Quebecor inc. reports fourth quarter and full-year 2017 consolidated results

Montréal, Québec – Quebecor Inc. (“Quebecor” or the “Corporation”) today reported its fourth quarter and full-year 2017 consolidated financial results. Quebecor consolidates the financial results of its Quebecor Media Inc. (“Quebecor Media”) subsidiary, in which it holds an 81.53% interest.

All comparative data have been restated to reflect the segment reorganization carried out in the fourth quarter of 2017, as described under “New segment structure” below. All references to numbers of shares and per-share amounts have been restated to reflect the 2-for-1 split of the Corporation’s shares described under “Financial transactions” below.


2017 financial year and recent developments

  • Revenues: $4.12 billion, up $105.8 million (2.6%) from 2016.
  • Adjusted operating income: $1.59 billion, up $99.3 million (6.6%), the largest annual increase since 2009.
  • Net income attributable to shareholders: $369.7 million ($1.53 per basic share) in 2017, compared with $194.7 million ($0.80 per basic share) in 2016, an increase of $175.0 million ($0.73 per basic share) or 90.0%, partly reflecting the favourable impact of the increase in adjusted operating income and a $330.9 million gain on the sale of spectrum licences, partially offset by a $129.2 million unfavourable variance related to the fair value of convertible debentures.
  • Adjusted income from continuing operating activities: $330.0 million ($1.37 per basic share) in 2017, compared with $305.5 million ($1.25 per basic share) in 2016, an increase of $24.5 million ($0.12 per basic share) or 8.0%.
  • The Telecommunications segment grew its revenues by $133.3 million (4.2%) and its adjusted operating income by $84.6 million (5.8%) in 2017.
  • Videotron Ltd. (“Videotron”) significantly increased its annual revenues from mobile telephony ($99.4 million or 19.5%), Internet access ($52.2 million or 5.3%), business solutions ($13.4 million or 12.1%) and the Club illico over-the-top video service (“Club illico”) ($8.3 million or 26.4%).
  • Videotron’s average monthly revenue per user (“ARPU”) up $9.73 (6.7%) from $144.86 in 2016 to $154.59 in 2017.
  • Revenue-generating units: Net increase of 115,700 (2.0%) in 2017, including 130,100 connections to the mobile telephony service (14.6%) and 46,900 memberships in Club illico (14.9%). Net increase of 53,700 subscribers to cable Internet access, the largest annual increase since 2013.
  • On July 24, 2017, Videotron realized a $243.1 million gain on the sale of its seven 2500 MHz and 700 MHZ wireless spectrum licences outside Québec to Shaw Communications Inc. for a $430.0 million cash consideration. On June 20, 2017, Videotron realized an $87.8 million gain on the sale of its Advanced Wireless Services spectrum licence in the Metropolitan Toronto area to Rogers Communications Canada Inc. for a cash consideration of $184.2 million.
  • Adjusted operating income up $15.4 million (28.6%) in the Media segment and $3.9 million (169.6%) in the Sports and Entertainment segment.
  • In the first quarter of 2017, the Corporation increased its quarterly dividend on Class A Multiple Voting Shares (“Class A Shares”) and Class B Subordinate Voting Shares (“Class B Shares”) by 22.2%, from $0.0225 to $0.0275 per share.
  • Changes to the Corporation’s senior management in 2017:
    • On February 16, 2017, Pierre Karl Péladeau returned to the position of President and Chief Executive Officer of Quebecor and Quebecor Media;
    • On October 13, 2017, France Lauzière was named President and CEO of TVA Group Inc. (“TVA Group”) following the retirement of Julie Tremblay;
    • On August 11, 2017, Martin Tremblay was named Chief Operating Officer of Sports and Entertainment Group.

Fourth quarter 2017

  • Revenues: $1.06 billion, up $8.8 million (0.8%).
  • Adjusted operating income: $411.9 million, up $22.6 million (5.8%).
  • Net income attributable to shareholders: $65.6 million ($0.27 per basic share) in the fourth quarter of 2017, compared with $123.3 million ($0.50 per basic share) in the same period of 2016, a decrease of $57.7 million ($0.23 per basic share), including the $56.8 million unfavourable impact of fluctuations in the fair value of convertible debentures.
  • Adjusted income from continuing operating activities: $78.7 million ($0.33 per basic share) in the fourth quarter of 2017, compared with $84.7 million ($0.35 per basic share) in the same period of 2016, a decrease of $6.0 million ($0.02 per basic share) due in part to the impact of revising the depreciation period for some telecommunications network components.
  • Net increase of 34,900 revenue-generating units (0.6%) in the fourth quarter of 2017, including 33,700 connections to the mobile telephony service, 12,400 subscriptions to the cable Internet access service and 14,200 memberships in Club illico.

I was very proud to return to the helm of Quebecor in 2017. Over time, this Corporation has built a very solid financial position and it has been growing its profitability for several years. Improving on this already positive record, our efforts yielded a $99.3 million (6.6%) year-over-year increase in profitability in 2017, as measured by adjusted operating income, the largest increase in the past eight years. All of our segments contributed to this exceptional result. In addition, Quebecor carried out a number of successful financial transactions in 2017, including the sale of spectrum licences outside Québec, which generated total inflows of $614.2 million and total gains on disposal of $330.9 million. The Corporation now has more than $2.0 billion in available liquidity, placing it in a powerful position in a highly competitive environment. Our excellent financial position will enable us to continue investing in Videotron’s wired and wireless networks, in Comcast Corporation’s XFINITY X1 platform, and in the process of repurchasing the Quebecor Media Common Shares held by CDP Capital d’Amérique Investissement inc. (“CDP Capital”).

Pierre Karl Péladeau, President and Chief Executive Officer of Quebecor

Once again, our strategy of investing in Videotron’s flagship products, including mobile telephony, Internet access, business solutions and Club illico, contributed to the increase in the Telecommunications segment’s profitability. Similarly, the significant improvement in adjusted operating income in the Media and Sports and Entertainment segments resulted from the diversification of our activities produced by our investing strategies, including our spending on the TVA Sports specialty channel and on film production & audiovisual services. The improvement was also driven by our unparalleled selection of content, which strengthened our advertising offerings to our advertisers and thereby helped grow our revenues in the Media segment, combined with stringent cost control and cost-reduction initiatives in those two segments, Pierre Karl Péladeau added.

In the space of a few years, TVA Sports has attracted nearly 1.9 million subscribers and its market share is already nearing that of its rival, which has been in existence for decades and, prior to the arrival of TVA Sports, had enjoyed a 20-year monopoly over French-language television sports in Québec. In the spring of 2017, TVA Sports posted the best Québec ratings since 2008 for the Stanley Cup finals, which were carried on the rival network from 2008 to 2014. Québec television audiences have benefited from the fact that TVA Sports has opened up the market to healthy competition and expanded the availability of sports programming. We therefore believe the Canadian Radio-television and Telecommunications Commission (“CRTC”) decision on the fee payable by Bell TV for distribution of the TVA Sports specialty service, issued on January 17, 2018, to be inequitable. Accordingly, on February 16, 2018, Quebecor filed an application in the Federal Court of Appeal for leave to appeal the CRTC decision, Pierre Karl Péladeau said.

Subscriber connections to the mobile telephony service increased by 14.6% in 2017, noted Manon Brouillette, President and Chief Executive Officer of Videotron. In November 2017, Videotron passed an historic milestone when it added the millionth subscriber connection to its mobile telephony service, a mark of the enviable stature it has achieved in Quebec's mobile market. Videotron’s mobile telephony service owes its resounding success to the steady addition of new enhancements, which are constantly improving customer experience. For example, since November 2017, Videotron has been including mobile access to Club illico with all new subscriptions to some mobile plans. This move meets growing demand from consumers, who increasingly are turning to their mobile phones to access their favourite content.

Our cable Internet access service registered its largest annual subscriber increase since 2013. One of the factors in the growth was the successful marketing strategy. Revenues from our business services were also up significantly. This performance stems from our investments of recent years in 4Degrees Colocation Inc. (“4Degrees Colocation”) and Fibrenoire Inc., which enable us to offer our business customers in Québec a full line of products and services, Manon Brouillette said.

Videotron also reached an agreement with Comcast Corporation in 2017 to develop an innovative IPTV solution based on Comcast’s XFINITY X1 platform. Videotron customers will enjoy a state-of-the-art television experience and more user-friendly navigation across a diverse selection of content, including on-demand television shows, movies and concerts, as well as Web videos and apps. This offering will also allow Quebecor Media to showcase its own content.

The numerous awards and distinctions Videotron earned in 2017 testify to the commitment of all our employees to delivering a high-quality customer experience. Videotron has been rated Québec’s most respected telecommunications company for 12 consecutive years. In 2017, it also ranked as the most forward-thinking and most engaging Québec brand on the Ipsos-Infopresse index. As well, Videotron led the list of the best telecommunications retailers in Québec for the sixth time, according to a Léger survey, Manon Brouillette concluded.

In the Media segment, the specialty channels, including TVA Sports, and film production & audiovisual services were responsible for a significant 46.2% increase in TVA Group’s adjusted operating income in 2017, said France Lauzière, President and Chief Executive Officer of TVA Group. Our broadcasting business posted very strong results, mainly because of the impact of the increase in advertising revenues at the specialty channels and TVA Network, higher subscription revenues at TVA Sports, and cost reductions generated by the various restructuring initiatives implemented in recent years. The total market share of TVA Group and its specialty channels was 37.2% in 2017, compared with 35.5% in 2016, a 1.7-point increase (Numeris – French Quebec, January 1 to December 31, 2017, Mon-Sun, 2:00 – 2:00, t2+). In 2017, Mels Studios and Postproduction G.P. (“MELS”) posted an impressive increase in volume on the strength of its soundstage and equipment rental services, which were used by a host of productions including the latest instalment of the American X-Men action film franchise. Our MELS teams picked up numerous industry awards for sound editing and visual effects for various productions, including an Iris award in the Best Sound category in June 2017 for the film Two Lovers and a Bear and three Canadian Screen Awards for Achievement in Visual Effects, Achievement in Sound Editing and Achievement in Overall Sound in March 2017 for the film Race.

In the Sports and Entertainment segment, the Videotron Centre completed its second year of operation in September 2017. During that period, the Videotron Centre hosted 82 sporting events and concerts, as well as 17 corporate events. In all, nearly 845,000 people passed through the turnstiles. In April 2017, Billboard magazine ranked the Videotron Centre number 4 on its list of Top Canadian Venues, based on concert receipts.

Quebecor was very active on the financial front in 2017, said Jean-François Pruneau, Senior Vice President and Chief Financial Officer of Quebecor. The redemption of Senior Notes and issuance of Notes at more advantageous interest rates at the beginning of the year will generate approximately $15.0 million in annual savings in interest on the debt. Quebecor also increased its quarterly dividend by 22.2% for a cumulative increase of 120.0% over the past three years, reflecting the strength of its balance sheet, and carried out a 2-for-1 stock split.

Also in 2017, Quebecor redeemed convertible debentures in the principal amount of $50.0 million for a $95.2 million consideration and Quebecor Media repurchased for cancellation a portion of the equity interest held by CDP Capital, buying 541,899 of its Common Shares for an aggregate consideration of $43.9 million, including $6.2 million in debt securities. It remains our goal to make Quebecor the sole shareholder of Quebecor Media upon completion of the share repurchase process begun in 2012. Lastly, the Corporation purchased and cancelled a total of 5,590,700 Class B Shares in 2017 for a total cash consideration of $127.5 million. Repurchases of equity interest in shares and debentures convertible into shares made in 2017 totalled over $260 million at fair value, without compromising the Corporation’s excellent financial flexibility, Jean‑François Pruneau reported.

In 2017, Quebecor posted solid financial results reflecting the implementation of its business plan, focused on investment in lines of business with high growth and profitability potential, combined with efforts to further diversify its activities, improve operational efficiency and increase its financial flexibility. The Corporation remains well positioned to create shareholder value, Pierre Karl Péladeau concluded.  


¹ The sum of subscriptions to the cable Internet access, cable television and Club illico services, plus subscriber connections to the mobile and cable telephony services.

For more details and to consult definitions of "adjusted operating income", "adjusted income from continuing operating activities" and "average monthly revenue per user", please refer to the attached PDF file for the complete version of the press release.


Jean-François Pruneau
Senior Vice President and Chief Financial Officer
Quebecor Inc. and Quebecor Media Inc.
514 380-4144

Communications department
Quebecor Inc. and Quebecor Media Inc.
514 380-4572

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