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

Third quarter 2024 highlights

• Net increase of 132,100 mobile telephone lines, the highest quarterly growth in our history, taking us past the 4,000,000 wireless lines mark, and a net increase of 11,800 Internet access customers.

• Thanks to disciplined management of all costs, resulting in a continued ability to generate ever‑increasing cash flows, Quebecor recorded cash flows provided by operating activities of $546.2 million, up 10.1% over the third quarter of 2023.

• The increase in our cash flows enabled us to reduce our consolidated net debt by more than $170 million in the third quarter of 2024 and further improve our consolidated net debt leverage ratio. At September 30, 2024, it stood at 3.36x, the lowest ratio among wireline and wireless telecom providers in Canada.

• In the third quarter, Quebecor purchased and cancelled 1,260,000 Class B Shares for a total cash consideration of $41.1 million.

• The quarterly dividend of $0.325 per share translates into a dividend yield of 3.7% at September 30, 2024 and a free cash flow payout ratio of almost 30%, at the bottom of our target range of 30% to 50%.

• In the third quarter of 2024, Quebecor recorded revenues of $1.39 billion, down $25.7 million (–1.8%), and adjusted EBITDA of $594.1 million, down $30.3 million (–4.9%), mainly due to the significant $25.8–million increase in the stock–based compensation charge.

• The Telecommunications segment reported a $26.9 million (–2.2%) decrease in revenues, largely in wireline services. As a result of tight control of and ongoing reductions in operating expenses, adjusted EBITDA decreased only slightly by $3.6 million (–0.6%). A $13.1 million increase in investment in the Canada–wide expansion plan led to a $16.7 million (–3.7%) decrease in adjusted cash flow from operations.

• On August 29, 2024, Videotron announced that, according to a survey conducted by Léger between August 5 and 15, 2024, Quebecers again rated Videotron as the telecommunications company with the best customer service in 2024. Videotron was picked by almost twice as many respondents as its nearest rival, confirming its status as the leader in customer service.

• On September 26, 2024, Videotron Ltd. (“Videotron”) announced the expansion of its wireless service area to the Gaspésie and Côte–Nord regions and the enlargement of its service area in the Bas–Saint–Laurent region. Residents of Sept–Îles, Baie–Comeau, Port–Cartier, Gaspé, Matane, Chandler, Rimouski, Amqui and Sayabec, among others, can now subscribe to Videotron wireless services. 

• On September 5, 2024, Fizz announced the expansion of its footprint with the addition of new service areas in British Columbia, Alberta, Manitoba, Ontario and Québec, bringing Fizz’s 100% digital world to an additional 2.2 million Canadians.

• On October 2, 2024, Quebecor, through its Quebecor Out–of–Home division, acquired NEO–OOH, the Canada–wide out–of–home advertising business of Media Group Inc. (“Media Group”), and integrated it into Québecor Affichage Neo inc. (“Québecor Affichage Neo”). The Corporation will be able to offer its advertising partners more than 17,000 advertising faces across Canada, forming a unified out–of–home platform with new reach and power to complement Quebecor’s comprehensive multiplatform advertising offering.

• On November 4, 2024, Videotron announced the pricing of its US$700 million aggregate principal amount of 5.7% Senior Notes due January 15, 2035, yielding 5.1% after taking into account cross-currency swaps. The closing of the offering is expected on or about November 8, 2024. Videotron intends to use the net proceeds, together with drawings under its revolving credit facility, for repayment in full of its $700.0 million tranche A term loan due October 2025 and for the redemption in full of its $375.0 million 5.750% Senior Notes due 2026.

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

Quebecor reached an important milestone in the third quarter of 2024 when the combined mobile subscriber base of its Videotron, Freedom Mobile and Fizz brands passed the 4–million–lines mark. With wireless growth of more than 132,000 connections in the third quarter and nearly 352,000 connections over the past 12 months, the Corporation continues to demonstrate its ability to gain market share across its service area and solidify its position as Canada’s fourth major telecommunications provider.

To bring its outstanding service and competitive plans to more Quebecers, Videotron expanded its wireless service area to the Gaspésie and Côte–Nord regions and enlarged its service area in the Bas–Saint–Laurent region. It also continued innovating and enhancing its offering by adding 45 new destinations to its Canada–International mobile plan, at no additional cost, bringing the total number of destinations covered by the first such plan in Québec to 66. Meanwhile, Fizz continued its nationwide expansion with the addition of new service areas in British Columbia, Alberta, Manitoba, Ontario and Québec. Over 2.2 million more Canadians now have access to Fizz’s innovative, made–to–measure wireless plans at highly competitive prices.

Videotron was proud to maintain its long lead over its competitors in customer service quality. In a Léger survey conducted between August 5 and 15, 2024. Videotron was selected as the telecommunications company with the best customer service in Québec in 2024 by nearly twice as many respondents as its nearest rival.

In line with its goal of constantly improving the customer experience, Videotron launched illico+, its new unified video streaming service for French speakers across the country, in October 2024. Created through the merger of Club illico and Vrai, illico+ has an extensive catalogue of more than 8,500 titles, with over 1,800 more titles to be added in 2025. We are therefore maintaining our commitment to investing in original Québec productions and offering the best international content in French.

We welcomed the Canadian Radio–television and Telecommunications Commission (“CRTC”) decision on wireless roaming rates. For too long, the Big Three have taken advantage of a situation that has been detrimental to Canadians, allowing them to charge regulated prices that the CRTC has rightly found to be too high. The CRTC has now mandated the major mobile carriers to take immediate steps to offer affordable roaming options. It is important to note that Canada has some of the highest roaming rates among Western countries. On the other hand, we were disappointed by the CRTC’s recent decision on access to fibre–to–the–home (FTTH) Internet networks. We had hoped for a decision that would reflect market realities and allow us to offer Freedom customers rates that lower their telecom bills, as we have been doing in mobile services for nearly 18 months. In its decision on the acquisition of Shaw Communications Inc. by Rogers Communications Inc., the Competition Bureau had underscored how difficult it is for a mobile telecommunications carrier without access to a wireline network to effectively serve its customers and Canadians as a whole. Unfortunately, the CRTC’s interim pricing leaves us no manoeuvring room and will hinder the development of healthy competition in the fibre internet market, to the detriment of all Canadians.

TVA Group’s third quarter 2024 results reflected again the challenging environment we face. TVA Group reported a $4.3 million decrease in adjusted EBITDA, largely due to the continuing decline in television advertising revenues. We are implementing the reorganization plan announced in November 2023 to reduce our operating expenses, but unfortunately the savings achieved in the third quarter of 2024 were largely offset by the new 3% federal tax on digital services, which was originally intended to make foreign digital companies contribute to Canada’s broadcasting system. The government must review this unfair and unacceptable tax to exempt Canadian businesses, which already pay taxes in Canada and make a significant contribution to the broadcasting system.

Audience loyalty remained strong in the third quarter of 2024. TVA Group maintained its lead in the Québec market with a 39.0% market share, an indication of the quality of its content. The news and current affairs channel LCN, Québec’s most–watched specialty channel, posted a significant 0.8–point increase in market share during the period, largely because of its outstanding coverage of the U.S. election campaign. TVA Network had 15 of the top 30 shows in Québec in the third quarter of 2024. Since the launch of its fall schedule, TVA Group has maintained its momentum, reaching 5.4 million Quebecers, or 71% of the population, each week.

In October 2024, we acquired NEO–OOH, the Canada–wide out–of–home advertising business of Media Group, to become a major player in Canada’s OOH market. This acquisition has been integrated into our Québecor Affichage Neo division, expanding our comprehensive multiplatform advertising portfolio to more than 17,000 advertising faces across the country.

In the third quarter of 2024, Quebecor recorded declines of 1.8% in consolidated revenues, 4.9% in adjusted EBITDA, mainly due to a significant increase in the stock–based compensation charge, and 9.8% in adjusted cash flows from operations, reflecting increased network investments. However, we increased cash flows provided by operating activities by more than 10% to $546.2 million, demonstrating our sound management and continued ability to generate substantial cash flows. With available liquidity of $2.34 billion as of September 30, 2024, we have considerable financial flexibility. In addition, disciplined management of operating costs enabled us to reduce our consolidated net debt by more than $170 million in the third quarter of 2024 and further improve our consolidated net debt leverage ratio. At September 30, 2024, it stood at 3.36x, the lowest ratio among wireline and wireless telecom providers in Canada.

To promote well–being in our community and help address the housing challenges faced by vulnerable seniors, Videotron formed a partnership with Mission Unitaînés. Videotron will contribute a total of more than $500,000—$300,000 in cash and the equivalent of $200,000 in telecommunications services—to support the development and connectivity of six new affordable seniors’ residences in as many cities. We are pleased to support Mission Unitaînés’ objective of enabling seniors to age at home with dignity, regardless of financial status, and enhancing their well–being by helping them stay connected to their loved ones.

Lastly, we remain strongly focused on our growth plans, supported by rigorous management of our investments and liquidity. With a solid financial position, an outstanding team and a clear strategy, we are continuing our cross–Canada expansion with our usual discipline in order to achieve our value–creation goals for the benefit of all our stakeholders.





 

For more details and to consult definitions of "adjusted EBITDA" and "adjusted cash flows from operations", 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