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Acquires Special Warrants of Q/Media on Redemption of Preferred Shares
Montreal, Quebec, November 27, 2001 - Quebecor World Inc. today
announced that Q/Media Services Corporation has redeemed 25,697,441
series A cumulative redeemable preferred shares of Q/Media owned
by Quebecor World. The redemption price was paid in special warrants
of Q/Media having an aggregate face value of CDN$14,509,307. The
special warrants can be converted into common shares of Q/Media.
The preferred shares of Q/Media were issued to a subsidiary of Quebecor World in 2000 upon conversion of a note and special warrants that were issued as partial consideration for the sale by Quebecor World of its North American CD replicating and fulfillment facilities to Vancouver-based Q/Media.
All or a portion of the special warrants may be redeemed for cash at the option of Q/Media at any time prior to December 31, 2004. However, any redemption on or before December 31, 2003 may only occur with the prior written consent of Quebecor World.
If none of the special warrants are redeemed before December 31, 2004, the special warrants will be automatically converted into 6,452,011 common shares of Q/Media, which represents 6,174,173 common shares issued at a conversion price of CDN$2.35 in relation to the par value of the special warrants plus an additional 277,838 common shares issued to pay dividends that will accrue during 2004 at the rate of 4.5% on the par value of the special warrants. Quebecor World presently owns 2,078,292 common shares of Q/Media, which represent 19.99% of the outstanding common shares of Q/Media. Following a conversion of all of the special warrants, the 6,452,011 common shares would represent 38.3% of the voting common shares of Q/Media and Quebecor World would own, in the aggregate, 50.64% of the voting common shares of Q/Media or approximately one third of Q/Media’s voting common shares on a fully diluted basis. If some of the special warrants have been redeemed before December 31, 2004, the number of underlying common shares received on automatic conversion would be adjusted accordingly based on a conversion price of CDN$2.35.
All or a portion of the special warrants may be converted into common shares at the option of Q/Media at any time after January 1, 2004. Any conversion of the special warrants into common shares prior to that date may only occur with the prior written consent of Quebecor World. In either case, the special warrants will be converted into common shares of Q/Media at a conversion price of CDN$2.35 and any accrued but unpaid dividends on the special warrants will be paid in common shares of Q/Media at the same conversion price. The special warrants can be transferred with the consent of Q/Media. However, no consent is required for a transfer to affiliates of Quebecor World.
Aside from the common shares of Q/Media that would be issued upon any conversion of the special warrants, Quebecor World has no current intention to acquire additional common shares or other securities of Q/Media.
Quebecor World Inc. (NYSE, TSE: IQW) is the largest commercial printer in the world. It is a market leader in most of its major product categories which include magazines, inserts and circulars, books, catalogs, specialty printing and direct mail, directories, digital pre-media, logistics, mail list technologies and other value added services. Quebecor World Inc. has approximately 40,000 employees working in more than 160 printing and related facilities in the United States, Canada, Brazil, France, the United Kingdom, Spain, Austria, Sweden, Switzerland, Finland, Chile, Argentina, Peru, Columbia, Mexico and India.
A copy of the corresponding report filed in respect of this news release with certain provincial securities commissions may be obtained from Tony Ross who can be contacted at (514) 877-5317 or (800) 567-7070.
Expands Latin American Directory Platform To Eight Countries
Buenos Aires & Montreal- Quebecor World Inc. today announced that it has signed a major long-term telephone directory printing contract with Telecom Argentina, a subsidiary of Telecom France. Quebecor World will print approximately 4 million telephone directories or 4.1 billion printed pages annually. The contract covers directories for all of Argentina’s major cities servicing a market of 37 million people.
Quebecor World has grown its share of the Latin America directory market from 3% in 1998 to approximately 40% today. Quebecor World now prints almost 58 billion directory pages a year for eight Latin American countries at its facilities in Mexico City, Lima, Recife, Sao Paulo and Buenos Aires. This is more than all the directory pages Quebecor World prints in Canada where it has more than 90% per cent of the market. See map Our customers are among the largest directory publishers in the region including, Telecom Argentina Listel, ADSA, and TeleListas. The Latin American directory market is expected to grow by approximately 10% per year during the next several years.
The five-year agreement with Telecom Argentina is payable in $U.S. and includes an additional two-year option. The majority of the directories will be printed in a newly expanded Quebecor World facility in the Buenos Aires suburb of Pilar. Quebecor World is investing in state-of-the-art prepress, and transferring modern press and bindery equipment from North America to the recently expanded Buenos Aires plant.
“We are delighted to sign this agreement with Telecom Argentina, an integral part of the world leading telecommunications group, Telecom France,” said Guy Trahan, President Quebecor World Latin America. “Our customer asked us to print in Argentina. The volumes in this enabling contract support an investment, with good returns, in an Argentine based plant. We are installing modern, highly efficient press and bindery equipment and linking our facility by a high-speed satellite and fiber optic network to our other global facilities. This improves customer service and opens export opportunities, thus significantly enhancing our investment.”
“Telecom Argentina is committed to supporting our community through local purchasing but we have demanding standards for price, quality and delivery,” commented Alejandro Martins, Director General of Paginas Amarillas del Grupo Telecom. “Quebecor World’s newly expanded Pilar facility, backed by the Quebecor World network, will ensure that we can satisfy our rapidly growing print demands in the coming years from a state of the art domestic location that is internationally competitive.”
In addition, the creation of a directory module in our Pilar plant extends our network of directory facilities in Latin America. This network gives us exceptional flexibility to service customers across the region.
Quebecor World is now the leading supplier of directories in the America’s in that it services publishers in Argentina, Brazil, Peru, Mexico, the Caribbean, Central America, the United States and Canada. The Telecom Argentina directory contract is the fourth long-term directory contract that Quebecor World has won in the last year in Latin America. Other major directory contracts were won in Brazil, Peru and Mexico.
Telecom Argentina, a subsidiary of Telecom France is one of Argentina’s leading telecommunications firms. It is licensed for an unlimited period of time to provide with national coverage Basic Telephone Services, which includes the provision of local, domestic and international long-distance telephone services, and the supply of fixed telecommunications links.
Quebecor World Inc. (NYSE; TSE: IQW) is the largest commercial printer in the world. It is a market leader in most of its major product categories which include magazines, inserts and circulars, books, catalogs, specialty printing and direct mail, directories, digital pre-media, logistics, mail list technologies and other value added services. Quebecor World Inc. has approximately 40,000 employees working in more than 160 printing and related facilities in the United States, Canada, Brazil, France, the United Kingdom, Belgium, Spain, Austria, Sweden, Switzerland, Finland, Chile, Argentina, Peru, Colombia, Mexico and India.
Announces Third Quarter Financial Results
Montreal, Canada, October 29, 2001 -- Quebecor World Inc. announced diluted earnings per share of $0.46 for the quarter ending September 30, 2001 compared to $0.58 during the same period in 2000. This is in keeping with recent guidance for the third quarter and full year 2001. Year to date diluted EPS was $1.13 compared to $1.21 for the year 2000.
“Traditionally we earn almost one-half of our third quarter net income in September. The shock experienced by the U.S. economy dramatically affected our September results,” said Charles G. Cavell, President and CEO of Quebecor World Inc. “These events weakened consumer confidence and had a direct impact on many of our publishing and retail customers. Business and airline magazines were specifically impacted and catalogers canceled orders, reduced circulation and delayed mailings. In addition, recent events are causing direct mail customers to rethink some of their products.”
Still some of Quebecor World’s North American product groups maintained or even improved results quarter to quarter. Revenues for the third quarter declined just 2% compared to the same period last year but by effectively managing costs and finding new efficiencies, domestic operating margins were an impressive 11.9%. Quebecor World partners with the biggest and the best publishers and retailers in the industry. The Company produced 30 book titles on the Publishers Weekly Bestseller List, and we produce 46% of the top 125 magazines in the U.S. Our customers are not immune to the current environment but will fair better than most and will be in a position to improve their market share when the economy improves.
The restructuring initiatives announced on October 9, 2001 will increase operational efficiency in 2002 to offset the slow market by reducing costs and improving returns. The restructuring plan will be implemented during the next six months and will result in annualized pre-tax earnings improvement of approximately $45 million.
Quebecor World is advantaged as the only truly global printer with more than 30% of its revenues generated outside of the U.S. While indirectly impacted by the events in North America, our European and Latin American platforms are expanding and developing new customer relationships. In the Nordic countries revenues increased and we have increased exports to Russia from our facility in Finland.
Quebecor World continues to develop its global mix. In August, the Company signed a binding agreement, subject to regulatory approval, that will solidify its French platform. Quebecor World is purchasing the printing assets of Hachette Filipacchi Medias, Europe’s largest magazine publisher. Those assets include printing, bindery and logistics facilities in France and 50% ownership of Helio Charleroi in Belgium. As part of this transaction, Quebecor World has been awarded a five-year contract with a five-year renewal option valued at $400 million to print many of Hachette’s magazines in France.
In Latin America revenues increased 52%. Quebecor World expanded its directory and book platform by purchasing the assets of Grupo Serla in Mexico City, Mexico. The facility will produce directories for ADSA, a subsidiary of Telmex, Mexico’s largest telecommunications company. Already a major supplier of educational textbooks the Serla acquisition will improve Quebecor World’s book platform, increasing capacity in Mexico by 100%.
“Our Latin America platform continues to expand and to produce better results,” said Mr. Cavell. “As we move forward we will replicate our successful strategy of being the region’s leading consolidator and partnering with publisher/printers as they turn more attention towards their core businesses.”
“In the U.S. the advertising outlook for the balance of the year remains uncertain but our management is disciplined and focussed on implementing measures that will allow us to provide improved efficiencies and service that will benefit customers and shareholders when the economy recovers,” said Mr. Cavell.
In August, the Company successfully completed the placement of 7,000,000 Cumulative Redeemable First Preferred Shares, Series 5 at a price of CDN$25.00 per share, for an aggregate amount of CDN$175,000,000. Net proceeds will be used for capital expenditures and to fund general corporate purposes.
The Board of Directors declared a dividend of $0.12 per share on Multiple Voting Shares and Subordinate Voting Shares. The Board also declared a dividend of CDN$0.3125 per share on Series 2 Preferred Shares, CDN$0.4219 per share on Series 4 Preferred Shares and CDN$0.50687 on Series 5 Preferred Shares. The dividends are payable December 1, 2001 to shareholders of record on November 16, 2001.
Quebecor World To Webcast Investor Conference Call on October 30, 2001
Quebecor World Inc. will broadcast its 2001 Third Quarter conference call live over the Internet on Tuesday, October 30 at 8:30 AM (EDT).
The conference call, which will last approximately one hour, will be webcast live and can be accessed on the Quebecor World Web site Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to differ materially from forecasted results.
Those risks include, among others, changes in customers' demand for the Company's products, changes in raw material and equipment costs and availability, seasonal changes in customer orders, pricing actions by the Company's competitors, and general changes in economic conditions.
Quebecor World Inc. (NYSE; TSE: IQW) is the largest commercial printer in the world. It is a market leader in most of its major product categories which include magazines, inserts and circulars, books, catalogs, specialty printing and direct mail, directories, digital pre-media, logistics, mail list technologies and other value added services. Quebecor World Inc. has approximately 40,000 employees working in more than 160 printing and related facilities in the United States, Canada, Brazil, France, the United Kingdom, Belgium, Spain, Austria, Sweden, Switzerland, Finland, Chile, Argentina, Peru, Colombia, Mexico and India.
Adjusts Earnings Guidance and Will Take Special Charges in Q4
Montreal, Canada - Quebecor World today revised its earnings outlook for the third quarter 2001 based on already weak markets that have been further disrupted by the September 11th terrorist attacks in the United States.
The Company will continue to deliver double-digit operating income margins but is reducing guidance for Q3 earnings per share on a fully diluted basis by approximately 15%. Quebecor World expects Q3 diluted EPS to be in the range of $0.45 to $0.50 compared to $0.58 for the same period last year. For the full year, the Company is reducing guidance to between $1.55 and $1.65 per share.
The revised estimates principally result from the slowing demand for printed products, particularly in the United States and Europe because of an overall economic slowdown and a significant drop in advertising spending. This has been exacerbated by the tragic events in New York and Washington.
“Although printing has historically proven to be recession resistant we are not immune to the economic consequences of these horrific acts, especially when typically 50% of our net income is earned in the last four months of the year,” said Charles G. Cavell, President and CEO of Quebecor World Inc. “We will aggressively protect our industry leading margins on the work available to us and management will be pro-active in reducing costs and increasing efficiencies in this period of reduced volume.”
As a result of the unprecedented negative market conditions and the poor economic outlook, management is taking this opportunity to set the stage for more extensive and aggressive cost controls and operational improvements across its global platform. The Company is currently analyzing the extent of special restructuring and other charges to be recognized in Q4. The initial estimate is approximately $225 million pre-tax, representing approximately 5% of the consolidated asset base, with a cash component of approximately $100 million. Most of the cash costs relate to plant closures, severance from workforce reduction, real estate and other commitments.
It is anticipated that the restructuring plans to be implemented will result in the closing of 7 facilities out of 160 facilities globally and the elimination of 6% of our workforce. The Company expects these actions, once fully implemented, to represent an annualized pre-tax earnings improvement of approximately $45 million.
“We learned a great deal about the effective use of scale during the process of integrating the Quebecor Printing and World Color printing platforms in America over the past two years,” said Mr. Cavell. ”We will apply those lessons during this exercise to realize even greater efficiencies. The redeployment of assets into larger and more efficient facilities will have the added benefit of reducing fixed costs while retaining production capacity to be available when the economy rebounds.”
“Quebecor World has faced tough times before and come out stronger,” added Mr. Cavell. ”I am confident our product mix, geographic diversification, employee base and strong management team make us uniquely positioned to continue our historic strong compound annual growth rate when demand and market conditions improve. These continuing cost and operational initiatives will better serve our customers and improve returns for our shareholders.”
Quebecor World continues to focus on strengthening its balance sheet in this environment. Management will provide details of its special charge and more detailed guidance for the fourth quarter and preliminary guidance for the year 2002 during its third quarter conference call on October 30, 2001.
Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to differ materially from forecasted results. Those risks include, among others, changes in customers' demand for the Company's products, changes in raw material and equipment costs and availability, seasonal changes in customer orders, pricing actions by the Company's competitors, and general changes in economic conditions.
Quebecor World Inc. (NYSE, TSE: IQW) is the largest commercial print media services company in the world. The Company is a leader in most of its major product categories, which include magazines, inserts and circulars, books, catalogs, specialty printing and direct mail, directories, digital pre-media, logistics, mail list technologies and other value-added services. The Company has approximately 40,000 employees working in more than 160 printing and related facilities in the United States, Canada, France, the United Kingdom, Spain, Switzerland, Austria, Sweden, Belgium, Finland, Brazil, Chile, Argentina, Peru, Colombia, Mexico and India.
Acquires Hachette Filipacchi Printing Assets in Europe
Montreal, Canada - Quebecor World Inc. announced today it has signed a binding agreement pending regulatory approval to purchase the European printing assets of Hachette Filipacchi Medias. The assets include printing and bindery facilities in France and Hachette’s 50% ownership of Helio Charleroi in Belgium. Compagnie Nationale a Portefeuille (CNP) will retain it’s 50% ownership of the facility for the next three years.
“We continue to grow on a continental basis with assets in France, Spain, Austria, Sweden, Finland, the U.K and now Belgium. This purchase will significantly strengthen our European platform,” said Charles G. Cavell, President and CEO of Quebecor World Inc. “As well as buying printing facilities from Hachette we are also extending our strategic partnership with them by means of long-term enabling contracts that will benefit both our businesses. These new contracts make Hachette one of our leading global magazine customers. We work with them in Europe, North America and Latin America. In addition this will continue to strengthen and support the development of our global sales initiative. This is a win-win transaction for both companies.”
Hachette Filipacchi Medias is one of the world’s top publishers with 210 magazine titles in 34 countries. It is the number one magazine publisher in Europe. As part of the transaction Hachette is entering into long-term agreement with Quebecor World to print many of its magazines. The estimated value is $US 400 million over the term of the contracts, excluding paper.
“This transaction is consistent with Quebecor World’s historic growth strategy of buying printing assets of publisher/printers as they decide to concentrate on their core businesses,” added Mr. Cavell. “We will continue to pursue this strategy on all three continents in which we operate.”
The plants in France and Belgium operate long-run gravure presses and print a combination of magazines, catalogs, and retail inserts. Some of the magazine titles include Paris Match, Elle, Parents, Tele 7 Jours and TV Hebdo which are two of the largest weekly magazines in France with circulations of three and two million respectively. CNP (Compagnie Nationale à Portefeuille) will partner with Quebecor World for three years in the Charleroi facility. CNP is a public investment firm controlled by the Frere family of Belgium.
The purchase price also includes the acquisition of two bindery and distribution operations in the Paris region, one of which will be operated as a joint venture with Hachette. Both these facilities do finishing work for Hachette and several other publishers.
“This is a very important transaction for Quebecor World Europe,” said Vincent Bastien, President and CEO, Quebecor World France. “The addition of the Hachette equipment to our existing platform in France will allow us to schedule Hachette magazines for multi-plant manufacturing in order to reduce delivery time. This is a key strategic alliance that will significantly improve our service to the French market and our ability to meet shareholder expectations.”
The transaction is subject to necessary regulatory approval.
Quebecor World Inc. (NYSE, TSE: IQW) is the largest commercial print media services company in the world. The Company is a leader in most of its major product categories, which include magazines, inserts and circulars, books, catalogs, specialty printing and direct mail, directories, digital pre-media, logistics, mail list technologies and other value-added services. The Company has approximately 40,000 employees working in more than 160 printing and related facilities in the United States, Canada, France, the United Kingdom, Spain, Switzerland, Austria, Sweden, Finland, Brazil, Chile, Argentina, Peru, Colombia, Mexico and India.
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