Cogeco Inc. · TSX:CGO
Cogeco — Investor Presentation (January 2023)
31 slides from Cogeco's investor presentation, Jan 12, 2023
Slide 1: Investor Update
Investor Update As of January 12, 2023 TSX: CGO | TSX: CCA
Slide 2: Contents
Contents Cogeco Communications (TSX: CCA) 4 Breezeline 14 Cogeco Connexion 18 Additional Financial Information 22 Cogeco (TSX: CGO) 26 Appendix 30 Customer Profile 31 2
Slide 3: Forward-looking statements and presentation of financial information
Forward-looking statements and presentation of financial information Forward-looking statements Certain statements contained in this presentation may constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to our future outlook and anticip
Slide 4: Cogeco Communications (TSX: CCA)
((, COGECO — COMMUNICATIONS TSX: CCA
Slide 5: Overview
Overview Growing competitive force in the North American telecommunications sector with a presence in Ontario, Québec and 13 states in the United TSX:CCA States $2,944M LTM $3,539M Market Unique North American (1) (2) Capitalization Revenue broadband platform with strong operational experience
Slide 6: Business segment overview
Business segment overview BREEZELINE Consolidated Revenue(1) Cogeco Communications completed 6 acquisitions in the U.S. since 2012 Covers a footprint of 1.7 million(2) homes which provides for attractive residential and business organic Breezeline growth opportunity 49% 51% Cogeco Connexion Of
Slide 7: Capital allocation priorities
Capital allocation priorities Span of operations in North America provides stability, while strong cash flow generation enables to reinvest in the business and return capital to shareholders CAPITAL ALLOCATION TO RETURN CAPITAL TO VALUE CREATION ACTIVITIES SHAREHOLDERS • Enhance and extend broadband
Slide 8: Financial snapshot
Financial snapshot Steady growth from both organic execution and strategic acquisitions In $M Revenue Adjusted EBITDA & Adjusted EBITDA margini 0.5% - 2.0% 2,901 growth 2,510 0.5% - 2.0% 2,332 2,384 1,393 growth 1,108 1,149 1,206 47.5% 48.2% 48.0% 48.0% 2019 2020 2021 2022 2023(G) 2019 2020 2021 202
Slide 9: Free cash flow generation
Free cash flow generation Sustained free cash flowii generation has allowed us to pursue growth objectives while returning capital to shareholders In $M Free cash flowii and free cash flow Cash flows from operating activities excluding network expansion projectsii 1,240 5% decline to 582(1) 5% growt
Slide 10: Dividend growth and low payout ratio
Dividend growth and low payout ratio Strong and consistent dividend per share growth +10% annual increase over the past 9 years 22%(2) free cash flow dividend payout ratiovi in FY2022 24%(2) - 36% free cash flow dividend payout ratiovi in FY2023(3) (1) 2010 2011 2012 2013 2014 2015 2016 2017 2018 20
Slide 11: Share buybacks
Share buybacks Cogeco Communications amended its Normal Course Issuer Bid, enabling it to acquire up to 10% of its public float, or 1,960,905 subordinate voting shares, from May 4, 2022 to May 3, 2023 4.7M shares, or 25%(1) of float, repurchased since May 2019 50.0 49.0 $131M repurchased in fiscal 2
Slide 12: Key Strategic Initiatives
Key Strategic Initiatives Consolidator of U.S. Completed 6 acquisitions in the U.S. since 2012. The American Regional Operator telecommunications segment now represents 51%(1) of consolidated revenue Competitive advantage with 1 Gig Internet offered in close to 97% of the U.S. footprint and 74%
Slide 13: Delivering sustainable value to our stakeholders through strong ESG practices
Delivering sustainable value to our stakeholders through strong ESG practices Environmental Social Governance First Canadian telecommunications company Continuing to foster a culture of Diversity & Variable executive compensation linked in with an approved near-term Inclusion (D&I) part to ESG perfo
Slide 14: Breezeline
% breezeline” a Cogeco company
Slide 15: Breezeline's footprint
Breezeline’s footprint Serving 500+ communities in 13 states in the U.S. 15
Slide 16: Breezeline's financial results overview
Breezeline’s financial results overview Strong revenue and adjusted EBITDAi growth In $M of Canadian dollars 1,460 1,487 1,097 1,117 1,037 11.7% revenue Revenue CAGR(2) since FY2019 (1) FY2019 FY2020 FY2021 FY2022 LTM 46.1% 45.8% 677 683 12.5% adjusted Adj. EBITDA 466 496 512 EBITDAi CAGR(2) & A
Slide 17: Breezeline's highlights
Breezeline’s highlights Strong Financial Growing adjusted EBITDAi and solid margini , contributing to free cash flowii Profile generation Major growth plan to extend fibre services into New Hampshire and West Virginia communities not previously served by the company The only fibre-to-the-home
Slide 18: Cogeco Connexion
(C;, COGECO — CONNEXION
Slide 19: Cogeco Connexion's footprint
Cogeco Connexion’s footprint Serving 600+ communities from Windsor to Gaspé 19
Slide 20: Cogeco Connexion's financial results overview
Cogeco Connexion’s financial results overview Strong adjusted EBITDAi and industry leading margini In $M 1,457 1,440 1,393 3.7% revenue CAGR(2) Revenue 1,295 1,288 since FY2019 FY2019 FY2020 FY2021 FY2022 LTM (1) 4.1% adjusted EBITDAi 785 775 46.1% CAGR(2) since FY2019 751 45.2% Adj. EBITDA & Ad
Slide 21: Cogeco Connexion's highlights
Cogeco Connexion’s highlights Strong Financial Strong adjusted EBITDAi and margini with solid cash flow generation Profile Ambitious network expansion projects, including partnering with governments to expand connectivity in underserved and unserved areas with strong economics Network Expansion
Slide 22: Additional Financial Information
Additional Financial Information 22
Slide 23: History of de-leveraging following acquisitions
History of de-leveraging following acquisitions Evolution of net indebtedness to adjusted EBITDA ratiovii Available liquidity: $990M Breezeline Connecticut system MetroCast Sale Ohio (formerly Atlantic Acquisition of data DERYtelecom broadband Acquisition Broadband) & centers Acquisition systems Nov
Slide 24: Low cost of capital and spread-out maturities
Low cost of capital and spread-out maturities November August 2023 2022 DEBT MATURITIES Average Cost of Debt(1) 4.5% 4.0% Excluding credit facilities and lease liabilities(2) $M Breezeline Cogeco Communications (excluding Breezeline) U.S. subsidiaries(6) $2,106(3)(4) $1,137(3)(5) $500 $300 $324(3) $
Slide 25: Compensation aligned with economic value creation (EVC)
Compensation aligned with economic value creation (EVC) Between 50% and 80% of senior executives’ compensation is variable and at risk based on long-term creation of Economic Value – Reasonable use of equity compensation to minimize dilution – Stock ownership requirements for senior executives – B
Slide 26: Cogeco (TSX: CGO)
(C; COGECO —_ TSX: CGO
Slide 27: Cogeco TSX: CGO
Cogeco Cogeco TSX: CGO LTM Revenue(1) $3,039M PUBLIC MARKET VALUE OF EQUITY $1,019M (15.8M shares at $64.68 (2)) 15.7M shares of CCA 84% Voting Rights 100% Voting Rights 35% Equity 100% Equity Investment in Cogeco Media Cogeco Communications TSX: CCA RADIO BROADCASTING (2)(3) $1,227M $2,944M LTM Rev
Slide 28: Cogeco Media: strong network of radio stations
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 28
Slide 29: Cogeco Media
Cogeco Media Most important radio broadcaster in Québec(1) and talented radio hosts in the industry ● 98.5 is the most listened to station in Canada. ● RYTHME 105.7 is the #1 music station of Montrealers. ● 92.5 THE BEAT is the #1 English music station in Montréal. ● FM93 and RYTHME 102.9 provide th
Slide 30: Appendix
Appendix 30
Slide 31: Customer profile
Customer profile November 30, 2022 Cogeco Connexion Breezeline Total Homes passed 2,018,146 1,695,261 3,713,407 Primary service units(1) 1,807,079 1,154,798 2,961,877 Internet service customers 775,063 693,781 1,468,844 Internet penetration(2) 38.4% 40.9% 39.6% Video service customers 644,329 309,62