Mr. Pierre Peladeau reports

QUEBECOR INC. REPORTS CONSOLIDATED RESULTS FOR THIRD QUARTER 2023

Quebecor Inc. has released its consolidated financial results for the third quarter of 2023. Quebecor consolidates the financial results of its wholly owned Quebecor Media Inc. subsidiary.

Third quarter 2023 highlights

• Further to the acquisition of Freedom Mobile Inc. ("Freedom") on April 3, 2023, Quebecor recorded revenues of $1.42 billion in the third quarter of 2023, up $271.7-million (23.8 per cent), adjusted EBITDA1 of $624.4-million, up $106.4-million (20.5 per cent), and adjusted cash flows from operations2 of $482.4-million, up $79.3-million (19.7 per cent) compared with the same period of 2022.
• The Telecommunications segment increased its revenues by $287.9-million (30.6 per cent), its adjusted EBITDA by $100-million (20.4 per cent), and its adjusted cash flows from operations by $72.2-million (18.9 per cent), reflecting, among other things, the contribution of the Freedom acquisition.
• The Telecommunications segment increased its revenues from mobile services and equipment (by $287.3-million or more than 100 per cent) due to the impact of the Freedom acquisition and growth in the revenues of Videotron Ltd. ("Videotron"), and its revenues from Internet access services (by $8.2-million or 2.6 per cent).
• There was a net increase of 61,000 revenue-generating units ("RGUs")3 (0.8 per cent) in the third quarter of 2023, including 88,700 connections (2.5 per cent) to the mobile telephony service and 4,500 subscriptions (0.3 per cent) to Internet access services.
• TVA Group Inc. ("TVA Group") reported declines of $11.9-million (-9.1 per cent) in revenues and $1.7-million (-9.4 per cent) in adjusted EBITDA, compared with the third quarter of 2022.
• The Sports and Entertainment segment increased its revenues by $2.3-million (4.0 per cent) and its adjusted EBITDA by $2.2-million (18.0 per cent) in the third quarter of 2023.
• Quebecor's consolidated net income attributable to shareholders: $209.3-million ($0.91 per basic share), up $30.9-million ($0.15 per basic share) or 17.3 per cent.
• Adjusted income from continuing operating activities4: $202.3-million ($0.88 per basic share), up $27.3-million ($0.13 per basic share) or 15.6 per cent.
• The consolidated net debt leverage ratio5 improved from 3.52x at June 30, 2023 to 3.39x Sept. 30, 2023.
• On October 12, 2023, Quebecor announced the launch of its Mobile Virtual Network Operator ("MVNO") service and the gradual deployment of the service territory of its Videotron, Fizz and Freedom brands in Canada, enabling them to offer their services to millions more Canadian consumers.
• On September 21, 2023, Videotron announced that, according to a survey conducted by Leger between August 1 and 7, 2023, Quebecers rated Videotron as the telecommunications company with the best customer service in 2023. Twice as many respondents as its closest competitor ranked Videotron first, confirming its status as the leader in customer service.
• On November 2, 2023, in the context of the worldwide crisis in the media industry, TVA Group announced major changes to its organizational structure. It will implement a reorganization plan that will refocus its mission on broadcasting, restructure its news division and optimize its real estate assets. The goal of the plan is to reduce operating costs. It will reduce the Corporation's workforce by 547 employees, or 31 per cent of TVA Group's workforce.

Comments by Pierre Karl Peladeau, President and Chief Executive Officer of Quebecor

Having firmly established ourselves as Canada's fourth major national wireless provider, we have successfully delivered the real change we promised by bringing more competition and affordable, quality products and services to the Canadian market. In fact, according to new data released by Statistics Canada in October 2023, wireless service prices in Canada have fallen by nearly 20 per cent since Videotron acquired Freedom in April 2023, benefiting all Canadian consumers.

Our mobile network now covers nearly 70 per cent of Canada's population. With the launch of our MVNO service in October 2023, we can now go even further in accessing new markets. Extending the service area of Videotron, Fizz and Freedom beyond the reach of our current facilities will enable us to gradually offer our attractive plans to millions of additional consumers across Canada, giving them more choice at better prices.

Quebecor outperformed in the third quarter of 2023, increasing revenues by 23.8 per cent, adjusted EBITDA by 20.5 per cent and adjusted cash flows from operations by 19.7 per cent. Adjusted income from continuing operating activities was up 15.6 per cent, reflecting the financial leverage effect of the acquisition of Freedom. A rigorous execution of our business plans has placed us in a strong financial position. Our operating costs are among the lowest in the Canadian telecommunications industry and we manage our capital investments with discipline, based on our strategic priorities. We were therefore able to repay more than $250 million of debt in the third quarter of 2023, reducing our consolidated net debt leverage ratio by 0.13x during the period to 3.39x at Sept. 30, 2023, one of the lowest in the Canadian telecommunications industry.

Leveraging the Freedom acquisition, the Telecommunications segment grew its revenues by 30.6 per cent, adjusted EBITDA by 20.4 per cent and adjusted cash flows from operations by 18.9 per cent. Thanks to our always disciplined management, the adjusted EBITDA margin of 47.9 per cent remains the best in the Canadian telecoms industry. Our offering of competitively priced products with true nationwide coverage drove customer base growth, with the addition of 177,100 lines (10.4 per cent) to our mobile telephony services and 23,300 customers (1.4 per cent) to our Internet access services over the past 12 months.

We continue to successfully integrate Freedom's operations, guided by our desire to offer the best products, the best service and the best prices to provide the best customer experience. We will also continue upgrading Freedom's wireless network and rolling out 5G services across Canada, while working to introduce advantageous multiservice bundles.

TVA Group generated adjusted EBITDA of $16.5 million for the third quarter of 2023, an unfavourable variance of $1.7 million, and negative adjusted EBITDA of $11.3 million for the first nine months of 2023, an unfavourable variance of $23-million. During that nine-month period, broadcasting activities generated negative adjusted EBITDA of almost $13-million. Even though TVA Group increased its market share by 0.5 points to 40.6 per cent in the third quarter of 2023, advertising revenues continued their sharp decline of recent years due to factors such as the globalization of television viewing linked to the proliferation of online video streaming platforms, competition from the Web giants and unfair competition from Radio-Canada, which is chasing ratings and advertising dollars while receiving massive government subsidies. This is not a short-term situation but a long-term trend that is reshaping the very fabric of the broadcasting industry. Over the past ten years and more, TVA Group has repeatedly told government bodies and regulators that urgent action is needed to allow Canada's private media companies to operate in a modernized ecosystem that can adapt to a borderless digital world.

TVA Group's losses are simply no longer sustainable and we have a responsibility to correct the situation. The lack of regulatory consideration for our industry, coupled with the mounting challenges it faces, has forced us to take unprecedented action. On November 2, 2023, TVA Group announced major changes to its organizational structure. It will implement a reorganization plan that will refocus its mission on broadcasting, restructure its news division, including closer collaboration with Quebecor's other media outlets, and optimize its real estate assets. With a goal of to decrease operating costs, the plan will unfortunately result in the elimination of 547 positions, or 31 per cent of TVA Group's current workforce.

There is no question of TVA Group disappearing from Quebec's media and television landscape. The purpose of the reorganization plan is to position TVA Group to be able to continue offering viewers original Quebec content, to continue investing, and to provide all Quebecers with reliable, high-quality news coverage.

Quebecor has a solid foundation on which to execute its business plan. We will continue managing our business and expanding our geographic reach in a responsible, disciplined and rigorous manner. We will focus on maintaining our solid financial position, with the aim of further reducing our consolidated net debt leverage ratio, while continuing to invest strategically for the future. We are optimistic about the future and will continue to be guided by the objective of creating long-term value for all our stakeholders.

2023/2022 third quarter comparison

Revenues: $1.42 billion, a $271.7 million (23.8 per cent) increase.

• Revenues increased in Telecommunications ($287.9 million or 30.6 per cent of segment revenues), due to the impact of the Freedom acquisition and growth in mobile services and equipment and Internet access services, and in Sports and Entertainment ($2.3 million or 4.0 per cent).
• Revenues decreased in Media ($4.1 million or -2.4 per cent).

Adjusted EBITDA: $624.4 million, a $106.4 million (20.5 per cent) increase.

• Adjusted EBITDA increased in Telecommunications ($100-million or 20.4 per cent of segment adjusted EBITDA, including Freedom's contribution), Media ($3-million or 16.7 per cent) and Sports and Entertainment ($2.2 million or 18.0 per cent).
• The change in the fair value of Quebecor stock options and stock-price-based share units resulted in a $2-million favourable variance in the Corporation's stock-based compensation charge in the third quarter of 2023 compared with the same period of 2022.

Net income attributable to shareholders: $209.3 million ($0.91 per basic share) in the third quarter of 2023, compared with $178.4 million ($0.76 per basic share) in the same period of 2022, an increase of $30.9 million ($0.15 per basic share) or 17.3 per cent.

• The main favourable variances were:
  • $106.4 million increase in adjusted EBITDA;
  • $6.7 million favourable variance in gains and losses on valuation and translation of financial instruments, including $5.9 million without any tax consequences.
• The main unfavourable variances were:
  • $47.3 million increase in the depreciation and amortization charge;
  • $25.7 million increase related to financial expenses;
  • $6.7 million increase in the income tax expense;
  • $5.1 million unfavourable variance in the charge for restructuring, acquisition costs and other.

Adjusted income from continuing operating activities: $202.3 million ($0.88 per basic share) in the third quarter of 2023, compared with $175-million ($0.75 per basic share) in the same period of 2022, an increase of $27.3 million ($0.13 per basic share) or 15.6 per cent.

Adjusted cash flows from operations: $482.4 million, a $79.3 million (19.7 per cent) increase due primarily to the $106.4 million increase in adjusted EBITDA, partially offset by a $20.4 million increase in additions to intangible assets and a $6.7 million increase in additions to property, plant and equipment.

Cash flows provided by operating activities: $496.2 million, a $28.4 million (6.1 per cent) increase due primarily to the increase in adjusted EBITDA and the decrease in current income taxes, partially offset by the unfavourable net change in non-cash balances related to operating activities and the increase in the cash portion of financial expenses.

2023/2022 year-to-date comparison

Revenues: $3.93 billion, a $582.6 million (17.4 per cent) increase.

• Revenues increased in Telecommunications ($598.1 million or 21.7 per cent of segment revenues), due to the impact of the Freedom acquisition and growth in mobile services and equipment and Internet access services, and in Sports and Entertainment ($20.5 million or 15.0 per cent).
• Revenues decreased in Media ($22.9 million or -4.2 per cent).

• Adjusted EBITDA: $1.67 billion, a $220.9 million (15.2 per cent) increase.
• Adjusted EBITDA increased in Telecommunications ($234.3 million or 16.3 per cent of segment adjusted EBITDA), due primarily to Freedom's contribution and also to the increased profitability of Videotron's other activities, and in Sports and Entertainment ($4-million or 23.8 per cent).
• Adjusted EBITDA decreased in Media ($16.1 million).
• The change in the fair value of Quebecor stock options and stock-price-based share units resulted in a $3-million unfavourable variance in the Corporation's stock-based compensation charge in the first nine months of 2023 compared with the same period of 2022.

Net income attributable to shareholders: $504.3 million ($2.18 per basic share) in the first nine months of 2023, compared with $457.2 million ($1.93 per basic share) in the same period of 2022, an increase of $47.1 million ($0.25 per basic share).

• The main favourable variances were:
  • $220.9 million increase in adjusted EBITDA;
  • $6.4 million favourable variance in gains and losses on valuation and translation of financial instruments, including $5.3 million without any tax consequences;
  • $7.4 million favourable variance in non-controlling interest.
• The main unfavourable variances were:
  • $100.1 million increase in the depreciation and amortization charge;
  • $57.8 million increase related to financial expenses;
  • $19.6 million unfavourable variance in the charge for restructuring, acquisition costs and other;
  • $10.1 million increase in the income tax expense.

Adjusted income from continuing operating activities: $520.6 million ($2.25 per basic share) in the first nine months of 2023, compared with $465.4 million ($1.97 per basic share) in the same period of 2022, an increase of $55.2 million ($0.28 per basic share) or 11.9 per cent.

Adjusted cash flows from operations: $1.28 billion, a $203.5 million (18.8 per cent) increase due to the $220.9 million increase in adjusted EBITDA and an $18.3 million decrease in additions to property, plant and equipment, partially offset by a $35.7 million increase in additions to intangible assets.

Cash flows provided by operating activities: $1.13 billion, a $189.3 million (20.2 per cent) increase due primarily to the increase in adjusted EBITDA and the decrease in current income taxes, partially offset by the increase in the cash portion of financial expenses and the unfavourable variance in the cash portion of restructuring, acquisition costs and other.

Capital stock

On August 9, 2023, the Corporation's Board of Directors authorized a normal course issuer bid for a maximum of 1,000,000 Class A Multiple Voting Shares ("Class A Shares"), representing approximately 1.3 per cent of issued and outstanding Class A Shares, and for a maximum of 2,000,000 Class B Subordinate Voting Shares ("Class B Shares"), representing approximately 1.3 per cent of issued and outstanding Class B Shares as of August 1, 2023. The purchases can be made from August 15, 2023 to August 14, 2024, at prevailing market prices on the open market through the facilities of the Toronto Stock Exchange or other alternative trading systems in Canada. All the repurchased shares will be cancelled.

On August 11, 2023, the Corporation entered into an automatic securities purchase plan ("the plan") with a designated broker whereby shares may be repurchased under the plan at times when such purchases would otherwise be prohibited pursuant to regulatory restrictions or self-imposed blackout periods. The plan received prior approval from the Toronto Stock Exchange. It came into effect on August 15, 2023 and will terminate on the same date as the normal course issuer bid.

Under the plan, before entering a self-imposed blackout period, the Corporation may, but is not required to, ask the designated broker to make purchases under the normal course issuer bid. Such purchases shall be made at the discretion of the designated broker, within parameters established by the Corporation prior to the blackout periods. Outside the blackout periods, purchases will be made at the discretion of the Corporation's management.

During the first nine months of 2023, the Corporation repurchased and cancelled 236,100 Class B Shares for a total cash consideration of $7.1 million (7,061,651 Class B Shares for a total cash consideration of $203.8 million in the same period of 2022).

Dividends declared

On November 8, 2023, the Board of Directors of Quebecor declared a quarterly dividend of $0.30 per share on its Class A Shares and Class B Shares, payable on December 19, 2023 to shareholders of record at the close of business on November 24, 2023. This dividend is designated an eligible dividend, as provided under subsection 89(14) of the Canadian Income Tax Act and its provincial counterpart.

600 MHz, 3500 MHz and 3800 MHz spectrum auction

In August 2023, Videotron qualified as a bidder in the auction for spectrum licences in the 3800 MHz band announced by Innovation, Science and Economic Development Canada ("ISED Canada"). The auction opened on October 24, 2023. In July 2023, Videotron entered into new unsecured on-demand credit facilities under which letters of credit were issued and submitted to ISED Canada as a pre-auction deposit. The submission of these letters of credit did not have the effect of reducing the Corporation's net available liquid assets under the Corporation's current credit facilities. In accordance with the rules of confidentiality established by ISED Canada respecting restrictions on communications during the auction process, it is strictly forbidden for the Corporation to disclose the amount of these letters of credit.

On January 26, 2023, Quebecor announced a $9.9 million investment by Videotron in the acquisition of spectrum licences in the 600 MHz band in Manitoba and in the 3500 MHz band in Quebec. The acquisition was made in the auction of residual spectrum licences that concluded on January 25, 2023 with the announcement by ISED Canada of the tentatively accepted bids. Videotron is thus increasing its wireless service capacity and continues to pave the way for the expansion of its wireless infrastructure outside Quebec.

Acquisition of Freedom

On April 3, 2023, Videotron acquired Freedom from Shaw Communications Inc. ("Shaw"). Videotron paid $2.07 billion in cash, net of cash acquired of $103.2 million. As part of the transaction, Videotron assumed certain debts, mainly lease obligations. The consideration paid is subject to certain post-closing adjustments. The acquisition includes Freedom's entire wireless and Internet customer base, as well as its owned infrastructure, spectrum and retail outlets. It also includes a long-term undertaking by Shaw and Rogers Communications Inc. to provide Videotron with transport services (including backhaul and backbone), roaming services and wholesale Internet services.

Through the acquisition of Freedom, Videotron has entered the British Columbia and Alberta telecommunications markets and strengthened its position in the Ontario market. This expansion of Videotron's wireless business outside of its traditional Quebec footprint has increased its geographic diversification, with approximately 45 per cent of mobile subscribers in Quebec, 40 per cent in Ontario and 15 per cent in Western Canada, following the transaction.

The number of Canadians reached by Videotron's mobile networks also increased from 7.5 million (or 20 per cent of the Canadian population) to more than 26 million (or 70 per cent of the Canadian population), thereby significantly increasing its addressable market. In addition, entering new markets as a MVNO will enable Videotron to further expand its reach and offer its competitive services to even more potential users.

In the markets that are now accessible to Videotron, three well-established mobile carriers offering a full range of telecommunication services over national wireline and wireless networks have a strong presence. These wireless carriers, including two incumbent local exchange carriers ("ILECs") and one broadcast distribution undertaking ("BDU"), have long business histories, a large portfolio of spectrum licenses and considerable operational and financial resources. Videotron's acquisition of Freedom promotes a more competitive mobile telephony environment in the markets where Freedom operates. Since the closing of the Freedom acquisition, significant enhancements have been made to Freedom's offering, plans and network to improve the customer experience. These enhancements include the introduction of 5G services, seamless handoff and nationwide free roaming. Videotron intends to bring further improvements to the Freedom offering by, among other things, introducing attractive multi-service bundles and improving the online experience for users.

Prior to the acquisition by Videotron, Freedom customers did not yet have access to 5G services. In order to be able to offer a true 5G experience, Freedom required greater bandwidth in mid-band frequencies, such as the 3500 MHz band, which it did not have. Upon the closing of the acquisition, Videotron was able to rapidly deploy the 3500 MHz spectrum licenses that it had acquired in 2021 in order to upgrade Freedom's infrastructure and offer 5G service to over 12 million Canadians in the Toronto, Vancouver, Calgary and Edmonton metropolitan areas along with select cities across Ontario, British Columbia and Alberta. Over time, Freedom will continue to roll out 5G to other markets. In addition, through the transaction, Videotron has acquired more than 90 MHz (and up to 135 MHz in some areas) of spectrum holdings in major markets in Ontario, British Columbia and Alberta, consisting of spectrum in the 600 MHz, 700 MHz, AWS-1, AWS-3 and 2500 MHz bands.

The Corporation anticipates that significant and recurring investments will be required in the new Canadian markets in order to, among other things, potentially acquire new spectrum licenses for the deployment of the latest technologies, expand and maintain the newly acquired mobile networks, support the launch and penetration of new services, and compete effectively with the ILECs and other current or potential competitors in these markets.

Detailed financial information

For a detailed analysis of Quebecor's third quarter 2023 results, please refer to the Management Discussion and Analysis and condensed consolidated financial statements of Quebecor, available on the Corporation's website at www.quebecor.com/en/investors/financial-documentation and the SEDAR+ website at www.sedarplus.ca.

Conference call for investors and webcast

Quebecor will hold a conference call to discuss its third quarter 2023 results on November 9, 2023, at 11:00 a.m. EST. There will be a question period reserved for financial analysts. To access the conference call, please dial 1-877-293-8052, access code for participants 99498#. The conference call will also be broadcast live on Quebecor's website at www.quebecor.com/en/investors/conferences-and-annual-meeting. It is advisable to ensure the appropriate software is installed before accessing the call. Instructions and links to free player downloads are available at the Internet address shown above. Anyone unable to attend the conference call will be able to listen to a recording by dialing 1-877-293-8133, access code 99498#, recording access code 0114044#. The recording will be available until February 7, 2024.

About Quebecor

Quebecor, a Canadian leader in telecommunications, entertainment, news media and culture, is one of the best-performing integrated communications companies in the industry. Driven by their determination to deliver the best possible customer experience, all of Quebecor's subsidiaries and brands are differentiated by their high-quality, multiplatform, convergent products and services.

Quebecor (TSX: QBR.A, QBR.B) is headquartered in Quebec and employs more than 10,000 people in Canada.

A family business founded in 1950, Quebecor is strongly committed to the community. Every year, it actively supports more than 400 organizations in the vital fields of culture, health, education, the environment, and entrepreneurship.

We seek Safe Harbor.