Cogeco 2004 Annual Report Download - page 4

2Cogeco Cable Inc. 2004
DURING FISCAL 2004, COGECO CABLE INC. ACHIEVED SOLID
IMPROVEMENTS IN ITS KEY PERFORMANCE INDICATORS.
OPERATING INCOME AND MARGIN, FREE CASH FLOW AND
CUSTOMER NUMBERS IN ITS MAIN SERVICES INCREASED FROM
LAST YEAR. HOWEVER, CERTAIN ACCOUNTING CHANGES HAVE
RESULTED IN A NET LOSS FOR THE YEAR AND, CONSEQUENTLY,
A NEW PRESENTATION FOR FISCAL 2003 FOR COMPARISON
PURPOSES. AMONG THESE FACTORS NEGATIVELY IMPACTING
OUR RESULTS WERE A DOWNWARD REVISION TO THE ESTIMATED
USEFUL LIFE OF RESIDENTIAL EQUIPMENT, AMENDMENTS TO
ONTARIO INCOME TAX RATES, AND THE ADOPTION OF NEW
ACCOUNTING POLICIES.
NONETHELESS, A NUMBER OF POSITIVE FACTORS HAVE
CONTRIBUTED TO OUR RESULTS FOR 2004 INCLUDING A CLEAR
AND CONSISTENT FOCUS ON CUSTOMER NEEDS, TARGETED
INVESTMENT SPENDING IN LEADING EDGE TECHNOLOGIES, THE
INTRODUCTION OF ATTRACTIVE NEW SERVICES, AND TEAM WORK.
CUSTOMERS:
THE HEART OF OUR BUSINESS
Over the last few years, Cogeco Cable has consistently sought to
increase customer satisfaction while improving shareholder return.
These two goals have largely shaped our decisions and actions.
This sustained focus has helped us to eliminate the loss of basic-
service customers. Following 15,000 basic-service customer attri-
tions in 2003, Cogeco Cable enjoyed a 3,200 increase in customers
in fiscal 2004, a result which we consider to be satisfactory. Thanks
to better customer service combined with a continuously improving
product and service offering, we have achieved a positive level of
customer acquisition and retention.
Other factors also contributed to this progression. Effective and
targeted marketing has made it possible to reach our customers,
satisfy their specific needs, and increase loyalty while still reducing
costs. Our marketing strategy has even earned recognition from
our North American industry peers. Last July in Boston, Cogeco
Cable was presented with two gold awards from the Cable and
Television Association for Marketing (CTAM) for its integrated
campaign, “Life’s just better with cable” and for its customer-
acquisition campaign, “Clean Your roof!”. These recognitions are
all the more impressive considering the very substantial invest-
ments made by our North American peers. This success confirms
what our customers tell us: cable is well-suited to their needs.
Our customers understand the advantages of this technology,
and their subscriptions to our services provide compelling proof.
EFFECTIVE AND UNIQUE
TECHNOLOGIES
Investments in leading-edge technologies and new, attractive
services have also contributed to these results.
For example, Cogeco Cable has been providing the fastest Internet
service in Canada since 1995 and, with download speeds of up
to 6 Mbps for regular service, we continue to be leaders in HSI in
North America. Regardless of their connection type, our customers
receive a service that ranks among the fastest in North America.
With all of the new products available on the Internet— games,
videos, music—speed remains the most important factor for
consumers. More speed, which is particularly appreciated and
sought after, contributes to making Cogeco Cable a superior
Internet service provider.
Internet Lite access is currently used as a loyalty-building offer
in Québec and as a customer-acquisition offer in Ontario. These
different strategies reflect the market development status of
each of these two regions.
Cable television services are expanding: digital cable television,
VOD, HD television, SVOD, and an expanded line of digital
terminals, including the HD DVR.
MESSAGE TO SHAREHOLDERS
Louis Audet, President and Chief Executive Officer