Cogeco 2013 Annual Report Download - page 6

Message to shareholders COGECO CABLE INC. 2013 5
MESSAGE TO SHAREHOLDERS
Dear fellow shareholders:
Cogeco Cable Inc. ("Cogeco Cable" or the "Corporation") had a transformative year in fiscal 2013 as it rebalanced its revenue-generating
segments through strategic acquisitions, reporting strong financial results and positioning itself successfully towards a future of sustainable
profitability. Having completed two major acquisitions that have allowed our business to diversify geographically and build our presence in the
promising data hosting and managed IT services sector, we are well positioned to create and deliver a larger variety of communications options
to a growing number of consumers and businesses throughout our markets in North America and parts of Europe.
On a consolidated basis, both revenue and operating income before depreciation and amortization(1) for fiscal 2013 rose by 32.5%. Profit for the
year amounted to $185 million and the Corporation generated free cash flow(1) of $150 million. We returned $51 million of capital to shareholders
through declared dividends that increased by 4%. Our financial position remains strong, following the successful refinancing of over half of the
Corporation’s indebtedness in order to take advantage of historically low interest rates. The value of Cogeco Cable’s stock rose just over 35%
in fiscal 2013.
A YEAR OF GROWTH AND TRANSFORMATION
Fiscal 2013 was indelibly marked by the conclusion of two major acquisitions and the ensuing restructuring of our Canadian cable services
segment. In November 2012, we completed the acquisition of Atlantic Broadband serving about 485,000 PSU and providing Analogue and Digital
Television, as well as HSI and Telephony service in Western Pennsylvania, South Florida, Maryland/Delaware, and South Carolina. In January
2013, we completed the acquisition of Peer 1 Network Enterprises, Inc. ("PEER 1"), one of the world’s leading web hosting providers, specializing
in managed hosting, dedicated servers, colocation and cloud services through a high performance fibre network connected to 16 state-of-the-
art data centres in Canada, the United States of America ("United States") and the United Kingdom. In early August 2013, the Canadian cable
services segment was regrouped into a self standing operational unit named “Cogeco Cable Canada” and operated under the leadership of
President and Chief Executive Officer, Louise St-Pierre. With these initiatives in each of our business segments, we have successfully diversified
our geographical risk and enhanced growth opportunities, opening up new market territories where penetration rates are below par and
opportunities for growth and value creation abound. Our solid management teams are well in place and we have a plan to further strengthen and
enhance our market position in our Canadian cable, American cable and Enterprise services segments, while remaining focused on reaching
Cogeco Cable’s conservative debt level objectives.
INITIATIVES
During fiscal year 2013, the cable industry was subject to intense competition redefining the interplay of market forces particularly in the area of
content distribution. From over-the-top services, new satellite transmission technologies to wireless solutions and related applications, consumers
were solicited and tantalized with a range of choices from varied service providers. At the same time, consumer appetite for communication
services overall has increased and particularly so in the consumption of data, which has grown exponentially. Cogeco Cable Inc. has historically
proven its ability to navigate during periods of change and seek ways to transform itself to create value for our customers and for our shareholders.
Below are a few of our accomplishments that are a reflection of our abilities in the face of these changing market dynamics.
Canadian cable segment
• Excellence in customer service continued to be a priority that has rewarded us with achievements in this regard as Cogeco Cable
Canada remains among the best performing companies in its industry.
• Our robust product offering was further enhanced to meet the growing demand for improved data transfer speeds and capacities and
accessibility through mobile platforms enabling our customers “anytime, anywhere” experiences.
American cable segment
• In June, Atlantic Broadband announced an exclusive partnership with TiVo in our areas served to power its state of the art digital
entertainment services across TV, Web and Mobile platforms greatly enhancing its digital television offering.
Enterprise services segment
• Cogeco Data Services Inc. ("CDS") opened its fourth data centre in Barrie, Ontario to respond to the growing demand of our corporate
customers in the Greater Toronto Area. With this new addition and with the acquisition of PEER 1, our total number of data centres
increased from 3 to 20 and our geographical footprint expanded to include markets in the United States and in Western Europe.
(1) The indicated terms do not have standardized definitions prescribed by IFRS and, therefore, may not be comparable to similar measures presented by other
companies. For more details, please consult the “Non-IFRS financial measures” section of the MD&A.