Mr. Pierre Peladeau reports

TVA GROUP REPORTS Q1 2023 RESULTS

TVA Group Inc. recorded revenues in the amount of $136.1-million for the first quarter of 2023, a year-over-year decrease of $8.4-million. Net loss attributable to shareholders was $23.5-million or 54 cents per share, compared with net loss attributable to shareholders of $13.0-million or 30 cents per share for the same quarter of 2022.

First quarter operating highlights:

• $23,977,000 in consolidated negative adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), a $14,256,000 unfavourable variance from the same quarter of 2022;
• $22,806,000 in negative adjusted EBITDA in the broadcasting segment, a $7,338,000 unfavourable variance mainly due to a decrease in profitability at TVA network, which increased its investments in content, and to a decrease in adjusted EBITDA at the news and entertainment specialty channels due to lower revenues. The variances were partially offset by a decrease in the loss for TVA Sports due to a combination of lower expenses and higher revenues;
• $555,000 in negative adjusted EBITDA in the film production and audiovisual services segment (MELS), a $4,399,000 unfavourable variance caused primarily by the decreased profitability of soundstage, mobile and equipment rental, whereas all other segment activities posted an increase in profitability;
• $367,000 in negative adjusted EBITDA in the magazines segment, an $807,000 unfavourable variance due mainly to lower revenues, particularly reduced government assistance, as well as lower advertising and subscription revenues;
• $355,000 in negative adjusted EBITDA in the production and distribution segment, an unfavourable variance of $1,908,000 reflecting fewer deliveries of films produced by companies in the Incendo Group during the period compared with the same period of 2022, when a number of new film sales were recognized.

"First quarter results continued to be impacted by declining profitability across all our segments. Even with the implementation of our restructuring plan, announced on Feb. 16, 2023, our cost-reduction measures, while not yet at their full potential during the period, were not sufficient to offset the impact of the challenges faced by the various industries in which we operate," said Pierre Karl Peladeau, acting president and chief executive officer of TVA Group.

"Results in the broadcasting segment reflect the impact of our continued investments in content, which inevitably affected the profitability of our over-the-air network. Although advertising revenues grew, driven by our TVA+ platform, where views and digital revenues for video-on-demand services increased 30 per cent and 33 per cent respectively, they remain uncertain due to current market conditions and were insufficient to support the level of investment required to compete with the Web giants and Radio-Canada, which is heavily government subsidized. We are forced to fight on an uneven playing field against players that capture a large share of the advertising revenues, further undermining Quebec's already fragile media and current television ecosystem.

"Our strategy of increasing our content investment continues to protect our market share, both for TVA Network and for our specialty services. TVA Network had four of the top five shows in Quebec in the first quarter, including the new reality TV show Sortez-moi d'ici!, which took the top spot with an average audience of nearly 1.7 million viewers, and La Voix, which stood out with nearly 1.6 million viewers.

"While the recent passage of Bill C-11 is a step in the right direction, we continue to urge governmental authorities to act quickly on the other outstanding issues before it is too late. For example, the CRTC must take urgent action to address Radio-Canada's unfair behaviour in scooping up advertising dollars, which are our over-the-air network's only source of revenues, as well as distributor Bell TV's highly prejudicial treatment of our specialty channels by continuing to pay below-market fees. Parliament must also act quickly to pass Bill C-18 and ensure that the use of our news content is recognized and paid for at fair value by the digital giants that are currently siphoning advertising dollars away from Canadian businesses.

"In the film production and audiovisual services segment, the corporation was particularly affected by a decrease in sound stage, mobile and equipment rental services, which continue to suffer from the lack of a foreign blockbuster. This is a very different situation from the same period of 2022, when Disney rented part of our studios. While MELS continued to make every effort to attract major foreign shoots to its studios, it is important to reiterate that the competition on tax incentives continues, both in Canada and abroad, and the Quebec government must act to allow our cultural industry and our economy to benefit from the positive spin-offs associated with the presence of foreign productions.

"In the magazines segment, results for all our titles were heavily affected by lower revenues. The significant reduction in government assistance is of particular concern for this segment, which has been coping with a significant market decline for a number of years and for which the Canada Periodical Fund has been a critical source of support. As a leading publisher in the French-language market, we produce titles that showcase our talent and local culture and we will continue to make our case to the government to put an end to the reduction in assistance to ensure the survival of this medium.

"Our production and distribution segment reported a lower volume of activities for the first three months of the year, as it focused on finalizing films that began production in 2022. Incendo delivered its first series co-produced with Ireland in the first quarter and completed production on two films for Tubi, which will be delivered in the coming months. Tubi reaffirmed its confidence in Incendo by placing an initial film order for 2023 and continuing to contribute to revenue growth by making our films available on its streaming platform," concluded Mr. Peladeau.

About TVA Group Inc.

TVA Group, a subsidiary of Quebecor Media Inc., is a communications company engaged in the broadcasting, film production and audiovisual services, international production and distribution of television content, and magazine publishing industries. TVA Group is North America's largest broadcaster of French-language entertainment, information and public affairs programming, and one of the largest private-sector producers of French-language content. It is also the largest publisher of French-language magazines and publishes some of the most popular English-language titles in Canada. The corporation's Class B shares are listed on the Toronto Stock Exchange under the ticker symbol TVA.B.

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