Montréal, Québec – Quebecor Inc. (“Quebecor” or the “Corporation”) today reported its consolidated financial results for the fourth quarter and full year of 2020. Quebecor consolidates the financial results of its wholly owned Quebecor Media Inc. (“Quebecor Media”) subsidiary.

 

Highlights

2020 financial year and recent developments

• Revenues: $4.32 billion in 2020, up $24.0 million (0.6%) from 2019.

• Adjusted EBITDA: $1.95 billion, up $73.1 million (3.9%).

• Net income attributable to shareholders: $607.2 million ($2.41 per basic share) in 2020, a decrease of $45.6 million ($0.14 per basic share).

• Adjusted income from continuing operating activities: $594.5 million ($2.36 per basic share) in 2020, an increase of $13.5 million ($0.09 per basic share).

• Cash flows from operations: $1.31 billion, up $168.3 million (14.7%).

• Consolidated net debt leverage ratio: 2.68x at December 31, 2020 compared with 2.91x at December 31, 2019.

• Quarterly dividend on the Corporation’s Class A Multiple Voting Shares (“Class A Shares”) and Class B Subordinate Voting Shares (“Class B Shares”) raised by 38% from $0.20 to $0.275 per share, in line with its dividend target of 30% to 50% of free cash flows.

• The Telecommunications segment grew its revenues by $142.2 million (4.1%) and its adjusted EBITDA by $61.0 million (3.4%) in 2020.

• Videotron Ltd. (“Videotron”) significantly increased its revenues from customer equipment sales ($139.1 million or 51.6%), mobile telephony ($57.8 million or 9.6%), and Internet access ($17.1 million or 1.5%) in 2020.

• Videotron’s total average billing per unit (“ABPU”) was $49.94 in 2020 compared with $50.00 in 2019, a $0.06 (‑0.1%) decrease. Mobile ABPU was $50.85 in 2020, compared with $52.56 in 2019, a $1.71 (‑3.3%) decrease due in part to a decrease in overage and roaming revenues caused by the COVID‑19 public health crisis and the popularity of bring your own device (“BYOD”) plans.   

• Net increase of 71,700 revenue‑generating units (“RGUs”) (1.2%) in 2020, including 150,600 connections (11.3%) to the mobile telephony service, 69,500 subscriptions (4.0%) to the Internet access service and 10,400 subscriptions (2.3%) to the Club illico over‑the‑top video service (“Club illico”).

• On February 10, 2021, the Sports and Entertainment segment announced the acquisition of Les Disques Audiogramme inc. The addition of the largest independent French‑language record label in North America positions the segment to continue supporting talented Québec artists and disseminating and promoting Québec music.

• On January 22, 2021, Videotron issued $650.0 million aggregate principal amount of 3.125% Senior Notes maturing on January 15, 2031, for net proceeds of $644.1 million, net of financing fees of $5.9 million. Videotron intends to use the proceeds from this offering for general corporate purposes, including, without limitation, the repayment of a portion of its current debt.

• On December 15, 2020, Videotron announced the launch of its 5G network, with service to be phased in first in the City of Montréal and then rolled out in other parts of Québec. This state‑of‑the‑art technology offers customers faster upload and download speeds and supports the introduction of new applications.

• On June 17, 2020, the Sports and Entertainment segment announced the acquisition of the Théâtre Capitole in Québec City. The acquisition of the unique, hundred‑year‑old, 1,300‑seat venue will enhance the Québec City entertainment scene.

• From March 13 through June 30, 2020, and December 20, 2020 through January 3, 2021, Videotron suspended data caps on all of its customers’ residential and business Internet plans to support the implementation of effective teleworking arrangements at Québec businesses and enable customers to stay connected with loved ones during the COVID‑19 pandemic. From March 13 to June 30, 2020, Videotron also cancelled roaming charges outside Canada and the Daily Traveller Pass fee.

• TVA Group Inc. (“TVA Group”) took a series of initiatives in the spring of 2020 to support Quebecers during the first COVID‑19 lockdown. The television event Une chance qu’on s’a, broadcast in partnership with the Government of Québec and Télé‑Québec, raised $2.0 million for organizations that help isolated seniors and victims of domestic violence. The daily program Ça va bien aller, which started airing on April 6, 2020, lessened the sense of isolation by keeping viewers informed of initiatives across Québec. Finally, the all‑news channel LCN was unscrambled to help Quebecers stay abreast of developments in the health crisis in real time.

• To alleviate the isolation of youths in rehabilitation centres and seniors in long‑term care facilities during the pandemic, Videotron donated 1,000 smartphones with unlimited plans in April 2020. Quebecor and the Fondation Chopin‑Péladeau also supported the Food Banks of Quebec network by joining forces with La Tablée des Chefs in the “Cuisines Solidaires” project.
   

Fourth quarter 2020

• Revenues: $1.15 billion, up $10.6 million (0.9%).

• Adjusted EBITDA: $526.8 million, up $32.3 million (6.5%).

• Adjusted EBITDA increased in the Telecommunications segment by $19.0 million (4.1%) and in the Media segment by $10.3 million (29.2%).

• Net income attributable to shareholders: $159.8 million ($0.64 per basic share) in the fourth quarter of 2020, an increase of $14.7 million ($0.07 per basic share).

• Adjusted income from continuing operating activities: $165.0 million ($0.66 per basic share) in the fourth quarter of 2020, a $5.4 million increase.

• Cash flows from operations: $345.2 million, up $84.7 million (32.5%).

• Net increase of 43,000 RGUs (0.7%) in the fourth quarter of 2020, including 28,500 connections (2.0%) to the mobile telephony service, 27,000 subscriptions (1.5%) to the Internet access service and 16,800 subscriptions (3.7%) to Club illico.
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As a major corporate citizen and Québec’s telecommunications, news and entertainment leader, Quebecor played a prominent role during the COVID‑19 pandemic that wreaked havoc throughout 2020. We supported the public by providing our essential services without interruption during the crisis while implementing measures to mitigate the impact on our employees, customers and business partners. For example, we took practical steps throughout the year to help our customers stay connected, informed and entertained in this challenging time, and we provided financial assistance to our employees who were affected by the pandemic.

Our prudent management of our operations and our balance sheet served us particularly well in 2020. We controlled our operating costs and adjusted our capital expenditures for physical and intangible assets to maintain our industry‑leading status going forward while being prepared to deal with future challenges. At the same time, we were able to continue the roll‑out of our latest technological innovations. For example, our new Helix and Fizz services have been a resounding success, making a strong contribution to growing our customer base and our profitability. As a result, despite the difficult business environment created by the pandemic and its impact on some of our operations, we posted a 3.9% increase in adjusted EBITDA and a 14.7% increase in cash flow from operations in 2020. We reduced our debt‑to‑equity ratio from 2.91x in 2019 to 2.68x in 2020. Our performance in the fourth quarter of 2020 also contributed to these positive results, with increases of 6.5% in adjusted EBITDA and 32.5% in cash flows from operations, Pierre Karl Péladeau stated.
 

As a provider of essential services subject to unprecedented demand, I am proud of what we accomplished at Videotron in 2020, said Jean‑François Pruneau, President and Chief Executive Officer of Videotron. Thanks to our strategic investments of recent years, Quebecers have been able to count on a reliable, robust network as well as the expertise and professionalism of our dedicated teams across Québec. To connect as many Quebecers as possible, we are pursuing our strategy of expanding our services outside urban areas by innovating and constructing new infrastructure, building on our successes to date.
 

Meanwhile, we began the roll‑out of our 5G network with a successful first deployment in December 2020, strengthening our industry‑leading position and demonstrating our determination to stay at the cutting edge of technological change and delivering a world‑class experience for our customers.
 

The addition of 150,600 mobile subscriber connections and 69,500 Internet access customers in 2020 is indicative of our ability to acquire new customers and increase our market share in growth sectors. The success of our Helix entertainment and home management platform, which now has more than 677,000 RGUs, is a prime example, as is the growth of Fizz’s mobile telephony and Internet access services. Fizz recently placed first for online experience in Canada’s telecommunications industry on Léger’s WOW Digital Index.
 

Finally, Club illico’s subscriber base continues to grow, thanks to its rich, diverse selection of programs, including exciting new documentary series and new dramas. We continue investing in these categories and some 30 original productions are currently in development, Jean-François Pruneau concluded.
 

Our organization faced multiple COVID‑19‑related challenges in 2020, noted France Lauzière, President and Chief Executive Officer of TVA Group. TVA Group posted a $12.5 million increase in adjusted EBITDA in the fourth quarter of 2020, mainly because of decreased costs due to the late start of the National Hockey League’s 2020‑2021 season, combined with the various government assistance measures. Our people’s sustained efforts to mitigate the impact of the pandemic were also a factor.
 

Despite the difficult conditions created by the pandemic, TVA Group continues to evolve and adjust to market transformations. For example, we successfully repositioned the TVA brand in the fall and launched the new TVA+ digital platform, which aims to reach ever more Quebecers and bring viewers together through its content offerings. Our combined market share continued to grow in the fourth quarter of 2020, rising 1.8 percentage points to 38.6%, due in particular to a 2.6‑point increase at the LCN all-news channel, which remained the most‑watched specialty channel in Québec with a 7.4% market share, added France Lauzière.
 

Quebecor’s Sports and Entertainment segment was hard hit by the health crisis, said Martin Tremblay, Chief Operating Officer of Quebecor Sports and Entertainment Group. Most of our shows and events were postponed or cancelled. We have managed our operations so as to protect the viability of the business and to come back even stronger than before after the pandemic. In February 2021, we acquired Les Disques Audiogramme inc., the largest independent French‑language record label in North America. As well, we enhanced entertainment offerings in the Québec City area with the acquisition of the Théâtre Capitole in June 2020, and we launched the new QUB musique streaming platform featuring Québec artists. Showcasing Québec artists and supporting the vitality of our culture remain core priorities for us and we are very proud of these acquisitions and initiatives. Expanding our complement of distribution platforms positions us to continue building a diversified ecosystem for the benefit of promoters, artists and everyone in Québec who loves music and culture.
 

Videotron strengthened its position as a leading issuer, said Hugues Simard, Chief Financial Officer of Quebecor and Quebecor Media. I am very pleased with the response to its offering of Senior Notes in the principal amount of $650.0 million, issued on January 22, 2021. The Notes bear 3.125% interest, the lowest coupon rate ever on the Canadian high‑yield note market. This issue, in addition to available liquidity of more than $1.8 billion, puts us in a strong position heading into the upcoming spectrum auctions and our Note maturities.
 

While the pandemic continues to create uncertainty, our ability to execute our strategies in an effective and disciplined manner, our healthy results and balance sheet, and our talented teams give us reason to look to the future with confidence, Pierre Karl Péladeau concluded. I extend my heartfelt thanks to our employees, who have shown extraordinary resilience and continue providing our customers with the highest standard of service, day after day. I am extremely proud of the outstanding leadership we have shown throughout the year. We will continue investing and growing for the benefit of all our stakeholders.

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For more details and to consult definitions of "adjusted EBITDA", "adjusted income from continuing operating activities", "cash flows from operations", "average billing per unit", "revenue-generating unit" and  "consolidated net debt leverage ratio" please refer to the attached PDF file for the complete version of the press release.

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Information :

Hugues Simard
Chief Financial Officer
Quebecor Inc. et Quebecor Media Inc.
hugues.simard@quebecor.com
514 380-7414
 

Communications department
Quebecor Inc. and Quebecor Media Inc.
medias@quebecor.com
514 380-4572