Quebecor Inc. Class A · TSX:QBR.A
Quebecor Inc. Class A — Scotiabank TMT Conference 2022
28 slides from Quebecor Inc. Class A's conference presentation, Mar 8, 2022
Slide 1: Scotiabank TMT Conference
Scotiabank TMT Conference MARCH 8-9, 2022 1
Slide 2: Cautionary Statements
Cautionary Statements Forward Looking Statement This presentation contains forward-looking statements which are subject to known and unknown risks and uncertainties that could cause the actual results of Quebecor Inc. ("the Corporation", "Quebecor" or “QI”) to differ materially from those set forth
Slide 3: Key Highlights
Key Highlights First-class networks #1 Leading market positions Proven track record of Differentiated Offering deploying new services Growing cash flow generation Experienced management team 3
Slide 4: Quebecor Overview
Quebecor Overview QUEBECOR
Slide 5: A Fully Integrated Telecom & Media Company
A Fully Integrated Telecom & Media Company (C$ in millions) All numbers are for 2021 Revenue $4,554 EBITDA $1,973 Class A TSX: QBR.A Class B TSX: QBR.B Market cap $6.8 billion 100% Revenue $4,554 EBITDA $1,974 Media Telecommunications Sports and Entertainment • Conventional & specialty television •
Slide 6: Convergence Strategy
Convergence Strategy Maximizing synergies within portfolio of assets and leveraging content across multiple distribution platforms TELECOMMUNICATIONS SPORTS & ENTERTAINMENT MEDIA • Management of Videotron Centre, an • Television: TVA’s conventional TV market 18,000-seat amphitheater in Quebec city s
Slide 7: Telecommunications Segment
Telecommunications Segment 7
Slide 8: First-Class Networks
First-Class Networks Leveraging our first-class broadband and mobile networks to offer a wide range of advanced services Covering 9 of Quebec’s top 10 urban areas LTE NETWORK of the population 1) Montreal in Quebec and the 94% Greater Ottawa Area 2) 3) Quebec Laval 4) Gatineau 5) Longueuil 6) Sherbr
Slide 9: Comprehensive Suite of Telecom Services
Comprehensive Suite of Telecom Services Bundling has proven effective to attract new customers, reduce churn and maximize customer lifetime value Mobile Internet Television Telephony OTT Video Lines: 1,602K Subscribers: 1,841K Subscribers: 1,419K Lines: 825K Subscribers: 503K • Launched in 2010 • Do
Slide 10: Leading Market Positions Across Offering
Leading Market Positions Across Offering Strong brand names contributing to deeper market penetration of existing suite of services and successful introduction of new services #1 Fastest growing mobile #1 Internet provider in #1 Television service operator in Quebec Quebec footprint provider in Queb
Slide 11: Leading Market Positions
Leading Market Positions From emerging player in mobile services to leadership position in Quebec Mobile Revenues as a Mobile Lines (000) at Period End 1 Percentage of Total Revenues 5G/LTE-A launch 1602 2021 1481 1503 VoLTE launch 1331 1154 1024 26% LTE launch 894 769 633 4G launch 504 3G+ launch 4
Slide 12: Differentiated Mobile Offering
Differentiated Mobile Offering Mobile plans offering distinctive features improving value proposition and differentiating offering from competition Exclusive rate for QUB Musique Free Club illico mobile Over 70 million songs Original French-language productions any time, anywhere 100 Gb of annual bo
Slide 13: Enhancing the home entertainment and management experience
Enhancing the home entertainment and management experience Helix’s evolution from IPTV and broadband to a platform offering countless functions in appliance functionality, energy efficiency, home security and entertainment is posing great potential Voice command and search Integration of Netflix
Slide 14: Proven track record of deploying new services
Proven track record of deploying new services New mobile and Internet brand featuring advantageous pricing, a fully digital experience and complete user autonomy No call center No retail network No truck roll Fizz gives the user full control: Mobile : reinvented the telecommunications market with
Slide 15: Bundling Reduces Churn
Bundling Reduces Churn Churn Rates –Residential Clients Lower churn due to strong demand for bundled offerings and superior customer experience • 71% of customers bundle more than 1 service 19.4% Churn rates are more than 10x lower for quadruple play customers compared to single product customers 10
Slide 16: Strong Financial Performance
Strong Financial Performance Telecommunications Segment C$ millions Revenue 2021 +3% HISTORICAL REVENUE CAGR = 3% Contributors: $3,735 • RGU and total ABPU growth $3,623 $3,735 $3,480 • Steady roll out of new services $3,623 $3,382 $3,288 • Continued focus on customer service • Operating leverage 20
Slide 17: Growth Drivers
Growth Drivers Well poised for growth by capitalizing on recent and ongoing initiatives Fizz Mobile and broadband brand Advantageous pricing Helix 100% digital service IPTV and broadband service 1st carrier to allow data gifting or carry over Smarter, enhanced TV experience Scalable digital platform
Slide 18: 3500 MHz Auction: Another Step Towards Expansion Outside Québec
3500 MHz Auction: Another Step Towards Expansion Outside Québec • $830M investment in Canada’s 5 most populous provinces : $357 million in Quebec $473 million in Ontario, BC, Alberta and Manitoba • Price paid by Videotron ($0.86/MHz-pop) compares favorably to overall auction results ($2.26/MHz-pop)
Slide 19: Quebecor's Financial Highlights
Quebecor’s Financial Highlights 19
Slide 20: Strong and Steady Growth
Strong and Steady Growth QI C$ millions CAGR = 3% Revenue 2021 +5% HISTORICAL REVENUE $4,554 Total Revenue Total EBITDA $4,554 $4,318 $4,294 $4,318 $4,181 $4,125 $4,554 $1,973 2017 2018 2019 2020 2021 Million Million 2020 2021 C$ millions EBITDA 2021 +1% HISTORICAL EBITDA CAGR = 4% $1,953 $1,973 Tel
Slide 21: Cash Flow Generation
Cash Flow Generation Focus on growth, cost optimization and opportunistic refinancings led to improved EBITDA and FCF Telecommunications Segment QI C$ millions C$ millions (EBITDA – CAPEX) Consolidated Free Cash Flow $1,312 $1,255 $1,114 $781 $1,012 $777 $714 $893 $607 $560 2017 2018 2019 2020 2021
Slide 22: Conservative Leverage
Conservative Leverage Low leverage despite the 2018 buyback of CDPQ’s remaining stake in QMI for a consideration of $1.54 billion in cash Videotron 1 QI Debt leverage ratio 2.7x Consolidated Net Debt leverage ratio 3.2x Total Debt / EBITDA Total Net Debt / EBITDA 3.2x 3.2x 2.9x 2.7x 2.6x 2.7x 2.0x 2
Slide 23: Upcoming Maturities
Upcoming Maturities •Intend to continue to proactively address maturities through opportunistic refinancing •Spread out maturities with 59% of debt maturing beyond 2026 Ba1 / Moody’s 3 / $1.6B Ba1 Net liquidity 1 5.1 years Ba1 W.A. Maturity Ba1 S&P Global BB+ QMI Consolidated Debt Maturity Profile 1
Slide 24: Distributions to Shareholders
Distributions to Shareholders 30-50% dividend target set by the BoD 49.6M class B shares repurchased at $23.18 avg price 1 From annual free cash flow Total consideration of $1,149 million Reflects strong projected operating performance and liquidity May 8th, 2018 December 31st, 2021 August 15th, 202
Slide 25: Appendix
Appendix 25
Slide 26: Convertible Debentures due 2024: Key Terms & Conditions
Convertible Debentures due 2024: Key Terms & Conditions $150M of subordinated convertible debentures issued to CDPQ in connection with QI’s repurchase of 1,564,696 QMI shares held by CDPQ on June 22, 2018 Key terms & conditions: Principal amount: $150M Tenor: 6 years (maturity June 26, 2024) I
Slide 27: Convertible Debentures: Illustrative Impact at Maturity
Convertible Debentures: Illustrative Impact at Maturity • Ownership by debenture holders of 2.2% or less of the total number of QI shares outstanding assuming QI share price remains > $28.00 • Cost to settle in cash at maturity of $150M if then prevailing market price of a share is equal to prevaili
Slide 28: QUEBECOR
QUEBECOR