Each issue of PaperMoney is approximately 500 fact filled pages.
Logout
Click here for Pulp & Paper Radio International
Items just for you
New publication added! Advertising Arguments 2015 book
Free Downloads
Search
My Profile
Login
Management Side
Technical Side
Quebecor World
Print
Montréal, Quebec, Canada, 07 November 2007 — Quebecor World Inc. (TSX:IQW, NYSE:IQW) announces that for the third quarter 2007, the company reported a net loss of USD 315 million from continuing operations compared to net income of USD 19 million in the third quarter of 2006.

On the same basis, diluted loss per share in the third quarter was USD 2.42 compared to diluted earnings per share of USD 0.09 in the third quarter 2006. Third quarter 2007 results incorporated an impairment of assets, restructuring and other charges (IAROC) and a goodwill impairment charge, net of income taxes, of USD 272 million, or USD 2.06 per share, compared with USD 10 million, or USD 0.08 per share, in 2006 which resulted in a non-cash impact mainly due to the European transaction.

Excluding these charges, adjusted diluted loss per share was USD 0.36 in the third quarter of 2007 compared to adjusted diluted earnings per share of USD 0.17 for the same period in 2006. Consolidated revenues for the quarter were USD 1.41 billion compared to USD 1.55 billion in the third quarter of 2006. Operating income before IAROC and goodwill impairment in the third quarter was USD 43 million compared to USD 67 million during the same period last year. On the same basis, EBITDA was USD 126 million in the third quarter compared to USD 151 million in the same period last year.

Considering the transaction and evaluation of the company’s European operations, Quebecor World incurred a non-cash goodwill impairment charge of USD 166 million, USD 159 million net of taxes or USD 1.21 per share. In addition, because of the previously mentioned European transaction with RSDB and because of the retooling plan and the relocation of existing assets in North America, impairment tests were triggered that resulted in an impairment of assets restructuring and other charges of USD 133 million, USD 113 million net of taxes or USD 0.85 per share of which USD 128 million was a non-cash impairment of long-lived assets.

“Our overall third quarter financial results are disappointing, but we are achieving three key milestones in the third quarter to turn around our business and to grow earnings and cash flow:
1) sale/merger of our European business,
2) refinancing our balance sheet, and
3) completion of the 3-year retooling of our plants.

“We firmly believe that the sale/merger of our European platform combined with other initiatives will strengthen our balance sheet, give us additional financial flexibility and allow us to focus on our core business in the Americas,” said Wes Lucas, president and CEO, Quebecor World.

“Now that our three-year retooling program is completed, we will concentrate on maximizing our cash flow, optimize the value of our asset base, reduce costs, and further develop value-added initiatives to ensure we succeed in the marketplace by providing our customers with the best solutions.”

Actions on 5-Point Transformation Plan
Customer Value: During the third quarter, Quebecor World continued to build the capability to increase value to customers by expanding its value-added services. For example, Quebecor World’s multi-channel solution to marketers and retailers offers integrated solutions combining the multiple forms of media across Quebecor World, to support customers as they advertise, prospect for sales, drive store traffic, improve brand awareness, and grow their business. As multi-channel marketers continue to target more focused market segments, they require a key partner to provide a complete solution that integrates the multiple channels of catalogs, retail fliers, direct mail, Internet, and other advertising channels, and Quebecor World is positioning itself to be this key partner. The company remains committed to achieve its objective of USD 300 million in new and higher margin sales, annual run-rate by year end 2008 from this initiative.

People: This initiative is focused on building high-performance teams and increasing the effectiveness of the organization. During the third quarter of 2007, the company continued to make progress in training and organizational development. The company also continues to make progress in making its plants a safer place to work, with 10% fewer accidents in its North American platform in the third quarter.

Execution: Continuous improvements in throughput and waste reduction have been the primary areas of focus as these represent the areas of highest impact with little or no capital requirement. In addition, gains are being recognized through the sharing of improved operating practices across the divisions as the projects integrate across the company. Latin America will kick off their projects in November 2007 to increase the benefits. Ensuring continued improvements, a total of 153 people have been trained in the Six Sigma/Lean Manufacturing continuous improvement program. Based on this progress, the company is on track with projects already implemented or being implemented to have a USD 100 million in annual improvements run-rate by year end 2008, and expects on the same basis to reach a USD 35 million run-rate by year end 2007.

Retooling Program: Quebecor World’s three-year retooling initiative was completed in October 2007. This was focused on installing state-of-the-art technology, in fewer but larger facilities, by running faster, more efficient next-generation technology. Since the end of the second quarter, the company started up 11 new and relocated presses in the North American book, catalog, retail and Canadian platforms, which negatively impacted the third quarter’s results in North America. Management is confident that the company will benefit from this retooled network in the future.

Given the substantial amount of investment during the last three years as part of the retooling program and the fact that the European operations will no longer be consolidated, additions to property plant and equipment are expected to be in the range of USD 100 million to USD 150 million per year for the next two years and normalized longer term to the level of USD 150 million to USD 200 million per year.

Balance Sheet: Quebecor World is committed to a long term solution to strengthen its balance sheet and ensure financial flexibility. The European transaction supports this initiative. During the quarter, Quebecor World also announced a full repurchase of its 8.42%, 8.52%, 8.54%, and 8.69% Private Notes. Other initiatives are being planned to further strengthen the balance sheet.

North America
North American revenues for the third quarter of 2007 were USD 1.10 billion, down from USD 1.24 billion in 2006. Excluding the effect of currency translation and the unfavorable impact of paper sales, revenues decreased by 5.5% in the third quarter. Revenues in the North American segment continued to be impacted by the increase in retooling in the third quarter (11 new and relocated press start-ups), soft volumes and negative price pressures. Due to a very strong Canadian dollar, the Canada group continued to be affected by less favorable foreign exchange contracts on sales to its U.S. customers. Operating income in North America was impacted by the highly competitive market conditions as well as by inefficiencies and costs related to the finalization of the company’s retooling plan during the third quarter of 2007. The decrease was partly offset by the benefits from the retooling completed in 2006 and cost reductions in the Book & Directory and Magazine groups.

Europe
European revenues for the third quarter of 2007 were USD 243 million, down from USD 244 million in 2006. Excluding the impact of currency translation and paper sales, revenues were down 6.3% for the third quarter compared to the same period in 2006. Overall, the volume decrease experienced in Europe was mostly the result of the disposal of the Lille and the Strasbourg French facilities, as well as press start-up inefficiencies and equipment transfers. This shortfall was partly offset by increases in facilities re-equipped with new presses in Austria, Spain, and Belgium, with Belgian volume up almost 45% from the nine-month period compared to 2006.

Latin America
Latin America’s revenues for the third quarter of 2007 were USD 75 million, up from USD 61 million in 2006. Excluding the impact of foreign currency and paper sales, revenues for the third quarter of 2007 were up 5.7% compared to last year. Significant revenue increases from Colombia and Mexico, during the third quarter were the result of growing volume. The increase in Colombia and Mexico mostly came from export sales of bibles and directories, respectively. However, the impact of these increases in volume on operating income was partly offset by less favorable pricing on the bibles during the quarter.

Year-to-date
For the first nine months of 2007, Quebecor World reported a net loss from continuing operations of USD 374 million or a diluted loss of USD 2.96 per share, compared to net income from continuing operations of USD 19 million or a diluted loss of USD 0.06 per share for the same period in 2006. The results for the first nine months of 2007 included impairment of assets, restructuring, and other charges (IAROC) and goodwill impairment (net of taxes) of USD 321 million or USD 2.43 per share compared to USD 54 million or USD 0.42 per share in 2006 which resulted in a non-cash impact mainly due to the European transaction as discussed above. Excluding impairment of assets, restructuring, and other charges (IAROC), and goodwill impairment (net of taxes) adjusted diluted loss per share was USD 0.53 for the first nine months of 2007 compared to adjusted diluted earnings per share of USD 0.36 in the same period of 2006. On the same basis, adjusted operating income in the first nine months of 2007 was USD 88 million compared to USD 167 million in 2006. This decrease reflects lower revenues from plant closures, and restructuring programs as well as the effect of the poor European market conditions, which offset the increased profits in divisions where the retooling has already been completed, such as the U.S. Book and Magazines Divisions. Consolidated revenues for the first nine months of 2007 were USD 4.17 billion compared to USD 4.47 billion in the same period of 2006.

Dividend
The board of directors of Quebecor World Inc. declared today a dividend of CAD 0.3845 per share on Series 3 Preferred Shares and CAD 0.43125 on Series 5 Preferred Shares. The dividends are payable on 01 December 2007 to shareholders of record at the close of business on 19 November 2007.

Financial statements are available on the company’s website and through the SEDAR and SEC filings.
• SEDAR web address: www.sedar.com
• SEC web address: www.sec.gov

Conference Call
Quebecor World Inc. will broadcast its third quarter conference call live over the Internet on 07 November 2007, at 8:30 a.m. (Eastern Time).

The conference call and accompanying PowerPoint presentation will be broadcast live and can be accessed on the Quebecor World Web site: www.quebecorworldinc.com/main.aspx?id=209.

The presentation and an archive of the webcast will be available on the Quebecor World Web site following the conference call. Anyone unable to attend this conference call may listen to the replay tape by phoning 1-877-293-8133 or 403-266-2079 – passcode 516211#, available to 07 December 2007.

Note: For the European transaction the conversion rate of Euros into U.S. dollars was at an exchange rate of USD 1.4219 for EUR 1.

About Quebecor World
Quebecor World Inc. (TSX:IQW, NYSE:IQW) is a world leader in providing high-value, complete marketing and advertising solutions to leading retailers, catalogers, branded-goods companies, and other businesses with marketing and advertising activities, as well as complete, full-service print solutions for publishers. The company is a market leader in most of its major product categories, which include advertising inserts and circulars, catalogs, direct mail products, magazines, books, directories, digital premedia, logistics, mail list technologies, and other value-added services. Quebecor World has approximately 27,500 employees working in more than 120 printing and related facilities in the United States, Canada, Argentina, Austria, Belgium, Brazil, Chile, Colombia, Finland, France, India, Mexico, Peru, Spain, Sweden, Switzerland, and the United Kingdom.

Web address: www.quebecorworld.com


Powered by Bondware
News Publishing Software

The browser you are using is outdated!

You may not be getting all you can out of your browsing experience
and may be open to security risks!

Consider upgrading to the latest version of your browser or choose on below: