Cogeco 2013 Annual Report Download - page 14

Management's discussion and analysis (“MD&A”) COGECO CABLE INC. 2013 13
Each day now over 3,000 surveys are initiated seeking customer feedback on the quality of the services and support our associates provide.
This significantly enhances our ability to track and refine our service offering while reinforcing our core value of commitment to the customer.
Recognizing the growing preference of customers for more self-service, we have enhanced our website design and functionality. New technology
to supply intelligent response to customers frequently asked questions ("FAQ’s") has generated over 25,000 real-time responses on average
each month. We have also added enhanced, city-based service outage reporting on our public websites to ensure real-time incident messaging
for our customers.
In addition, through improved training, support and workforce resource management, we successfully improved the average speed of answer
for our customers calling into our local call centers in Burlington and Trois-Rivières.
We unveiled a new retail store concept and design for our Ontario mall stores to improve customer flow, agent accessibility and enhanced
"shoppability".
KEEPING A SOUND CAPITAL MANAGEMENT AND STRICT CONTROL OVER SPENDING
Cost containment is a core element of our financial performance and remains a key factor to maintain operating margins. We intend to continue
executing our strategy of tight operating and capital cost controls and rigorous customer-related processes, including customer credit controls,
which generate increased free cash flow.
Progress in fiscal 2013
We successfully refinanced over half of Cogeco Cable's indebtedness in order to take advantage of historically low interest rates. In the process,
we extended average maturity from 4.6 years to 6.4 years and increased fixed rate debt to 66% of total indebtedness.
We benefit from significant economies of scale by utilizing, in many cases, centralized procurement, engineering, information systems, human
resources, marketing and accounting systems throughout the Canadian cable services segment and a portion of the Enterprise services segment.
Principally as a result of cost reduction initiatives in the Canadian cable services segment, this segment was able to increase its operating income
margin from 48.3% for the year ended August 31, 2012 to 49.8% for the year ended August 31, 2013.
ANTICIPATED RESULTS OF THE CORPORATION'S STRATEGIES
This section contains forward-looking statements concerning the business outlook of our Canadian and American cable services and Enterprise
services segments. This section also describes certain key economic, market and operational assumptions we have made in preparing such
forward-looking statements and other forward-looking statements contained in this MD&A. For a description of risk factors that could cause actual
results or events to differ materially from our expectations expressed in or implied by such forward-looking statements, refer in particular to our
competitive environment, our regulatory environment and risks that could affect our business and results. For further details please refer to the
"Uncertainties and main risk factors" section.
The successful implementation of the above-described strategies should result in increased revenue and slower increases in operating expenses
which combined, should lead to heightened profitability and reduced Indebtedness that will be measured based on the following criteria (these
criteria are described in greater detail in the “Fiscal 2014 financial guidelines” section):
• We intend to grow our residential cable services principally by leveraging the speed of our HSI offerings and the demand for On-demand
television and High Definition ("HD") television, and cross-selling to our existing customers to expand the number of ‘‘triple-play’’ customers;
• We intend to continue concentrating on growing our business customer base in our operating footprint in Canada and the United States.
We currently believe there are in aggregate approximately 235,000 addressable business customers within our footprint, with approximately
173,000 in Canada and approximately 62,000 in the United States. We intend to increase our market share of addressable business customers
by increasing the effectiveness of our sales and marketing efforts through a dedicated sales force. We also intend to grow our share of the
addressable market by leveraging our dedicated fibre-based connectivity to launch enhanced products. In general, we plan to deploy
additional capital on a success-based basis for network expansion to serve new business customers;
• We believe bundling increases revenue and cash flow, reduces customer churn and maximizes product profitability;
• We believe we are well-positioned to capture a larger share of the growing demand for the services of our Enterprise services segment:
cloud infrastructure, managed IT, managed and dedicated hosting, data centre colocation and connectivity. The Enterprise services segment
is expanding as small and medium sized businesses increasingly require a more sophisticated Internet infrastructure which is often more
cost-efficient to provide through an outsourced service. We expect to expand our penetration of Enterprise services customers by leveraging
our 20 data centres, fibre-rich network and excellent customer service; and
• We expect further opportunities to achieve synergies and improve business efficiencies with the recent acquisitions of Atlantic Broadband
and PEER 1.
Please refer to the “Key performance indicators” section for further details on the fiscal 2013 results and achievements.