TC Transcontinental Posts Slight Revenue, Income Increases
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.
Fourth quarter
Transcontinental’s revenues in the fourth quarter decreased 3 percent, from $556.4 million to $537.5 million. This decrease was primarily due to the non-recurring revenue from the printing contract for the Canadian Census last year.
Adjusted operating income decreased 3 percent, from $88.9 million to $86.3 million. This decrease was primarily due to the non-recurrence of the Census contract as well as continued strategic investments in the Media and Interactive sectors.
Net income applicable to participating shares decreased 82 percent, from $44.5 million to $8.0 million. This decrease is mainly due to an impairment of goodwill and intangible assets of $52.2 million, as explained above.
Operating Highlights for Fiscal 2011
• Announced the indirect acquisition of all the shares of Quad/Graphics Canada, Inc. This transaction is subject to approval of the Competition Bureau. The Corporation expects this transaction to close at the beginning of 2012. We also sold our Mexican operations (revenues of C$67 million in 2010) and our black and white book printing business destined for U.S. export (revenues of C$25 million in 2010) to Quad/Graphics. This exchange of assets is expected to generate at least $40 million in net incremental EBITDA for Transcontinental, over 12 to 24 months following closing of the Canadian transaction.
• Adjusted our go-to-market strategy by combining the Interactive and Media sectors on Nov. 1, 2011. This reorganization will make it easier to market our products and services and emphasize our offer on the various communication platforms, while continuing to deploy our other media and printing products.
• Launched a new brand and positioning to better reflect our evolution into a leading player in the new marketing communications landscape: TC Transcontinental, a marketing activation company. The new brand better reflects the company’s comprehensive and integrated marketing communications service offering including print, media, digital, interactive and mobile.
• Consolidated five printing plants by transferring the volume to larger plants which have benefited from investments in the recent years.
• Continued to grow our newspaper publishing operations in Quebec by acquiring the publishing assets of Groupe Le Canada Français, Avantage Consommateurs de l’Est du Québec inc., Journal Nouvelles Hebdo as well as launching several newspapers.
• Launched new services for our small and medium-sized business customers in local communities including Search Engine Marketing (SEM), website design, online auctions through BidGo.ca and a group buying site under the brand Themegacatch.com.
• Expanded our digital advertising representation by signing numerous deals which have led us to triple our digital network audience. We are now reaching over 13 million unique monthly visitors per month in Canada through more than 1,000 websites, bringing our global reach to almost 1 in 2 Canadian Internet users.
• Acquired Vortxt Interactive, a leading provider of integrated mobile solutions located in Toronto.
About TC Transcontinental
TC Transcontinental creates marketing products and services that allow businesses to attract, reach and retain their target customers. The Corporation is the largest printer in Canada and the fourth-largest in North America. As the leading publisher of consumer magazines and French-language educational resources, and of community newspapers in Quebec and the Atlantic provinces, it is also one of Canada’s top media groups. TC Transcontinental is also the leading door-to-door distributor of advertising material in Canada through its celebrated Publisac network in Quebec and Targeo in the rest of Canada. Thanks to a wide digital network of more than 1,000 websites, the Corporation reaches over 13 million unique visitors per month in Canada. TC Transcontinental also offers interactive marketing products and services that use new communication platforms supported by marketing strategy and planning services, database analytics, premedia, e-flyers, email marketing, custom communications and mobile solutions.
Transcontinental Inc. (TSX: TCL.A, TCL.B, TCL.PR.D), known by the brands TC Transcontinental, TC Media and TC Transcontinental Printing, has approximately 10,000 employees in Canada and the United States, and reported revenues of C$2.0 billion in 2011.
Source: TC.
- Companies:
- Transcontinental Inc.