Quebecor's (QBCRF) CEO Pierre Karl Péladeau on Q2 2017 Results - Earnings Call Transcript

About: Quebecor Inc. B (QBCRF)
by: SA Transcripts

Quebecor Inc. B (OTCPK:QBCRF) Q2 2017 Results Earnings Conference Call August 10, 2017 11:00 AM ET


Martin Tremblay - VP, Public Affairs

Pierre Karl Péladeau - President and CEO

Jean Francois Pruneau - SVP and CFO

Manon Brouillette - President and CEO, Videotron

Julie Tremblay - President and CEO, Media Group


Greg MacDonald - Macquarie Research

Rob Goff - Echelon Wealth Partners

Phillip Huang - Barclays Capital

Jeff Fan - Scotia Bank

Tim Casey - BMO Capital Markets


Good morning ladies and gentlemen. Thank you for standing by, and welcome to the Quebecor Inc. Conference Call.

I would like to introduce Martin Tremblay, Vice President, Public Affairs of Quebecor Media Inc. Please go ahead.

Martin Tremblay

Ladies and gentlemen welcome to this Quebecor conference call. My name is Martin Tremblay, Vice President, Public Affairs. And joining me to discuss our financial and operating results for the second quarter of 2017 are Pierre Karl Péladeau, President and Chief Executive Officer; Jean Francois Pruneau, Senior Vice President and Chief Financial Officer; Manon Brouillette, President and Chief Executive Officer of Videotron; and Julie Tremblay, President and Chief Executive Officer of our Media Group.

You will be able to listen to this conference call on tape until November 11th, 2017, by dialing 877-293-8133, conference number 1220905 and passcode 48006#. This information is also available on Quebecor's website at

I also want to inform you that certain statements made on the call today may be considered forward-looking, and we would refer you to the risk factors outlined in today's press release and reports filed by the corporation with regulatory authorities.

Let's now move on with our first speaker, Pierre Karl Péladeau.

Pierre Karl Péladeau

Merci Martin and good morning everyone. So, we're very pleased to report once again strong financial and operating performance for the quarter as both our Telecom and Media operations outperformed.

On a consolidated basis, we posted our largest year-over-year EBITDA growth in almost five years, with year-over-year EBITDA growth exceeding 7%. Our Telecom segment recorded in this quarter the highest growth amongst the major Canadian cable and telecom operators.

Our mobile service maintained its strong momentum with subscribers and ARPU meeting our targets, thank you to our outstanding customer service, our data-focused plan, our creative bundling offers and the best quality network in Eastern Canada according to J.D. Power and Associates.

On the wireline front, we continue to leverage the superiority of our hybrid fiber and coax network, which contributes to favorable year-over-year subscriber statistics in our broadband services and supports improving trends in our other primary services.

On the business solutions front, our data center and fiber connectivity services continue to attract new customers to our overall offering. Manon will later elaborate on our Telecom segment leading performance for the quarter.

In our Media Group, TVA Sports delivered very strong viewership ratings in the past NHL playoff season, which translated into superior advertising revenue growth from our broadcasting activities.

With 37% market share and close to 1 million viewers on average per game, we are very proud of having posted the best ratings for the Stanley Cup final round since 2008, although we have been the French language broadcaster of the NHL playoff for only three years.

For the third consecutive quarter, we exhibited year-over-year advertising revenue growth from TVA Network, our conventional TV channel. Overall, our Media Group's EBITDA performance was stellar as it more than doubled year-over-year.

Finally, we're very satisfied with the outcome of our process for the disposal of our portfolio of out-of-Québec wireless spectrum licenses. Not only we have cash in close to $615 million, but most of our license remains in the hand of another new entrant which can only be positive for the Canadian competitive landscape.

I would also want to assure Minister Bains and his team that we intend to actively participate in the public consultation to come in respect of the 600 megahertz spectrum auction, and we welcome the proposed favorable provisions for new entrants in the said auction.

I will now let Jean Francois review our consolidated financial results.

Jean Francois Pruneau

Merci Pierre Karl. Quebecor's revenues were up 4% in the quarter to $1 billion as revenues from our Telecom segment grew 5% to $820 million. Quebecor's EBITDA was up 10% to $395 million in the quarter, supported by the 7% EBITDA growth from our Telecom segment to $389 million and 122% growth from our Media segment.

We reported a net income attributable to shareholders of $132 million in the quarter or $1.09 per share compared to a net income of $10 million or $0.08 per share reported in the same quarter last year. The increase is primarily explained by our 10% EBITDA growth and by the $88 million gain on the sale of our AWS-1 spectrum in Toronto to Rogers.

I'd like to point out that the $243 million gain resulting from the $430 million spectrum license sale to Shaw will be recorded in the third quarter, and that for both transactions, available capital losses will shield the gain.

Adjusted income from continuing operations, excluding unusual items and gains or losses on valuation of financial instruments, came in at $83 million in the second quarter or $0.69 per share compared to $70 million or $0.57 per share reported in the same quarter last year.

Quebecor Media's consolidated free cash flow from continuing operating activities increased from $20 million in the second quarter of last year to $162 million this quarter, explained primarily by lower CapEx, EBITDA growth, lower current income tax expense, and a favorable variance in non-cash balances.

For the first six months of the year, revenues were up 3% to $2 billion and EBITDA was up 6% to $760 million. Adjusted income from continuing operations, excluding unusual items and gains or losses on valuation of financial instruments, came in at $154 million or $1.20 per share compared to $138 million or $1.12 per share reported last year.

As of the end of the quarter, our net debt-to-EBITDA ratio stood at three times, but 2.7 times pro forma for the sale of spectrum licenses to Shaw. Available liquidity of more than $1.6 billion as of the end of the quarter, full access to capital markets financing and free cash flow generated by our operations are more than sufficient to cover near-term debt maturities.

In the quarter, we purchased and canceled 391,000 Class B shares. Since we initiated our NCIB program in 2011, approximately 7.8 million Class B shares have been purchased and canceled. Note that the Board of Director, upon the termination of the August 2016 program, approved the renewal of the program for an additional year.

I also want to point out that recently we received a notice for conversion into Class B shares of $50 million of principal value of our convertible debentures maturing in October 2018. We have advised debenture holder that we will exercise our option to settle in cash for the 2.1 million underlying shares as per the trust and debentures provision.

I will now let Manon review our Telecom operations.

Manon Brouillette

Thank you, JF. Good morning everyone. We are pleased to report continued strong financial result in the second quarter despite the residential moving season usually reflected in the second quarter. Our EBITDA year-over-year growth proved to be our strongest for the last 15 quarters.

Wireless services continue to lead our solid performance. As of June 30th, we reached 953,000 activated lines, supported by a growth of 30,000 -- 32,000 lines in the second quarter compared to 33,000 in the same quarter of last year and 124,000 lines year-over-year. Wireless ARPU grew 6% year-over-year from $50.51 to $53.32 and ARPU from new subscribers is relatively stable year-over-year. Our monthly churn rate continues to be stable at 1.3% and we are still ranked first in share of growth activations in the quarter.

In 2017, Videotron continues to differentiate itself as an industry leader in wireless network excellence according to the last J.D. Power Annual Study. And for a third consecutive year, we proved we provide the best mobile network quality in Eastern Canada.

Primary services subscriber performance was, once again this year, impacted by the residential moving season. However, we're pleased to report slower declines across all services, although this moving season intensity seemed similar to last year, and overall RGUs held steady in the quarter.

In Internet services, we exhibited a decline of 1,000 subscribers in the quarter compared to 6,000 last year. Year-over-year, we added 56,000 customers to our service. We continue to roll out our giga Internet service access, which will be deployed to nearly half of our footprint by the end of the year. Furthermore, the discontinuation of our analog service expected to be completed by the end of the year will allow us to reallocate bandwidth to Internet access.

As of the end of the quarter, 338,000 customers subscribed to Club illico, our over-the-top video service for a growth of 71,000 customers over the last 12 months. In cable TV and cable telephony services, we recorded declines of 24,000 and 20,000 customers respectively, a similar performance to last year.

In our B2B operations, revenue grew 30% in the quarter mainly due to RGU and ARPU growth in wireless services, as well as higher revenues from our data center and fiber connectivity businesses. Year-over-year, B2B wireless lines grew 28% and B2B wireless ARPU grew 4% while churn continued to improve in the quarter.

On the financial front, our revenues amounted $820 million in the second quarter compared to $780 million in the same quarter of 2016 for a 5% growth, primarily due to RGU and ARPU growth mainly in mobile and Internet services. We continue to maintain a disciplined approach in respect to pricing and promotions. For the first six months of the year, revenue grew 4% to $1.62 billion.

We recorded EBITDA of $389 million in the second quarter compared to $363 million last year for a 7% growth, favored by revenue growth and operating efficiencies. For the first six months of the year, EBITDA grew 6% to $766 million. EBITDA from wireless services grew approximately 60% from last year.

Our cost of acquisition for new subscriber was fairly stable at $402. We generated $217 million in cash flow from operations, a $77 million increase from the second quarter of last year due to EBITDA growth and lower CapEx.

Net capital expenditures, including acquisition of intangible assets but excluding spectrum licenses, amounted to $171 million in the second quarter, a decrease of $50 million over the second quarter of last year and in line with guidance. This decrease is mainly explained by investments made last year in our data center and in our LTE wireless network which is completed. In this quarter, we spent $24 million on our wireless infrastructure.

For the first six months of the year, net CapEx amounted to $366 million, of which $41 million was spent on our wireless infrastructure. At this stage, no material amount was spent on our IPTV investment program.

Julie, for the Media Group.

Julie Tremblay

Thank you, Manon. Consolidated revenues for the Media Group increased $2 million or 1% in the second quarter to $231 million. Broadcasting revenues increased 12%, primarily due to revenue growth from TVA Sports. Advertising revenues from our broadcasting activities grew 15% to $74 million, supported by the 78% growth from TVA Sports and a 7% growth at TVA Network.

Subscription revenues from our specialty channels increased 12% to $32 million as TVA Sports exhibited a 22% growth in subscription revenue mostly due to higher fees for carriage charged to distributors.

Magazine publishing revenues declined 19% to $24 million, mostly due to discontinuation of some titles and lower advertising and subscription revenues. MELS revenues increased 12% in the second quarter to $14 million with the increase coming from sound stage and equipment leasing activities due to shooting on MELS stage of the Hollywood production, X-Men and the American television series, The Bold Type.

Our newspaper publishing business reported revenues of $47 million in the second quarter compared to $51 million reported last year, for a 8% decline. Advertising revenues declined 14%, while circulation revenues decreased 7%.

Media Group's EBITDA reached $15 million in the second quarter for an $8 million increase compared to last year. Our broadcasting activities reported EBITDA of $5 million in the quarter compared to a loss of $2 million reported last year, while our newspaper publishing business reported EBITDA of $1 million compared to $4 million in the same quarter last year.

Our Magazine business recorded EBITDA of $4 million, stable compared to last year quarter. And MELS recorded an EBITDA of $2 million compared to $1 million recorded last year.

For the six-month period ending June 30th, Media Group's revenues amounted to $442 million, a decrease of $9 million or 2% year-over-year. Advertising revenues from our broadcasting activities increased 10% to $141 million and subscription revenues from our specialty channel increased 11% to $64 million.

Our Magazine business posted revenue decrease of 20% for the six months period to $45 million and MELS recorded an 8% revenue decline to $26 million.

Our newspaper publishing business recorded revenues of $92 million for the six-month period, a 9% decline as advertising revenues declined 16%, while circulation revenues decreased 7%.

Media Group's EBITDA amounted to $12 million for the first six months of the year. Our broadcasting business recorded a $6 million EBITDA, while our newspaper publishing business recorded $1 million of $2 million. Our magazine recorded EBITDA of $4 million, while MELS broke even for the period.

Cash flow from segment operation was $6 million in the quarter which represents an $8 million increase compared to the second quarter of last year, while cash flow from segment operation for the first six-month period was negative $4 million but a $16 million improvement compared to last year.

Let me now turn the floor back to Pierre Karl.

Pierre Karl Péladeau

Merci, Julie and merci Manon. So, in conclusion, we can only be very pleased with our performance in the second quarter. While our Telecom segment maintained its course, our Media segment recorded outstanding results as our broadcasting operations were supported by solid advertising and subscription revenue growth and the activity level picked up at Mels Studio.

As JF mentioned earlier, our net debt-to-EBITDA ratio now stands at 2.7 times pro forma from the sale of our spectrum to Shaw. Over the years, significant progress was made to reduce our leverage despite substantial amounts being invested for the build-out of our wireless network and the buyback of Quebecor Media shares held by our partner.

I can only remember June 2001, when we were marketing our high yield bonds in the U.S. at a leverage ratio higher than seven times. And I'm very proud today that we have delivered on our promise to improve our credit statistics and as we did it for the last -- for more than the last decade.

I therefore feel our healthy balance sheet can currently support sound investment projects such as the full buyback of our partner or the investment to come in an IPTV program that would generate increasing value for our stakeholders including our shareholders.

I thank you very much for your attention. And I'll let operator, please, open the lines for questions.

Question-and-Answer Session


Yes, thank you. [Operator Instructions]

The first one comes from Greg MacDonald from Macquarie. Please go ahead Greg.

Greg MacDonald

Thanks and good morning guys. Manon, questions are targeted for you on the cable side of the business. So, you made some reference to cable subscriber trends in the quarter, and I know this is moving season in Montreal, so it's a seasonally weak quarter. But we had traditionally -- or well, in the first quarter, at least, seen some improvements on a year-over-year basis on the cable subs side. Any comments to make on that?

And then I'll layer on top of that what I consider a more important subscriber trend and that the broadband subs continue to do better year-over-year sequentially as quarters go on despite the loss of basic subs on the cable side. Can you comment on what's driving that growth whether that's business, consumer, both or anything that unique is going on in that sector.

Manon Brouillette

Yes. Actually, to respond to the first portion of your question regarding cable, you're referring to cable TV, I assume?

Greg MacDonald

Yes, correct.

Manon Brouillette

Yes, okay. What we see this year because we were looking at the trend, basically, the movement from the Internet which is better performance than what -- year-over-year than what we see in cable TV.

And our explanation would be that since it's -- actually the moving season is right into the middle of summer and we used to see that a few years back that in terms of TV subscription, people would just come back more early September and back-to-school since they're out under [Indiscernible] during summer time, they can let go a little more of their TV.

And I think that with the OTT phenomenon, maybe this is the explanation, because we see July basically in the same trend. But last year, we saw we had a big back-to-school and we assume that it will be the same thing since we are planning tactic to make sure that those subscriber are coming back home.

Greg MacDonald

Okay. And then -- sorry, go ahead.

Manon Brouillette

No, I was going on to the Internet. In the Internet, I think that there are two things. Basically, in the last quarter I told you that we were getting better and better at mastering the reseller type of dynamic. I think that we are getting stronger to that.

Our strategy is still very strong in terms of focusing on the fiber hybrid 120 unlimited as well as 30 megabits since those two access are not available on the fiber-to-the-node footprint of our main competitors.

So, all of that together, focusing as well on the customer service, we're still ranked first and we're ahead of any other player in the industry. So, all of this together, I think this is what explains that good performance.

We've been maybe surprised a few years back by the reseller dynamic, but truly now we mastered that. And I think that you can achieve -- you can think that we might achieve strong performance in the future as well.

Greg MacDonald

And so that suggests and you're talking consumer throughout that response, that suggests your marginal growth is taking place in the consumer segment, is that correct?

Manon Brouillette

No, it's taking place as well in the B2B. But the big performance in B2B last quarter was mostly into wireless. Of course, the growth is there. But we still keep growing that segment and we make a big focus -- with the acquisition of Fibrenoire, we're making a better focus on bigger scale enterprise. And so far, all the KPIs we're following are pretty good at that point.

Greg MacDonald

Okay, great. And then JF, just one quick accounting follow on. There is a pretty big increase in minority interest charged this quarter, was that operating or non-operating related?

JeanFrancois Pruneau

On the minority charge -- minority interest charge, there's nothing special except for the buyback of the shares from the case in July. We bought back 540,000 shares from the case and obviously, it has an impact on the minority charge.

And on top of that, TVA -- obviously, TVA has increased its profit year-over-year, so it also has an impact.

Greg MacDonald

Okay. Thanks for that.


Next question comes from Rob Goff from Echelon. Please go ahead Rob.

Rob Goff

Thanks very much. Where you are rolling out your one gig Internet? Are you seeing increased upticks in terms of the broadband and pull through on the video?

Manon Brouillette

If I see what? I'm sorry I didn't get you.

Rob Goff

Sure. As you are rolling out with broader coverage with one gig Internet, are you seeing a significant uptick or is it more of a niche product right now?

Manon Brouillette

I think it's more of a niche product right now. We all have to be, I mean, honest when we look at the gig, the ecosystem is not even there. So, I don't think that we promoted that much because we see that the 120 unlimited truly fits the need of subscribers. But we keep the roll out. By the end of the year, we'll be close to 50% footprint covered with the giga and it's still on plan.

Rob Goff

Thank you. And last quarter you gave some great information in terms of the overall Québec wireless market growth and market shares, could you please update?

Manon Brouillette

Yes, we ranked first in terms of gross ads for the second quarter in the row. We were quite ahead of our main competitor in the quarter. So, we're very pleased with the performance. And basically we improved our market share by a few points. We're now at 15.3%. We rank ahead of Fido, Rogers, we're close to Telus and basically Bell is leading the market share in our territory.

Rob Goff

Okay. Thank you very much.

Manon Brouillette

You're welcome.


Next question comes from Phillip Huang from Barclays. Please go ahead Phillip.

Phillip Huang

Hi, thanks. good morning. I was wondering -- with $640 million in proceeds from the sale of your non-core spectrum, I was wondering if you could give us an update on your investment priorities for redeploying that capital?

You indicated in your release that investments in both your wireless network and wireline IP networks and I think [Indiscernible] also alluded to acquiring full ownership of [Indiscernible] in his earlier remarks, but I was wondering where does that investment rank in terms of your priorities?

Pierre Karl Péladeau

Yes, Phillip. Basically, what I can say is, I would refer to my conclusion, I guess, that our priority would be to make a transaction with [Indiscernible]. And we said this for the last 10 years, so our goal -- our promise was to be a full 100% shareholder of Quebecor Media.

And second, also as I mentioned, IP is certainly a top priority for our Telecom business. We've been working on this aspect of the business for the last few months -- even more than months.

So, we will continue on this. And that will require a significant portion of capital, which we intend to invest to make sure that we will keep our network at the highest level in terms of quality available.

Phillip Huang

Great. That's very helpful. And then maybe a question for Manon. By my calculation, I think your wireless EBITDA in the quarter was around $24 million, is that correct?

Manon Brouillette

It was--

Pierre Karl Péladeau

It was up 60% compared to last year.

Phillip Huang

Okay. I think last year was $15 million, right?

Pierre Karl Péladeau

It was low $20 million.

Phillip Huang

It was low $20 million, okay. All right. Number's wrong. Maybe on the BYOD, you previously indicated that the BYOD segment is a significant untapped opportunity for Videotron. I was wondering if you could provide any color on how you performed in that segment in the quarter? To what extent BYOD helped drive the stronger wireless EBITDA growth? And whether you see that sort of continuing over the coming quarters? Thanks.

Manon Brouillette

It's quite stable quarter-after-quarter. We were down actually in the quarter by 2%. But basically when you look at our customer base, it's about 34% at our bring-your-own-device program. So, it's always the management of that we're happy to give them because the cost of acquisition is way lower.

On the other hand, we have to follow them carefully to make sure that churn is stable. But so far, I think we're pleased and it keep going the same trend as we have seen over the last few quarters.

Phillip Huang

That's very helpful. Thanks very much.


So, next question is from Jeff Fan from the Scotia Bank. Please go ahead Jeff.

Jeff Fan

Thanks. Good morning. I've got a few questions. First, maybe to start up on the OTT market. There's been a lot of news related to English content with Disney and CBS this past week.

Your Club illico service now has almost 340,000 customers. Is that a complement to your existing video product? I guess, the question would be, what percentage of these customers actually also subscribed to a TV -- traditional TV service?

And then the second part of that question is what kind of margins do you get on this Club illico service considering you got a lot of unique content or special content that you offer taking into account the content cost.

Pierre Karl Péladeau

Manon, I will tart, and then I will let you maybe give more details on specific things. I guess that what I would like to point out here is since we acquired Videotron, our model was based on convergence. And we always thought that we need to bring to our dumb [ph] pipe or whatever, our Telecom service, value added. We started very early in the process.

I remember bringing significant amount of content through our VoD service which was certainly something that was specifically addressing technology in the market and was adding the capacity to differentiate our service from our competitor.

And we will continue in this direction, and we always move in this direction. Club illico was part of that strategy and we anticipated a few years ago that OTT will become a significant player in the game.

And therefore, we need to participate there and this is the reason why with our content business, we decided to move in this direction. And obviously, proposing to our customers another service and to differentiate ourselves from our competitors -- as our -- to our main competitor, as Manon used to say. Maybe you can provide more detail.

Manon Brouillette

Yes. In terms of cable subscription and Club illico subscription ratio, I might say that it's more a stacking strategy, meaning that we try to incentive -- incent our customer, sorry, to keep their TV subscription. That's the strategy here. And so far it's going great.

The idea to be -- actually we're about, I think, 90% of Club illico subscriber also have a TV subscription with us, just to give you the right number. But the strategy is to make sure that once a consumer feel that they want to let go of the TV, they go towards Club illico.

Same strategy as for the landline telephony. When we see that phenomena at cord cutting and landline telephony, we want to make sure that they migrate onto our mobile network. So, in terms of content distribution, that's mainly the focus.

And as for the EBITDA contribution, I would say it's a great EBITDA contribution. It's a very profitable product.

Jeff Fan

Just to follow-up on -- the quarter was very strong in terms of margins both on wireless as well as the core cable business. It looks like on the core cable some of this is maybe driven by mix, and maybe I'll get you to comment the sustainability of the margins on the core cable. Is it a mix driver? Is it because we've seen some price increases flow through this quarter? Can you just talk about how sustainable the margins are going to be going forward?

Manon Brouillette

I think it's going to be sustainable for one fact. Actually, our challenge was in the last few years when we entered mobility to make sure that -- it's known that EBITDA margin in terms of wireless business is always lower than landline.

So, for us, that was a challenge, but what we see today is we even gained one point year-over-year. We are now at 47 at blended EBITDA margin and we were at 46.5 last year, so it's 1% increase. So, I'm very confident.

And when I look at the landline EBITDA margin, it's very good. It's getting stronger. Of course, we tell you every quarter that we manage our costs very rigorously. We make sure that we get all efficiency everywhere. It's part of the game and I think it's sustainable to my extent.

Jeff Fan

And just one last question, maybe a follow-up on the content on the Club illico. You obviously have a sense of what content you have on the platform that is proprietary or unique to your platform. What's the mix there now in terms of the content? How much of it is Quebecor-owned content versus content that you have to purchase? And when you look at the viewers that watches on Club illico, can you give us some insights on how much those unique content drive your overall viewership?

Manon Brouillette

Yes, of course. I think that the ratio of what is our main content versus what we purchase outside is not a ratio that we could focus on because it's more about what do we promote. And the strategy for us is to make sure that we have new unique content every month. And of course that we focus on our own production because that is where we drive the most viewership.

I don't have the number with me, but basically all those Blue Moon, those Victor Lessard that they are ranked still high, just a second, I'm getting the numbers. Just to give you an idea, we are over close to 2.5 million viewing on each of those two titles at itself, so it's still amazing.

And in terms of year-over-year, we almost doubled the viewership -- the usage, sorry, of Club illico and we did not double our customer base. So, this means that usage of the platform is increasing which is very, very positive.

But definitely, that strategy of innovative, local created and produced content, that's what makes the whole difference. And truly this is what makes the success of Club illico, so we will keep doing like that.

Pierre Karl Péladeau

I think it's worth also to mention that it's part of an ecosystem, I would say. As you probably know, we have a content unit which is managed by one of our colleague by the name of France Lauzière. And we have, as you know, many platforms. So yes, Club illico is one broadcasting platform, but we have many others.

And then therefore, we have the capacity to buy and to produce content and to broadcast that on those many platform from specialized services to generalist broadcaster and we intend to continue in this direction. And obviously, having the capacity to amortize the cost of our content on higher amount of platforms and then, therefore, continue to invest for high quality content.

Martin Tremblay

We'll take a last question please.


Yes, thank you. So, last question is from Tim Casey from BMO. Please go ahead Tim.

Tim Casey

Thanks. I just wanted to go back to, Pierre Karl, your comments on investment priorities and the IP platform. Should we assume then that you are more focused on a purchase model where you're buying something and to own it? Or are you speaking more about a partnership model which will require ongoing investment? Just wondering how your thoughts are evolving with respect to next-gen video?

Pierre Karl Péladeau

Well, we've been -- you raised this question a few times in the past. And obviously, for strategic reason, we would not comment on this. The only thing I can say is that obviously we're well aware about the importance of this factor. And then, therefore, I would say that in due time, we will announce our strategy, and I should say that should not be so long.

Tim Casey

Got it. Thank you.

Martin Tremblay

Okay. Thank you, everybody. This closes our conference call.

Pierre Karl Péladeau

Thank you, Martin. And so for the rest of the summer, I wish that you're going to have good time and we'll talk to you at the third quarter conference call. Thank you very much.