QMI Presentation Citigroup Mar2005

Slide1: 

Citigroup 14th Annual High Yield/ Leveraged Finance Conference March 6 - 9, 2005 - Vail, Colorado

Safe Harbor Act : 

Safe Harbor Act Except for historical information contained herein, certain statements in this document may constitute forward-looking statements made pursuant to the safe harbour provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to known and unknown risks and uncertainties that could cause Quebecor Media’s actual results to differ materially from those set forth in the forward-looking statements. These risks include changes in customer demand for Quebecor Media’s products, changes in equipment costs and availability, pricing actions by competitors, and general changes in the economic environment. Currency Unless noted otherwise, all dollars are expressed in Canadian dollars. LTM Results are for the period ended December 31, 2004

Slide3: 

Jacques Mallette Executive Vice President and Chief Financial Officer Mark D’Souza Vice President and Treasurer Management Attendees

Corporate Structure: 

Corporate Structure Leading Canadian multi-platform media company 54.7% Inc. 45.3% 40% Economic 99% Voting 100% 2004 Revenue : $2,462 2004 EBITDA : 697 2004 Revenue: $872 2004 EBITDA: 341 2004 Revenue: $888 2004 EBITDA: 228 2004 Revenue: $358 2004 EBITDA: 81 2004 Revenue: $407 2004 EBITDA: 52 #1 Pay television operator in Quebec; #3 in Canada; #1 video store chain in Quebec Largest newspaper publisher in Quebec; second largest in Canada Largest French language broadcaster and magazine publisher in Quebec and in North America 100% (C$ in millions) Book Retailing New Media Business Telecom Other Note: Segmented revenues include inter-company revenues. Segmented EBITDA excludes head office.

Leading Market Positions: 

Leading Market Positions Quebecor Media can reach 60% of English Canadians in Major Canadian Markets and 95% of French Canadians in Quebec on a weekly basis Sources: BBM Survey (Sep 1 – Nov 30, 2004); NADbank 2003 PMB 2004; comscore (Media Metrix December 2004) CARD (Infopresse Annual Media Guide); IMS (Media Mix) National Presence #2 Newspaper publisher Leading content-focused national and local Internet portals Leading Market Position in Quebec #1 Newspaper publisher #1 Cable operator #1 High speed Internet service provider #1 Television broadcaster #1 Magazine publisher #1 Video store chain #1 Music producer/distributor/retailer #1 Internet portal

Quebecor Media : A Unique Platform in a Unique Market: 

Quebecor Media : A Unique Platform in a Unique Market Exclusive Internet and VOD content Point of sale advertising and sales of CD’s and DVD’s in retail stores Videotron Telecom (VTL) handled telephone voting Produced, distributed and retailed 4 spin-off multiple platinum (Canada) CD’s Published several special issue magazines and increased circulation of its entertainment magazines

Nationwide Presence and Strategically Clustered: 

Nationwide Presence and Strategically Clustered Nationwide presence covering key markets offers national advertising solutions Clustering provides significant cost efficiencies and opportunities for bundled advertising packages Community Newspapers and Specialty Publications 192 Community Newspapers and Specialty Publications 8 Paid Urban Dailies + 2 Free Commuter Dailies (Mtl / Tor)

Demonstrated Financial Performance: 

EBITDA has been growing at a 4.5% CAGR pace (5.6% excluding the impact of the recent start-up of two free dailies) (C$ MM) EBITDA* (C$ MM) Revenue* CAGR = 4.5% * Excludes discontinued operations. Demonstrated Financial Performance

Maintained Strong Margins: 

Despite the launch of two free dailies, stringent focus on costs has allowed Sun Media to consistently deliver industry leading margins Peer Comparison (LTM 12/31/04) EBITDA Margin * As of Oct 31, 2004; ** As of Nov 30, 2004; N.B: Torstar, GTC, Canwest: newspaper ops. Publishing EBITDA Margin Maintained Strong Margins

Strong Advertising Market Share Trends: 

Urban Dailies ROP Linage Source: CNA December 2004 report Market Share * * Market share vs competing broadsheets Strong Advertising Market Share Trends

Launch of Free Dailies: 

24 Hours / 24 Heures : Remarkable market reception Circulation of 217,700 and 113,000 in Toronto and Montreal respectively Readership 24 hours: 259,100 every day, 504,000 each week 24 heures: 152,400 every day, 256,800 each week 79% of readers are in the key age range of 18-49 Male:female split is 43:57 24 hours has a pick-up rate of 98% 24 heures has a circulation that is 10% higher than Metro’s This market reception confirms our strategy and will translate into robust long term return on our current investment Source : CCAB for the six months ending September 2004; NADbank 2004 Spring Supplementary Study; Montreal CMA, Toronto CMA. Launch of Free Dailies

Continuing Focus on Profit Improvement Programs: 

Continuing Focus on Profit Improvement Programs Expenses Newsprint (formats / waste) Labour (headcount / cost control) Benchmarking programs Increasing automation (data entry processes) Revenue Increasing ad rates Increasing newspaper prices New clients New products (Free dailies) Leveraging press sites Investment $2.6 million invested in new press (Leduc) Computer to Plate Press room & distribution equipment Urban circulation system Classified systems $4.6 million in annualized savings

Leading Canadian Cable Operator: 

Leading Canadian Cable Operator Cable TV 1,453 basic subs as of December 31, 2004 334 K digital subs Fastest growing digital TV provider in Canada (cable or satellite) over the LTM and last three years Superior offering including VOD and SVOD Internet 503 K subs as of December 31, 2004 Fastest growing cable Internet provider in Canada over the LTM and last two years Highest speed in its market Source: Company reports. Based on LTM ended Dec 31, 2004 except for Shaw and Cogeco which are as at Nov 30, 2004. Telephony Launched on January 24, 2005 First Canadian cable company to market Hybrid VOIP telephony service Strong market reception

Improving Customer Base: 

Source: Vidéotron Improving Customer Base Net Change (LTM) in Cable TV Customers (000’s)

Growing ARPU: 

2002 2003 2004 2001 Source: Vidéotron (ARPU is gross of programming credits and excludes accounting changes relating to installation revenues starting Q2-04) 9.3% CAGR during the last 3 years CAGR = 9.3% Growing ARPU Gross Total ARPU

Residential Telephony Strategy: 

Progressive commercial launch, using a combination of Videotron’s existing IP network and VTL’s circuit switched network Soft switches will be introduced to offer VoIP value added services Rationale for Pricing Specific market environment Cost structure (VTL is a CLEC) Aggressive penetration strategy Thorough market analysis Infrastructure and Capex build-up will be on a sequential / incremental basis tied to commercial demand Fixed Capex of C$80M over the next four years COA of C$250, including modem and installation Residential Telephony Strategy

Improved Quality of Service Drives Churn Down: 

Improved Quality of Service Drives Churn Down Note: Figures presented are monthly averages on a last twelve months (LTM) basis

Slide20: 

QMI Financial Review

QMI Diversified Financial Profile : 

Cable 48.9% Newspapers 32.7% Leisure and Entertainment 3.3% Broadcasting 11.5% Cable 34.5% Other 6.5% Broadcasting 14.2% Leisure and Entertainment 9.6% Newspapers 35.2% QMI Diversified Financial Profile Notes: Segmented revenue percentages include inter-company revenues. Other 3.6% LTM Revenue LTM EBITDA $697 Million $2.5 Billion

QMI – 2004 Financial Performance: 

QMI – 2004 Financial Performance

Delivering on Key Objectives: Leverage: 

As per respective Credit Agreements Debt / proportionate EBITDA (restricted subsidiaries) Redeemable preferred shares held by the Carlyle Group Including FX differential liability of derivatives instruments. Net of prepayments of derivative obligations. Additional Amount Payable (VTL) Delivering on Key Objectives: Leverage Quebecor Media (Holdco) Vidéotron Sun Media TVA Total Quebecor Media (C$ in millions) Other Debt LTM EBITDA / Interest 6.69x 5.57x 2.27x $1,140.7 888.9 484.3 34.9 $2,836.2 12/31/04 Debt As of 186.0 101.4 $1,293.8 886.7 551.7 24.4 $3,015.6 12/31/03 Debt As of 190.3 68.7 $1,820.1 1,119.6 515.1 51.2 $3,773.9 12/31/02 Debt As of 13.7 254.2 (c) (d) Almost C$1 billion in debt reduction over the last two years

Delivering on Key Objectives: Free Cash Flow Growth: 

Vidéotron QMI Consolidated Sun Media Delivering on Key Objectives: Free Cash Flow Growth QMI’s intense focus on profitable growth and cost containment has resulted in significant improvements in EBITDA and Free Cash Flow which will continue to drive leverage reduction in the future Note: Free Cash Flow is defined as EBITDA less interest expense less cash taxes less Capex Sun Media FCF shows benefit of recovering taxes from prior years

Delivering on Key Objectives : Financial Flexibility: 

Delivering on Key Objectives : Financial Flexibility QMI Consolidated Debt Maturity Profile Note: US$ debt converted at exchange rates under hedging agreements. Debt maturities well staggered over the next ten years

QMI – Key Priorities: 

Continue to improve Free Cash Flow generation by: Launching new products and services Cross selling using our multiple media platform Investing in cost reducing technologies Execute residential telephony strategy Increase market share penetration with triple play bundle Targeting strategic acquisitions in core business segments Jumbo Video acquisition Ant Farm acquisition Netgraphe privatization Toronto One acquisition QMI – Key Priorities