Rogers Communications Inc. Class A · TSX:RCI.A
Rogers Communications Inc. Class A — Investor Presentation (October 2018)
32 slides from Rogers Communications Inc. Class A's investor presentation, October 2018
Slide 1: Investor presentation
Investor presentation 1|
Slide 2: Cautionary note
Cautionary note The following materials are for presentation purposes only. These materials should be read in conjunction with the disclosure documents referenced below. Certain statements made in this presentation, including, but not limited to, statements relating to expected future events, financ
Slide 3: Diversified Canadian communications & media company
Diversified Canadian communications & media company Largest Wireless provider in Canada Fastest widely available Internet Media focused on Canada’s largest speeds across entire footprint and sports entertainment portfolio Canada’s largest cable TV provider of Canada’s population employees 96% reache
Slide 4: Diversified revenue streams with solid growth profiles
Diversified revenue streams with solid growth profiles Total revenue 1 Adjusted EBITDA1 • Wireless 59% • Wireless 66% $14.4 • Cable 26% • Media 15% $5.5 • Cable 32% • Media 2% Billion Billion Revenue streams grounded in wireless data and Internet growth 1. For the year ended Dec. 31, 2017 4|
Slide 5: Strong balance sheet with healthy liquidity in 2017
Strong balance sheet with healthy liquidity in 2017 $14.4B $5.5B $1.7B $1.9B Total Adjusted Free cash Adjusted net revenue EBITDA flow income $34.7B $30.3B $2.4B 57% 2.5x Market Total assets 2 Available Dividend Conservative capitalization 1 liquidity 2 payout ratio of free debt leverage ratio 2 cas
Slide 6: Excellent 2017 financial and subscriber performance
Excellent 2017 financial and subscriber performance • Best financial and subscriber performance in many years • Strong growth in total service revenue, adjusted operating profit, margins and free cash flow • Delivered on 2017 guidance and paid $988 million in dividends to shareholders Consolidated (
Slide 7: Key strategic priorities
Key strategic priorities Create best-in-class customer Invest in our networks and Deliver innovative solutions experiences by putting our technology to deliver leading and compelling content that customers first in everything we do performance and reliability our customers will love Drive profitable
Slide 8: Highlights from our 2018 plan
Highlights from our 2018 plan Create best-in-class customer Invest in our networks and Deliver innovative solutions experiences by putting our technology to deliver leading and compelling content that customers first in everything we do performance and reliability our customers will love Wireless Ig
Slide 9: 2018 guidance
2018 guidance 20171 Previous 2018 Guidance2 Updated 2018 Guidance Revenue 14,369 3% - 5% growth no change Adjusted EBITDA 5,502 5% - 7% growth 7% - 9% growth Capital expenditures 2,436 2,650 to 2,850 no change Free cash flow 1,685 3% - 5% growth 5% - 7% growth (In millions of dollars, except percent
Slide 10: Strong three quarters of 2018 reflecting momentum
Strong three quarters of 2018 reflecting momentum Consolidated Total Adjusted revenue +5% EBITDA +10% ($M) ($M) 11,158 4,462 10,638 4,066 9 months1 9 months1 9 months1 9 months1 2017 2018 2017 2018 • Total revenue growth of 5% and adjusted EBITDA growth of 10% in the first nine months of 2018 • Stre
Slide 11: Enhancing financial flexibility
Enhancing financial flexibility Debt Leverage Ratio 2.5x 3.1x 3.0x Strong adjusted EBITDA contributed to cash provided by operating activities of $1.3 billion in 2.7x the third quarter of 2018 2.5x 2.5x - Entering the high end of our optimal debt 2.0x leverage ratio range of 2.0x – 2.5x Investment-g
Slide 12: Wireless
Wireless 12 |
Slide 13: Largest wireless provider in Canada
Largest wireless provider in Canada Operating under 3 strong brands Total revenue 1 to target and attract a broad customer base $8.6 Billion • Service 79% • Equipment 21% Adjusted EBITDA margin of 44% 1,2 • • Largest wireless service provider in Canada 96%1 LTE coverage across Canadian population 10
Slide 14: Substantial wireless growth potential
Substantial wireless growth potential Wireless penetration as % of population 1 Mobile data growth in Canada (PB/month) 2,3 167% 168% 140% 142% 139% 135% 135% 120% 97% 99% 95% 95% 85% • Revenue growth opportunities in Canada supported by lower relative penetration • Significant growth in data consum
Slide 15: Robust wireless network speeds and quality in Canada
Robust wireless network speeds and quality in Canada Download Speeds (Mbps)1 46 40 38 37 33 31 30 28 28 25 26 23 24 20 18 19 19 17 15 • Long-term evolution (LTE) networks are available to approximately 99% of Canadians2 • Canada has the 2nd greatest number of 4G/LTE networks in the world2 • Canada’s
Slide 16: 2017 overall performance largely driven by Wireless
2017 overall performance largely driven by Wireless • Strong Wireless financial results: • 2017 Wireless service revenue growth of 7% • Strong cost management supported growth in Wireless margins of 50bps and AOP of 8% • 354,000 postpaid net subscriber additions with churn of 1.20% – best results si
Slide 17: Q3'18 Wireless performance
Q3’18 Wireless performance Adjusted Service Adjusted Blended EBITDA revenue +5% EBITDA +8% margin +90bps ABPU +4% ($M) ($M) (%) ($) 1,837 1,099 47.1 66.20 1,757 1,017 46.2 63.78 Q3'17 Q3'18 Q3'17 Q3'18 Q3'17 Q3'18 Q3'17 Q3'18 Postpaid gross adds Postpaid net adds Postpaid churn (000s) (000s) (%) 434
Slide 18: Cable
Cable 18 |
Slide 19: Extensive cable footprint in Canada
Extensive cable footprint in Canada Total revenue 1 Largest cable footprint across Ontario, New Brunswick, and Newfoundland and Labrador with 4.4M3 homes passed $3.9 • Internet 51% • Television 39% Billion • Phone 10% Adjusted EBITDA margin of 47% 1,2 Ontario is home to ~40% of Canada’s population •
Slide 20: 2017 Cable performance driven by Internet
2017 Cable performance driven by Internet • 2017 Cable revenue supported by Internet revenue growth of 7% on Internet competitive speed advantage • Strong full-year financial performance with growth in revenue, adjusted operating profit and margins • Cost efficiencies and product mix shift to Intern
Slide 21: Q3'18 Cable performance
Q3’18 Cable performance Adjusted Adjusted Internet EBITDA Revenue +1% EBITDA +4% margin +160bps revenue +8% ($M) ($M) (%) ($M) 983 490 49.8 534 977 471 48.2 495 Q3’17 Q3’18 Q3’17 Q3’18 Q3’17 Q3’18 Q3’17 Q3’18 Total service units net adds Internet net adds Internet penetration1 (000s) (000s) (%) 55.2
Slide 22: Enhancing Cable offerings with Ignite TV
Enhancing Cable offerings with Ignite TV Ongoing strategic rollout of Ignite TV – building awareness about Ignite TV in our Ontario cable footprint Premium service with the most advanced features: • natural language voice search and commands • deep integration of streaming services like Netflix • cl
Slide 23: Illustrative example: Reducing investment per home
Illustrative example: Reducing investment per home Rogers Home Investment – Current State 1 Rogers Home Investment – Future State 1 Modem hub Modem TV set-top box TV set-top box Voice SHM Voice SHM Install Self install $1,000 $400 SHM: Smart Home Monitoring 23 | 1. Represents one home configuration
Slide 24: Media
Media 24 |
Slide 25: 2017 Media performance
2017 Media performance • 2017 revenue growth in each of sports, TV, radio and digital • Remain focused on local content and live sports Media Sportsnet remains Canada’s revenue #1 sports media brand for third straight year ~60% Exclusive national 12-year licensing agreement Owner of the Toronto Broa
Slide 26: Investing for sustainable growth and shareholder returns
Investing for sustainable growth and shareholder returns Primary focus is growing our core business Delivering on the fundamentals – growth in revenue, profit, margins, free cash flow and return on investment Focusing on our strategic priorities – our customers, our people, investments in our networ
Slide 27: Financial performance
Financial performance 27 |
Slide 28: Consolidated financial results
Consolidated financial results Rogers Communications Inc. Consolidated Financial Results (unaudited) 1 2018 2017 (In millions of dollars, except per share amounts) Q3'18 Q2'18 Q1'18 Annual Q4'17 Q3'17 Q2'17 Q1'17 x Revenue Wireless 2,331 2,214 2,191 8,569 2,288 2,203 2,076 2,002 2 Cable 983 991 969
Slide 29: Wireless
Wireless Rogers Communications Inc. Wireless (unaudited) 2018 2017 1 (In millions of dollars, except margins) Q3'18 Q2'18 Q1'18 Annual Q4'17 Q3'17 Q2'17 Q1'17 Revenue Service revenue 1,837 1,761 1,687 6,765 1,724 1,757 1,680 1,604 Equipment revenue 494 453 504 1,804 564 446 396 398 Revenue 2,331 2,2
Slide 30: Cable
Cable Rogers Communications Inc. Cable (unaudited) 2018 2017 1 (In millions of dollars, except margins) Q3'18 Q2'18 Q1'18 Annual Q4'17 Q3'17 Q2'17 Q1'17 Revenue Internet 534 538 506 1,967 508 495 490 474 Television 357 357 365 1,501 372 377 377 375 Phone 88 93 96 411 98 101 106 106 Service revenue 9
Slide 31: Media
Media Rogers Communications Inc. Media (unaudited) 2018 2017 (In millions of dollars, except margins) Q3'18 Q2'18 Q1'18 Annual Q4'17 Q3'17 Q2'17 Q1'17 x Revenue 488 608 532 2,153 526 516 637 474 1 Operating expenses 415 548 509 2,026 489 455 578 504 Adjusted EBITDA 73 60 23 127 37 61 59 (30) Adjuste
Slide 32: The best is yet to come.
The best is yet to come. Tad Kec A
Rogers Communications — Investor Presentation (October 2018) on 6ix