I’ll start with a brief look back.

In February 2009, when I stood before you at the end of my first year as president and chief executive officer, we were in the middle of the worst recession Transcontinental had ever experienced. I promised you then that we would come out of it stronger than ever, even if we were forced to make difficult decisions.

And that is what happened. After the first two quarters of 2009, we got back on track with our growth, improving our performance each of the subsequent quarters, and our momentum has continued ever since.

Last year, I also ended my speech to you by saying: “Transcontinental is now a more agile organization, more focused than ever on its strategic assets and priorities. We are in an enviable position for the future.”

Today, I am proud, on behalf of our some 10,500 employees, to tell you that fiscal 2010 was the best operating performance in our history. Once again, we responded appropriately to change and to the transformations in the economy and in our industry.  

Two aspects of the past year are particularly promising: we have now had six quarters in a row of improvement in our operating income before unusual items; and we are now reporting organic growth in profits and consolidated revenues.

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What is driving this superior performance? I see it as being based on three main factors.

First, our culture of efficiency, which means that we continually adjust our offer to the demand, in each of our niches. This culture is also based on the ability of our employees to optimize the potential of our technological infrastructure and adapt it to the specific needs of each customer.

Second, we have gained many customers and market share in a number of strategic niches thanks as a result of investing about 700 million dollars over the past three years.

The third factor is the close to 35% increase in digital revenues from our Media Sector, as well as the growing success of our interactive products and services for our major clients. These services now account for close to 10% of our sales and are in high demand by our customers.

I would also add our twofold strategy of Build the New and Strengthen the Core. This strategy is supported by disciplined financial management, by a strong financial foundation that allows to continually invest in our development and, above all, by the quality of our people. The best strategy will go nowhere if we do not have the people to carry it out. Here I would like to pay a well-deserved tribute to all our employees and thank them for their dedication to Transcontinental and their remarkable performance in 2010.

All these elements are part and parcel of the business model that has resulted in our success, and that of our customers, for the past 35 years.

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Our performance last year was all the more remarkable in that it was achieved in a fragile economic recovery, and took place while we were actively transforming our organization to ensure we remain in the forefront.

I will now update you on our ongoing transformation, which is not always visible from the outside, and illustrate it with some concrete examples.

Concrete Examples

The key event of 2010 was definitely in October when we started printing the new Globe and Mail under an 18-year contract. This contract will bring in total revenues of 1.7 billion dollars, with an additional 25 million dollars in new business every year.

To maintain its leading position with its readers and advertisers, The Globe and Mail told us they needed two additional graphical capabilities: they wanted to be able to use colour on every page and to print on glossy paper. But how could we meet these requirements and ensure the investment was a profitable one?

Our people came up with an innovative solution: the establishment of a network of new hybrid presses that could print newspapers and flyers all across Canada. Management at
The Globe and Mail get exactly what they need and our retail customers now have access to new state-of-the-art printing capabilities.

The resulting synergies, as well as the increase in market share in these two strategic niches, will make it possible for Transcontinental to quickly produce a return on this investment. Note that since 2007, the Corporation has invested some 700 million dollars in three special projects which are now all operational: we built our plant to print the San Francisco Chronicle in Fremont, California, we modernized the Transmag printing plant in Montreal and we set up the Canada-wide network of plants to print The Globe and Mail.

These investments are now behind us and they have placed us in a unique position. Their positive impact will be felt for years to come.

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Our closeness with our customers and our new approach based on developing a customer-specific offering has led to the development of new niches.

In that respect, I’m very happy to announce this morning a ground-breaking agreement with one of our long-standing customers, Canadian Tire. Our new approach based on a custom offering has won us a new four-year agreement worth several hundred million dollars that will start in January 2012.

This contract makes Transcontinental the primary supplier of marketing solutions for Canadian Tire across Canada, doubling the number of services we provide this client. Canadian Tire, which already uses our design and printing services for some of its marketing programs and for flyer distribution, has now awarded us a nation-wide printing contract for all of its brands.

Canadian Tire will also be able to draw on Transcontinental’s other services, such as data analytics, Canada-wide distribution, e-flyer production, direct marketing programs via print, mobile and email channels, and advertising campaigns in Transcontinental’s consumer magazines, newspapers and media websites.

Having started with our traditional services of premedia, printing and distribution, we now provide Canadian Tire with new marketing services that are adapted to its communication needs, including six that use the new digital platforms. This agreement marks the shift toward other similar agreements in the months ahead.

To make it easier to integrate these new services into the products and services we offer, we renamed our sector which specializes in digital marketing communications solution. It is now called Transcontinental Interactive. 

We also ramped up the integration of the companies acquired in recent years and made strategic investments in our digital products and services, in both the Interactive Sector and the Media Sector.

Our interactive and web-based services generated 183 million dollars in sales in 2010, which makes us one of the industry leaders in this group in Canada.

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Transcontinental thus will continue to grow and to help its customers meet their new needs, at a pace they are comfortable with.

This was the context for two acquisitions made in 2010 to meet the demand for mobile solutions from our customers. We acquired LIPSO, a leading Canadian provider of integrated mobile solutions in Montreal, and Vortex Mobile, a Toronto-based provider of marketing solutions aimed at building meaningful consumer relationships.

Transcontinental now has a comprehensive set of mobile solutions and has captured a significant share of the emerging industry for advertising on mobile devices. Our offer adds a strategic component to organizations who want to facilitate their communications or transactions with their consumers on mobile platforms.

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Transcontinental is also the largest publisher of consumer magazines in Canada. Every month, our some 30 titles attract over 11 million readers, most of them women.

In 2010, these magazines continued to upgrade their content and their graphic design to make them even more relevant and appealing to the major communities of interest they serve both on paper and on the web.

We were also active on the digital front, with sales up almost 35% again this year. Towards the end of fiscal 2010 we launched a digital representation house which will help us continue this momentum in 2011. This representation house which is partnering with some of the largest publishers of online content in North America, will make it possible for our advertisers to reach more potential customers.

Furthermore, over the past several years we have pushed ahead with our efforts to develop multi-platform solutions for advertisers. We are also producing an increasing number of custom campaigns that draw on our print media, digital media and data management assets. We are designing marketing and advertising programs that effectively reach the customers of our advertising clients – whether they read our newspapers or magazines, visit our websites, get information through our mobile apps or attend our promotional events.

The Transcontinental Media sector is also the leading publisher of business publications in Quebec. Our products, whether in print, on the Web or on mobile, are much appreciated by the business community. In the past year we have made a number of improvements, which included the complete redesign of the magazine A+, the launch of the bookzine Premium, and, today, the launch of a new look for the Les affaires newspaper. Which you will be able to see at the end of the meeting, as copies will be handed to you.

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Finally, a few words about an important area of growth for Transcontinental:  local communities.

Our 175 daily and weekly newspapers form the historical basis of our community presence in six Canadian provinces. In 2010, we added six community papers to our portfolio in Quebec.

Also, in 2010, we revamped the pre-shopping site publisac.ca, and launched dealstreet.ca for the English-speaking community. These websites give consumers an overview of promotions and discounts on thousands of products.

Furthermore, weblocal.ca, our online search site for finding and rating local businesses, launched the first online reputation management tool for its advertisers. In the next few days, weblocal.ca will also be launching two new services: website design for small and medium businesses, and the purchase of key words, which gives a business visibility in sponsored links on the biggest search engines, including a partnership with Google.

Lastly, sales and profits from our Publisac distribution network continued to risein a highly competitive environment and it will soon launch the websites TheMegacatch.com and LaMegaPrise.com. This new web-based solution is a response to merchants’ and consumers’ growing interest in group buying.

We are confident that these new services will consolidate our position as a preferred partner for local businesses.

Conclusion

To conclude, we have an effective strategy and a special relationship with our customers. Also, our already enviable financial situation will continue to improve under the dual impact of our higher operating income and the reduction of capital expenditures in the Printing Sector.

The fast-paced change in the marketing needs of our customers, whether businesses or advertisers, will lead us to continually find new ideas, new strategies and original solutions.

In short, more than ever, it is our people, with their creative energies and ingenuity, who will make the difference!

At Transcontinental, that’s our strength: our employees. That is why I have so much confidence in the future and in our ability to change with our customers by improving our existing products and creating the products of tomorrow.

Thank you for listening. I will now hand the mike over to our Vice President and Chief Financial Officer, Benoît Huard.