Thank you Rémi and welcome everyone.

Speech Webcast

This year’s annual meeting has a special meaning for me, because it was on this day a year ago that I officially became the president and chief executive officer of Transcontinental.

Believe me, it’s been a busy year!

First of all, I want to tell you that I’m very proud of our financial results for 2008. Excluding unusual items, most of our financial indicators are up, and in some cases by a considerable amount. Once again we have proven our ability to stay focused on growth in tough economic times and for this I want to thank all of our people throughout the Corporation.

At the same time, we have continued to judiciously invest in our network of printing plants, brand development and the deployment of our content on our digital platforms. We have also made several acquisitions in our new services in Canada and the United States. Transcontinental will start benefiting from these investments in 2009.

RECESSION

This year, in contrast to the past, I will talk about the short term first, and that is because we are experiencing a particularly difficult context. Rémi spoke about it a few minutes ago: our economy is in recession and it is sliding deeper into it every day.

As shareholders, you are entitled to ask us: “What steps have you taken to deal with the situation? What do you plan to start doing right now? Will we get through this?”

I can tell you without hesitation: Yes, we will make it through the recession, and we will be the stronger for it! But it has forced us to make difficult decisions, and more will be demanded of us in the future.

Proactive and mobilized

One of the key features of Transcontinental is our responsible and disciplined management. We did not wait for the storm to hit before we reacted, and we have taken action in our own way, which is by mobilizing our people.

In terms of our production activities, we have conducted a rigorous capacity evaluation so that we can match costs to demand. Our capital investments, except for those planned for outsourced newspaper printing, have been substantially reduced. We are focusing on the initiatives that are absolutely necessary or strategic, and that offer a quick recovery of our investment.

In terms of administrative functions, we have questioned each budget line item and each new project.  We have instituted a hiring freeze. For their part, the Corporation’s senior managers have decided to take two weeks of unpaid leave, but to work throughout that period.

At this point in time, I estimate our annualized cost-cutting measures will total about $75 million on an annualized basis, including $50 million in 2009. Naturally, from that we must deduct the cost of closures and severance packages.

Sadly, some 1500 jobs have been eliminated. The job cuts particularly affect our direct mail activities in the United States, but the impact is being felt in our operations all across North America. It is a tough situation for everyone affected, but we must act in the best interests of our employees as a whole. Our Human Resources policies for layoffs are responsible and fair. I have also asked our managers to, now more than ever, show respect and empathy for the employees who are leaving us.

We are continuing to monitor the situation very closely. There have been and there will be further closures of publications and plants. Across the organization managers have started to implement a range of measures, such as instituting unpaid time off, cancelling internal events, cutting back on travel costs and reducing capacity even more. Our goal is to make it through the storm while keeping as many employees as possible, so that we are ready to move forward when the recession ends.

The movement thus comes from the base. My role is one of coordination. I want to pay tribute to our managers: they are entrepreneurs who can make tough decisions and get their people involved in the process.

Another asset: our financial discipline

Another important asset in this context is our disciplined financial management, which has given us a solid balance sheet as we start fiscal 2009. In an environment where access to credit is restricted and more costly, this gives us a critical advantage. We have started the process of renewing the financing arrangements that mature in 2009 and we will be able to keep making appropriate investments in our future growth.

We plan to maintain our prudent balance between profits, costs, debt and investments.

REINVENTING TRANSCONTINENTAL

That’s the picture for the short term. But as chief executive officer, my role is to maximize the long-term value of Transcontinental. Recession or not.

Keeping focused on the long term means rethinking and updating our business strategy to take into account technological, cultural and social change. As soon as I took on my duties, I asked our management teams this question: “How can we reposition our global offering to the marketplace so that we maximize our potential for growth?”

This exercise culminated at our annual meeting of senior managers, where our clients came and told us three things:

• We want more advertising personalization.
• We want to be able to deploy our advertising content on a broad range of platforms.
• We want to decrease the number of suppliers we deal with.

For the past several years we have been expanding our service offering to incorporate the Internet, new marketing services and new communication channels. We have decided to intensify this focus and, at the same time, continue to develop our core publishing and printing activities.

I’d like to thank Isabelle Marcoux and her team who piloted this new and crucial stage in our strategic planning process. I’d also like to thank Isabelle for each of the acquisitions that I will soon touch on, as she is also responsible for managing acquisitions.

Building the new

To “build the new” we have identified four priority areas of growth.

The first involves supporting the development of our marketing communication activities. To that end we have revamped our operating structure, setting up the new Marketing Communications sector.

This new sector is focused on the creation and development of services built on advertising personalization, new communication platforms and the printing of marketing products. Its core competency is its knowledge of the latest marketing channels for reaching the consumer. This sector is highly exploratory and innovative. It generates annualized revenues of about $400 million. Its new president will be appointed soon.

In 2008, we enriched the service offering in the Marketing Communications sector by making four strategic acquisitions that will bring in $100 million in new business:

• First, ThinData, which is Canada’s leading permission-based email marketing services firm. Based in Toronto, ThinData has about 60 employees. I’d like to welcome Chris Carder and his team to the Transcontinental family.

• The second is Rastar, a company in Salt Lake City that offers personalized marketing services with interactive databases and variable digital printing. I welcome its founder, Kevin Despain, as well as Grant Fletcher and their 300 employees.

• We then acquired Redwood Custom Communications, which is a North American leader in custom communications. Located in Toronto, Redwood creates turnkey solutions with personalized content for print and digital. Welcome to Eric Schneider and his team of 130 creative staff.

• Lastly, there is Conversys, the leading Canadian vendor of electronic flyers. Based in London, Ontario, Conversys repurposes print content, turning it into interactive Web content. Welcome to the three founders, Mark Baldwin, Dan Hurrel and Larry Chevalier and their team.

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Our Media sector has also been actively building the new. This sector, which consists of our magazine, newspaper and book publishing operations, door-to-door distribution operations and over 120 Web sites, generated revenues of $650 million in 2008. Its president is Natalie Larivière.

Transcontinental owns more than 170 local and regional newspapers in six Canadian provinces, which generate annual revenues of about $270 million. We have over 400 sales reps who are well integrated into their communities. It is because of this unique force that we have identified our offering to local communities across the country as our second priority area of growth.

One of the highlights of 2008 was the November launch of weblocal.ca, a Canada-wide site for finding and rating local businesses, as well as their products and services. The site is highly interactive, with content that is based on the information entered by users. In the past 30 days, our site has already attracted 1.8 million unique visitors. This is an exceptional result and well beyond our expectations. This initiative, and others to come, will allow us to generate new revenues and enhance our multi-platform offering for local advertisers. Congratulations to Marc Ouellette, Andrei Uglar and their team for this big success.

Let me mention two other promising online initiatives:

• the launch of the Web site recipefeast.com, the English-language counterpart of the very popular recettes.qc.ca Web site, which receives over a million visitors a month;
• and the integration of mobile technology into our Web sites thehockeynews.com and canadianliving.com. More than 80,000 hockey fans have now gotten into the habit of visiting thehockeynews.com on their cell phone or Blackberry.

In 2008, Transcontinental earned $17 million from its Web sites, up 30% over 2007. Our monthly unique visitors have risen from four million to more than six million. And, I’d like to quickly add, our Internet activities are profitable.

Developing and extending our core activities

In line with the second component of our strategy, we have also continued to develop our core activities.

Transcontinental operates in two major and continually evolving trades: publishing and printing. We firmly believe that print will continue to be an important part of any communications, sales or marketing strategy, but that it will do so in complementarity with the new media. And vice versa: the new media are much more effective when tied in with print.

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As Canada’s leading consumer magazine publisher, our portfolio of titles reaches over 11 million Canadian women a month. We accompany them in every aspect of their work and family lives, which is why our content and solutions for women are our third priority area for growth.

In 2008, we launched Vita, the French-language counterpart of More magazine for women over the age of 40. Like the unprecedented success of More, which we introduced in March 2007, Vita’s second issue attracted 75,000 subscribers.

Congratulations to Francine Tremblay and her team for this dual success.

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Our printing activities remain a pillar of our business plan. To support growth in this area, we have grouped our printing operations into one sector that generated $1.5 billion in revenues in 2008. This third sector, which is our biggest source of income, is composed of our services to newspaper, book and magazine publishers, our Mexican operations, our direct mail activities in the United States, and our service offering to retailers. Brian Reid was named its president in November 2008. Brian joined Transcontinental in 1992 and has risen through the ranks with great success. Congratulations on this new appointment, Brian.

Our integrated service offering to publishers is our fourth priority area of growth.

One of the highlights of 2008 was winning Rogers Communications. We have an exclusive six-year contract to print all of their magazines. The other major addition was the Shoppers Drug Mart-Pharmaprix chain. We have a five-year contract to print their flyers all across Canada and have been doing so since April 2008. These two clients alone bring in annual revenues of about $65 million. I’d like to thank Brian Reid, Norrie Meth and their team for these promising new partners.

In terms of newspaper printing, in 2009 we will start benefiting from printing the San Francisco Chronicle and from our $60 million investment to upgrade and modernize the Transcontinental Transmag printing plant in Montreal.

In 2008 we also signed a $1.7 billion contract to print The Globe and Mail until 2028, starting at the end of 2010. In addition to extending the current contracts for the Atlantic provinces, Quebec and Ontario, it also adds the Alberta and British Columbia markets. For Transcontinental, this means annual revenues of about $95 million, of which $25 million is new business.

We owe the success of these newspaper printing projects to Ted Markle and Michel Lévesque and their team. Congratulations to you both.

In short …

In short, today Transcontinental is in an enviable position for maximizing its growth potential. We have the customers, whom we already supply with many of their marketing tools. We have the business credibility. We create the content for our publications and Web sites. And we have the financial base to accelerate the addition of new marketing services and new communication channels to our service offering.

SUSTAINABLE DEVELOPMENT

Before I finish, I’d like to mention sustainable development. At this meeting last year I made a commitment to make sustainable development a priority for Transcontinental. One of the initiatives I mentioned was our forward-looking Paper Purchasing Policy, which we had just adopted and which goes well beyond existing standards and certifications. Since then, we have taken steps to make our suppliers and customers more aware and to help them move forward with us.

Today I am proud to announce the concrete and verifiable results of our steps to protect the environment. From 2007 to 2008, our customers’ use of “Gold” ranked papers, which meet the highest standards of sustainable forest management, rose by 37%. Not only that, this trend has intensified since the start of fiscal 2009.

I am also very proud to announce that we have obtained three separate forest product chain-of-custody certifications for our 45 facilities in Canada and the United States. This triple certification shows that the paper-making process meets the standards set for sustainable forest management.

For this I’d like to thank Jean Denault, who has been highly committed to working on sustainable development in conjunction with his other responsibilities.

IN CONCLUSION

To conclude, we are facing a difficult economic situation in 2009. We will continue to make the decisions that need to be made. In the short term such decisions carry a cost, but they will help improve our financial results in the medium term and thereby ensure that Transcontinental thrives over the long-term.

We will also maintain our disciplined approach to financial management, and will continue to play our role as a consolidator in the North American publishing and printing industries, while prudently building our new service offering.

I firmly believe that we have the assets, the organizational capacity, the strategy, the values and, above all, the people we need not only to weather the storm, but to come out of it stronger and in a better position to keep growing.