forward looking statements
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CIBC World Markets 7 th Annual Eastern Institutional Investor Conference September 22 - 24, 2008 Montreal, Quebec. Forward Looking Statements. - PowerPoint PPT PresentationTRANSCRIPT
CIBC World Markets7th Annual Eastern
Institutional Investor Conference
September 22 - 24, 2008Montreal, Quebec
/2
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 customer demand for the Company's products, changes in raw material and equipment costs and availability, seasonal fluctuations in customer orders, pricing actions by competitors, and general changes in the economic environment.
Currency
Unless noted otherwise, all dollars are expressed in Canadian dollars.
LTM Results are for the period ended June 30, 2008
/3
Management
Pierre Karl Péladeau President and Chief Executive Officer
Louis Morin Vice President and Chief Financial Officer
/4
Corporate Structure
Notes: Segmented revenues include inter-company revenues. Segmented EBITDA excludes head office. (1) Pro Forma the Osprey Media acquisition.
(2) Osprey Media and Sun Media are 100% owned separately by Quebecor Media.
(C$ in millions)
54.7%
Inc.
45.3%
51% Economic99% Voting
100%
LTM Revenue : (1) $3,638
LTM EBITDA : (1) 1,078
LTM Revenue: $1,700
LTM EBITDA: 726
LTM Revenue: $433
LTM EBITDA: 68LTM Revenue: $443
LTM EBITDA: 28
#1 pay television operator in Quebec; #3 cable operator in Canada; #1 video store
chain in Quebec
Largest newspaper publisher in Quebec and
Canada (2)
100%
Book Retailing
New Media
Largest French language broadcaster and magazine publisher in Quebec and in
North America
25%
LTM Revenue: $1,160
LTM EBITDA: 258
/5
-40%
-20%
0%
20%
40%
60%
80%
100%
Sep-0
1
Dec-01
Mar
-02
Jun-
02
Sep-0
2
Dec-02
Mar
-03
Jun-
03
Sep-0
3
Dec-03
Mar
-04
Jun-
04
Sep-0
4
Dec-04
Mar
-05
Jun-
05
Sep-0
5
Dec-05
Mar
-06
Jun-
06
Sep-0
6
Dec-06
Mar
-07
Jun-
07
Sep-0
7
Dec-07
Mar
-08
Jun-
08
Quebecor Inc.’s Value Drivers
Quebecor Inc. is well positioned for growth with the totality of its value being derived from Quebecor Media
Notes: Assuming 100% of holding company discount attributed to QMI value
QMI’s share of QI’s enterprise value
% o
f Q
I va
lue
/7
QMI Diversified Financial Profile
Cable 67.3%
Newspapers 24.0%
Leisure and Entertainment
1.9%
Broad casting
6.3%
Corporate & Other
0.5%
LTM EBITDA (1)LTM Revenue (1)
Revenues (1) = $3.6 billion
Cable 46.7%
Newspapers 31.9%
Leisure and Entertainment
8.5%Broadcasting
11.9%
Other & Intersegment
1.0%
(1) Pro Forma for the Osprey Media acquisition.
EBITDA (1) = $1,078 million
/9
Leading Canadian Cable Operator
- 1,660K basic subs (831K digital subs) as of Jun 30
- Fastest growing digital TV provider in Canada (cable or satellite) during LTM
- Superior offering including VOD and SVOD
Cable TV
- 989K cable modem subs as of Jun 30
- 15.8% cable Internet subscriber growth during LTM
- Highest speed in its market (50Mbps service available)
- Currently testing wideband technology (speeds up to 100Mbps)
Internet
- 743K subs as of Jun 30
- Achieved penetration of 44.7% of basic subs
- Strong lift effect for other services
- Hybrid VoIP telephony service
Telephony
- 55K lines as of Jun 30- Completed Videotron
bundling offer- ARPU above initial
projections- Operates under a
MVNO strategy (“white label”) utilizing Rogers wireless’ network
- Just acquired 40MHz of AWS licenses in Quebec
Wireless
Quadruple Play
Vidéotron continues to lead the industry in new service deployment
/10
$938$863
$1,080
$1,310
$1,553
$1,700
700
800
900
1,000
1,100
1,200
1,300
1,400
1,500
1,600
1,700
$1,800
2003 2004 2005 2006 2007 LTM
$ m
illio
ns
$364
$292
$414
$513
$643
$726
200
250
300
350
400
450
500
550
600
650
700
$750
2003 2004 2005 2006 2007 LTM
$ m
illio
ns
Robust new service deployment and focus on customer service have led to strong financial performance
Strong Financial Performance
Reported EBITDA
Note: Pro Forma Vidéotron Telecom.
Reported Revenue
CAGR = 22%
CAGR = 16%
/11
94%
96%
98%
100%
102%
104%
106%
108%
110%
112%
114%
116%
118%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Bas
is c
ust
om
ers
as p
erce
nt
of
bas
e p
erio
d (
%)
Videotron
Rogers
Shaw
Cogeco
2003
Growing Basic Cable Customer Base
Videotron exhibits the highest growth in the industry in terms of basic cable customers
Videotron has realized 12 consecutive quarters of positive net adds and improved momentum since the launch of its telephony service
Number of Basic Cable Customers
Launch of Telephony
2004 2005 2006 2007 2008
/12
2008 20082003 200420022002 2003
0%
100%
200%
300%
400%
500%
600%
700%
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1
Su
bs
cri
be
rs a
s p
erc
en
t o
f b
as
e p
eri
od
(%
) Videotron
Rogers
Shaw
Cogeco
2004 2005 2006 2007
Videotro
n CAGR = 36%
Cable Internet CustomersCable Digital TV Customers
Digital Services Subscriber Growth
Videotron is the fastest growing Canadian cable digital TV and cable modem Internet service provider
Source: Videotron and company reports.
50%
100%
150%
200%
250%
300%
350%
400%
450%
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1
Su
bs
cri
be
rs a
s p
erc
en
t o
f b
as
e p
eri
od
(%
) Videotron
Rogers
Shaw
Cogeco
Videotron C
AGR = 25%
2005 2006 2007
/13
20082005
Strong Residential Telephony Momentum
In the first half of 2008, VL added 106,600 subscribers to its telephony service
• 238,500 adds in 2007 (record)
• 234,900 in 2006
• 160,800 in 2005 (launch year)
Penetration of basic cable subs Lift Effect
Record 2007, Promising 2008
57% lift experienced (more than one new product) in Q2-2008
37% new customers in Q2-2008
• 96% taking more than 1 product
• 66% taking all three
39%42%
45%
36%
32%
28%25%
3%1%
7%
11%
15%
19%22%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2006 2007
Vidéotron has positioned itself as a major player in Canadian Telecom since its launch of VoIP in 2005
Advanced Wireless Services
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Canadian wireless operators exhibit world leading EBITDA margins
Canada's penetration of wireless service lags compared to other countries
Quebec’s penetration is below the Canadian average
Market Potential
Auction Rules favored new entrants:• 40 MHz (on a total of 105 MHz) of
spectrum set aside for new entrants• Mandated roaming and tower
sharing at commercial rates gives entrants network build out flexibility
QMI acquired all of the set aside spectrum in the province of Quebec, except for 20 MHz in the Outaouais region, thus preventing any other new entrant
/17
Nationwide Presence and Strategically Clustered
249 Community Newspapers andSpecialty Publications
190 Sun Media59 Osprey
8 Paid Urban Dailies +7 Free Commuter Dailies
Nationwide presence covering key markets offers national advertising and distribution solutions Clustering provides significant cost efficiencies and opportunities for bundled advertising packages Acquisition of Osprey Media creates the #1 newspaper publisher in Canada and provides a strong fit
with Sun Media – Osprey Media’s community newspaper focus and limited geographic overlap increases stability and diversification of Sun Media asset portfolio
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14%
16%
18%
20%
22%
24%
26%
28%
30%
1999 2000 2001 2002 2003 2004 2005 2006 2007 LTM
Sun Media Impact of Free Dailies
Sun Media and Osprey have continued to deliver industry leading margins despite increased costs from new free dailies (at Sun)
Synergies and new presses in Mirabel and Islington should provide additional cost savings
Maintained Strong Margins
Osprey
24.2%
21.6%
18.2%
15.0%
21.8%
13%
16%
19%
22%
25%
28%
Torstar * GTC ** CanWest***
Osprey SunMedia
Pu
blis
hin
g E
BIT
DA
Mar
gin
* As of Jun 30, 2008; ** As of Apr 30, 2008; *** As of May 31, 2008. Notes: Sun Media – Newspaper segment excluding Osprey
Torstar - Star Media and Metroland Media segmentsGTC - Media segmentCanWest - Newspaper segment
Sun Media and Osprey EBITDA Margins Peer Comparison (LTM)
23.7%
/19
2008
0
10
20
30
40
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
$ m
illi
on
s
LTM Revenues
Strong Growth from Free Dailies 24 Hours/heures Toronto, Montréal, Vancouver combined, showed a 5.2%
growth in total readership (1)
Combined Revenues of Toronto, Montreal and Vancouver Free Dailies
2005
Creating a well-respected national free-daily newspaper brand with the recent launches of Ottawa, Edmonton and Calgary
Combined Revenues of Ottawa, Calgary and Edmonton Free Dailies
0
12
34
56
7
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
$ m
illi
on
s
LTM Revenues
2006 2007
20082005 2006 2007
(1) 2007 NADbank versus 2006 NADbank studies
.
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Leading Market Share
Tele-Quebec 4%
TQS 7%
TVA 26%
Other 7%
Specialty Channels
44%Radio-Canada
(CBC) 12%
French-language TV Market Share Financial performance
Consistently delivering strong market share despite increased fragmentation
Source: Audimétrie BBM; Monday - Sunday, 2 years + April 28 – August 3, 2008
Revenues ($ million) 6M-2008 6M-2007 YoY (%)
Television 169.9 155.1 9.5%Publishing 39.9 38.6 3.4%Distribution 9.4 9.0 4.4%Other & Inter-Segment (1.7) (2.9) n.m.
Total 217.5 199.8 8.9%
EBITDA ($ million) 6M-2008 6M-2007 YoY (%)Television 27.3 23.0 18.7%Publishing 5.0 3.3 51.5%Distribution 0.6 (1.5) n.m.Other & Inter-Segment 0.1 - n.m.
Total 33.1 24.8 33.5%
Financial Highlights
/23
Steady Growth of QMI
$697
$612
$734
$803
$964
$1,075
500
600
700
800
900
1,000
$1,100
2003 2004 2005 2006 2007 LTM
$ m
illio
ns
CAGR = 13%
$2,298
$2,462
$2,703
$3,011
$3,366
$3,619
2,000
2,250
2,500
2,750
3,000
3,250
3,500
$3,750
2003 2004 2005 2006 2007 LTM
$ m
illio
ns
EBITDA
CAGR = 11%
Revenues
/24
QMI Consolidated Free Cash Flow
$45
$146
$192
$119$148
$255 $254
$120
0
50
100
150
200
250
300
$350
2001 2002 2003 2004 2005 2006 2007 LTM
$ m
illio
ns
Cash Flow Generation
Videotron’s strong operating results translated into strong free cash flow
QMI’s intense focus on profitable growth, cost containment and opportunistic refinancings has resulted in improvements in EBITDA and Free Cash Flow
Press investment projects at Newspapers impacted free cash flow in 2005 and 2006
Note: Free Cash Flow is defined as EBITDA, less cash interest expense, less current taxes, less Capex. (1) Includes Vidéotron Telecom, with the exception of 2001.
Videotron Free Cash Flow (1)
$42
$103
$159
$130 $129
$232
$259
$70
0
50
100
150
200
250
$300
2001 2002 2003 2004 2005 2006 2007 LTM
$ m
illio
ns
/25
Solid EBITDA growth and repayment of debt from free cash flow has allowed significant improvement of leverage statistics
QMI Consolidated Leverage Ratio
6.9x
5.5x 5.2x4.5x 4.3x 4.1x
3.6x 3.8x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
2001 2002 2003 2004 2005 2006 2007 Q2-2008
De-Leverage
Note: Debt including swap’s fair market value, as per Credit Agreement. (1) Pro forma 12 months of contribution from Osprey
(1)
(1)