Quebecor Inc. Class A · TSX:QBR.A
Quebecor Inc. Class A — Quebecor Media — Citigroup 14th Annual High Yield/Leveraged Finance Conference 2005
26 slides from Quebecor Inc. Class A's conference presentation, March 2005
Slide 1: Citigroup 14th Annual High Yield/Leveraged Finance Conference
Citigroup 14th Annual High Yield/ Leveraged Finance Conference March 6 - 9, 2005 - Vail, Colorado
Slide 2: Safe Harbor Act
Safe Harbor Act Except for historical information contained herein, certain statements in this document may constitute forward-looking statements made pursuant to the safe harbour provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to known and
Slide 3: Management Attendees
Management Attendees Jacques Mallette Executive Vice President and Chief Financial Officer Mark D’Souza Vice President and Treasurer 3
Slide 4: Corporate Structure
Corporate Structure Leading Canadian multi-platform media company (C$ in millions) 54.7% 45.3% 2004 Revenue : $2,462 Inc. 2004 EBITDA : 697 40% Economic 100% 100% 99% Voting Other #1 Pay television operator in Largest newspaper Book Quebec; #3 in Canada; #1 publisher in Quebec; Largest French lang
Slide 5: Leading Market Positions
Leading Market Positions Quebecor Media can reach 60% of English Canadians in Major Canadian Markets and 95% of French Canadians in Quebec on a weekly basis Leading Market Position in Quebec #1 Newspaper publisher #1 Cable operator #1 High speed Internet service provider #1 Television broadcaster
Slide 6: Quebecor Media: A Unique Platform in a Unique Market
Quebecor Media : A Unique Platform in a Unique Market Launched “American Idol” type 9 week reality show (TV Market Share Peaked at 80%+) • Exclusive Internet and VOD content • Point of sale advertising and sales Daily coverage, special of CD’s and DVD’s in retail stores inserts, increased circulatio
Slide 7: Sun Media
SUN MEDIA CORPORATION A QUEBECOR MEDIA COMPANY @ QUEBECOR MEDIA
Slide 8: Nationwide Presence and Strategically Clustered
Nationwide Presence and Strategically Clustered Nationwide presence covering key markets offers national advertising solutions Clustering provides significant cost efficiencies and opportunities for bundled advertising packages 8 Paid Urban Dailies + 2 Free Commuter Dailies (Mtl / Tor) 192 Commu
Slide 9: Demonstrated Financial Performance
Demonstrated Financial Performance EBITDA has been growing at a 4.5% CAGR pace (5.6% excluding the impact of the recent start-up of two free dailies) (C$ MM) Revenue* (C$ MM) EBITDA* 900 888.1 240 224.8 227.8 219.4 875 845.9 215 850 201.5 197.9 831.6 825.6 825 814.9 190 183.2 % 802.8 = 4.5 GR CA 8
Slide 10: Publishing EBITDA Margin
Maintained Strong Margins Despite the launch of two free dailies, stringent focus on costs has allowed Sun Media to consistently deliver industry leading margins EBITDA Margin Peer Comparison (LTM 12/31/04) 28% 26.6% 30% 25.7% 26.4% Publishing EBITDA Margin 25.7% 25% 22.4% 26% 20% 17.9% 18.4% 24.4
Slide 11: Strong Advertising Market Share Trends
Strong Advertising Market Share Trends Urban Dailies ROP Linage Market Share * 38% 36.8% 36.3% 36.3% 35.8% 36% 34.7% 34% 32% 30% 2000 2001 2002 2003 2004 * Market share vs competing broadsheets Source: CNA December 2004 report 11
Slide 12: Launch of Free Dailies
Launch of Free Dailies 24 Hours / 24 Heures : Remarkable market reception Circulation of 217,700 and 113,000 in Toronto and Montreal respectively Readership • 24 hours: 259,100 every day, 504,000 each week • 24 heures: 152,400 every day, 256,800 each week • 79% of readers are in the key age rang
Slide 13: Continuing Focus on Profit Improvement Programs
Continuing Focus on Profit Improvement Programs Revenue Expenses Increasing ad rates Newsprint (formats / waste) Increasing newspaper prices Labour (headcount / cost New clients control) New products (Free dailies) Benchmarking programs Leveraging press sites Increasing automation
Slide 14: Quebecor Media
@ QUEBECOR MEDIA @ QUEBECOR MEDIA 14
Slide 15: Leading Canadian Cable Operator
Leading Canadian Cable Operator Cable TV Internet Telephony 1,453 basic subs as of 503 K subs as of Launched on December 31, 2004 • 334 K digital subs December 31, 2004 January 24, 2005 Fastest growing digital Fastest growing cable First Canadian cable TV provider in Canada Internet prov
Slide 16: Improving Customer Base
Improving Customer Base 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 2002 2003 2004 Source: Vidéotron 16
Slide 17: Growing ARPU
Growing ARPU 9.3% CAGR during the last 3 years Gross Total ARPU $60 $55 9 .3 % $50 GR= CA $45 $40 $35 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2001 2002 2003 2004 Source: Vidéotron (ARPU is gross of programming credits and excludes accounting changes relating to installation revenues starti
Slide 18: Residential Telephony Strategy
Residential Telephony Strategy Progressive commercial launch, using a combination of Videotron’s existing IP network and VTL’s circuit switched network Soft switches will be introduced to offer VoIP value added services Rationale for Pricing • Specific market environment • Cost structure (VTL
Slide 19: Improved Quality of Service Drives Churn Down
Improved Quality of Service Drives Churn Down 100% 1,88% 95% 1,75% 90% 1,63% 85% 1,50% 80% 1,38% 75% 1,25% Answ er Rate 70% 1,13% Churn - Cable TV (Total) 65% 1,00% Q Q Q Q Q Q Q Q Q Q Q Q Q 4- 1- 2- 3- 4- 1- 2- 3- 4- 1- 2- 3- 4- 01 02 02 02 02 03 03 03 03 04 04 04 04 Note: Figures presented are mon
Slide 20: QMI Financial Review
QMI Financial Review @ QUEBECOR MEDIA
Slide 21: QMI Diversified Financial Profile
QMI Diversified Financial Profile LTM Revenue LTM EBITDA Cable Newspapers Cable Newspapers 34.5% 35.2% 48.9% 32.7% Other Leisure and Leisure and 6.5% Entertainment Entertainment Other Broadcasting Broadcasting 9.6% 3.3% 3.6% 11.5% 14.2% $2.5 Billion $697 Million Notes: Segmented revenue percentages
Slide 22: QMI – 2004 Financial Performance
QMI – 2004 Financial Performance Revenues ($ million) 2004 2003 Y-o-Y (%) Cable 871.6 805.0 8.3% Newspapers 888.1 845.9 5.0% Broadcasting 358.0 340.9 5.0% Leisure and Entertainment 241.7 205.0 17.9% Business Telecom 78.6 77.7 1.2% Other & Inter-Segment 24.4 23.6 3.4% Total 2,462.4 2,298.1 7.1% EBITD
Slide 23: Delivering on Key Objectives: Leverage
Delivering on Key Objectives: Leverage Almost C$1 billion in debt reduction over the last two years (C$ in millions) Debt As of Debt As of Debt As of Total Debt / LTM EBITDA / 12/31/02 12/31/03 12/31/04 LTM EBITDA Interest Quebecor Media (Holdco) $1,820.1 $1,293.8 $1,140.7 (a) Vidéotron 1,119.6 88
Slide 24: Delivering on Key Objectives: Free Cash Flow Growth
Delivering on Key Objectives: Free Cash Flow Growth QMI’s intense focus on QMI Consolidated 225 profitable growth and cost 200 192 containment has resulted in 175 146 150 significant improvements in 125 120 EBITDA and Free Cash Flow 100 75 which will continue to drive 50 45 25 leverage reduction i
Slide 25: Delivering on Key Objectives: Financial Flexibility
Delivering on Key Objectives : Financial Flexibility Debt maturities well staggered over the next ten years QMI Consolidated Debt Maturity Profile 900 1 557 827 800 700 600 (in C$ millions) 500 400 291 312 300 200 96 100 38 3 3 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Note: US$ debt con
Slide 26: QMI – Key Priorities
QMI – Key Priorities Continue to improve Free Cash Flow generation by: • Launching new products and services • Cross selling using our multiple media platform • Investing in cost reducing technologies Execute residential telephony strategy • Increase market share penetration with triple play bun
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