Mr. Pierre Peladeau reports

TVA GROUP REPORTS CONSOLIDATED RESULTS FOR FOURTH QUARTER AND FISCAL 2023

TVA Group Inc. has released its consolidated financial results for the fourth quarter and fiscal 2023.

Highlights

Fiscal 2023:

• $545,197,000 in revenues, a $49,212,000 (minus 8.3 per cent) decrease compared with 2022;
• $47,891,000 (minus $1.11 per basic share) net loss attributable to shareholders, a $39,022,000 (minus 90 cents per basic share) unfavourable variance from 2022;
• $5,431,000 in consolidated negative adjusted earnings before interest, taxes, depreciation and amortization, a $24,816,000 unfavourable variance compared with fiscal 2022;
• $9,312,000 in negative adjusted EBITDA in the broadcasting segment, an $8,727,000 unfavourable variance due mainly to a significant decrease in revenues, combined with higher content costs, partially offset by certain operating cost reduction measures;
• $686,000 in adjusted EBITDA in the film production and audiovisual services segment, a $12,198,000 unfavourable variance due mainly to lower volume of activities in sound stage, mobile and equipment rental, postproduction, and media accessibility services, partially offset by the positive impact of the discontinuation of visual effects activities on March 31, 2023;
• $2,008,000 in adjusted EBITDA in the magazines segment, $1,795,000 unfavourable variance due mainly to a decrease in revenues, particularly reduced government assistance, as well as lower newsstand and subscription revenues, partly offset by certain savings, notably in employee costs, printing costs, subscription and newsstand selling expenses;
• $553,000 in adjusted EBITDA in the production and distribution segment, a $2,312,000 unfavourable variance due to lower margins on international and Canadian distribution than last year;
• In the third quarter of 2023, unfavourable market conditions and the changing ecosystem in the television industry led the corporation to record a $4,813,000 goodwill impairment charge, as well as a $2.85-million charge for impairment of intangible assets in the broadcasting segment.

Fourth quarter 2023:

• $151,714,000 in revenues, a $20.21-million (minus 11.8 per cent) decrease compared with the fourth quarter of 2022;
• $15,872,000 (minus 37 cents per basic share) net loss attributable to shareholders, a $15,608,000 (minus 36 cents per basic share) unfavourable variance compared with the same quarter of 2022;
• $5,904,000 in consolidated adjusted EBITDA, a $1,772,000 unfavourable variance from the same quarter of 2022;
• $3,577,000 in adjusted EBITDA in the broadcasting segment, a $2,612,000 favourable variance mainly due to a retroactive adjustment related to Canadian Radio-television and Telecommunications Commission Part 2 licence fees and other cost savings that offset the decrease in revenues, particularly advertising revenues;
• $985,000 in adjusted EBITDA in the film production and audiovisual services segment, a $3,298,000 unfavourable variance due mainly to lower volume of activities in sound stage, mobile and equipment rental, postproduction, and media accessibility services, partially offset by the positive impact of the discontinuation of visual effects activities;
• $778,000 in adjusted EBITDA in the magazines segment, a $283,000 favourable variance, mainly because cost savings were slightly higher than the decrease in revenues;
• $472,000 in adjusted EBITDA in the production and distribution segment, a $1.28-million unfavourable variance due to lower margins on international and Canadian distribution compared with the same period of 2022.

Pierre Karl Peladeau, acting president and chief executive officer of TVA Group, had this to say: "For the fiscal year ended Dec. 31, 2023, all business segments recorded a significant decrease in revenues and adjusted EBITDA.

"The broadcasting segment's results continue to be greatly affected by the crisis in the media industry, as evidenced by its $9,312,000 in negative adjusted EBITDA for 2023, an unfavourable variance of $8,727,000 compared with 2022 and over $54-million compared with 2021. With the responsibility to take action to remedy this unsustainable deficit situation, TVA Group implemented two major restructuring plans during the year to reduce its operating costs. The deployment over the coming months of the measures announced on Nov. 2, 2023, which include refocusing TVA Group's mission exclusively on broadcasting, reorganizing its news division and optimizing its real estate assets, all of which will result in the elimination of 547 positions, is essential for the corporation to return to a better financial position and ensure its survival. Implementation of this plan will enable TVA Group to pursue its mission, offering its viewers and advertisers the best original content produced in Quebec, providing reliable, high-quality news coverage throughout Quebec and presenting major sporting events live.

"To protect its market share, both for TVA Network and for its specialty services, TVA Group also continued to invest in content. The family show Chanteurs masques, the Quebec version of The Masked Singer, which drew an average audience of over 1.8 million viewers, as well as programs such as La Voix, Sortez-moi d'ici! and the daily program Indefendable, with more than 1.5 million viewers each, played a major role in TVA Network's high ratings. TVA Nouvelles also remains Quebeckers' No. 1 news source in each of its time slots (noon, 6 p.m. and 10 p.m.). Most viewers tune in at 6 p.m., where TVA dominates the field, with an average audience of 787,500 last fall, beating the competition by 41.2 per cent across Quebec and also leading the pack in the Montreal area. On a weekly basis, these flagship news programs reached an impressive 4.3 million viewers.

"TVA Group's market share was 41.0 per cent, up 0.2 points compared with 2022. These figures are a testament to TVA Group's popularity, at twice the market share of its rivals.

"Nevertheless, the broadcasting segment is obviously not immune to the difficult market trend and again recorded a loss of advertising revenues in 2023, due in particular to the proliferation of on-demand digital broadcasting platforms, competition from the Web giants and unfair competition from Radio-Canada.

"In the film production and audiovisual services segment, the corporation was particularly affected by a decrease in sound stage and equipment rental services due to the shutdown of foreign productions as a result of the writers and actors strikes in the [United States] during the year. However, MELS's virtual stage services have seen attractive growth this year, drawing the attention of increasing numbers of producers to the technology. MELS is also proud to welcome two major U.S. productions to its studios, with shooting set to begin shortly.

"In the magazines segment, results for all titles were affected by a decline in revenues, offset by cost savings. The significant reduction in government assistance from the Canada Periodical Fund remains a cause for concern for this segment, which has been operating in a declining market for several years.

"Adjusted EBITDA in the production and distribution segment decreased, primarily due to the negative impact of the strikes in the U.S. on the order books. In December, 2023, Incendo delivered its original production Guess Who to the U.S. platform Tubi, owned by Fox. Shot entirely in the Montreal area, the horror film is attracting interest from international buyers.

"The year 2023 is indicative of a media industry undergoing profound transformation, and the resulting suite of restructuring initiatives once again demonstrates the urgent need for action to support local businesses. Government bodies and regulators need to take concrete action now to provide relief, flexibility and tax credits that are better suited to the realities of film and television production.

"TVA Group will continue to focus all its efforts and make the necessary decisions to regain a solid foundation on which to maintain its leadership in this new media reality."

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.

The audited consolidated financial statements, with notes, and the annual management's discussion and analysis, can be consulted on the corporation's website.

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