Cogeco 2014 Annual Report Download - page 6

Message to shareholders COGECO CABLE INC. 2014 5
MESSAGE TO SHAREHOLDERS
For Cogeco Cable Inc., fiscal 2014 was a year of integration,
consolidation and further enhancement of our positioning in all of our
markets. Through the successful execution of our operational objectives
and effective cost controls, we achieved continued solid growth and
profitability, while further strengthening our ability to create value in the
years ahead.
Jan Peeters
Our ability to grow profitably despite intense competition from existing and
new players, changing market dynamics and rapid technology advances
reflects our capacity to adapt effectively and offer compelling services and
solutions to our customers.
Louis Audet
Dear fellow shareholders:
For Cogeco Cable Inc. ("Cogeco Cable" or the "Corporation"), fiscal 2014 was a year of integration, consolidation and further enhancement of
our positioning in all of our markets. Through the successful execution of our operational objectives and effective cost controls, we achieved
continued solid growth and profitability, while further strengthening our ability to create value in the years ahead.
Consolidated revenue increased by 15.1% in fiscal 2014 to nearly $1.9 billion, while adjusted EBITDA reached $893.4 million, up by 14.4%. Profit
for the year amounted to $209.4 million and the Corporation generated free cash flow(1) of $274.7 million. Dividends paid to our shareholders
increased by 15.4% to $58.5 million. As planned, we made good progress toward reducing our leverage ratio and ended the fiscal year in a strong
financial position. The value of Cogeco Cable’s stock rose just over 30% in fiscal 2014.
A YEAR OF GROWTH IN ALL SEGMENTS
Fiscal 2014’s solid performance was driven mainly by organic growth and effective cost control in our three operating segments - Canadian cable
services, American cable services and Enterprise data services, as well as by the inclusion of a full year of operating results from Atlantic Broadband
and Peer 1 Hosting ("the recent acquisitions"), both of which were acquired during the course of fiscal 2013. Our ability to grow profitably despite
intense competition from existing and new players, changing market dynamics and rapid technology advances reflects our capacity to adapt
effectively and offer compelling services and solutions to our customers. Our strong Canadian cable footprint and our recent geographic expansion
into the United States of America ("United States"), as well as our broader presence in Canada, the United States and United Kingdom in the
expanding data hosting and managed IT services market, position us well to create and deliver an even broader variety of communications
services to a much larger customer base. Our solid management teams strive to further strengthen and enhance our market position in all our
operating segments, while remaining focused on reaching Cogeco Cable’s conservative debt level objectives.
INITIATIVES
Over the last few years, the cable industry has been subject to intense competition redefining the interplay of market forces and consumers are
more solicited than ever with a range of choices from varied service providers. At the same time, consumer appetite for communication services
overall has increased. Cogeco Cable has historically demonstrated its capacity to adapt to fulfill customers’ needs and create value for its
shareholders. Below are a few examples of initiatives and achievements that position our operating segments for future growth.
Canadian cable services segment
• Through our subsidiary Cogeco Cable Canada, we concluded a partnership with TiVo Inc. ("TiVo") and will launch the service in Ontario
on November 3rd, 2014 and in Spring of fiscal 2015 in Québec. TiVo is a global leader in next-generation television services that enable
viewers to consume content across all screens in and out-of-the home.
• For the fifth year out of the last seven, Service Quality and Measurement Group awarded Cogeco Cable Canada two ‘’Voice of Customer
Excellence Awards’’ - for highest customer satisfaction for the TV and telecom consumer industry in Canada, and for best interactive
voice response customer experience in North America. We were also awarded the “Service Award (large company category)” by the
Burlington Chamber of Commerce during its 2014 Business Excellence Awards Gala. The combination of superior customer service
and leading edge networks is the foundation of our competitive advantage and profitable growth.
American cable services segment
• Our subsidiary Atlantic Broadband has launched TiVo service at the beginning of fiscal 2014 and has successfully deployed it to 95%
of its footprint. It has also concluded a partnership with Netflix Inc. ("Netflix") to enable customers to easily find and watch the best
shows and movies from Netflix through the same set-top box they use to watch Live TV.
• Atlantic Broadband increased residential and business Internet speeds, including the launch of our first Gigabit Internet services in the
greater Miami area, leading to a notable increase in Internet subscriber growth.
(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.