Montréal, Québec – Quebecor Inc. (“Quebecor” or the “Corporation”) today reported its consolidated financial results for the third quarter of 2018. Quebecor consolidates the financial results of Quebecor Media Inc. (“Quebecor Media”), a wholly owned subsidiary since June 22, 2018.
Third quarter 2018 highlights
- Revenues: $1.06 billion, up $17.6 million (1.7%) from the third quarter of 2017.
- Adjusted EBITDA: $465.4 million, up $33.4 million (7.7%).
- Net income attributable to shareholders: $186.7 million ($0.80 per basic share) in the third quarter of 2018, compared with $178.4 million ($0.74 per basic share) in the same period of 2017, a favourable variance of $8.3 million ($0.06 per basic share).
- Adjusted income from continuing operating activities: $142.0 million ($0.61 per basic share) in the third quarter of 2018, compared with $103.7 million ($0.43 per basic share) in the same period of 2017, an increase of $38.3 million ($0.18 per basic share) or 36.9%.
- The Telecommunications segment grew its revenues by $30.2 million (3.6%) and its adjusted EBITDA by $35.6 million (9.1%) in the third quarter of 2018.
- Videotron Ltd. (“Videotron”) significantly increased its revenues from mobile telephony ($18.8 million or 15.7%), Internet access ($11.3 million or 4.3%) and the Club illico over‑the‑top video service (“Club illico”) ($1.8 million or 17.8%) in the third quarter of 2018.
- Videotron’s total average billing per unit (“ABPU”) was $49.70 in the third quarter of 2018, compared with $48.50 in the same period of 2017, a $1.20 (2.5%) increase. Mobile ABPU was $54.28 in the third quarter of 2018, compared with $53.34 in the same period of 2017, a $0.94 (1.8%) increase.
There was a net increase of 56,500 revenue generating units (“RGU”) (0.9%) in the third quarter of 2018, including 41,500 connections to the mobile telephony service (3.8%), 23,400 subscriptions to the cable Internet access service (1.4%) and 11,000 memberships in Club illico (2.8%).
- On August 21, 2018, the Corporation issued a notice of redemption on October 12, 2018, of all its remaining outstanding 4.125% convertible debentures due October 15, 2018, for a total aggregate principal amount of $362.5 million. Pursuant to the terms of the convertible debentures, the Corporation elected to exercise its share redemption payment right with respect to the entire outstanding debentures. Consequently, Quebecor issued and delivered 30,129,869 Class B Shares to the holders on October 12, 2018.
- On October 16, 2018, Quebecor announced that Manon Brouillette will step down as President and Chief Executive Officer of Videotron on December 31, 2018 for personal reasons. Ms. Brouillette’s name will be submitted to the Corporation’s Human Resources Committee and Corporate Governance Committee in 2019 for appointment to Quebecor’s Board of Directors.
Quebecor posted solid financial results again in the third quarter of 2018, still driven by Videotron’s excellent performance. Adjusted income from continuing operating activities was up $38.3 million or 36.9%, reflecting the increase in our interest in the income of Quebecor Media, which became a wholly owned subsidiary on June 22, 2018, combined with the increase in Videotron’s profitability. We are constantly striving to stay at the forefront of trends and technological innovations in order to position ourselves for the future. For example, we recently launched QUB radio, our first digital radio station. It marks the beginning of a new era in Québec radio and confirms our status as a Canadian digital media leader. QUB radio is already a resounding success, with more than 100,000 downloads in less than two weeks since it launched. Quebecor also acquired LC Media Inc, owner of the authoritative car guide, Le Guide de l’auto, which has made a successful shift to digital and is drawing 1.5 million unique visitors monthly to its websites guideautoweb.com and carguideweb.com. The addition of these two powerhouses to our digital space will support our convergence strategy.
Subscriber connections to our mobile telephony and Internet access services increased by 130,400, or 13.2%, and 43,400, or 2.6%, respectively, during the 12‑month period ended September 30, 2018, said Manon Brouillette, President and Chief Executive Officer of Videotron.
These strong results highlight our ability to stand out in a competitive marketplace, and to offer products and services tailored to fast‑changing consumer habits. For example, in the third quarter of 2018 we launched Fizz, a new mobile carrier and Internet service provider that delivers a fully digital experience, promotes simplicity and user autonomy, and offers its members advantageous plans. This innovative offering aims to increase our market penetration among digital natives and new mobile users. It is also noteworthy that our mobile telephony service will pass our cable telephony service in total number of subscriber connections in the fourth quarter of 2018, demonstrating the success of our strategy and our ability to reinvent ourselves. We are also continuing to invest in the roll‑out of our Helix platform, based on our partner Comcast Corporation’s XFINITY X1 platform. Helix will offer innovative, integrated technology that is in sync with consumers and their connected lives. It will feature voice control and will support, among other things, smarter Wi‑Fi, an advanced IP‑based television experience, and an entirely new line of home automation products and services.
Videotron’s success and market stature are holding strong. Among other things, since 2016 we have been a partner in the Open‑Air Laboratory for Smart Living in the heart of Montréal’s Quartier de l’innovation, which is home to a series of innovative projects and has now been recognized by the Québec government as a Centre of Excellence for Next‑Generation Evolved Network and Internet of Things. In a sign that our efforts to address the needs of younger customers are paying off, Videotron was ranked the coolest telecom by Quebecers aged 13 to 34 in the first Léger youth poll.
Club illico, a Québec leader in subscription video on demand, recently celebrated its fifth birthday and used the occasion to announce the arrival of 9 original series and some 20 exclusive acquisitions in the coming months. Club illico has been a resounding success, with more than 350 million views since launch. Its revenues were up 17.8% in the third quarter of 2018, Ms. Brouillette noted.
TVA Group Inc.’s (“TVA Group”) adjusted EBITDA decreased in the third quarter of 2018, mainly because of lower advertising revenues and soundstage and equipment rental revenues, said France Lauzière, President and Chief Executive Officer of TVA Group.
Our moves to cut operating costs in recent quarters did not entirely make up for the decline in revenues. At the same time, TVA Group’s market share increased by 1.0 point compared with the same period of 2017, largely because of the strong performance of the specialty channels, particularly LCN, which gained a significant 0.7 points. Our Québec election night coverage on TVA and LCN was watched by up to 2.1 million people, an all‑time record.
The customer remains the cornerstone of all our business strategies and initiatives. We make every effort to deliver the best products and services in order to exceed customer expectations, position ourselves for sustainable growth and generate returns for our shareholders, Pierre Karl Péladeau added.
Last but not least, I thank Manon Brouillette for her major role in Videotron’s success over the past 14 years and her contribution to Quebecor’s business plan. Manon is a builder with a keen strategic vision and she has also assembled an exceptional team. I’m very pleased by the prospect that Quebecor will continue to have the benefit of her vast expertise as a director of the Corporation, Pierre Karl Péladeau concluded.
For more details and to consult definitions of "adjusted EBITDA", "adjusted income from continuing operating activities", "revenue-generating unit" and "average billing per unit", please refer to the attached PDF file for the complete version of the press release.
Senior Vice President and Chief Financial Officer
Quebecor Inc. and Quebecor Media Inc.
Quebecor Inc. and Quebecor Media Inc.