TVA GROUP REPORTS CONSOLIDATED RESULTS FOR FOURTH QUARTER AND FISCAL 2023

MONTREAL, Feb. 21, 2024 /CNW/ – TVA Group Inc. (TSX:TVA) (“TVA Group” or the “Corporation”) today reported its consolidated financial results for the fourth quarter and fiscal 2023.

Highlights

Fiscal 2023

$545,197,000 in revenues, a $49,212,000 (-8.3%) decrease compared with 2022.
$47,891,000 (-$1.11 per basic share) net loss attributable to shareholders, a $39,022,000 (-$0.90 per basic share) unfavourable variance from 2022.
$5,431,000 in consolidated negative adjusted EBITDA,1 a $24,816,000 unfavourable variance compared with fiscal 2022.
$9,312,000 in negative adjusted EBITDA1 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 EBITDA1 in the Film Production & Audiovisual Services segment (“MELS”), a $12,198,000 unfavourable variance due mainly to lower volume of activities in soundstage, 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 EBITDA1 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 EBITDA1 in the Production & 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 $2,850,000 charge for impairment of intangible assets in the Broadcasting segment.

Fourth quarter 2023

$151,714,000 in revenues, a $20,210,000 (-11.8%) decrease compared with the fourth quarter of 2022.
$15,872,000 (-$0.37 per basic share) net loss attributable to shareholders, a $15,608,000 (-$0.36 per basic share) unfavourable variance compared with the same quarter of 2022.
$5,904,000 in consolidated adjusted EBITDA,1 a $1,772,000 unfavourable variance from the same quarter of 2022.
$3,577,000 in adjusted EBITDA1 in the Broadcasting segment, a $2,612,000 favourable variance mainly due to a retroactive adjustment related to CRTC Part II licence fees and other cost savings that offset the decrease in revenues, particularly advertising revenues.
$985,000 in adjusted EBITDA1 in the Film Production & Audiovisual Services segment, a $3,298,000 unfavourable variance due mainly to lower volume of activities in soundstage, 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 EBITDA1 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 EBITDA1 in the Production & Distribution segment, a $1,280,000 unfavourable variance due to lower margins on international and Canadian distribution compared with the same period of 2022.

Pierre Karl Péladeau, acting President and CEO of TVA Group, had this to say:

“For the fiscal year ended December 31, 2023, all business segments recorded a significant decrease in revenues and adjusted EBITDA.1

“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 EBITDA1 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 November 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 masqués, 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 Indéfendable, with more than 1.5 million viewers each, played a major role in TVA Network’s high ratings. TVA Nouvelles also remains Quebecers’ number one 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% 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%, 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 & Audiovisual Services segment, the Corporation was particularly affected by a decrease in soundstage and equipment rental services due to the shutdown of foreign productions as a result of the writers’ and actors’ strikes in the U.S. during the year. However, MELS’ 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 EBITDA1 in the Production & 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.”

Definition

Adjusted EBITDA

In its analysis of operating results, the Corporation defines adjusted EBITDA, as reconciled to net income (loss) under IFRS, as net income (loss) before depreciation and amortization, financial expenses, operational restructuring costs and other, income tax expense (recovery) and share of income of associates. Adjusted EBITDA as defined above is not a measure of results that is consistent with IFRS. It is not intended to be regarded as an alternative to other financial operating performance measures or to the statement of cash flows as a measure of liquidity. This measure should not be considered in isolation or as a substitute for other performance measures prepared in accordance with IFRS. This measure is used by management and the Board of Directors to evaluate the Corporation’s consolidated results and the results of its segments. This measure eliminates the significant level of depreciation and amortization of tangible and intangible assets, including any asset impairment charges, as well as the cost associated with one-time restructuring measures, and is unaffected by the capital structure or investment activities of the Corporation and its segments. Adjusted EBITDA is also relevant because it is a significant component of the Corporation’s annual incentive compensation programs. The Corporation’s definition of EBITDA may not be the same as similarly titled measures reported by other companies.

Forward-looking information disclaimer

The statements in this Management’s Discussion and Analysis that are not historical facts may be forward-looking statements and are subject to important known and unknown risks, uncertainties and assumptions which could cause the Corporation’s actual results for future periods to differ materially from those set forth in the forward-looking statements. Forward-looking statements generally can be identified by the use of the conditional, the use of forward-looking terminology such as “propose,” “will,” “expect,” “may,” “anticipate,” “intend,” “estimate,” “plan,” “foresee,” “believe” or the negative of these terms or variations of them or similar terminology. Certain factors that may cause actual results to differ from current expectations include the possibility that the reorganization plan will not be carried out on schedule or at all, the possibility that the Corporation will be unable to realize the anticipated benefits of the reorganization plan in a timely manner or at all, the possibility of unknown potential liabilities or costs related to the reorganization plan, the possibility that the Corporation will be unable to successfully implement its business strategies, seasonality, operational risks (including pricing actions by competitors and the risk of loss of key customers in the Film Production & Audiovisual Services and Production & Distribution segments), programming, content and production cost risks, credit risk, government regulation risks, government assistance risks, changes in economic conditions, fragmentation of the media landscape, risk related to the Corporation’s ability to adapt to fast-paced technological change and to new delivery and storage methods, labour relation risks, and the risks related to public health emergencies, as well as any emergency measures implemented by government.

The forward-looking statements in this document are made to give investors and the public a better understanding of the Corporation’s circumstances and are based on assumptions it believes to be reasonable as of the day on which they were made. Investors and others are cautioned that the foregoing list of factors that may affect future results is not exhaustive and that undue reliance should not be placed on any forward-looking statements.

For more information on the risks, uncertainties and assumptions that could cause the Corporation’s actual results to differ from current expectations, please refer to the “Risks and Uncertainties” section of the Corporation annual Management’s Discussion and Analysis and other public filings available at www.sedarplus.ca and www.groupetva.ca.

The forward-looking statements in this news release reflect the Corporation’s expectations as of February 21, 2024, and are subject to change after that date. The Corporation expressly disclaims any obligation or intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required to do so by the applicable securities laws.

TVA Group

TVA Group Inc., 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 Inc. 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 at www.groupetva.ca.

TVA GROUP INC.
Consolidated statements of loss

(unaudited)
(in thousands of Canadian dollars, except per-share amounts)

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