Quebecor Reports 3Q Results: Developing a Global Mix of Revenue
Press release from the issuing company
MONTREAL---Oct. 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.
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