Quebecor Inc. Class A · TSX:QBR.A
Quebecor Inc. Class A — Investor Presentation (June 2006)
41 slides from Quebecor Inc. Class A's investor presentation, June 2006
Slide 1: Investor Presentation June 2006
Investor Presentation June 2006
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements, which are subject to known and unknown risks and uncertainties that could cause the Company's actual results to differ materially from those set forth in the forward-looking statements. These risks include changes in c
Slide 3: Management Attendee
Management Attendee Mark D’Souza Vice President and Treasurer - QI Vice President, Finance - QMI Jean-François Pruneau Treasurer - QMI /3
Slide 4: Corporate Structure
Corporate Structure 26.2% * 54.7% Caisse de Dépôt et Public Placement du Québec 73.8% 45.3% One of the world’s largest commercial printers One of the largest media company in Canada and the largest in Quebec Operating in 17 countries Leading market positions in cable, newspaper publishing,
Slide 5: Quebecor Media
Se ~—h © QUEBECOR MEDIA
Slide 6: Leading Market Positions
Leading Market Positions Set of dominant media properties in Quebec and national presence allows Quebecor Media to maximize its reach Leading Market Position in Quebec #1 Newspaper publisher #1 Cable operator #1 Television broadcaster #1 Magazine publisher #1 Video store chain #1 French-music prod
Slide 7: QMI Strategic Focus
QMI Strategic Focus Execute residential and mobile telephony strategy Generate Free Cash Flow Implement integrated Internet strategy Improve productivity Target accretive acquisitions in core business segments /7
Slide 8: Integrated Interactive Media Strategy
Integrated Interactive Media Strategy Digitalization of content and high-speed connectivity allows the Web to become a new media interface New generations of consumers want interactive content Advertising revenues slowly but surely migrating to Internet QMI is being proactive Appointed a V
Slide 9: Optimizing QMI's Capital Structure
Optimizing QMI’s Capital Structure QMI continues to take advantage of favorable credit momentum and market conditions to meet its capital structure objectives. Objectives Refinancing Impact Reasonable QMI leverage of 4.7x at March 31, 2006 down from over 7x at leverage YE ’01 Reduce interest Con
Slide 10: Sun Media Corporation
SUN MEDIA CORPORATION A QUEBECOR MEDIA COMPANY
Slide 11: Nationwide Presence and Strategically Clustered
Nationwide Presence and Strategically Clustered Nationwide presence covering key markets offers national advertising and distribution solutions Clustering provides significant cost efficiencies and opportunities for bundled advertising packages 8 Paid Urban Dailies + 3 Free Commuter Dailies 199
Slide 12: Strong and Established Newspaper Franchise
Strong and Established Newspaper Franchise (in 000’s) Market Avg. Daily Weekly Urban Daily Publications Year Founded Position Circulation Readership Le Journal de Montréal 1 268.9 1,189.7 1964 The Toronto Sun 2 182.0 1,806.6 (a) 1971 Le Journal de Québec 1 103.5 342.4 1967 The London Free Press 1 87
Slide 13: Strong and Growing Market Share
Strong and Growing Market Share Sun Media is the second largest newspaper publisher in Canada, with a 21.0% national market share (1) All urban daily newspapers rank first or second in their markets (1) Urban Dailies ROP Linage 40% Market Share* 39.0% 38.7% 38% 36.8% 36.3% 36.3% 35.8% 36% 34.7%
Slide 14: Demonstrated Financial Performance
Demonstrated Financial Performance Robust financial performance despite erosion of circulation and launches of Free Dailies (3.8% EBITDA CAGR 1999 - LTM excluding the impact of Free Dailies). Reported Revenue Reported EBITDA $950 $270 $923 925 $916 255 900 $888 240 $225 $228 $222 $219 875 225 $218 $
Slide 15: Maintained Strong Margins
Maintained Strong Margins Sun Media has continued to deliver industry leading margins despite increased costs from new free dailies and higher raw material costs Sun Media EBITDA Margin Peer Comparison (LTM) 30% 28% 25.6% 27.2% 27.2% 28% 26.6% 26.2% Publishing EBITDA Margin 25.6% 25% 26% 24.4% 24.
Slide 16: Strong Market Reception for Free Dailies
Strong Market Reception for Free Dailies 24 Hours 24 heures 24 Hours Toronto Montreal Vancouver Circulation 249,342 134,691 145,000* Readership (Daily) 349,500 176,700 159,700 Exclusive Readership 45% 29% 72% Readership (Adult 18-49) 77% 79% 66% Readership (Female) 56% 50% 46% 24 Hours have a high
Slide 17: New Press Projects
New Press Projects Total investment for QMI and Quebecor World of $220 million Reduce current 13 lines to 6 lines of Man Roland presses – Reduce paper width from 22 ¾” to 21 ½” New Ferag mailroom equipment Located in Mirabel, Quebec and Islington, Ontario Provide for additional colour reve
Slide 18: Circulation Strategies
Circulation Strategies Sun Media is implementing various initiatives in order to stimulate circulation and increase revenues Install additional boxes and dealer racks Increase telemarketing to attract new customers and lengthen subscription terms Invest in content and format ("star" columnis
Slide 19: Online Strategy
Online Strategy Consumers are increasingly relying on Internet as a primary source of information Sun Media’s online strategy includes redesign of Urban Dailies websites Six Urban Daily websites redesigned in 2005 to reflect vibrant tabloid personality of Urban Dailies In Q1-2006, unique vis
Slide 20: Videotron
@ QUEBECOR MEDIA
Slide 21: Leading Canadian Cable Operator
Leading Canadian Cable Operator Cable TV Internet Telephony Wireless - 1,520K basic subs - 682K cable modem - Launched in H1-2005 - Will operate under a (512K digital subs) as subs as of March 31 - Hybrid VoIP telephony MVNO strategy of March 31 - Fastest growing cable service (“white label”) utiliz
Slide 22: Strong Financial Performance
Strong Financial Performance Robust new service deployment has led to strong financial performance. Reported Revenue Reported EBITDA 1,200 500 $1,131 1,150 $432 $450 0% 1,100 9.5 % $1,080 = 16. $414 = GR GR CA 1,050 CA 400 $363 1,000 $ millions $ millions $938 350 950 $293 900 300 $861 $267 $841 8
Slide 23: Continued Momentum in Q1 2006 Subscriber Results
Continued Momentum in Q1 2006 Subscriber Results Net Additions Q1 2006 LTM Comment Basic Cable 13,900 65,000 Largest annual net growth since 1996 Digital Cable 37,800 157,000 Largest annual increase since service was launched in 1999 Cable Modem 43,900 151,800 Largest annual increase since service w
Slide 24: Growing Basic Cable Subscriber Base
Growing Basic Cable Subscriber Base Vidéotron has realized nine consecutive quarters of positive net adds on an LTM basis (net adds of 13,900 subscribers in Q1 ’06) and improved momentum since the launch of telephony service. Net Change (LTM) in Cable TV Subscribers (000’s) 65.0 IP telephony was lau
Slide 25: Digital Services Subscriber Growth
Digital Services Subscriber Growth Videotron is the fastest growing Canadian cable digital TV and cable modem Internet service provider Cable telephony launch and Bell’s recent anti-piracy measures have been followed by increased momentum for Videotron’s digital services Cable Digital TV Custome
Slide 26: Significant Potential for Increased Penetration
Significant Potential for Increased Penetration Digital Penetration of Basic Subscribers Internet Penetration of Homes Passed 80% 45% Videotron – Current (3/31/06) Videotron – Current (3/31/06) 40% 69% Videotron – 1 year ago (3/31/05) 40% 38% Videotron – 1 year ago (3/31/05) 70% 35% 35% 60% 30% 50%
Slide 27: Strong Residential Telephony Momentum
Strong Residential Telephony Momentum Telephony Subscribers Roll-out Progress Number of 250 227 Territory Launch Date Homes (‘000s) 202 South Shore January 24 300 200 Laval March 29 145 181 163 West Island May 30 90 Subscribers ('000) 145 150 Quebec City July 11 268 118 Rest of Montreal August 17 82
Slide 28: Growing ARPU
Growing ARPU Videotron has recorded a 9.0% CAGR in its ARPU since 2001. Net Total ARPU $60 55 9 .0% 50 G R= CA ARPU 45 40 35 30 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2001 2002 2003 2004 2005 2006 Source: Vidéotron (ARPU excludes accounting changes relating to installation re
Slide 29: Bundling Results in Lower Churn
Bundling Results in Lower Churn Monthly Churn (a) 3.00% Internet Only 2.50% Cable Only 2 Prod. Bundled (Cable + Int) 2.00% 3 Prod. Bundled Clients 1.50% 1.00% 0.50% 0.00% Nov Nov Jan Jun Jan Jun Jan Jul Jul Mar Apr Mar Apr Mar Feb Aug Feb Aug Feb Sept Oct Dec May Sept Oct Dec May 2004 2005 2006 (a)
Slide 30: TVA
Slide 31: TVA - Leading Margins and Market Share
TVA - Leading Margins and Market Share Peer Comparison (LTM) French-language TV Market Share Consistently delivering strong market share despite increased Industry leading margins fragmentation – 8 of top 10 shows in Spring 2006 season Other 8% 25% Broadcasting EBITDA Margin (%) 21% TVA 28% 20% 20%
Slide 32: TVA - Financial Performance
TVA – Financial Performance Revenues ($ million) 2005 2004 YoY (%) Q1-2006 Q1-2005 YoY (%) Television 306.8 271.2 13.1% 71.7 74.0 -3.1% Publishing 77.1 76.3 1.0% 17.5 19.1 -8.4% Distribution 21.8 13.2 65.2% 3.6 4.5 -20.0% Other & Inter-Segment (4.3) (2.8) 53.6% (1.9) (0.9) n.m. Total 401.4 358.0 12.
Slide 33: Protecting Leadership Position
Protecting Leadership Position Fragmentation of viewership is transforming fundamental principles To reach viewers, need to be on different platforms TVA is investing in Specialty Channels Specialty Channel - Launch Schedule Channel Launch Date LCN 1997 MenTV* 2001 Mystery* 2001 Mystère 2004 A
Slide 34: Other Businesses Overview
Other Businesses Overview
Slide 35: Other Businesses
Other Businesses Divisions / Companies Key LTM Stats ($ mm) Commentary Leisure & Entertainment Revenue: $277 Continued growth in book and video sales EBITDA: $26 Q1 ’06 Y-o-Y revenues of Archambault increased 9.8% Recently acquired Sogides, a major book publishing and distribution group Numb
Slide 36: Canoe: Key Piece of QMI's Internet Strategy
Canoe: Key Piece of QMI’s Internet Strategy Quebec’s leading Internet portals: General and special interests (Canoe, Jobboom, Réseau Contact, Autonet, Micasa) Monthly reach of 31% in Canada (Source: ComScore Media Metrix) 6.5 million unique visitors in March 2006 (5.8 million in March 2005)
Slide 37: Financial Highlights
Financial Highlights
Slide 38: QMI - Financial Performance
QMI – Financial Performance Revenues ($ million) 2005 2004 YoY (%) Q1-2006 Q1-2005 YoY (%) Cable * 1,080.4 937.6 15.2% 301.6 251.3 20.0% Newspapers 915.6 888.1 3.1% 219.7 212.6 3.3% Broadcasting 401.4 358.0 12.1% 90.9 96.7 -6.0% Leisure and Entertainment 255.4 241.7 5.7% 70.8 49.2 43.9% Interactive
Slide 39: Free Cash Flow Growth
Free Cash Flow Growth QMI’s intense focus on profitable QMI Consolidated Free Cash Flow growth and cost containment has $250 resulted in significant improvements in $196 200 EBITDA and Free Cash Flow $152 $ millions 150 $129 Current capex programs at $117 $113 100 Newspapers and Cable are expect
Slide 40: Videotron - High Growth Cable Company
Videotron - High Growth Cable Company New product launches and focus on customer service are driving profitability Growth in Adjusted LTM EBITDA 160% Videotron EBITDA as percent of base period (%) 150% Rogers Shaw 140% Cogeco 130% 120% 110% 100% 90% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2003 2004 2005 2006
Slide 41: Favorable Tax Position
Favorable Tax Position QMI and its wholly-owned subsidiaries currently sit on a very favorable tax position QMI Tax Position (as of December 31, 2005) $ Net Operating Losses (NOL's) 361 Undepreciated Cost of Capital (UCC) 1,016 As a result, QMI and its wholly-owned subsidiaries do not expect to