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Dear guests and friends,
The annual shareholders’ meeting
is a special opportunity for me to take stock of Transcontinental’s
current situation and outlook. This is especially
true with the advent of Internet viewing and archiving,
which make it possible to reach a wider audience both
inside and outside the company. Speaking of which,
I’d like to welcome all the Net viewers who
have just joined us.
As executive chairman of the board,
I still participate in the major strategic decisions
that affect the direction of the company and I keep
a close eye on its performance. But Transcontinental’s
day-to-day success has been in the hands of Luc Desjardins
and his management team for the past three years now
and I have total confidence in them. At Transcontinental,
we ask our officers to be leaders, to share the company’s
vision with their teams, to promote innovation and
change, and to motivate and coach their people. Our
company is in good hands.
My position of being closely involved
in the major issues facing Transcontinental yet being
at a distance from its daily operations gives me a
unique and stimulating perspective. Plus I have time
to read more about our industry, to meet with people
from different backgrounds and to travel. In February
last year, for instance, I toured about 10 printing
plants in China.
I’d like to share with you a
few of my thoughts about the future of our company
and the communications industry.
•••
The past two fiscal years have been
more difficult for Transcontinental, which is also
true for the North American communications industry
as a whole. That’s a fact. But does that mean
that we should, as some observers have done, talk
about a “crisis” in our industry, particularly
for daily newspapers and printing in general? I think
not. I see these difficulties simply as a continuation
of the fast-paced change of the last decade. I believe
that in the end there will be winners and losers and
that Transcontinental will be one of the winners.
Over the past 10 years alone:
- Our industry has gone through a profound consolidation
that has resulted in mega-corporations, a phenomenon
that has also touched our customers.
- The penetration of the Internet and digital technology
in general has accelerated.
- Young consumers have developed new habits and
new values.
- The Canadian dollar versus its U.S. counterpart
has risen from 62 cents U.S. to as high as 90 cents
U.S.
- We have seen the rise of what are being called
“emerging economies,” particularly China.
- And I’ll stop there.
These phenomena have had an impact
on most industries. At Transcontinental, they affect
our operations to different degrees. Our performance
during this period of profound change is reassuring
for the future.
Let’s talk facts. Over the past
10 years, our revenues and workforce have more than
doubled. We’ve expanded our operations throughout
North America. We’ve become a major player in
the U.S. direct marketing industry, a fast-growing
segment, and will become a major player in newspaper
printing thanks to our unique outsourcing model. And
along the way, Transcontinental has become the sixth-largest
printer in North America and the biggest in Canada,
as well as the fourth-largest print media group in
the country.
In other words, we have kept our focus
on growth during a period of major change. What is
more, the return on our shareholders’ investment
has usually been above the industry average, year
in and year out.
In business, nothing is ever guaranteed
in advance and nothing will ever be easy. But the
real test of a company’s value is whether it
can consistently deliver over time. We have shown
that we can be successful during, with and through
change. And I’m convinced that not only do we
have the people we need to keep moving forward, but
that we also have the right vision, business plan
and company culture.
That’s what I’d like to
talk about for the next few minutes.
•••
Let’s look at our development
strategy, which is based on niches. Niches in printing,
marketing, and content creation and dissemination.
We have about a dozen niches in our portfolio of activities
and in Canada we are top in most of them. At the international
level, our expansion is targeted both geographically
and in terms of products and services. The United
States is our priority market, particularly in the
two niches that offer strong growth potential: direct
marketing and, thanks to the way we organize our work,
newspaper printing.
In Canada, our approach is to offer
our customers a broad range of products and services.
On the other hand, the products we export to the U.S.
are highly targeted based on our competitive edge.
In book printing, for instance, we specialize in short
runs with very tight production deadlines. We strive
to be the best and the most advanced in each of our
niches.
•••
Another reason for our success is our
closeness to our customers, whether they’re
companies, advertisers or consumers. That means that
we are continually attuned to new trends. Let me give
you a few examples.
- We were the first in flyer printing, which became
the primary tool of our retail customers.
- We developed the Publi-Sac to differentiate ourselves
from other printers and to professionalize the distribution
of door-to-door advertising material. It’s
still a unique advertising vehicle in Canada.
- Through our purchase of Les Affaires newspaper
in 1979, we pioneered business journalism in Quebec.
I was certain that the Quebec business community
was ready for a business and financial publication
written by and for Quebecers. We developed this
product and made it the business paper for Quebecers.
- We launched magazines for senior citizens because
we knew that the population was aging and would
give us a solid base for such publications.
- We were the first in Canada to publish a free
daily paper, Métro, aimed at meeting
the need readers of all ages have for quick information.
- In 2003, we started printing the daily paper
La Presse in an ultramodern plant built specifically
for that purpose so that we could handle outsourced
newspaper printing, another irreversible trend.
We were already doing it for The Globe and Mail.
I’ll leave it at that. With every
one of these initiatives, people said that we were
reckless. But we were actually simply paying attention
to developing trends. Transcontinental has maintained
that spirit of innovation and boldness that will continue
to be the basis of our success.
Our Evolution 2010 business
project identified three major market trends: digital
technology, personalization and companies reducing
the number of suppliers they use. These will be our
primary areas for development in the years ahead.
The new digital media are radically
changing the way we work, get information, consume
and entertain ourselves. In our role as a magazine
and newspaper publisher, we are already putting new
content on the Internet. We are also planning digital
added-value, both on a content and transactional basis.
In printing, our premedia services are making us a
leader in this area and we’ll keep integrating
digital technology into printing and postpress services.
Personalization is like second nature
for Transcontinental because our publications are
targeted geographically or by community of interest
and the distribution of Publi-Sac is based on socio-demographic
data. So it’s completely natural that we have
become one of the biggest players in the U.S. direct
marketing industry. We will be developing our North
American platform even more in the future.
Digital technologies and personalization
are two sides of the same coin: the expansion of individualized
marketing and interactivity. We’re already doing
it and we’ll be doing more of it.
Another irreversible trend is that
companies are reducing the number of suppliers they
deal with and want to concentrate on their core business.
So they’re looking for complementary competencies
through alliances or outsourcing. For example: some
customers outsource their premedia activities to us,
thereby integrating us into their value chain, while
we’re able to offer others custom publishing
services.
Our business culture and credibility
make partnerships a natural extension of our business
relationships. In addition to meeting the needs of
clients, our ability to create partnerships also gives
us the opportunity to associate with other companies
to develop new products and enhance our growth.
Thus, in 2006, we added several prestigious
names to the list of North American corporations we
have close relationships with. These included the
A&P food-store chain; U.S. publisher Meredith
Corporation; the market-leading men’s lifestyle
website AskMen.com; and Bell Canada, through Sympatico.MSN.ca.
Lastly, by becoming the printer of the San Francisco
Chronicle in 2009, we are laying the basis for
a partnership with a real icon in the global communications
industry, the Hearst Corporation.
Plus, the concept of partnership also
extends to relations with our other stakeholders:
our shareholders, suppliers, the geographic communities
we operate in and, of course, our employees.
Transcontinental will continue to evolve
and change in the years ahead. Consumer behaviours
and the needs of our customers will also be constantly
changing, as will the dynamics in our own industry.
But with our business culture and business plan, we
will keep coming out ahead, as winners.
•••
I’d like to add a word about
our social responsibility as a corporation. Social
responsibility involves the quality of our labour
relations, the health and well-being of our employees,
our donations and sponsorships, our community involvement,
respect for the environment and corporate governance.
I’ve often told you that I’m proud that
Transcontinental is recognized as a Canadian leader
in this area and we intend to continue to distinguish
ourselves in this area in the future.
•••
In closing, I’d like to thank
the members of the Board for their unfailing support.
I’d like to particularly thank Pierre Brunet,
who is leaving us after more than 22 years of loyal
service. During all those years we benefited greatly
from his knowledge of the financial community and
the high regard he enjoyed in Canadian business.
Thank you for your attention. I’ll
now pass the microphone over to Luc
Desjardins.
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