Cogeco Inc. · TSX:CGO
Cogeco — Investor Presentation (April 2024)
34 slides from Cogeco's investor presentation, Apr 11, 2024
Slide 1: Investor Update
Investor Update As of April 11, 2024
Slide 2: Contents
Contents Cogeco Communications (TSX: CCA) 4 Cogeco Connexion 16 Breezeline 21 Additional Financial Information 25 Cogeco (TSX: CGO) 29 Appendix 33 Customer Profile 34 2
Slide 3: Forward-Looking Statements and Presentation of Financial Information
Investor Update Forward-Looking Statements and Presentation of Financial Information Forward-looking statements Presentation of financial information Certain statements contained in this presentation may constitute forward-looking information within This presentation also includes non-IFRS and other
Slide 4: Cogeco Communications TSX: CCA
Cogeco Communications TSX: CCA 4
Slide 5: Investment Highlights
Cogeco Communications Overview Investment Highlights Growing competitive force in the North American telecom sector • Providing Internet, video and phone services to 1.6M customers High adjusted EBITDA margins and strong Free Cash Flow TSX:CCA • Driven by a stable business model, scale, and operatio
Slide 6: Leveraging a North American Platform
Cogeco Communications Overview Leveraging a North American Platform High quality product offering Internet Service Customers(1) Revenue As of February 29, 2024 • Internet packages of up to 1 Gbps $M 000’s for residential customers and 10 Gbps for commercial customers Canada Canada U.S. U.S. • Fibre-
Slide 7: Expanding Addressable Market
Cogeco Communications Overview Expanding Addressable Market Network Evolution & Expansion • Fibre-to-the-home expansions in Canada and the U.S. resulting in Homes Passed(2)(3) 000’s 228,000 homes passed added since the beginning of F2022(1), representing a nearly 8% increase. Canada • Participating
Slide 8: Strong Return of Capital to Shareholders
Cogeco Communications Overview Strong Return of Capital to Shareholders Shareholder returns enhanced through return of capital to complement growth investments Dividend per Share $4.00 • 10%+ annual increase over the past 10 years $3.50 $3.42 F2023(1) F2024(1)(2) $3.10 $3.00 $2.82 Dividend payout ra
Slide 9: Summary of the Recent Share Repurchases
Cogeco & Cogeco Communications Overview Summary of the Recent Share Repurchases CCA Benefits: CGO Benefits: • Accretive on a free cash flow per share basis • Accretive on a free cash flow per share basis • 5% reduction in shares outstanding • Increase in net asset per share • Increase in the public
Slide 10: Attractive Margins & Profitability
Cogeco Communications Overview Attractive Margins & Profitability Impressive adjusted EBITDA margins due to span of operations, stable business model and operational efficiency Adjusted EBITDAi Profit $M $M (except per share) Consolidated Profit attributable to owners of Cogeco Communications Consol
Slide 11: Significant Free Cash Flow Generation
Cogeco Communications Overview Significant Free Cash Flow Generation Strong cash flow generation has enabled growth investments and return of capital to investors Free Cash Flowii Cash flows from operating activities $M $M 1,240 582(1) 588(1) 1,088 551(1) 1,019 963 487 157(2) 918 173(2) 121(2) 455 4
Slide 12: Solid Debt Profile
Cogeco Communications Overview Solid Debt Profile Strong Financial Position As of February 29, 2024 • Net indebtedness to adjusted EBITDA ratiovi of 3.5x • Available liquidityvii of $745M Cogeco Communications: Senior Secured Debt Rating • Cash and cash equivalents of $81M BBB- Q2 F2024 Debt Statist
Slide 13: F2024 Financial Guidelines
Cogeco Communications Overview F2024 Financial Guidelines In millions of Canadian dollars, except Fiscal Fiscal 2024 percentages 2023 Projections Actual (constant currency)iv(1) Revenue 2,984 Stable Adjusted EBITDAi 1,421 Stable Net capital expendituresiii 700 $700 to $775 Net capital expenditures i
Slide 14: Recent Developments
Cogeco & Cogeco Communications Overview Recent Developments Breezeline to Launch Mobile Service in the U.S. – March 14th, 2024 • Mobile service to be launched in the U.S. in the spring • Provides Breezeline broadband customers with flexible, affordable and reliable mobility bundling options Frédéric
Slide 15: Sustainable Value through Strong Sustainability Practices
Cogeco & Cogeco Communications Overview Sustainable Value through Strong Sustainability Practices Environmental Social Governance First Canadian telecommunications company with Fostering a culture of Diversity & Inclusion (D&I) Variable executive compensation linked in part to an approved near-term
Slide 16: Cogeco Connexion
(C; coceco CONNEXION
Slide 17: Cogeco Connexion's Broadband Network
Cogeco Connexion Cogeco Connexion’s Broadband Network Serving 600+ communities from Windsor to Gaspé Through its digital oxio brand, operates in majority of Canadian provinces 17
Slide 18: Highlights
Cogeco Connexion Highlights Strong financial profile Growth Opportunity • Strong adjusted EBITDAi and margini with • Network expansion projects, including those in solid cash flow generation collaboration with governments, to expand connectivity in underserved and unserved areas • Historic full-year
Slide 19: Financial Results Overview
Cogeco Connexion Financial Results Overview Strong growth and industry leading adjusted EBITDA margini, with capital invested into acquisitions and fibre-to-the-home network expansion to drive future growth Adj. EBITDAi & Adj. EBITDA Net CapExiii & Capital Revenue Margini Intensityv $M $M $M Increas
Slide 20: Wireless Spectrum Coverage to Enable MVNO Framework
Cogeco Connexion Wireless Spectrum Coverage to Enable MVNO Framework 100% broadband footprint covered by wireless spectrum for upcoming launch of mobility services 92% share of spectrum powered by 5G-optimized 3500 & 3800 MHz $588 million in spectrum secured to date 20
Slide 21: Breezeline
a breezeline™ «a Cogeco company
Slide 22: Breezeline's Broadband Network
Breezeline Breezeline’s Broadband Network Serving 500+ communities in 13 states in the U.S. 22
Slide 23: Highlights
Breezeline Highlights Strong financial profile Growth opportunity • Strong adjusted EBITDA margini with solid free • Extending fibre services into New Hampshire and cash flowii generation West Virginia communities not previously served • Growing revenue per user as our Broadband First by the company
Slide 24: Financial Results Overview
Breezeline Financial Results Overview Internet-led strategy and fibre-to-the-home network expansion are contributing to revenue per user growth and a higher EBITDA margin product mix Adj. EBITDAi & Net CapExiii & Revenue Adj. EBITDA Margini Capital Intensityv $M of US dollars $M of US dollars $M of
Slide 25: Additional Financial Information
Additional Financial Information 25
Slide 26: Prudently Managing Leverage
Financial Overview – Cogeco Communications Prudently Managing Leverage Evolution of net indebtedness to adjusted EBITDA ratiovi Breezeline (formerly Connecticut system MetroCast Acquisition Sale Wireless Ohio broadband Wireless Share repurchase, Atlantic Broadband) & Acquisition of data spectrum & s
Slide 27: Low Cost of Capital & Spread-Out Maturities
Financial Overview – Cogeco Communications Low Cost of Capital & Spread-Out Maturities Debt Maturities Excluding credit facilities and lease liabilities As at February 29, 2024 $M February 29, Cogeco Communications Breezeline 2024 (excluding Breezeline) U.S. subsidiaries(5) Average Cost 5.7% of Debt
Slide 28: Compensation Aligned with Economic Value Creation (EVC)
Financial Overview – Cogeco Communications Compensation Aligned with Economic Value Creation (EVC)(1) Between 55% and 81% of senior executives’ INCENTIVE PROGRAMS SUMMARY FEATURES compensation is variable and at risk based Annual Bonus 60% based on the level of EVC achieved on long-term creation of
Slide 29: Cogeco TSX: CGO
Cogeco TSX: CGO 29
Slide 30: Investment Structure
Cogeco Overview Investment Structure Cogeco TSX: CGO 12.0M shares of CCA(1) 80% Voting Rights $549M 100% Voting Rights 28% Equity Market 100% Equity Capitalization(1) 6.0% Dividend Yield(2) Investment in Cogeco Cogeco Media Communications RADIO BROADCASTING TSX: CCA $721M $99M (1)(3) Investment Valu
Slide 31: Cogeco Media: Strong Network of Radio Stations
Cogeco Overview Cogeco Media: Strong Network of Radio Stations Radio broadcasting network and news agency STATIONS THAT ARE RANKED AMONGST THE BEST 21 RADIO STATIONS LARGEST INDEPENDENT MORE THAN 5 MILLION INTEGRATED SALES RADIO NEWS SERVICE LISTENERS / WEEK SERVICES IN QUÉBEC IN QUÉBEC 31
Slide 32: Cogeco Media: Top Ratings
Cogeco Overview Cogeco Media: Top Ratings One of the largest radio broadcasters in Québec(1) and the most popular radio hosts in the industry ● 98.5 is the most listened to station in Canada ● RYTHME 105.7 is the #1 music station of Montréalers ● 92.5 THE BEAT is the #1 English music station in Mont
Slide 33: Appendix
APPENDIX 33
Slide 34: Customer Profile
Cogeco Communications Customer Profile February 29, 2024 COGECO CONNEXION BREEZELINE TOTAL Homes passed(1)(3) 2,078,557 1,753,613 3,832,170 Primary service units(2)(3) 1,870,524 1,066,847 2,937,371 Internet service customers(3) 874,401 660,227 1,534,628 Video service customers(3) 618,478 274,939 893