UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington,  DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 or 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2007

Commission File Number :  1-14118

2007 THIRD QUARTER RESULTS

QUEBECOR WORLD INC.

(Translation of Registrant’s Name into English)

612 Saint-Jacques Street, Montreal, Quebec H3C 4M8

(Address of Principal Executive Office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b)(1):   o

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Fork 6-K in paper as permitted by Regulation S-T Rule 101 (b) (7):   o

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other filing on EDGAR.

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes  o                     No x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):    82-                     .

QUEBECOR WORLD INC.

Filed in this Form 6-K

Documents index

1.                                        Press Release dated November 7, 2007;

2.                                        Management’s Discussion and Analysis of Financial Condition and Results of Operations

3.                                        Consolidated Financial Statements

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Quebecor World

QUEBECOR WORLD ANNOUNCES

SALE/MERGER OF EUROPEAN BUSINESS TO RSDB

AND RELEASES THIRD QUARTER RESULTS

HIGHLIGHTS

•       Sale/merger of European business to RSDB for approximately $341 million

•       Transaction will reduce Quebecor World’s debt and is expected to improve financial flexibility

•       Creates leading European player in combined Roto Smeets Quebecor

•       Revenue of $1.41 billion in third quarter compared to $1.55 billion in third quarter 2006

•       Third quarter results include non-cash impairment of assets and goodwill charges of $294 million, primarily related to Europe

•       Three-year retooling plan completed with 11 new or relocated presses installed since the end of the second quarter

Montréal, Canada – Quebecor World Inc. (TSX:IQW, NYSE:IQW) and RSDB NV announced that they have signed a definitive Share Purchase Agreement (SPA) and Implementation Agreement to sell/merge Quebecor World’s European operations to RSDB Group. RSDB will buy Quebecor World’s European operations and Quebecor World will retain a 29.9% interest in the merged entity that will be named “Roto Smeets Quebecor” (RSQ) and will be listed on Euronext Amsterdam.

Under the terms of the Share Purchase Agreement and Implementation Agreement, RSDB will deliver to Quebecor World, at closing, cash, a note and shares valued in the aggregate at approximately €240 million ($341 million), subject to certain post-closing adjustments. More specifically, the consideration payable to Quebecor World will be comprised of approximately €150 million ($213 million) in cash, a €35 million ($50 million) note, and 1.4 million shares in

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RSQ representing approximately 29.9% of the issued and outstanding shares of the combined business post-closing.

Completion of the merger is conditional, among other things, on the approval of the shareholders of RSDB and receipt of clearances from the European Commission. Closing is expected to take place by the end of 2007.

“This transaction is a key element of our 5-Point Transformation Plan and is expected to deliver several significant benefits to our shareholders. The sale/merger will improve our balance sheet, and will provide additional financial flexibility and strategic options to create further shareholder value. We believe that it will also enable us to strategically reposition our company to focus on growing earnings within our core business in the Americas, where we are a leader”, stated Wes Lucas, President and CEO Quebecor World. “We are pleased that retaining an investment in RSQ may present an upside opportunity, as Quebecor World will help facilitate the consolidation of the European print industry and the creation of the leading printer in Europe, which will benefit our customers and employees going forward. Quebecor World and RSQ will also work together in the future to serve global customers”, Mr. Lucas added.

John Caris, Chief Executive Officer of RSDB stated: “The combination of Quebecor World’s European printing business with RSDB will enable RSDB, through its increased scale and broader footprint throughout Europe, to play an important role in the consolidation of the graphic industry in Europe. We see a great opportunity to pool the best practices and extensive industry experience available in the two businesses and to benefit from an attractive range of potential synergies”.

Roto Smeets Quebecor, the new merged company, will become the leading player in the European printing industry, and the leader in the European market. Quebecor World’s European operations currently include 18 printing and related facilities employing approximately 4,000 people in Austria, Belgium, Finland, France, Spain, Sweden, and the United Kingdom. These plants produce magazines, catalogs, retail inserts, direct mail products, book and directories for many of Europe’s leading retailers, publishers and branded goods companies.

RSDB NV (Euronext: RSDB) is a leading European provider of high-value graphic printing services based in Hilversum, The Netherlands. RSDB’s principal business, Print Productions, produces full service gravure and offset printing material, with seven printing facilities in The Netherlands and one printing facility in Hungary, supported by sales offices in seven European countries. RSDB’s Marketing Communications business focuses on marketing communications solutions and customer management processes.

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Specifics of the Transaction

The aggregate consideration payable by RSDB to Quebecor World in respect of the transaction will amount to approximately €240 million ($341 million), to be paid in cash, shares and through the assumption of indebtedness by RSDB, subject to certain post-closing adjustments. RSDB will acquire all shares held by Quebecor World Europe Holding (“QWE”), a wholly-owned subsidiary of Quebecor World, and in return will make payment of €150 million ($213 million) in cash to Quebecor World, and will issue a €35 million ($50 million) 8-year note repayable from 2011 to 2015. RSDB will also issue approximately 1.4 million new RSQ shares to Quebecor World representing 29.9% of its share capital post-closing, on a fully diluted basis. RSDB will also assume QWE’s pension, legal, and other liabilities, subject to restrictions in accordance with the terms of agreement.

The acquisition is subject to conditions precedent including the approval of RSDB’s shareholders, and receipt of clearances from The European Commission (the “Conditions Precedent”). The transaction is not subject to the approval of Quebecor World’s shareholders.

The parties have agreed to arrangements for the provision of certain transitional services and procurement arrangements in the period between the closing of the sale/merger until the end of 2008 in order to ensure the smooth transfer of QWE and its business to RSQ.

In the event that the transaction is not completed as a result of a default of one party (other than as a result of a failure to satisfy the Conditions Precedent or under other limited circumstances), the defaulting party is obliged to pay the other party a break-up fee of €15 million ($21 million).

The Supervisory Board of RSQ will be comprised of five directors. Two of the five members of the Supervisory Board will be nominated by QWI. Resolutions of the Supervisory Board are, in general, adopted by an absolute majority. However upon completion of the sale/merger, Quebecor World and RSDB have agreed that certain predefined corporate decisions relating to important strategic matters, such as decisions relating to mergers and acquisitions, the issuance of new shares and the change of the dividend policy, will require a four out of five majority vote.

RSDB’s current CEO, John Caris, will lead RSQ.  QWE’s experienced senior management team will continue to run the operations in each European country from which it currently operates. The key members of QWE’s existing senior management team have indicated their support for the transaction and their continued involvement with the combined business. Their local expertise will be a valuable asset of the combination of the companies.

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Quebecor World Third Quarter Results

In the discussion of our third quarter 2007 results below, we use certain financial measures that are not calculated in accordance with Canadian generally accepted accounting principles (GAAP) or United States GAAP to assess our financial performance, including EBITDA (earnings before interest, tax, depreciation and amortization), Adjusted EBITDA and operating income before IAROC (impairment of assets, restructuring and other charges) and goodwill impairment. We use such non-GAAP financial measures because we believe that they are meaningful measures of our performance. Our method of calculating these non-GAAP financial measures may differ from the methods used by other companies and, as a result, the non-GAAP financial measures presented in this press release may not be comparable to other similarly titled measures disclosed by other companies. We provide a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures in Figures 5 and 6, “Reconciliation of non-GAAP Measures” of our third quarter 2007 management’s discussion and analysis filed with the Canadian securities regulatory authorities at www.Sedar.com and with the United States Securities and Exchange Commission at www.sec.gov . A copy of our third quarter 2007 management’s discussion and analysis is also available on the Company’s website at www.quebecorworld.com .

Quebecor World Inc. announces that for the third quarter 2007, the Company reported a net loss of $315 million from continuing operations compared to net income of $19 million in the third quarter of 2006. On the same basis, diluted loss per share in the third quarter was $2.42 compared to diluted earnings per share of $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 $272 million, or $2.06 per share, compared with $10 million, or $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 $0.36 in the third quarter of 2007 compared to adjusted diluted earnings per share of $0.17 for the same period in 2006. Consolidated revenues for the quarter were $1.41 billion compared to $1.55 billion in the third quarter of 2006. Operating income before IAROC and goodwill impairment in the third quarter was $43 million compared to $67 million during the same period last year. On the same basis, EBITDA was $126 million in the third quarter compared to $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 $166 million, $159 million net of taxes or $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 $133 million, $113 million net of taxes or $0.85 per share of which $128 million was a non-cash impairment of long-lived assets.

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“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 America’s,” 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 $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 $100 million in annual improvements run-rate by year end 2008, and expects on the same basis to reach a $35 million run-rate by year end 2007.

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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 $100-to-$150 million per year for the next two years and normalized longer term to the level of $150-to-$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 $1.10 billion, down from $1.24 billion in 2006. Excluding the effect of currency translation and the unfavourable 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 favourable 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 $243 million, down from $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% for the nine month period compared to 2006.

Latin America

Latin America’s revenues for the third quarter of 2007 were $75 million, up from $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

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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 favourable 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 $374 million or a diluted loss of $2.96 per share, compared to net income from continuing operations of $19 million or a diluted loss of $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 $321 million or $2.43 per share compared to $54 million or $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 $0.53 for the first nine months of 2007 compared to adjusted diluted earnings per share of $0.36 in the same period of 2006. On the same basis, adjusted operating income in the first nine months of 2007 was $88 million compared to $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 $4.17 billion compared to $4.47 billion in the same period of 2006.

Dividend

The Board of Directors of Quebecor World Inc. declared today a dividend of CA$0.3845 per share on Series 3 Preferred Shares and CA$0.43125 on Series 5 Preferred Shares. The dividends are payable on December 1, 2007 to shareholders of record at the close of business on November 19, 2007.

Full Financial Information

Management Discussion and Analysis (“MD&A”)

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 to include slide presentation in its Quarterly Investor Conference Call

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Quebecor World to Webcast Investor Conference Call and Presentation on November 7, 2007

Quebecor World Inc. will broadcast its third quarter conference call live over the Internet on November 7, 2007 at 8:30 AM (Eastern Time).

The conference call and accompanying PowerPoint presentation will be broadcast live and can be accessed on the Quebecor World Website:

http://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.

Prior to the call please ensure that you have the appropriate software. The Quebecor World web address listed above has instructions and a direct link to download the necessary software, free of charge.

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 from November 7, 2007 to December 7, 2007.

For the European transaction the conversion rate of Euros into U.S. dollars was at an exchange rate of $1.4219 U.S. dollars for one Euro.

Forward looking statements

This press release may include “forward-looking statements” that involve risks and uncertainties. All statements other than statements of historical facts included in this press release, including statements regarding the prospects of the industry and prospects, plans, financial position and business strategy of Quebecor World Inc. (the “Company”), may constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Canadian securities legislation and regulations. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “plan,” “foresee,” “believe” or “continue” or the negatives of these terms or variations of them or similar terminology. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. Forward-looking statements do not take into account the effect that transactions or non-recurring or other special items announced or occurring after the statements are made have on the Company’s business. For example, they do not include the effect of dispositions, acquisitions, other business transactions, asset writedowns or other charges announced or occurring after forward-looking statements are made.

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Investors and others are cautioned 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 Company’s actual results to differ from current expectations, please refer to the Company’s public filings available at www.sedar.com , www.sec.gov and www.quebecorworld.com . In particular, further details and descriptions of these and other factors are disclosed in the “Risks and Uncertainties related to the Company’s business” section of the Company’s Management’s Discussion and Analysis for the year ended December 31, 2006, and the “Risk Factors” section of the Company’s Annual Information Form for the year ended December 31, 2006.

The forward-looking statements in this press release reflect the Company’s expectations as of November 7, 2007 and are subject to change after this date. The Company 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 by the applicable securities laws.

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

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For further information contact:

Tony Ross

Vice President, Communications

Quebecor World Inc.

(514) 877-5317

(800) 567-7070

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Roland Ribotti

Vice President, Investor Relations

and Assistant Treasurer

Quebecor World Inc.

(514) 877-5143

(800) 567-7070

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EBITDA: Operating income before depreciation and amortization.

IAROC: Impairment of assets, restructuring and other charges.

Adjusted: Defined as before IAROC and before goodwill impairment charge.

Debt-to-Ajusted-EBITDA ratio: Total debt divided by Adjusted EBITDA.

Interest coverage ratio: Adjusted EBITDA divided by financial expenses.

MANAGEMENT’S DISCUSSION AND ANALYSIS

THIRD QUARTER 2007

TABLE OF CONTENTS

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INTRODUCTION

The following is a discussion of the consolidated financial condition and results of operations of Quebecor World Inc. (the “Company” or “Quebecor World”) for the three-month and nine-month periods ended September 30, 2007 and 2006, and it should be read together with the Company’s corresponding interim Consolidated Financial Statements and the 2006 annual Management’s Discussion and Analysis (“MD&A”). The interim Consolidated Financial Statements and MD&A have been reviewed by the Company’s Audit Committee and approved by its Board of Directors. This discussion contains forward-looking information that is qualified by reference to, and should be read together with, the discussion regarding forward-looking statements that is part of this MD&A. Management determines whether or not information is “material” based on whether it believes a reasonable investor’s decision to buy, sell or hold securities in the Company would likely be influenced or changed if the information were omitted or misstated.

A complete review of Quebecor World’s profile and strategy can be found in the “Overview” section of the Company’s 2006 annual MD&A.

Presentation of financial information

Financial data has been prepared in conformity with Canadian generally accepted accounting principles (“Canadian GAAP”).

The Company reports on certain non-GAAP measures that are used by management to evaluate performance of business segments. These measures used in this discussion and analysis do not have any standardized meaning under Canadian GAAP, although management believes that such measures are meaningful and helpful to understanding the Company’s affairs, operations and results. When used, these measures are defined in such terms as to allow the reconciliation to the closest Canadian GAAP measure. Numerical reconciliations are provided in Figures 5 and 6. It is unlikely that these measures could be compared to similar measures presented by other companies.

The Company’s reporting currency is the U.S. dollar, and its functional currency is the Canadian dollar.

Forward-looking statements

This MD&A includes “forward-looking statements” that involve risks and uncertainties. All statements other than statements of historical facts included in this MD&A, including statements regarding the prospects of the industry, and prospects, plans, financial position and business strategy of the Company, may constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Canadian securities legislation and regulations. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “plan”, “foresee”, “believe” or “continue” or the negatives of these terms or variations of them or similar terminology. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. Forward-looking statements do not take into account the effect that transactions or non-recurring or other special items announced or occurring after the statements are made have on the Company’s business. For example, they do not include the effect of dispositions, acquisitions, other business transactions, asset write-downs or other charges announced or occurring after forward-looking statements are made. Investors and others are cautioned that undue reliance should not be placed on any forward-looking statements.

For more information on the risks, uncertainties and assumptions that would cause the Company’s actual results to differ from current expectations, please also refer to the Company’s public filings available at www.sedar.com , www.sec.gov and www.quebecorworld.com . In particular, further details and descriptions of these and other factors are disclosed in the “Risks and uncertainties related to the Company’s business” section in the MD&A for the year ended December 31, 2006 and in the “Risk Factors” section of the Company’s Annual Information Form for the year ended December 31, 2006.

The forward-looking statements in this MD&A reflect the Company’s expectations as of November 7, 2007 and are subject to change after this date. The Company 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 by the applicable securities laws.

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1.      Overall performance and outlook for 2007

1.1     European operations

On November 7, 2007, Quebecor World announced a sale and merger of its European operations with Roto Smeets De Boer NV (“RSDB”). The new merged entity will be named Roto Smeets Quebecor (“RSQ”) and will be listed on Euronext Amsterdam. Under the terms of the merger agreement RSDB will remit to Quebecor World cash and securities valued at €240 million, subject to certain post closing adjustments. The consideration for Quebecor World will be comprised of 1.4 million shares in RSDB whereby Quebecor World will acquire a 29.9% stake in the combined business and €150 million in cash. The net cash proceeds of approximately €150 million will be used by Quebecor World to repay debt and to provide a 8-year note of €35 million to RSQ repayable from 2011 to 2015. The merger would create the largest independent European gravure and offset printing company. It is conditional on the approval of the shareholders of RSDB and receipt of clearance from the European Commission, with closing expected to take place by the end of 2007.

This merger is a key element of Quebecor World’s 5-Point Transformation Plan, and should be a significant benefit for shareholders by reducing debt, and repositioning its risk profile, while allowing Quebecor World to play a leading role in the consolidation of the European print industry. The new entity, RSQ, will have a great opportunity to consolidate the industry, reduce duplicate costs, capture scale synergies and leverage opportunities in the combined entity. The merger will improve Quebecor World’s financial position and provide additional financial flexibility. It will also enable Quebecor World to strategically reposition itself to focus on growing earnings within its core businesses in the Americas.

Quebecor World’s European operations currently include 18 printing and related facilities employing approximately 4,000 people in Austria, Belgium, Finland, France, Spain, Sweden and the United Kingdom. Quebecor World Europe (“QWE”) produces magazines, catalogs, retail inserts, direct mail products, books and directories for many of the world’s largest retailers, publishers and branded goods companies.

RSDB is a leading European provider of high-value graphic printing services based in Hilversum, the Netherlands with annual revenues of more than €500 million in 2006. RSDB’s principal business, Print Productions, produces full service gravure and offset printing material, with seven printing facilities in the Netherlands and one printing facility in Hungary, supported by sales offices in seven European countries. RSDB’s Marketing Communications business focuses on marketing communications solutions and customer management processes.

The merger is subject to the following conditions precedent: the approval of RSDB’s shareholders, and certain regulatory clearances (the “Conditions Precedent”). The transaction is not subject to the approval of Quebecor World’s shareholders. Parties have agreed to provide certain transitional services in the period until the end of 2008 in order to ensure the smooth transition of QWE and its business from Quebecor World to RSQ. In the event that the transaction is not completed as a result of a default by one party (other than as a result of a failure to satisfy the Conditions Precedent or under other limited circumstances), the defaulting party is obliged to pay the other party a break-up fee of €15 million.

The Supervisory Board of Roto Smeets Quebecor will be comprised of five directors. Two out of five members, including the vice-chairman’s role, of the Supervisory Board will be nominated by Quebecor World. Resolutions of the Supervisory Board are, in general, adopted by an absolute majority, however, certain predefined corporate decisions, such as decisions relating to mergers and acquisitions, the issuance of new shares and the change of the dividend policy, will require a four out of five majority vote for a period of four years from closing. While QWI and RSDB have agreed that the Management Board of Roto Smeets Quebecor will be led by current RSDB management, it is expected that QWE’s experienced senior management team will continue to run the operations in each European country in which it currently operates. The key members of QWE’s existing senior management team have indicated their support for the transaction and their continued involvement with the combined business. Their local expertise will be a valuable asset in the new merged company. This merger could result in an estimated loss on disposal of $70 million before cumulative translation adjustment impact. Following this transaction, the basis of accounting for the investment in RSQ will be the equity method.

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1.2     Third quarter 2007 at a glance

Quebecor World continues to build on the initiatives it launched in 2006 with regard to the Company’s Five-Point Transformation Plan. The following was achieved in the third quarter of 2007:

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 is offering a multi-channel solution to marketers and retailers. This integrated solution combines the multiple forms of media across Quebecor World, to support customers as they advertise, improve prospecting, 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 $300 million in new and higher margin sales, annual run-rate by year end 2008 from this initiative.

An important aspect of Quebecor World’s customer value initiative is ensuring customers receive a quality product delivered on-time, every time. In the quarter, the Company’s focus on quality was recognized by the award of 27 Gold Ink Awards, including 4 gold, 2 silver and 21 pewter awards in the 2007 Gold Ink competition. Now in its 20th year, the Gold Ink Awards recognizes excellence in print reproduction and is considered one of the most prestigious and challenging production competitions in the printing industry. In all, 13 Quebecor World facilities were honoured this year demonstrating that Quebecor World’s coast-to-coast North American platform provides customers with a unique capability to fulfill their publishing, marketing and advertising needs.

People: Quebecor World’s People initiative is focused on building high performance teams. During the third quarter of 2007, the Company continued to make progress in training and organizational development. In addition, the Company added two new members to its leadership team. Mr. Hughes Bakewell joined as President of the Direct Marketing Business to support the growth of this attractive business by providing innovative targeted marketing and advertising solutions to Quebecor World’s customers. Mr. Ben Schwartz was appointed as Senior Vice President People and Leadership to provide his expertise in building high performance teams and help people develop to the best of their abilities. The Company also continues to make progress in making its plants a safer place to work; with 10% fewer lost time accidents in its North American platform in the third quarter .

Execution: The Company’s continuous improvement program realized great progress in the quarter, and increased its momentum across the North American platform. A total of 153 individuals have been trained in the Six Sigma/Lean Manufacturing continuous improvement program. 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 trained Belts collaborate across their projects. Latin America will join their North American colleagues as they begin training in the Six Sigma/Lean Methodologies in November 2007. Based on these successes, the Company is on track to have projects already implemented or being implement with $100 million in annual improvements run-rate by year end 2008.

Retooling: Quebecor World’s three-year retooling initiative is 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 completed eleven press start-ups consisting of 2 new presses and 9 relocations, including four relocations during the month of October. New and relocated equipment was installed in the North American book, catalog, retail, direct mail and Canadian platforms. The Company is pleased that the retooling effort is now completed. As part of its ongoing operations to further enhance customer and shareholder value, Quebecor World continues to explore and evaluate opportunities to deploy the latest press and bindery technology to maximize value and efficiencies. This major retooling effort has taken the last three years to complete and management is confident that the Company will benefit from this retooled network in the future.

Balance sheet: Quebecor World is committed to strengthening its balance sheet in a responsible manner. A key milestone to improve the Balance Sheet is the sale and merger of its European operations as discussed above. In addition, during the quarter, Quebecor World announced a full repurchase of its 8.42%, 8.52%, 8.54% and 8.69% Private Notes. Also, the Company successfully amended the terms of its revolving credit facility and agreed to a $750 million commitment limit which will be reduced to $500 million by July 1, 2008. Also in the quarter, Quebecor World completed a sale-leaseback transaction for net proceeds of $14.5 million. These transactions are further discussed in the “Liquidity and capital resources – Financing activities” section.

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Overall, Quebecor World’s operating income was lower in the third quarter and year-to-date 2007 when compared to the same period in 2006. A significant portion of the shortfall was attributable to the Company’s European segment which faced challenging market conditions including excess capacity that is having an ongoing negative impact on prices. The Company’s operations in 2007 were also negatively impacted by the depreciation of the U.S. dollar against most major currencies. However, the recently retooled Magazine and Book Groups in North America continued to show improved results year-over-year in 2007. The results for the first nine-months of 2007 incorporated specific charges that are non-recurring in nature, including a significant loss on the disposal of the Lille facility in France in the first quarter. These charges are discussed in the “Financial Review” section of this MD&A. Management believes that the successful implementation of the Company’s Five-Point Transformation Plan as well as the merger of its European operations will promote long-term earnings growth and create more value for Quebecor World’s customers, people and shareholders.

1.3     Outlook for remainder of 2007

The Company continues to experience a number of challenges and expects to continue to face difficult and highly competitive market conditions. In response, the Company is taking measures to implement over time its Five-Point Transformation Plan, described in the 2006 annual MD&A. The Company believes that it is making progress on all five points within the transformation plan, in order to deliver on its targeted benefits. These benefits are expected to be $100 million in reduced costs and higher efficiencies from the Execution initiative, and $300 million in new revenues from the Customer Value initiative, both targeted annual run rates to be achieved by the end of 2008.

1.4     Impairment of goodwill and long-lived assets

The Company completed its annual goodwill impairment testing in the third quarter of 2007. Taking into account financial information such as the sale and merger with RSDB (see “European Operations” section), management determined that the carrying value of goodwill for its European reporting unit was not recoverable and that the resulting impairment of such goodwill amounted to its entire carrying value of $166.0 million at September 30, 2007. Quebecor World also concluded that the goodwill for its North America and Latin America segments was fully recoverable.

Quebecor World also recorded a $128.0 million impairment charge on long-lived assets in North America and Europe principally applied to machinery and equipment. This charge was a result of impairment tests being triggered in North America, because of the retooling plan and the relocation of existing presses into fewer, but larger and more efficient facilities. As part of the Five-Point Transformation Plan, the Company is continuously seeking to re-evaluate the future efficiency of its retooled network and make the necessary adjustments to its strategic plans. In Europe, the impairment test was triggered as a result of the merger of Quebecor World Europe with RSDB.

The Company may be required to take additional goodwill impairment charges and additional write-downs on the value of its long-lived assets and, in such event, its financial results and operations could be affected. However, this would not have any negative impact on Company’s bank covenants.

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2.      Financial review

The Company assesses performance based on, among other measures, operating income and Adjusted EBIT (Figure 5). The following financial review focuses on continuing operations.

2.1     Third quarter review

The Company’s consolidated revenues for the third quarter of 2007 were $1.41 billion, a 8.5% decrease when compared to $1.55 billion for the same period in 2006. Excluding the impact of currency translation (Figure 2), revenues were $1.38 billion for the quarter, down 10.8% compared to 2006. The decrease in revenues resulted mostly from lower paper sales, but also from reduced volume mostly caused by plant closures and temporary restructuring dislocations as well as continued price pressures, as further discussed in the “Segment results” section. In the third quarter of 2007, Adjusted EBIT decreased to $43.2 million compared to $67.3 million in 2006. Adjusted EBIT margin was 3.1% for the third quarter, compared to 4.3% for the same period in 2006.

Paper sales, excluding the effect of currency translation, decreased by 18.2% for the third quarter of 2007, compared to the same period in 2006. The paper sales decrease is mostly explained by plant closures as well as more client supplied paper. Although the variance in paper sales has an impact on revenues, it has little impact on operating income because the cost is generally passed on to the customer. Most of the Company’s long-term contracts with its customers include price-adjustment clauses based on the cost of materials in order to minimize the effects of fluctuation in the price of paper.

Cost of sales for the third quarter of 2007 decreased by 9.6% to $1.17 billion compared to $1.30 billion for the corresponding period in 2006. The decrease, compared to 2006, is mostly explained by a decrease in sales volume

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and labour costs, both partly resulting from plant closures. Gross profit margin was 17.1% in the third quarter of 2007 compared to 16.2% in 2006. Excluding the negative impact of currency, gross profit margin increased to 17.3% in the third quarter of 2007. The improvement in Quebecor World’s gross profit margin principally reflects some of the anticipated productivity gains in business groups where the retooling and restructuring initiatives have been completed.

Selling, general and administrative expenses for the third quarter of 2007 were $112.2 million compared with $98.5 million in 2006. Excluding the unfavourable impact of currency translation of $3.2 million, selling, general and administrative expenses increased by 10.7% compared to the same period last year. The increase is due in part to investments in continuous improvement programs.

Securitization fees totalled $8.3 million for the third quarter of 2007, up from $8.1 million for the third quarter of 2006. The increase for the quarter was mainly due to higher interest rates underlying the program fees partially offset by lower usage of the program. Servicing revenues and expenses did not have a significant impact on the Company’s results.

Depreciation and amortization expenses were $77.2 million in the third quarter of 2007, compared with $76.4 million in 2006. Excluding the unfavourable impact of currency translation of $2.0 million, depreciation and amortization expenses decreased by 1.6% compared to the third quarter of 2006. The replacement and decommissioning of underperforming assets by investments in state-of-the-art printing technology mostly offset the decrease in depreciation and amortization expenses in the third quarter of 2007 caused by plant closures, and sale and leaseback agreements on land and buildings and equipment.

Loss on business disposals was $1.7 million in the third quarter of 2007 and was related to the disposal of an offset facility used in commercial printing in Nantes, France.

During the third quarter of 2007, the Company recorded impairment of assets, restructuring and other charges (“IAROC”) of $132.7 million, compared to $11.6 million last year. The charge for the quarter was related to the impairment of long-lived assets in Europe and in North America. These measures are described in the “Impairment of assets and restructuring initiatives” section.

Quebecor World completed its annual goodwill impairment test in the third quarter of 2007. As a result, management concluded that, taking into account financial information such as the sale and merger of its European operations, the entire carrying amount of goodwill for the European reporting unit was not recoverable and as such, a pre-tax impairment charge of $166.0 million was taken at the end of the third quarter. See the “European Operations” and “Impairment of goodwill and long-lived assets” sections for additional information.

Financial expenses were $106.5 million in the third quarter of 2007, compared to $33.7 million in 2006. The variance of $72.8 million was mainly explained by a one time prepayment premium of $53.1 million for the early redemption of the Company’s outstanding 8.42% Senior Notes, Series A, due July 15, 2010, 8.52% Senior Notes, Series B, due July 15, 2012, 8.54% Senior Notes, Series C, due September 15, 2015 and 8.69% Senior Notes, Series D, due September 15, 2020. The increase was also caused by higher interest rates, a higher average level of debt as well as by the depreciation of the U.S. currency against the other major currencies.

Income tax recovery was $49.8 million in the third quarter of 2007, compared to a charge of $2.7 million in 2006. Income tax recovery before IAROC and goodwill impairment charge was $23.1 million in the third quarter of 2007, compared to a charge of $4.0 million for the same period last year. The income tax recovery, in the third quarter of 2007, was mostly due to impairment of assets and restructuring charges in North America (recovery of $19.6 million), the impairment of goodwill in Europe (recovery of $6.8 million) as well as higher financial expenses as discussed above.

For the third quarter ended September 30, 2007, the Company reported a loss per share of $2.42 compared to earnings per share of $0.09 in 2006. These results incorporated IAROC and goodwill impairment charge, net of income taxes, of $272.0 million or $2.06 per share compared with $10.3 million or $0.08 per share in 2006. Excluding these charges, adjusted diluted loss per share was $0.36 in the third quarter of 2007 compared to adjusted diluted earnings per share of $0.17 for the same period in 2006.

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2.2     Year-to-date review

On a year-to-date basis, the Company’s consolidated revenues were $4.17 billion, a 6.7% decrease when compared to $4.47 billion for the same period in 2006. Excluding the impact of currency translation (Figure 2), revenues were $4.09 billion for the nine months of 2007, down 8.5% compared to 2006. The decrease in revenues resulted from lower paper sales as well as reduced volume mostly caused by temporary restructuring dislocations and plant closures as well as continued price pressures as further discussed in the “Segment results” section. On a year-to-date basis, adjusted EBIT decreased to $88.3 million compared to $167.3 million in 2006. Adjusted EBIT margin was 2.1% for the nine months of 2007, compared to 3.7% for the same period in 2006. These results were impacted by significant non-recurring specific charges that are discussed below.

Paper sales, excluding the effect of currency translation, decreased by 15.6% on a year-to-date basis, compared to the same period in 2006. The explanation provided in the “Third Quarter Review” section above, outlining the causes behind the decrease, also applies for the year-to-date variation.

On a year-to-date basis, cost of sales decreased by 7.1% to $3.49 billion compared to $3.76 billion for the corresponding period in 2006. The decrease, compared to 2006, is explained mostly by decreases in sales volume, impacting all variable costs, but more significantly labour costs. Decreases in variable costs and sales volume are both partly resulting from plant closures. Gross profit margin increased to 16.3% for the nine months of 2007 compared to 15.9% in 2006. Excluding the negative impact of currency, gross profit margin increased to 16.4% on a year-to-date basis. The improvement in Quebecor World’s gross profit margin principally reflects some of the anticipated productivity gains in business groups where the retooling and restructuring initiatives have been completed.

Selling, general and administrative expenses were $329.1 million on a year-to-date basis compared with $293.4 million in 2006. Excluding the unfavourable impact of currency translation of $6.6 million, selling, general and administrative expenses increased by 9.9% compared to the same period last year. The increase is due in part to investments in continuous improvement programs as well as charges related to strategic initiatives and changes in the timing of accruals for compensation charges in 2007 compared to 2006.

Securitization fees totalled $21.6 million on a year-to-date basis, down from $22.6 million for the same period in 2006. The decrease for the period was mainly due to lower usage of the program partially offset by higher interest rates underlying the program fees. Servicing revenues and expenses did not have a significant impact on the Company’s results.

Depreciation and amortization expenses were $226.9 million for the first nine months of 2007, compared with $223.4 million in 2006. Excluding the unfavourable impact of currency translation of $4.5 million, depreciation and amortization expenses were fairly flat compared to last year. The replacement and decommissioning of underperforming assets by investments in state-of-the-art printing technology has mostly offset the decrease in depreciation and amortization expenses caused by plant closures, and sale and leaseback agreements on land and buildings and equipment.

Loss on business disposals was $12.7 million on a year-to-date basis and was related to the disposal of the Lille and Nantes facilities in France respectively during the first and the third quarter of 2007. The loss of $2.2 million in 2006 was mainly attributable to the disposal of a facility in North America.

During the first nine months of 2007, the Company recorded IAROC of $198.2 million, compared to $65.1 million last year. On a year-to-date basis, the charge was mainly related to the impairment of long-lived assets in Europe and North America and to the closure and consolidation of facilities in North America as well as workforce reductions. Finally, the Company recorded pension settlement charges related to prior year initiatives. These measures are described in the “Impairment of assets and restructuring initiatives” section.

Quebecor World completed its annual goodwill impairment test in the third quarter of 2007. As a result, management concluded that, taking into account financial information such as the sale and merger of its European operations, the entire carrying amount of goodwill for the European reporting unit was not recoverable and as such, a pre-tax impairment charge of $166.0 million was taken at the end of the third quarter. See the “European Operations” and “Impairment of goodwill and long-lived assets” sections for additional information.

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On a year-to-date basis, financial expenses were $182.3 million, compared to $94.8 million in 2006. The variance of $87.5 million is partly explained by a one time prepayment premium of $53.1 million, in the third quarter, for the early redemption of the Company’s outstanding 8.42% Senior Notes, Series A, due July 15, 2010, 8.52% Senior Notes, Series B, due July 15, 2012, 8.54% Senior Notes, Series C, due September 15, 2015 and 8.69% Senior Notes, Series D, due September 15, 2020. The variance is also explained by a lower amount of interest capitalized to the cost of equipment due to the finalization of Quebecor World’s retooling plan as well as the premium paid and loss incurred on the redemption of the Company’s 6.00% Convertible senior subordinated notes during the second quarter. In addition to those elements, the increase was also caused by higher interest rates, a higher average level of debt and the depreciation of the U.S. currency against the other major currencies.

Income tax recovery was $89.3 million on a year-to-date basis, compared to $12.0 million in 2006. Income tax recovery before IAROC and goodwill impairment charge was $46.4 million for the first nine months of 2007, compared to $1.2 million for the same period last year. The income tax recovery in the first three quarters of 2007 was mainly due to increased losses and the impairment of long-lived assets in North America.

The effective tax rate for the first nine months of 2007 was 19.2% compared to a statutory rate of 33.1%. The decrease of 13.9% was mainly explained by a valuation allowance on tax losses in Canada and Europe as well as the goodwill impairment charge in Europe that is mostly non-deductible.

On a year-to-date basis, the Company reported a loss per share of $2.96 compared to $0.06 in 2006. These results incorporate IAROC and goodwill impairment charge, net of income taxes, of $321.3 million or $2.43 per share compared with $54.3 million or $0.42 per share in 2006. Excluding these charges, adjusted diluted loss per share was $0.53 for the first nine months of 2007 compared with adjusted diluted earnings per share of $0.36 in the same period of 2006.

2.3     Quarterly trends

Adjusted EBITDA trend

Adjusted EBITDA for the first nine months of 2007 was, overall, lower than last year due to price pressures, volume declines and inefficiencies resulting from previous periods restructuring activities. These more than offset the year-over-year improvements, achieved in the first nine months of 2007, resulting from the retooling initiatives and restructuring process.

Overall performance for the previous eight quarters was also affected by operational inefficiencies mainly in plants involved in the installation of new equipment or press closures as well as those due to plant closures. In all four quarters of 2006, the Company continued to face difficult market conditions, resulting in price erosion worldwide and decreased volume in certain of the Company’s markets. The retooling benefits, as well as growth in new value added services such as in Premedia and Logistics, as well as the Company’s Five-Point Transformation Plan are intended to help reverse this negative trend.

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Seasonal impact

Revenues generated by the Company are seasonal with a greater part of volume being realized in the second half of the fiscal year, primarily due to the higher number of magazine pages, new product launches, back-to-school ads, marketing by retailers, increased catalog activity, and holiday promotions. Therefore, an analysis of the consecutive quarters is not a true measurement of the revenue trend (Figure 3).

IAROC impact

Significant IAROC have resulted from the Company’s focus on cost reduction and retooling activities undertaken during the previous years that involved a reduction in workforce, closure or downsizing of facilities, decommissioning of under-performing assets, lowering of overhead expenses, consolidating corporate functions and relocating sales and administrative offices into plants. This determined focus on cost containment has reduced the Company’s long-term cost structure and is expected to improve efficiency across the platform. For the nine-month period ended September 30, 2007, the Company recorded IAROC of $198.2 million relating to its European and North American platforms. Of that amount, $155.8 million was related to an impairment charge of long-lived assets for European and North American facilities, $37.6 million related to restructuring charges incurred in the first nine months of 2007 for the closure of North American facilities and the continuation of prior year initiatives, and $4.8 million related to pension settlements in North American facilities.

Goodwill impairment charge impact

Throughout 2005, the European reporting unit suffered from poor market conditions, namely continued price erosion and decreased volumes, as well as several production inefficiencies and the loss of an important client in the United Kingdom. As a result, the Company concluded that the carrying amount of goodwill for the European reporting unit was not fully recoverable and a pre-tax impairment charge of $243.0 million was taken at December 31, 2005. Since then, the European reporting unit continued to be severely impacted by the same poor market conditions. Quebecor World completed its annual goodwill impairment test in the third quarter of 2007, taking into account financial information such as the sale and merger of its European operations. Consequently, management determined that the entire carrying amount of goodwill for the European reporting unit was not recoverable and a pre-tax impairment charge of $166.0 million was taken at the end of the third quarter of 2007.

General market conditions impact

The Company’s performance for the last eight quarters was primarily affected by the difficult market environment, which more than offset some of the benefits from Quebecor World’s restructuring process and the decreased costs from other initiatives mentioned above. Competition in the industry remains intense as the industry is still in the process of consolidation, evidenced by several recent mergers. The publishing market is largely constant in volumes, while the primary demand for printed marketing materials is stable with low growth. The Company is focusing on adding customer value and improving productivity through continuous improvement projects and the recent deployment of next generation technology, in order to create an operating network capable of being highly competitive in this market.

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2.4     Segment results

The following is a review of activities by segment which, except as otherwise indicated, focuses only on continuing operations.

(1) Including both continuing and discontinued operations

North America

The North American segment is comprised of the following business groups: Magazine, Retail, Catalog, Book & Directory, Direct, Canada, Logistics, Premedia and other value added services. North American revenues for the third quarter of 2007 were $1,098.4 million, down 11.5% from $1,241.1 million in 2006 and $3,224.9 million for the nine-month period, down 8.8% from $3,537.6 million for the same period in 2006. Excluding the effect of currency translation and the unfavourable impact of paper sales, revenues decreased by 5.5% in the third quarter and 3.4% on a year-to-date basis compared to the same periods last year. Revenues in the North American segment continued to be impacted by negative price pressures. Volume decreased during the third quarter and the nine first months of 2007, mainly due to restructuring initiatives in the Catalog, Magazine, Book and Canada groups. Additional volume contracted with Yellow Book positively impacted the Directory group since the beginning of the second quarter of 2007. Finally, due to a very strong Canadian dollar, the Canada group continued to be affected by less favourable foreign exchange contracts on sales to its U.S. customers.

Operating income and margin in North America decreased in the third quarter and on a year-to-date basis compared to 2006. Operating income in North America was impacted by the highly competitive market conditions as well as 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 over the nine-month period ended on September 30, 2007. In addition, the Book and Direct groups benefited from the impact of favourable product mix with higher value added work and services.

In the third quarter of 2007, the Company completed the start-up of two Timson book presses in its Buffalo, NY facility (Book & Directory group). Quebecor World also completed the U.S. Catalog retooling plan in July with the installation of a Rotoman 64 page press in its Jonesboro, AR facility (Catalog & Retail group). Although management is considering additional investments in Quebecor World’s North American platform, the Company finalized its major North American retooling plan, as expected, before the 2007 busy season.

The North American workforce was reduced year-over-year by 1,007 employees, or 4.4%, mostly as a result of the restructuring initiatives completed thus far.

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Europe

The European segment operates mainly in the Magazine, Retail, Catalog and Book markets. European revenues for the third quarter of 2007 were $242.5 million, down 0.6% from $244.1 million in 2006 and $744.6 million for the nine-month period, down 1.8% from $758.1 million for the same period in 2006. Excluding the impact of currency translation and paper sales, revenues were down 6.3% and 6.5% respectively for the third quarter and the year-to-date compared to the same periods in 2006. Overall, 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 however partly offset by increases in facilities re-equipped with new presses in Austria, Spain and Belgium, with Belgian volume almost up 45% from last year during the nine-month period of 2007.

On a year-to-date basis, the operating income and margin for the European segment decreased compared to the same period in 2006, but increased in Finland and Sweden. The increased volume in Belgium and Spain did not translate into increased operating income as their positive effects were offset by press start up inefficiencies and a negative work mix in the nine-month period of 2007. The trend in this segment’s operating income and margin reflects lower demand, price pressures, temporary inefficiencies experienced with the installation of new presses and transfer of volumes between plants. Year-over-year, the European workforce was reduced by 8.0% or 318 employees.

Latin America

Latin America operates mainly in the Book, Directory, Magazine, Catalog and Retail markets. Latin America’s revenues for the third quarter of 2007 were $75.0 million, up 22.5% from $61.2 million in 2006 and $202.3 million, on a year-to-date basis, up 18.6% from $170.5 million for the same period 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 and the first nine months, were the result of a 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 favourable pricing on the bibles during the quarter. Overall, in addition to cost reductions, these factors contributed to the growth in operating income during the third quarter of 2007 compared to last year.

2.5   Impairment of assets and restructuring initiatives

Quebecor World has undertaken various restructuring initiatives to increase the efficiency of the pressroom and the return on capital employed by its facilities. Restructuring costs are mostly the result of plant closures and workforce reductions resulting from current and prior years’ initiatives. A description of these initiatives is provided in Note 3 to the Consolidated Financial Statements for the period ended September 30, 2007.

The 2007 restructuring initiatives affected a total of 892 employees, of which 832 positions have been eliminated as of September 30, 2007. The remaining 60 positions will be eliminated in the near future. However, the Company estimates that 387 new jobs should be created in other facilities with respect to the 2007 initiatives. The execution of prior years’ initiatives resulted in the elimination of 773 jobs for the first nine months of 2007 and 209 are still to come.

As at September 30, 2007, the balance of the restructuring reserve was $21.9 million. The total cash disbursement related to this reserve is expected to be $14.4 million for the remainder of 2007. Finally, the Company expects to record a charge of $13.9 million in upcoming quarters for the restructuring initiatives that have already been announced at September 30, 2007.

The Company also recorded an impairment charge on long-lived assets of $128.0 million in the third quarter of 2007 for a total of $155.8 million after nine months in 2007.

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Reconciliation of non-GAAP measures

($ millions, except per share data)