Cogeco 2014 Annual Report Download - page 7

6 COGECO CABLE INC. 2014 Message to shareholders
Enterprise data services segment
• As a result of higher demand than anticipated, Cogeco Data Services is building additional pods ahead of schedule at its Barrie data
centre. When complete, the addition will add approximately 24,000 square feet to the facility. Cogeco Data Services also began
preparations for the construction of the first pod of a new 100,000 square feet facility in Kirkland (Montréal) that is scheduled to receive
its first clients in the Spring of fiscal 2015.
• Peer 1 Hosting added data centre capacity in the United States, United Kingdom and Canada to meet growing customer demand and
expanded the existing capabilities of its cloud services to better support distributed workloads and big data analytics operations.
CORPORATE SOCIAL RESPONSABILITY - PROGRESS AND RECOGNITION
Sustained efforts continue to be deployed to integrate Corporate Social Responsibility (“CSR”) best practices into our operations, in accordance
with our CSR Policy. We published our second CSR Report, detailing our environmental, social, economic and governance practices and
performance. We were thrilled to see our efforts recognized by Corporate Knights Magazine, which listed the Corporation in its The Future 40
Responsible Corporate Leaders in Canada ranking, and by being selected for the Jantzi Social Index, which consists of 60 Canadian companies
that passed a set of broadly based environmental, social, and governance rating criteria. For fiscal 2015, our focus will continue to be the integration
of the recent acquisitions into our CSR program as well as strengthening our responsible purchasing practices.
REGULATORY MATTERS
In fiscal 2014, the CRTC launched its “Let’s Talk TV” proceeding with a view to adapting the broadcasting regulatory framework in Canada to the
new market realities resulting from technological change and the new ways through which Canadian consumers receive and use video programming
content. Our Canadian cable operating entity, Cogeco Cable Canada, took an active part in the proceeding to share its position on the future of
Canada’s media broadcasting system and regulatory environment. Cogeco Cable Canada and the broadcasting distribution industry have been
faced with multiple challenges over the years and have successfully continued their growth by adapting and meeting evolving consumer needs.
Cogeco Cable strongly believes that continuing to do so is the best and most effective way to satisfy the expectations of Canadian consumers,
thus keeping them engaged in the Canadian broadcasting system. Cogeco Cable is also actively participating in an important proceeding initiated
by the CRTC aiming to review the regulatory framework for wholesale wireless services. Cogeco Cable seeks the adoption of regulatory measures
that would mandate the provision of wholesale radio access network services by the major wireless service carriers and hence enable the entry
of competitive Mobile Virtual Network Operators ("MVNOs") in Canada.
2015 OUTLOOK
In our Canadian and American cable services segments, we expect revenue growth to be driven by higher penetration rates of our High Speed
Internet ("HSI") and Telephony services in the business sector. Residential digital video and HSI services should benefit from the full-year availability
of TiVo digital advanced television service in the United States markets and the Fall 2014 launch of TiVo in Ontario and in Spring of fiscal 2015
in Québec. In the Enterprise data services segment, revenue growth is expected primarily from the expansion of data centre facilities as well as
from the migration of services in the portfolio toward higher margin revenue.
For fiscal 2015, Cogeco Cable expects to achieve revenue of $2.03 billion, adjusted EBITDA of $925 million, free cash flow of $280 million and
profit for the year of $260 million.
From a strategic standpoint, we are entirely focused on optimizing the operating results of our existing operating segments and reducing our
leverage ratio.
CONCLUDING REMARKS
We wish to thank the members of our Board of Directors for their counsel and unwavering support. In particular, we wish to thank Harry King,
one of our longest-serving members, who is stepping down after 21 years as a director of the Corporation. On behalf of the Board and the entire
Cogeco Cable team, we express our gratitude for his outstanding contribution.
In conclusion, we wish to acknowledge the contribution of more than 4,000 employees who work towards Cogeco Cable’s success on a daily
basis by upholding our values of dedication to customers, teamwork, innovation, respect and integrity.
Jan Peeters
Chairman of the Board Louis Audet President and Chief Executive Officer