News Media segment's results were down significantly in 2012 compared with the previous year," said Pierre Karl Peladeau. "The upheavals in the traditional print media industry, combined with a stagnant economy, negatively affected the profitability of our publications. The impact of the investments made to generate new revenue streams and the large fixed component of the segment's operating costs were also important factors. The News Media segment needs to adapt its business model and streamline its cost structure. To continue meeting this challenge, the segment launched another reorganization of its newsgathering, editorial, advertising and industrial operations in 2012, with the goal of streamlining its organizational structures and accelerating decision-making. The organizational changes are expected to yield estimated annual savings of $45.0 million."
In the Broadcasting segment, some of TVA Group Inc.'s ("TVA Group") hit shows, such as the 2012 edition of Star Academie and the new show La Voix, which has been on the air since the beginning of 2013, have posted exceptional ratings and market shares, with average audiences of 2.2 million for the weekly Star Academie galas and 2.7 million for the weekly La Voix specials, and market shares of 54.5% and 57.5% respectively, demonstrating once again the success of Quebecor's convergence strategy in creating value-added multiplatform content around high-quality television products for the benefit of all of Quebecor's media properties.
Jean-Francois Pruneau, Chief Financial Officer of Quebecor, noted that no summary of Quebecor's 2012 highlights would be complete without mentioning a major financial event: the repurchase of part of CDP Capital's interest in Quebecor Media for $1.50 billion. "This mutually advantageous transaction increased the Corporation's interest in Quebecor Media from 54.7% to 75.4%, while respecting the Corporation's fundamental financial objectives of maintaining a sufficient level of operational and financial flexibility."
For Quebecor, 2012 was therefore a year that saw solid consolidated financial results, one of the largest financial transactions in the Corporation's history, and continued restructuring and adaptation efforts in all its segments. Quebecor is thus pursuing its goals of growth, profitability, business development, and shareholder value creation.
2012/2011 financial year comparison
Revenues: $4.35 billion, an increase of $145.2 million (3.5%).
Operating income: $1.40 billion, an increase of $61.9 million (4.6%).
Net income attributable to shareholders: $167.7 million ($2.65 per basic share), down $33.3 million ($0.49 per basic share) from $201.0 million ($3.14 per basic share) in 2011.
Adjusted income from continuing operations: $196.1 million in 2012 ($3.10 per basic share), compared with $191.5 million ($2.99 per basic share) in 2011, an increase of $4.6 million ($0.11 per basic share).
2012/2011 fourth quarter comparison
The fourth quarter of the 2011 financial year contained an additional week in the News Media, Broadcasting, Leisure and Entertainment, and Interactive Technologies and Communications segments.
Revenues: $1.14 billion, a decrease of $5.6 million (-0.5%).
Operating income: $370.8 million, an increase of $1.6 million (0.4%).
Net income attributable to shareholders: $9.2 million ($0.15 per basic share) compared with $85.4 million ($1.34 per basic share) in the fourth quarter of 2011, a decrease of $76.2 million ($1.19 per basic share).
Adjusted income from continuing operations: $56.0 million in the fourth quarter of 2012 ($0.89 per basic share) compared with $55.6 million ($0.87 per basic share) in the same quarter of 2011, an increase of $0.4 million ($0.02 per basic share).
Financing
A number of financial transactions were carried out during 2012.
Dividends
On March 13, 2013, the Board of Directors of Quebecor declared a quarterly dividend of $0.05 per share on its Class A Multiple Voting Shares ("Class A shares") and Class B shares, payable on April 22, 2013 to shareholders of record at the close of business on March 28, 2013. This dividend is designated to be an eligible dividend, as provided under subsection 89(14) of the Canadian Income Tax Act and its provincial counterpart.
Normal course issuer bid
On August 9, 2012, the Corporation filed a normal course issuer bid for a maximum of 980,357 Class A shares, representing approximately 5% of the issued and outstanding Class A shares, and for a maximum of 4,351,276 Class B shares, representing approximately 10% of the public float of the Class B shares as of July 31, 2012. Purchases can be made from August 13, 2012 to August 12, 2013 at prevailing market prices, on the open market, through the facilities of the Toronto Stock Exchange. All shares purchased under the bid have been or will be cancelled.
In 2012, the Corporation purchased and cancelled 1,058,800 Class B shares for a total cash consideration of $38.3 million (928,100 Class B shares for a total cash consideration of $30.2 million in 2011). The excess of $30.3 million of the purchase price over the carrying value of Class B shares repurchased was recorded in reduction of retained earnings in 2012 ($23.1 million in 2011).
Detailed financial information
For a detailed analysis of Quebecor's fourth quarter and full-year 2012 results, please refer to the Management Discussion and Analysis and consolidated financial statements of Quebecor, available on the Corporation's website at: or from the SEDAR filing service at .
Conference call for investors and webcast
Quebecor will hold a conference call to discuss Quebecor's fourth quarter and full-year 2012 results on March 14, 2013, at 11:00 a.m. EDT. There will be a question period reserved for financial analysts. To access the conference call, please dial 1 877 293-8052, access code for participants 58308#. A tape recording of the call will be available from March 14 to June 14, 2013 by dialling 1 877 293-8133, conference number 656419#, access code for participants 58308#. The conference call will also be broadcast live on Quebecor's website at . It is advisable to ensure the appropriate software is installed before accessing the call. Instructions and links to free player downloads are available at the Internet address shown above.
Cautionary Statement Regarding Forward-Looking Statements
The statements in this press release that are not historical facts are forward-looking statements and are subject to significant known and unknown risks, uncertainties and assumptions that could cause the Corporation's actual results for future periods to differ materially from those set forth in the forward-looking statements. Forward-looking statements may be identified by the use of the conditional or by forward-looking terminology such as the terms "plans," "expects," "may," "anticipates," "intends," "estimates," "projects," "seeks," "believes," or similar terms, variations of such terms or the negative of such terms. Certain factors that may cause actual results to differ from current expectations include seasonality (including seasonal fluctuations in customer orders), operating risk (including fluctuations in demand for Quebecor's products and pricing actions by competitors), insurance risk, risks associated with capital investment (including risks related to technological development and equipment availability and breakdown), environmental risks, risks associated with labour agreements, risks associated with commodities and energy prices (including fluctuations in the cost and availability of raw materials), credit risk, financial risks, debt risks, risks related to interest rate fluctuations, foreign exchange risks, risks associated with government acts and regulations, risks related to changes in tax legislation, and changes in the general political and economic environment. Investors and others are cautioned that the foregoing list of factors that may affect future results is not exhaustive and that undue reliance should not be placed on any forward-looking statements. For more information on the risks, uncertainties and assumptions that could cause Quebecor's actual results to differ from current expectations, please refer to Quebecor's public filings available at and including, in particular, the "Risks and Uncertainties" section of Quebecor's Management Discussion and Analysis for the year ended December 31, 2012.
The forward-looking statements in this press release reflect Quebecor's expectations as of March 14, 2013, and are subject to change after that date. Quebecor expressly disclaims any obligation or intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.
The Corporation
Quebecor Inc. (TSX: QBR.A)(TSX: QBR.B) is a holding company with a 75.4% interest in Quebecor Media Inc., one of Canada's largest media groups, with more than 16,000 employees. Quebecor Media Inc., through its subsidiary Videotron Ltd., is an integrated communications company engaged in cable television, interactive multimedia development, Internet access services, cable telephony and mobile telephony. Through Sun Media Corporation, Quebecor Media Inc. is the largest publisher of newspapers in Canada. It also operates Canoe.ca and its network of English- and French-language Internet properties in Canada. In the broadcasting segment, Quebecor Media Inc. operates, through TVA Group Inc., the number one French-language conventional television network in Quebec, a number of specialty channels and, through Sun Media Corporation, the English-language SUN News channel. Another subsidiary of Quebecor Media Inc., Nurun Inc., is a major interactive technologies and communications agency with offices in Canada, the United States, Europe and Asia. Quebecor Media Inc. is also active in magazine publishing (Publications TVA Inc.), book publishing and distribution (Sogides Group Inc., CEC Publishing Inc.), the production, distribution and retailing of cultural products (Archambault Group Inc., TVA Films), video game development (BlooBuzz Studios, L.P.), DVD, Blu-ray disc and videogame rental and retailing (Le SuperClub Videotron ltee), the printing and distribution of community newspapers and flyers (Quebecor Media Printing Inc., Quebecor Media Network Inc.), outdoor advertising (Quebecor Media Out of Home), news content production and distribution (QMI Agency), and multiplatform advertising solutions (QMI Sales).
DEFINITIONS
Operating income
In its analysis of operating results, the Corporation defines operating income, as reconciled to net income under IFRS, as net income before amortization, financial expenses, gain (loss) on valuation and translation of financial instruments, charge for restructuring of operations, impairment of assets and other special items, charge for impairment of goodwill and of intangible assets, loss on debt refinancing, and income tax. Operating income as defined above is not a measure of results that is consistent with IFRS. It is not intended to be regarded as an alternative to other financial operating performance measures or to the statement of cash flows as a measure of liquidity. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The Corporation uses operating income in order to assess the performance of its investment in Quebecor Media. The Corporation's management and Board of Directors use this measure in evaluating its consolidated results as well as the results of the Corporation's operating segments. This measure eliminates the significant level of impairment and amortization of tangible and intangible assets and is unaffected by the capital structure or investment activities of the Corporation and its segments. Operating income is also relevant because it is a significant component of the Corporation's annual incentive compensation programs. A limitation of this measure, however, is that it does not reflect the periodic costs of tangible and intangible assets used in generating revenues in the Corporation's segments. The Corporation also uses other measures that do reflect such costs, such as cash flows from segment operations and free cash flows from continuing operating activities. In addition, measures like operating income are commonly used by the investment community to analyze and compare the performance of companies in the industries in which the Corporation is engaged. The Corporation's definition of operating income may not be the same as similarly titled measures reported by other companies.
Table 2 below provides a reconciliation of operating income with net income as disclosed in Quebecor's consolidated financial statements. The consolidated financial information for the three-month periods ended December 31, 2012 and 2011 presented in Table 2 is drawn from the unaudited consolidated statements of income.
Adjusted Income from Continuing Operating Activities
The Corporation defines adjusted income from continuing operations, as reconciled to net income attributable to shareholders under IFRS, as net income attributable to shareholders before gain (loss) on valuation and translation of financial instruments, charge for restructuring of operations, impairment of assets and other special items, charge for impairment of goodwill and of intangible assets, and loss on debt refinancing, net of income tax related to adjustments and net income attributable to non-controlling interests related to adjustments. Adjusted income from continuing operations, 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's definition of adjusted income from continuing operating activities may not be identical to similarly titled measures reported by other companies.
Table 3 provides a reconciliation of adjusted income from continuing operations to the net income attributable to shareholders measure used in Quebecor's consolidated financial statements.
Average Monthly Revenue per User
ARPU is an industry metric that the Corporation uses to measure its monthly cable television, Internet access, cable and mobile telephony revenues per average basic cable customer. ARPU is not a measurement that is consistent with IFRS and the Corporation's definition and calculation of ARPU may not be the same as identically titled measurements reported by other companies. The Corporation calculates ARPU by dividing its combined cable television, Internet access, and cable and mobile telephony revenues by the average number of basic customers during the applicable period, and then dividing the resulting amount by the number of months in the applicable period.
(1)The Chief Executive Officer uses operating income as the measure of profit to assess the performance of each segment. Operating income is referred as a non-IFRS measure and is defined as net income before amortization, financial expenses, gain on valuation and translation of financial instruments, restructuring of operations, impairment of assets and other special items, impairment of goodwill and intangible assets, loss on debt refinancing and income taxes.
QUEBECOR INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(in millions of Canadian dollars) (unaudited)
7
Contacts:
Jean-Francois Pruneau
Chief Financial Officer
Quebecor Inc. and Quebecor Media Inc.
514 380-4144
Martin Tremblay
Vice President, Public Affairs
Quebecor Media Inc.
514 380-1985
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