Cogeco Inc. · TSX:CGO
Cogeco — Investor Presentation (January 2024)
33 slides from Cogeco's investor presentation, Jan 10, 2024
Slide 1: Investor Update
Investor Update As of January 10, 2024
Slide 2: Contents
Contents Cogeco Communications (TSX: CCA) 4 Cogeco Connexion 15 Breezeline 20 Additional Financial Information 24 Cogeco (TSX: CGO) 28 Appendix 32 Customer Profile 33 2
Slide 3: Forward-Looking Statements and Presentation of Financial Information
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 financial measu
Slide 4: Cogeco Communications TSX: CCA
Cogeco Communications TSX: CCA 4
Slide 5: Investment Highlights
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 operational $2.5B 5.8% efficiency Divid
Slide 6: Leveraging a North American Platform
Leveraging a North American Platform High quality product offering Internet Service Customers(1) Revenue As of November 30, 2023 • 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-to-the-home in all expansion 2,
Slide 7: Expanding Addressable Market
Expanding Addressable Market Network Evolution & Expansion • Fibre-to-the-home expansions in Canada and the U.S. resulting in Homes Passed 000’s 209,000 homes passed added since the beginning of F2022(1), representing a 7% increase. Canada U.S. • Partnering with governments to expand connectivity in
Slide 8: Strong Return of Capital to Shareholders
Strong Return of Capital to Shareholders Shareholder returns enhanced through return of capital to complement growth investments Predictable Dividend per Share Strategy $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 ratioviii 33
Slide 9: Repurchase of Rogers' Share Block in December 2023
Repurchase of Rogers’ Share Block in December 2023 CCA Benefits: CGO Benefits: • Accretive on a free cash flow per share basis • Accretive on a free cash flow per share • 5% reduction in shares outstanding • Increase in net asset per share • Increase in the public float of 29%*** • 38% reduction in
Slide 10: Attractive Margins and Profitability
Attractive Margins and Profitability Impressive adjusted EBITDA margins due to span of operations, stable business model and operational efficiency Adjusted EBITDAi Profit $M $M (except per share) 2,000 100% Consolidated Profit attributable to owners of Cogeco Communications Consolidated Margin % 1,
Slide 11: Significant FCF Generation
Significant FCF 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 Free Cash Flow Network Expansions 1,240 582(1) 588(1) 587(1) 1,019 1,006 487 139 963 157 173 918 455 487 455 448 424 41
Slide 12: Solid Debt Profile
Solid Debt Profile Strong Financial Position As of November 30, 2023 • Net indebtedness to adjusted EBITDA ratiovi of 3.4x • Available liquidityvii of $786M Cogeco Communications: Senior Secured Debt Rating • Cash and cash equivalents of $85M BBB- Fiscal 2024 Financial Guidelines(1) • Net indebtedne
Slide 13: Financial Guidelines
Financial Guidelines In millions of Canadian dollars, except Fiscal Fiscal 2024 percentages 2023 Projections Actual constant currencyiv(1) Revenue 2,984 Stable Adjusted EBITDAi 1,421 Stable Net capital expendituresiii 700 $700 to $775 Net capital expenditures in connection with network expansion pro
Slide 14: Sustainable Value through Strong ESG Practices
Sustainable Value through Strong ESG 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 science-based • Gender diversity: 34% of managerial
Slide 15: Cogeco Connexion
(C; coGeco CONNEXION
Slide 16: Cogeco Connexion's Broadband Network
Cogeco Connexion’s Broadband Network Serving 600+ communities from Windsor to Gaspé Through its digital oxio brand, operates in majority of Canadian provinces 16
Slide 17: Cogeco Connexion's Financial Results Overview
Cogeco Connexion’s Financial Results Overview Strong growth and industry leading adjusted EBITDA margini, with capital invested into acquisitions and fibre-to-the-home 1,000 network expansion to drive future growth 100.0% 950 Adj. EBITDAi & Adj. EBITDA Net CapExiii & Capital Revenue Margini 90.0% In
Slide 18: Cogeco Connexion's Highlights
Cogeco Connexion’s 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 • Fibre-to-the-hom
Slide 19: Wireless Spectrum Coverage to Enable MVNO Framework
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 ~40% of the price/MHz/pop paid by national carrier
Slide 20: Breezeline
wy breezeline™ «a Cogeco company
Slide 21: Breezeline's Broadband Network
Breezeline’s Broadband Network Serving 500+ communities in 13 states in the U.S. 21
Slide 22: Breezeline's Financial Results Overview
Breezeline’s 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 o
Slide 23: Breezeline's Highlights
Breezeline’s 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 compa
Slide 24: Additional Financial Information
Additional Financial Information 24
Slide 25: Prudently Managing Leverage
Prudently Managing Leverage Evolution of net indebtedness to adjusted EBITDA ratiovi Breezeline (formerly Connecticut system MetroCast Acquisition Sale Wireless Ohio broadband Wireless Atlantic Broadband) & Acquisition of data spectrum & systems spectrum & Peer 1 Hosting centers DERYtelecom Acquisit
Slide 26: Low Cost of Capital and Spread-Out Maturities
Low Cost of Capital and Spread-Out Maturities Debt Maturities Excluding credit facilities and lease liabilities As at November 30, 2023 $M November 30, Cogeco Communications Breezeline 2023 (excluding Breezeline) U.S. subsidiaries(5) Average Cost 5.4% $1,760(2)(3) of Debt(1) $984(2)(4) $500 $326(2)
Slide 27: Compensation Aligned with Economic Value Creation (EVC)
Compensation Aligned with Economic Value Creation (EVC) 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 Economic Value vs target, 20% based on strateg
Slide 28: Cogeco TSX: CGO
Cogeco TSX: CGO 28
Slide 29: Cogeco
Cogeco Cogeco TSX: CGO 12.0M shares of CCA(1) 80% Voting Rights $551M 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 $712M $98M (1)(3) Investment Value LTM Revenue $3.0B LTM Revenu
Slide 30: 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 30
Slide 31: Cogeco Media Top Ratings
Cogeco Media Top Ratings Largest radio broadcaster 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 Montréal ● 96.9 CKOI reaches 1.8M
Slide 32: APPENDIX
APPENDIX 32
Slide 33: Customer Profile
Customer Profile November 30, 2023 COGECO CONNEXION BREEZELINE TOTAL Homes passed(1) 2,063,949 1,749,585 3,813,534 Primary service units(2) 1,873,244 1,077,813 2,951,057 Internet service customers 865,468 663,286 1,528,754 Video service customers 626,672 280,145 906,817 Phone service customers 381,1