Quebecor Inc. Class A · TSX:QBR.A
Quebecor Inc. Class A — CIBC World Markets Frontenac Institutional Investor Conference 2005
36 slides from Quebecor Inc. Class A's conference presentation, Sep 22, 2005
Slide 1: Investor Presentation – CIBC World Markets Frontenac Institutional Investor Conference
Investor Presentation CIBC World Markets Frontenac Institutional Investor Conference Quebec City September 22, 2005
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 / QMI) /3
Slide 4: Corporate Structure
Corporate Structure 26.3% * 54.7% Caisse de Dépôt et Public Placement du Québec 73.7% 45.3% One of the world’s largest commercial printers 3rd largest media company in Canada and the largest in Quebec Operating in 17 countries Leading market positions in cable, newspaper publishing, LTM re
Slide 5: Quebecor Media
Se ~—h © QUEBECOR MEDIA
Slide 6: Leading Market Positions
Leading Market Positions Quebecor Media can reach 60% of English Canadians in Major Canadian Markets and 95% of French Canadians in Quebec on a weekly basis Leading Market Position in Quebec #1 Newspaper publisher #1 Cable operator #1 High speed Internet service provider #1 Television broadcaster
Slide 7: QMI Strategic Focus
QMI Strategic Focus Generate Free Cash Flow Execute Residential Telephony Strategy Target Accretive Acquisitions in Core Business Segments Optimize Capital Structure /7
Slide 8: Driving Free Cash Flow Growth
Driving Free Cash Flow Growth New Products Cross Selling Residential Telephony Created dedicated QMI position to Video on Demand enhance cross selling opportunities (VP, Advertising Convergence) 24 Hours (Montreal, Toronto, Vancourer) Sun TV (formerly Toronto 1) Channel Exploit content o
Slide 9: Sun Media Corporation
SUN MEDIA CORPORATION A QUEBECOR MEDIA COMPANY
Slide 10: 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 194
Slide 11: Demonstrated Financial Performance
Demonstrated Financial Performance EBITDA has been growing at a 3.9% CAGR pace (5.1% excluding the impact of the recent start-up of free dailies) REVENUE* EBITDA* 925 906.9 240 227.8 226.6 224.8 900 888.1 219.4 215 875 201.5 845.9 197.9 850 831.6 190 183.2 % 826.1 3.9 = 825 814.9 GR CA 803.3 800 1
Slide 12: Maintained Strong Margins
Maintained Strong Margins Despite the launch of three free dailies, stringent focus on costs has allowed Sun Media to consistently deliver industry leading margins EBITDA Margin Peer Comparison (LTM 06/30/05) 27% 26.6% 26.4% 30% 25.0% 25.7% Publishing EBITDA Margin 26% 25% 22.0% 25.0% 25% 24.4% 24
Slide 13: Strong Advertising Market Share Trends
Strong Advertising Market Share Trends Urban Dailies ROP Linage Market Share * 38% 37.1% 36.8% 36.3% 36.3% 35.8% 36% 34.7% 34% 32% 30% 2000 2001 2002 2003 2004 2005 Q1 * Market share vs competing broadsheets Source: CNA March 2005 report /13
Slide 14: Launch of Free Dailies
Launch of Free Dailies Remarkable market reception 24 Hours 24 Heures 24 Hours Toronto Montreal Vancouver Circulation 239K * 133K * 145K ** Readership (Daily) 308K 153K - Readership (Exclusive) 45% 35% - Readership (18-49) 81% 80% - Readership (Female) 56% 49% - Source: NADbank 2004 * CCAB, March
Slide 15: Printing Plant Modernization
Printing Plant Modernization QMI investment of $220M is underway for the modernization and consolidation of printing operations in Ontario and Montreal: • Enhancing product quality (heat set printing capability) • Reducing costs (headcount, waste, productivity) • Providing additional revenue oppor
Slide 16: Quebecor Media
@ QUEBECOR MEDIA
Slide 17: Leading Canadian Cable Operator
Leading Canadian Cable Operator Cable TV Internet Telephony Wireless - 1,459 K basic subs as - 572 K HSD subs as of - Launch in H1-2005 - Will operate under a of August 31 August 31 MVNO strategy - Hybrid VoIP telephony - 411 K digital subs (“white label”) utilizing - Fastest growing cable service R
Slide 18: Vidéotron Key Priorities
Vidéotron Key Priorities Disciplined Growth Cost Control • Maximize customer service through • Reduce costs and improve operating delivery of best experience efficiency and productivity - Superior, high-quality products • Vidéotron / VTL merger : $3M in savings - Exclusive entertainment content bein
Slide 19: Basic Cable Subscriber Base
Basic Cable Subscriber Base Positive trend : 6 consecutive quarters of net adds on an LTM basis Net Change (LTM) in Cable TV Customers (000’s) 30 20 10 0 (10) (20) (30) (40) (50) (60) (70) (80) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2002 2003 2004 2005 Source: Vidéotron /19
Slide 20: Digital Services Subscriber Growth
Digital Services Subscriber Growth Fastest growing Cable DTV and HSD service provider Bell’s recent anti-piracy measures (new smart cards) should help maintain the momentum for Vidéotron’s digital services Digital Customers High-Speed Internet Customers 325 225 Vidéotron Vidéotron 300 275 Rogers
Slide 21: Substantial Potential for Increased Penetration
Substantial Potential for Increased Penetration Digital Penetration of Basic Subscribers Internet Penetration of Homes Passed 70% 40% Vidéotron - Current Vidéotron - Current 35% Vidéotron - 1 year ago 35% 34% Vidéotron - 1 year ago 60% 58% 31% 30% 50% 27% 45% 43% 41% 25% 23% 40% 34% 19% 19% 31% 20%
Slide 22: Residential Telephony Subscribers
Residential Telephony Subscribers Telephony Subscribers (000s) Roll-out Progress Number of Territory Launch Date Homes (000s) 80 75.3 South Shore January 24 300 Laval March 29 145 60 West Island May 30 90 55.4 Quebec City July 11 268 Rest of Montreal August 17 825 41.8 40 Total 1,628 30.0 22.8 • Exc
Slide 23: Taking Care of Business and Customers
Taking Care of Business and Customers • Improved Quality of Service and Bundling Lead to Lower Churn Call Answer Rate vs. Cable TV Churn Monthly Churn (a) 100% Call Answer Rate 1.9% 3.00% Internet Only Churn - Cable TV (Total) Cable Only 95% 1.8% 2.50% Bundled Clients Call Answer Rate (%) 90% 1.6% 2
Slide 24: Growing ARPU
Growing ARPU 9.2% CAGR during the last 3 years Gross Total ARPU $60 $55 % = 9.2 G R $50 CA $45 $40 $35 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2001 2002 2003 2004 2005 Source: Vidéotron (ARPU gross of programming credits and excludes accounting changes relating to installation revenu
Slide 25: TVA
Slide 26: TVA Recent Developments
TVA Recent Developments In December 2004, TVA paid $32.4M for a 75% interest in Toronto 1 (renamed Sun TV), a television station in Toronto In December 2004, TVA launched Mystère, a French language digital specialty channel focusing on mystery and science-fiction programming content In January
Slide 27: TVA – Leading Margins and Market Share
TVA – Leading Margins and Market Share Peer Comparison (LTM) French-language TV Market Share Industry leading margins Consistently delivering strong market share despite increased fragmentation – 24 of top 30 shows in Spring 2005 season 25% 24% Other Broadcasting EBITDA Margin (%) 12% TVA 20% 20% 20
Slide 28: Quebecor Media
INC. @ QUEBECOR MEDIA
Slide 29: Canoe: Blossoming in a Growing Market
Canoe: Blossoming in a Growing Market Quebec’s leading Internet portals: •General and special interests (Jobboom, Réseaucontact, Autonet, Canoe) In 2005, launched Micasa.ca, a portal devoted to real estate Canoe is well positioned to take full advantage of the Internet 8 EBITDA (in $M) 20% 6 M
Slide 30: Financial Highlights
Financial Highlights
Slide 31: QMI – Financial Performance
QMI – Financial Performance Revenues ($ million) 2004 2003 YoY (%) H1-05 H1-04 YoY (%) Cable 871.6 805.0 8.3% 473.2 419.1 12.9% New spapers 888.1 845.9 5.0% 452.1 433.4 4.3% Broadcasting 358.0 340.9 5.0% 200.8 180.3 11.4% Leisure and Entertainment 241.7 205.0 17.9% 101.8 99.0 2.8% Business Telecom 7
Slide 32: QMI: A Free Cash Flow Powerhouse
QMI: A Free Cash Flow Powerhouse QMI Consolidated 225 200 QMI’s intense focus on 200 192 175 profitable growth and cost 150 146 120 containment has resulted in 125 100 significant improvements in 75 45 EBITDA and Free Cash Flow 50 25 0 2001 2002 2003 2004 LTM Vidéotron Sun Media 200 250 169 175 15
Slide 33: Accounting Practice Discrepancies
Accounting Practice Discrepancies Different accounting practices amongst Canadian cable companies make EBITDA comparisons difficult • Vidéotron and Rogers: Subscriber subsidies are expensed • Shaw and Cogeco: Subscriber subsidies are capitalized EBITDA must be adjusted to reflect these differenc
Slide 34: 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, 2004) $ Net Operating Losses (NOL's) 527 Undepreciated Cost of Capital (UCC) ~946 As a result, QMI and its wholly-owned subsidiaries do not expect to p
Slide 35: Refinancing Opportunities
Refinancing Opportunities As of July 15, 2006, QMI will have the option to refinance its Senior Notes and Senior Discount Notes This should generate substantial interest savings, further driving free cash flow growth Current Situation Refinancing Interest Coupon Int. ($) * Coupon Int. ($) * Savi
Slide 36: CIBC World Markets Frontenac Institutional Investor Conference
Investor Presentation CIBC World Markets Frontenac Institutional Investor Conference Quebec City September 22, 2005
Quebecor — CIBC World Markets Frontenac Institutional Investor Conference 2005 on 6ix