Cavell Gives Final Outlook, Parting Words as Outgoing CEO of Quebecor World
Press release from the issuing company
February 6, 2003 -- (WhatTheyThink.com) -- Quebecor World announced 2002 year-end and fourth quarter results this week. As reported on Tuesday, revenues for the fourth quarter increased 5% to $1.7 billion and operating income increased 7% to $160 million. The company recorded strong performance in the North American Magazine/Catalog and Directory Groups that helped offset significantly weaker results in the North American Commercial/Direct Group and in their French operations.
Raine Radar, a service of WhatTheyThink.com that summarizes conference calls between industry firms and financial analysts, listened in on Quebecor’s conference call. The outgoing President/CEO of Quebecor World, Charlie Cavell, led his final earnings call before turning the reigns over to Michel Desbiens, the new CEO.
Cavell summarized the market this way: the demand for print is still weak, there is no clear indication of sustainable recovery, there is significant unsold capacity and accompanying price pressure, and industry compression and capacity reduction has been about 3% per year since January 2001.
In terms of the different business segments and geographic highlights, the following items were noted:
Retail - Delivered more volume with 7% less headcount, expect to continue to improve efficiency, pricing changes by sector. Very large accounts – pricing is stable, small accounts more volatile, Food/Drug – pricing erratic
Magazine and Catalogs (Mag/Cat) - Good quarter, head count down 20% since 9/11, costs down through digital prepress, wide web, binding automation, and robotics, the company will continue to push to be the low cost provider, aggressive pricing
Books - Volume hard to find, expanded market share, pricing reasonably stable
Directories - Margins improved
Commercial/Direct - 2002 was a poor year with restructuring problems, pricing very volatile – wider choice of provider, excess capacity
Latin America - Will continue to expand with “managed growth”
Europe - Worse market conditions than US - except for France – but volume up, margins up, expanding market share
France – “Industrial Socialism,” French-style labor push back - strikes, plant seizures - taken a reserve to prepare for and fund any further issues in France
In the conference call, Charlie Cavell offered a few parting words. He looked on Quebecor World as his “baby” and was very emotionally involved in the business. Because it is difficult to disconnect emotionally, he said he will disconnect physically. Cavell will provide support on projects as requested by Michel Desbiens, and will protect his history of customer intimacy. Cavell stated that he will stay abreast of technology and contribute to the decision-making process if asked. “This management change is a demonstration of a good succession process.”
Editor’s Note: A 16 point summary of Quebecor’s conference call is available for Premium Access Members of WhatTheyThink.com. Raine Radar is a joint effort between WhatTheyThink.com and Raine Consulting. The purpose of Raine Radar is to provide competitive intelligence about the industry's publicly traded companies by reporting and summarizing important quarterly conference calls held between company executives and financial analysts. To see this report, visit www.whattheythink.com.
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