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TC Transcontinental Posts Slight Revenue, Income Increases

December 8, 2011
MONTREAL—Dec. 8, 2011—In 2011, Transcontinental Inc. increased its revenues by 1 percent, from $2.028 billion to $2.044 billion, driven primarily by its Printing sector as a result of numerous new contracts, most notably from the expanded relationship with The Globe and Mail, and to a lesser extent by increased volume in our distribution and community newspaper publishing activities. This growth was mitigated by lower volume from the printing of magazines, books. catalos and marketing products, as well as educational book publishing activities.

Excluding acquisitions, divestitures and closures, the impact of the exchange rate and the paper component variance, organic revenue growth was slightly positive and was generated in all three operating sectors.

For this same period, adjusted operating income increased 1 percent, from $249.9 million to $252.7 million, driven primarily by the Printing sector through the contribution of new contracts coupled with the synergies associated with the use of our most productive assets and continued efficiency improvement initiatives. This growth was partially offset by continued strategic investments in the Media and Interactive sectors.

Excluding acquisitions, divestitures and closures and the impact of the exchange rate, we generated close to 5 percent of organic profit growth.

“I am very proud of our 2011 results as we managed to grow both our revenues and profit in an industry that is undergoing a profound transformation,” said François Olivier, president and CEO. “This past year alone we aligned our business portfolio with our strategy by making strategic acquisitions, divesting non-core businesses and consolidating our operations. We also signed new contracts and launched new products and services to develop both our traditional and new digital offering.

“In fact, we have now built a business of close to $200 million in digital and interactive solutions. In addition, we laid the groundwork to accelerate our development by adapting our go-to-market strategy, through the integration of our Media and Interactive sectors, by launching a new brand and positioning and by improving our financial position significantly. Given all this, we are very well positioned to be a Canadian leader in marketing activation, helping our customers attract, reach and retain their target consumers,” Olivier added.

Net income applicable to participating shares decreased 53 percent, from $166.6 million to $77.8 million. This decrease is mainly attributable to two non-cash and non-operational items. The first item is an impairment of goodwill and intangible assets of $52.2 million in 2011. The second item is a significant negative variance related to discontinued operations due to the double effect of a net gain of $29.4 million in 2010, on the disposal of our direct mail operations in the United States.
 

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