Transcontinental - 2009 Annual Meeting of Shareholders

Dear friends,

This year our annual meeting has a special aspect to it. As I stand before you our economy is in a recession, and that recession is present in all industrialized countries. No industry and no company can escape it. It goes without saying that this is a situation of great concern for everyone, starting with our employees and shareholders.

I believe that it is my duty, as Chairman of the Board and founder of Transcontinental, to use this forum to offer some perspective.

My message is one of realism in the short term, but also great confidence in the future of our organization in the medium and long term – which is what really counts.

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The true test of a company is its ability to stay in business. To be successful over a long period of time and make it through stormy periods. To be able to say: “We’ve been through this before and we rose to the challenge.”

In the years since it was founded, Transcontinental has weathered two recessions, a revolution in technology, the dramatic rise of the Internet and new communication channels, the intense and ongoing consolidation of the printing and publishing industries in North America, and the globalization of the economy. Not to mention the unprecedented rise in the Canadian dollar of the past several years.

Over the years, we have proven our ability to weather the storm and embrace change. These experiences are now part of our makeup and we should be proud of what we have become, which is:

the leading printer in Canada and sixth largest in North America
Canada’s leading publisher of consumer magazines and second-biggest publisher of community newspapers
the top publisher of French-language educational resources in Canada
one of North America’s best performing printers and publishers in the past 10 years

We have achieved all of this thanks to our people and our culture of continuous improvement; thanks to our values, our business model based on proximity to the client, our constantly evolving offer of services, our targeted strategy; and, lastly, thanks to our sound financial position.

All of these attributes allowed us to get through previous recessions and come out in a good position to take maximum advantage of the economic recovery.

But all that is no longer enough.

My friends, I must admit that today we are in a recession whose scope and violence have never been experienced in the history of Transcontinental. As responsible managers, we have taken action to protect the interests of our employees as a whole, and the interests of our customers and shareholders.

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This morning, in preparation for our annual meeting with the media, we issued a press release to publicly announce the measures Transcontinental has already taken to cope with the recession, and the measures we will implement in the future. As is customary, our employees were informed of them first.

François Olivier, our president and chief executive officer, will talk about these measures in a few minutes. On behalf of the Board of Directors, I’d like to congratulate François on the leadership he has shown during this past year. He quickly mobilized his managers to address the emergency situation created by the recession and he has not been afraid to make difficult decisions and to do so in a way that shows respect for our employees and our values. And in that process he has never lost sight of the organization’s long-term growth.

Despite the highly volatile markets in 2008, especially in the fourth quarter, Transcontinental continued to generate significant cash flow from operations and we ended the year with a solid balance sheet and low level of debt. This is always a winning combination, but even more so in the current environment where credit is costly and hard to come by.

Our solid financial situation has allowed us, in the past two weeks, to finalize financing arrangements totalling $400 million. I see this as concrete evidence of the financial community’s confidence in our strategy and future outlook, and I particularly thank the Solidarity Fund QFL for their support. We expect that we will be able to cover all of our financing needs for 2009 in the near future.

Transcontinental thus has the tools it needs to pursue its growth.

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I would now like to say a few words about the future of the printing and publishing industries. Like most industries, they are in the midst of a rapid and profound transformation. Demographic change, the explosive growth in new communication channels, and new values like sustainable development are radically changing the way we work, get information, entertain ourselves and consume. The combined impact of these changes has already had major repercussions on the demands and expectations of our clients.

I believe that our two industries will long continue to offer excellent opportunities for growth and Transcontinental is in a very good position to play the game and come out ahead.

First, we have the strategy, the business models, the sound finances and the leaders we need to succeed. Second, we have never stopped investing in the development of our products, services and brands.

Furthermore, our mission is to help advertisers reach and keep their target consumers. With that in mind, since the late 1990’s we have continually expanded our service offering so that it integrates the Internet and new communication platforms. We intend to continue and intensify this migration.

This means that Transcontinental will continue, as it has in the past, to adapt to the new realities of its customers.

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Before I conclude, I would like to say a few words about corporate social responsibility, a concept that covers sustainable development, donations and sponsorships, health and safety, and labour relations. It is an area I care about a great deal. In 2008, our commitment to social responsibility was again recognized by the Jantzi Social Index®, which is composed of 60 Canadian companies selected for their performance in the area of social responsibility. Transcontinental has been part of this special group since 2004 and I am very proud of this. To give higher visibility to our initiatives, I have asked that our Web site page on social responsibility be restructured and enhanced.

I am particularly happy with the progress achieved during the year in the area of sustainable development. In accordance with our action plan, our people have introduced many new initiatives in the workplace and with customers. We will continue to take concrete steps to influence the practices of our industry in our own way, which is to say in partnership with our customers, suppliers and environmental organizations.

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In closing, I wish to reiterate to our shareholders that we will, as we always have, do everything we can to maximize their investment in Transcontinental. Like all the stocks listed on the Toronto Stock Exchange, ours has been affected by the tough economic times of the past few years. And I am in a good position to know, because I myself own several Transcontinental shares!

Lastly, I thank the members of the Board of Directors for your contribution to Transcontinental’s advancement and for your professionalism in carrying out the strategic and critical role entrusted to you by our shareholders. I also thank our customers and our shareholders for their loyal support, and our employees for their dedication under difficult conditions.

I view the future with confidence. I am very optimistic about Transcontinental’s potential for growth.

I will now pass you over to our president and chief executive officer, François Olivier.