Quebecor Inc. has tapped long-time finance executive Jean-François Pruneau to lead the company’s all-important Videotron telecom business.
Mr. Pruneau has been with the company since 2001 and chief financial officer of Quebecor since 2010. The company said on Monday that he will replace Manon Brouillette, who announced her departure as Videotron president and chief executive in October and formally left at the end of December.
Pierre Karl Péladeau, who is the controlling shareholder and returned to the company in 2017 after a four-year absence and a stint in provincial politics as the leader of the Parti Québécois, remains CEO of Montreal-based Quebecor. The company also has a media business that includes the TVA broadcasters as well as a portfolio of magazines and newspapers.
But it is Videotron’s cable, internet and wireless business that is Quebecor’s primary source of strength – at more than $1.5-billion, the telecom division accounted for 96 per cent of adjusted profit in 2017. Ms. Brouillette’s exit left a significant gap in leadership, one that financial analysts say Mr. Pruneau is well suited to fill.
He is known and respected on Bay Street and has played a large role in strategic decisions at Videotron during his time as CFO, which coincided with the launch of a wireless business that now has about 16 per cent of the Quebec mobile market.
Mr. Pruneau also helped steer the company’s repurchase of shares owned by pension fund Caisse de dépôt et placement du Québec, which was staggered over several years and culminated in a final payment of $1.69-billion last year, giving Quebecor full control over all of the cash flow it generates.
The company is well positioned to use that financial flexibility as it heads into a crucial public auction for cellular airwaves in March, said Macquarie Capital analyst Sanford Lee.
“We do not see a change in strategic focus or balance sheet priorities under new management and believe the timing for these changes is opportune,” Mr. Lee wrote in a report to clients, referencing two other senior appointments also announced Monday.
Quebecor named Marc Tremblay chief operating officer and said Hugues Simard would replace Mr. Pruneau as CFO.
Mr. Tremblay has been with Quebecor since 2007 and will also retain his current responsibilities as chief legal officer and corporate secretary. He was previously a lawyer with a labour and employment law practice at Ogilvy Renault (now Norton Rose Fulbright Canada).
Mr. Simard worked at Quebecor for almost 20 years before leaving in 2017 for a role as CFO with Indigo Books & Music Inc. in Toronto. Before that, he had held finance and strategy roles at various Quebecor divisions.
Barclays Capital’s Phillip Huang said it is rare in the telecom industry for a CFO to be promoted to CEO, but added, "Mr. Pruneau has been very hands-on in every key aspect of Quebecor’s operations.”
“Over the past two decades, we believe Mr. Pruneau has established strong credibility with investors and has been an important piece of the Videotron growth story,” said RBC Dominion Securities' Drew McReynolds, adding that with the new appointment, “the risk of an unexpected departure by Mr. Pruneau has been significantly reduced.”
Mr. Péladeau praised the new Videotron CEO in a press release, saying he had “rarely encountered a CFO with such well-developed business instincts and sense for operations.”
“He has been able to develop customized strategies that have enabled Quebecor and its subsidiaries, including Videotron, to post strong performances and execute on our ambitious business plan,” Mr. Péladeau added.
For his part, Mr. Pruneau said Videotron “will continue to focus on the customer experience, innovation and the power of convergence.” Quebecor uses the term convergence to describe its strategy of owning both telecom and media assets.
"I am determined to continue growing the company and want to lead Videotron to new heights,” Mr. Pruneau said.
Neither executive was available for an interview on Monday.