Last year when I stood here we were in the midst of a recession of unprecedented scope.

At that time I said to you: “"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 I added “"As chief executive officer, my role is to maximize the long-term value of Transcontinental, which means rethinking and updating our business strategy to take into account technological, cultural and social change. Recession or no recession."”

On behalf of our some 12,500 employees, I am proud to tell you that we have kept our commitment.

OVERVIEW OF OUR PERFORMANCE IN 2009

After being hit hard by the recession in the first quarter, we continually improved our profitability in each subsequent quarter. Thanks to the rationalization measures, results for the final two quarters of 2009 even outperformed those of the final two quarters of 2008. The change in our adjusted operating income before amortization is particularly revealing: after dropping 29% in the first quarter and 10% in the second, it then rose 5% in the third quarter and 15% in the fourth, despite an overall decrease of 6% in annual revenues.

How did we achieve this?

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First, we reacted quickly.

Last year at this meeting I announced a tough rationalization plan to deal with the recession. In all, we merged or consolidated five printing plants, sold two others, terminated eight publications and sold two titles. We cut close to 2,000 jobs, half of them in our U.S. operations.

A number of other rationalization measures were also implemented throughout the company. Total recurring cost savings amount to about $110 million per year, of which about $80 million applies to the 2009 results.

All across the company our people put their shoulders to the wheel.  Once again, their commitment, their innovative energy and their ability to get the job done made all the difference. Again, I thank them for it.

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The steps we took to counter the recession did not, however, stop us in our efforts to offer and develop top quality products and services.

First, our ongoing investments in the latest technology, new media and the development of our brands have helped us win market share in our three operating sectors.

In the past three years alone we have invested more than $600 million in fixed assets, along with more than $250 million in acquisitions, the development of digital solutions and the creation of new marketing communication platforms.

Another encouraging element for the future is that although in 2009 we experienced the worst financial crisis since the 1930s, we were able to complete financing agreements for a total of $885 million, at competitive rates, despite the tight credit situation at the beginning of last year. I see this as acknowledgement by investors of our financial credibility, and their confidence in our future prospects.

I would like to congratulate Benoit Huard, our Chief Financial Officer, Donald LeCavalier, our VP Finance, as well as Christine Desaulniers, Vice President, Legal Affairs and Secretary of the Corporation, and their respective teams, who worked very hard to finalize these agreements.

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Given the major structural changes in our industry and the necessary consolidation in several market segments, last week we made the decision to sell our direct mail operations in the United States. We have concluded an agreement that assigns a fair value to our U.S. assets. This transaction, which should receive the necessary regulatory approvals, is expected to close by late April 2010.

For us this was an important decision that reflects our ambition to focus our energies on certain core activities, but also on the development of our digital products and services offering. We are still, however, the leader in direct marketing in Canada.

Today, Transcontinental is a more flexible business, one that is oriented more than ever to its assets and strategic priorities. We are proud of everything we have achieved under difficult conditions in 2009.

But this achievement only partially guarantees our success in the long term. The vital question is this: “"Are we ready to deal with the major structural changes that are affecting our areas of operation – — changes that will inevitably take down many players and introduce new ways of communicating?"” 

This leads me to talk about the “"new Transcontinental."”

THE NEW TRANSCONTINENTAL

One of the perverse effects of the recession is that it has fed the perception that the advent of the Internet and wireless technologies signals an inevitable decline in publishing and printing, if they are not already on life support.

Obviously, I do not agree with this view. Print is still an important component of any communications, sales and marketing strategy, and in information and culture. But it must work in complementarity with the new media.

This mix is central to our growth strategy and mission, which is to help our customers identify, reach and keep their target consumers.

Creation of Marketing Communications Sector

Going forward, our growth will be strongly influenced by our ability to provide our customers with new services based on one-to-one advertising and new digital communication platforms, including ones that use wireless technology.

Which is why, in early fiscal 2009, we created the Marketing Communications Sector, which now focuses solely on these new marketing realities.

What does this mean, for our retail customers, for instance?

As well as printing their flyers and managing their distribution, we now also create, manage and repurpose retailers' visual content which we deploy across multiple channels. Plus, we provide data analytics, email-based marketing, e-flyers, and custom publishing to promote their brands. We can prepare an interactive marketing campaign, a promotional microsite and a dynamic application for wireless technologies for them, while also offering advertising space in our magazines and newspapers. That's what the Transcontinental is all about: multiple integrated services so that retailers can communicate with their target consumers more effectively.

Two strategic acquisitions enriched our service offering in the Marketing Communications Sector in fiscal 2009:

• First, Toronto-based Redwood Custom Communications (now called Totem), a leading North American company in custom communications that creates personalized content for print and digital.
• Then, another important acquisition: Conversys, located in London, Ontario, is Canada's leading supplier of electronic flyers and it already serves most of the major Canadian retailers.

I wish to thank Isabelle Marcoux, Vice Chair of the Board and Vice President, Corporate Development, and all of her team for their work on these acquisitions. I would also like to thank them for their strategic support and the many other acquisitions concluded over the past 24 months, which have made it possible to create the new Marketing Communications Sector.

I'd like to give you an example of what the acquisitions contribute, in this case Conversys.

Our Publisac, like flyers, continues to hold sway as an effective and affordable marketing tool. We know, however, that consumers' purchase behaviours are changing and that they are increasingly using the Internet to find the best deals.

The Publisac team worked with Conversys to develop an original solution in which our retail customers would be able to optimize the return on their marketing dollar by using our new Dealstreet.ca site for English-speaking customers and Publisac.ca for French-speakers. Transcontinental will be launching this new online pre-shopping site across Canada in March 2010. Conversys will use its tools to supply the platform with hundreds of thousands of products already scanned into its databank from dozens of Canadian retailers. For their part, consumers will find a search engine that will allow them not only to find what they want, but also to compare and choose the best deals, get discount coupons and, in the final analysis, save money.

The Marketing Communications Sector will play a strategic role in the company's transformation. It has annualized revenues of about $120 million and employs more than 800 people. The president of this sector, Christian Trudeau, joined us in April 2009. Christian came to us with solid expertise in electronic commerce acquired, among others, as President and Chief Executive Officer of Centria Commerce and BCE Emergis. Christian is thus attending his first meeting with us. I will now ask Christian to please stand up.

Media Sector

In 2009, our Media Sector continued to develop integrated marketing solutions on multiple platforms.

Our strategy is for our magazines to serve communities of interest, and our newspapers to serve geographic communities. We accompany the members of these communities at every stage of their personal and professional lives. We are engaged in a constant dialogue with several millions of them. This is an engaged clientele, and perfectly targeted for our advertising customers.

Thanks to the power of our brands and our relevant content, we are very successfully extending our presence to the Web. Today we reach more than 6 million unique visitors a month through our some 120 websites. And about a dozen of our brands now have a mobile presence. For the second year in a row, advertising revenues from our websites have increased 30% in one year.

Our newspapers serve about a hundred communities across Canada. For local advertisers, the community newspaper is the most effective and affordable way to make themselves known to their customers. We sell them advertising space in our print newspapers or banner advertising on our websites; we distribute local advertising through our Publisac; and, since November 2008, we also offer hosting or subscriptions on weblocal.ca, our pan-Canadian search site. For Transcontinental, these are four diversified and integrated revenue streams. Lastly, I'd like to remind you that Transcontinental is the company that is in the best position, in terms of Internet marketing and e-commerce, to help local merchants get on the Web.

That's a concrete example of Transcontinental's new offer in Media!

The Media Sector generated revenues of $607 million in 2009 and has about 3,000 employees. The president is Natalie Larivière.

Printing Sector

As a printer, we are the first – — and the best, of course! –— in all our segments in Canada and Mexico: flyers, books, newspapers, catalogues, magazines and commercial products. We continue to gain market share.

For example, we have won two exclusive contracts with Rogers Communications to print its magazines and marketing products. We also, of course, started printing the San Francisco Chronicle in July 2009 at our new plant in Fremont, California.

In regards to the 15-year, one-billion dollar contract for the San Francisco Chronicle, I'd like to point out this project started on time, on budget, and to the complete satisfaction of our client. Furthermore, our plant was profitable from day one. In the coming months, we are planning to open our doors to new publishing and retail customers coming mainly from the Greater San Francisco area. I'm also very proud that our plant is one of the first in our industry to obtain Silver LEED Certification, which recognizes its Leadership in Energy and Environmental Design.

I'd like to pay tribute to Ted Markle, Vice President of the Newspaper Group, and his team, for the remarkable work they did to complete this project.

In 2009, we also completed the modernization of the Transcontinental Transmag plant in Montréal. The production of daily and weekly newspapers on the new presses started in the second half of the year. This project involved an investment of more than $60 million.

We also continued to set up a newspaper and flyer-printing platform through our Canadian network of printing plants. This hybrid platform, a first in the country, is being developed as part of an 18-year, $1.7 billion contract with The Globe and Mail that will take effect at the end of this year. On the night shift we will provide The Globe and Mail with the capacity to print on glossy stock and put colour on every page; on the day shift, we will offer our state-of-the-art print technologies to our retail customers. For Transcontinental, this is a new form of specialization that brings with it significant benefits in terms of synergy and operational efficiencies.

As you can see, the new Transcontinental also extends to our business as printers.

Transcontinental continues to stand out for its excellent manufacturing, technological innovation and total offering. Because of our capital investments, we now head one of the most modern and top-performing printing platforms in North America.

The Printing Sector has annualized revenues of more than $1.5 billion and more than 8,000 employees. Brian Reid is the president of this sector.

CONCLUSION

To conclude, the economic situation will remain difficult in 2010 and we will continue to be vigilant and proactive. But I'd like to wrap up by answering the question: “"Where is Transcontinental headed?"

Transcontinental will play a key role in the transformation of the Canadian marketing communications industry moving forward.

Even though we predict low growth in the print market, we are certain that print will remain an essential component of our customers' marketing programs for a long time to come. Given that, in our traditional core activities, as a leader, we are in a good position to take advantage of the business opportunities that arise. Our recent investments will have a major positive impact on our future profitability.

Also, we will continue to accompany our clients as they shift their marketing budgets towards new communication platforms. We have already been providing them with a number of these new services for several years.

We will thus be accelerating this shift toward the new media and new communications channels. That's where the future will be shaped. Such development will, however, take place at the pace of and in accordance with the needs of our customers and consumers.

We will be developing new products that will offer good growth potential and we will continue to improve our financial performance in our more traditional markets. These two avenues of development, the traditional and the new, will ensure Transcontinental thrives well into the future.

Lastly, my confidence in that future is based on a single critical factor: our people. They are what makes the difference, recession or not. We will continue to invest in their development, knowledge and ability to innovate.

I will end my presentation with images of some of the people who make Transcontinental what it is every day. Last fall I did a North American tour of our 500 senior managers, accompanied by our sector presidents, and I took advantage of that opportunity to meet with hundreds of our employees in their workplaces. I explained our strategy and our objectives, and listened to what they had to say. And I came away from every meeting with one certainty strengthened: Transcontinental is in good hands!

Thank you for your attention and I will now turn the meeting over to Benoit Huard, our Chief Financial Officer.