Mr. Pierre Peladeau reports

QUEBECOR INC. REPORTS CONSOLIDATED RESULTS FOR FIRST QUARTER 2024

Quebecor Inc. has released its consolidated financial results for the first quarter of 2024.

First quarter 2024 highlights

• Quebecor recorded revenues of $1.36 billion, up $247.2 million (22.2 per cent), adjusted EBITDA 1 of $559.5 million, up $116.7 million (26.4 per cent), and adjusted cash flows from operations 2 of $419.0 million, up $73.0 million (21.1 per cent) compared with the same period in 2023.
• The Telecommunications segment increased its revenues by $254.5 million (27.5 per cent), its adjusted EBITDA by $101.3 million (21.4 per cent), and its adjusted cash flows from operations by $63.1 million (16.6 per cent) in the first quarter of 2024, reflecting, among other things, the contribution of the Freedom Mobile ("Freedom") acquisition on April 3, 2023.
• The Telecommunications segment increased its revenues from mobile services and equipment ($264.2 million or 95.7 per cent) due to the impact of the Freedom acquisition, as well as its revenues from Internet access ($5.8 million or 1.8 per cent).
• There was a net increase of 17,400 revenue-generating units 3 ("RGUs") (0.2 per cent) in the first quarter of 2024, including 60,200 connections (1.6 per cent) to the mobile telephony service.
• TVA Group Inc. ("TVA Group") recorded a $6.9 million (-5.1 per cent) decrease in revenues and a $4.7 million favourable variance in adjusted EBITDA compared with the first quarter of 2023.
• The Sports and Entertainment segment's revenues decreased by $1.8 million (-3.7 per cent) and its adjusted EBITDA increased by $0.5 million (14.7 per cent) in the first quarter of 2024.
• Quebecor's consolidated net income attributable to shareholders: $173.2 million ($0.75 per basic share), up $52.3 million ($0.23 per basic share) or 43.3 per cent.
• Adjusted income from operating activities 4 : $163.1 million ($0.71 per basic share), an increase of $27.1 million ($0.12 per basic share) or 19.9 per cent.
• The consolidated net debt leverage ratio 5 improved from 3.39x at December 31, 2023 to 3.31x at March 31, 2024.
• On April 10, 2024, Videotron Ltd. ("Videotron") announced that it would help improve wireless coverage in outlying regions of Quebec by installing at least 37 new cell towers in Abitibi-Temiscamingue and the Laurentians in partnership with the Quebec government.
• On May 6, 2024, credit rating agency S&P Global Ratings ("S&P") upgraded Videotron's credit rating from BB+ to BBB-. S&P also raised Videotron's unsecured debt rating from BB+ to BBB-.

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

2024 will be remembered as the year of the passing of our esteemed Chair of the Board, the Right Honourable Brian Mulroney. Mr. Mulroney had been a pillar of our Board of Directors from the beginning of the millennium and an exemplary Chair for the past 10 years. With his unique experience, deep wisdom and sound advice, he made a major contribution to Quebecor's current growth and success. We are immensely grateful to him. As an expression of our deep gratitude, we are honoured to posthumously name Mr. Mulroney a Director Emeritus of the Corporation to forever enshrine his contribution and his attachment to Quebecor.

One year after the successful acquisition of Freedom, it is with immense pride that we mark this milestone in the history of Quebecor, which has established itself as Canada's fourth major national wireless carrier. By offering Canadians the best wireless products, services and prices, we have transformed Canada's telecommunications industry, as indicated by the 26.2 per cent drop in the wireless component of the Consumer Price Index (CPI) between March 2023 and March 2024.

Quebecor posted an excellent performance in the first quarter of 2024, growing its revenues by 22.2 per cent, its adjusted EBITDA by 26.4 per cent and its adjusted cash flows from operations by 21.1 per cent. The financial leverage generated by the Freedom acquisition is also reflected in the 19.9 per cent increase in adjusted income from continuing operations. In addition, through disciplined management of our operating costs, we were able to reduce our consolidated net debt by more than $140 million in the first quarter of 2024, which brought our consolidated net debt leverage ratio down by 0.08x during the quarter to 3.31x at March 31, 2024, the lowest in the Canadian telecom industry.

With its portfolio of complementary brands, which now consists of Videotron, Freedom and Fizz, our Telecommunications segment had a solid first quarter in 2024, increasing its revenues by 27.5 per cent, its adjusted EBITDA by 21.4 per cent and its adjusted cash flow from operations by 16.6 per cent. Our line of competitively priced plans, with true nationwide coverage, drove customer base growth; we have added 264,100 lines (15.2 per cent) to our mobile telephony services over the past 12 months. We also announced that, following a successful beta test, our Fizz brand will be stepping up its Canadian expansion and offering extremely attractive plans to the 26 million residents of Quebec, Ontario, Manitoba, Alberta and British Columbia over the coming months. Demonstrating our ability to innovate while offering the best prices, Freedom announced the gradual roll-out of its new wireline Internet and TV services, Freedom Home Internet and Freedom TV, to its existing customer base, becoming a true multiservice player and positioning itself to reach a new customer segment seeking bundled plans.

Under a new Quebec government initiative to improve wireless coverage in outlying regions of Quebec, Videotron was chosen to install at least 37 new cell towers in Abitibi-Temiscamingue and the Laurentians. As we have been present in Abitibi-Temiscamingue since 2019 and continue to invest in the region, we are pleased to help bring Videotron customers even more complete wireless coverage.

We take great pride in Videotron's customer service, which has earned another series of honours since the beginning of 2024. For example, Videotron was ranked the most respected telecommunications provider in Quebec for the 18th time since 2006 in the 2024 Leger reputation survey. Videotron and its Fizz brand hit a double when Leger released its 2024 WOW Index. According to the study, Videotron was rated the telecommunications retailer with the best in-store experience in Quebec, while Fizz ranked first in Canada for online experience for the fifth year in a row. Videotron and Freedom also stood out from the competition in the mid-year report released on April 25, 2024 by the Commission for Complaints for Telecom-television Services. While the volume of complaints about the telecom industry as a whole rose by 43.1 per cent, Videotron contrasted with the other major players with a significant drop of 11.4 per cent and Freedom's proportion of total complaints fell from 6.5 per cent to 4.7 per cent.

We were disappointed by the arbitration decision rendered on April 22, 2024 by the Canadian Radio-television and Telecommunications Commission (CRTC) regarding rates for access to the TELUS wireless network under the Mobile Virtual Network Operator ("MVNO") regime. This decision will considerably increase our operating costs in MVNO areas, forcing us to review our pricing and the launch of our services in some parts of Canada. The decision is out of sync with current wireless market realities and will have the effect of creating two classes of Canadians, preventing part of the population from getting access to better rates and innovative new plans. It is imperative that regulatory and governmental authorities keep pace with the rapidly evolving wireless industry, particularly characterized by the sharp increase in data consumption.

Although there was improvement in most of its lines of business, TVA Group continued to be affected by the industry-wide decline in revenues. Its adjusted EBITDA for the first quarter of 2024 was negative $19.3 million.

2024 is a transitional year for TVA Group. Implementation of the reorganization plan announced on November 2, 2023 is under way. The purpose of the plan is to streamline TVA Group's activities: TVA Group's mission is being refocused on broadcasting and its operations and real estate assets are being optimized. These reorganization measures will generate significant recurring savings in the coming quarters. Despite the many challenges facing the industry, TVA Group continues to hold the highest market share in Quebec at close to 41 per cent in the first quarter of 2024. TVA Network was number 1 every day of the week. It had 7 of the top 10 shows in Quebec and 8 programs that drew more than a million viewers. The TVA Nouvelles newscast was the leader in all its time slots with 4.1 million viewers per week.

In the Film Production & Audiovisual Services segment, our services were in high demand in the first quarter of 2024. Volume was up significantly for soundstage and equipment rentals. We were very pleased to welcome two major foreign productions from Apple and Skydance to our studios.

I welcome S&P's recent decision to upgrade Videotron's credit rating to investment grade, confirming Videotron's superior operating performance, rigorous financial discipline and strong balance sheet. S&P's BBB- rating will improve Videotron's access to capital markets and reduce its cost of borrowing.

In the lead-up to Quebecor's Annual General Meeting today, I am pleased to announce the appointment of Sylvie Lalande as Chair of the Board of Quebecor, succeeding Mr. Mulroney, and the appointment of Andre P. Brosseau as Vice-Chair of the Board. A member of the Board since 2011, Ms. Lalande has an exceptional track record in media, communications, marketing, telecommunications and governance. Ms. Lalande has been Vice-Chair and Lead Director of the Corporation since 2018. Over the course of his career, Mr. Brosseau has acquired extensive experience in financing, complex mergers and acquisitions, digital transformation management and telecom infrastructure management. He has been a director of the Corporation since 2016.

Having firmly established itself as Canada's fourth major wireless carrier, Quebecor has a solid foundation from which to continue its expansion across the country and offer an ever-increasing number of Canadians ultra-competitive rates combined with exceptional customer service. Building on our track record of successful execution, we are maintaining our financial discipline and implementing a judicious, disciplined investment plan that will steadily reduce our debt leverage ratio. We are upbeat about the future, confident that we have the right strategy, the right objectives and the right team to continue generating long-term value for all our stakeholders.

2024/2023 first quarter comparison

Revenues:

$1.36 billion, a $247.2 million (22.2 per cent) increase.

Revenues increased in Telecommunications ($254.5 million or 27.5 per cent of segment revenues), due to the impact of the Freedom acquisition.

Revenues decreased in Media ($2.0 million or -1.2 per cent) and in Sports and Entertainment ($1.8 million or -3.7 per cent).

Adjusted EBITDA:

$559.5 million, a $116.7 million (26.4 per cent) increase.

Adjusted EBITDA increased in Telecommunications ($101.3 million or 21.4 per cent of segment adjusted EBITDA), due primarily to Freedom's contribution. There were favourable variances in Media ($9.7 million) and Head Office ($5.2 million), due in both cases to reductions in some operating expenses.

The change in the fair value of Quebecor stock options and stock-price-based share units resulted in an $8.8 million favourable variance in the Corporation's stock-based compensation charge in the first quarter of 2024 compared with the same period of 2023.

Net income attributable to shareholders:

$173.2 million ($0.75 per basic share) in the first quarter of 2024, compared with $120.9 million ($0.52 per basic share) in the same period of 2023, an increase of $52.3 million ($0.23 per basic share) or 43.3 per cent.

The favourable variances were:

$116.7 million increase in adjusted EBITDA;

$21.1 million favourable variance in gains and losses on valuation and translation of financial instruments, including $21.4 million without any tax consequences;

$3.4 million favourable variance in the charge for restructuring, acquisition costs and other.

The main unfavourable variances were:

$47.7 million increase in the depreciation and amortization charge;

$31.0 million increase related to financial expenses;

$8.4 million increase in the income tax expense.

Adjusted income from operating activities: $163.1 million ($0.71 per basic share) in the first quarter of 2024, compared with $136.0 million ($0.59 per basic share) in the same period of 2023, an increase of $27.1 million ($0.12 per basic share) or 19.9 per cent.

Adjusted cash flows from operations: $419.0 million, a $73.0 million (21.1 per cent) increase in the first quarter of 2024 due primarily to the $116.7 million increase in adjusted EBITDA, partially offset by a $43.7 million increase in additions to property, plant and equipment and to intangible assets.

Cash flows provided by operating activities: $388.8 million, a $116.9 million (43.0 per cent) increase due primarily to the increase in adjusted EBITDA and the favourable net change in non-cash balances related to operating activities, partially offset by increases in the cash portion of financial expenses and in current income taxes.

Acquisition

On April 3, 2023, Videotron acquired Freedom from Shaw Communications Inc. Videotron paid $2.07 billion in cash and assumed certain liabilities, mainly lease obligations. The acquisition included the Freedom brand's entire wireless and Internet customer base, as well as its owned infrastructure, spectrum and retail outlets.

Dividends declared

On May 8, 2024, the Board of Directors of Quebecor declared a quarterly dividend of $0.325 per share on its Class A Multiple Voting Shares and Class B Subordinate Voting Shares ("Class B Shares"), payable on June 18, 2024 to shareholders of record at the close of business on May 24, 2024. This dividend is designated an eligible dividend, as provided under subsection 89(14) of the Canadian Income Tax Act and its provincial counterpart.

Board of Directors

On May 8, 2024, the members of the Corporation's Board of Directors appointed Sylvie Lalande as Chair of the Board of Quebecor, succeeding the Right Honourable Brian Mulroney who passed away on February 29, 2024. A member of the Board since 2011, Ms. Lalande has an exceptional track record in media, communications, marketing, telecommunications and governance. In 2017, she received the Corporate Director Emeritus Award from the Institute of Corporate Directors. Ms. Lalande has been Vice-Chair and Lead Director of the Corporation since 2018. She has also served as a director of TVA Group since 2001 and as Chair of its Board since 2014. She will continue to chair the Human Resources and Corporate Governance Committee of Quebecor.

Concurrently with Ms. Lalande's appointment as Chair of the Board, Andre P. Brosseau was appointed Vice-Chair of the Board. Mr. Brosseau has been a director of the Corporation since 2016. He also sits on the Audit and Risk Management Committee and the Human Resources and Corporate Governance Committee. Over the course of his career, Mr. Brosseau has acquired extensive experience in financing, complex mergers and acquisitions, digital transformation management and telecom infrastructure management. He has also been a director of Alithya Group Inc. since 2022.

Quebecor salutes the memory of the Right Honourable Brian Mulroney. His enduring legacy will live on in the political, economic, and philanthropic life of Quebec and Canada. He was also a pillar of the Corporation's Board of Directors for more than 20 years and served as its Chair since 2014. On May 8, 2024, as an expression of our deep gratitude, Mr. Mulroney was posthumously named a Director Emeritus of the Corporation to forever enshrine his contribution and his attachment to Quebecor.

Detailed financial information

For a detailed analysis of Quebecor's first quarter 2024 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 first quarter 2024 results on May 9, 2024, at 3:15 p.m. EDT. 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 32876#. 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 32876#, recording access code 0114400#. The recording will be available until August 9, 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 11,000 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.