Cogeco Communications Inc. · TSX:CCA
Cogeco Communications — Investor Presentation (October 2022)
31 slides from Cogeco Communications's investor presentation, Oct 27, 2022
Slide 1: Investor Update
Investor Update As of October 27, 2022 TSX: CGO | TSX: CCA
Slide 2: Contents
Contents Cogeco Communications (TSX: CCA) 4 Breezeline (formerly Atlantic Broadband) 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 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 anticipated events, business, oper
Slide 4: TSX: CCA
((, COGECO — COMMUNICATIONS TSX: CCA
Slide 5: Overview
Overview Growing competitive force in the North American telecommunications sector with a presence in Ontario, Quebec and 13 states in the United TSX:CCA States Unique North American $2.9B FY2022 Revenue $3.0B Market (1) Capitalization broadband platform with strong operational experience Prov
Slide 6: Business segment overview
Business segment overview BREEZELINE FY2022 Consolidated Revenue Cogeco Communications entered into the U.S. market in November 2012 and the segment has grown through 5 other acquisitions since then Covers a footprint of 1.7 million(1) homes which Breezeline provides for attractive residential a
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 VALUE CREATION ACTIVITIES 1• Enhance and extend broadband networks to offer more evolve
Slide 8: Financial snapshot
Financial snapshot Steady growth from both organic execution and strategic acquisitions In $M Revenue Adjusted EBITDA & Adjusted EBITDA margini 2% - 4% 2,901 growth 1.5% - 3.5% 2,332 2,384 2,510 2,147 1,393 growth 1,108 1,149 1,206 1,007 46.9% 47.5% 48.2% 48.0% 48.0% 2018 2019 2020 2021 2022 2023(G)
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 1,019 487 5% 918 454 455 decl
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) - 31% 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 2
Slide 11: Share buybacks
Share buybacks Cogeco Communications renewed its Normal Course Issuer Bid, enabling it to acquire up to 1,500,000 subordinate voting shares from May 4, 2022 to May 3, 2023 4.2M shares, or 22%(1) float, repurchased since May 2019 50.0 49.0 $131M repurchased in fiscal 2021 Outstanding shares in M 48.0
Slide 12: Key Strategic Initiatives
Key Strategic Initiatives Acquisition of the Ohio broadband systems for a purchase price of US$1.125B(1), closed on September 1, 2021 Consolidator of U.S. Regional Operator Completed 6 acquisitions in the U.S. since 2012. The American telecommunications segment now represents 50% of consolidated
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 Taking additional steps to foster a culture of Variable executive compensation company with an approved, Diversity & Inclusion (D&I) linked in part to ESG p
Slide 14: Breezeline (formerly Atlantic Broadband)
(formerly Atlantic Broadband) 14
Slide 15: Breezeline
Breezeline 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 1,460 1,097 1,117 1,037 847 14.6% revenue Revenue CAGR(2) since FY2018 FY2018 (1) FY2019 (1) FY2020 (1) FY2021 (1) FY2022 (1) 16.4% adjusted EBITDAi CAGR(2) 46.1% since FY2018 45.8% 677 Adj. EBITDA 466 496 5
Slide 17: Breezeline's highlights
Breezeline’s highlights Strong Financial Growing adjusted EBITDAi and 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 Enhanced Growth The only fibre-to-
Slide 18: Cogeco Connexion
(C;, COGECO — CONNEXION
Slide 19: Cogeco Connexion
Cogeco Connexion Serving 600+ communities from Windsor to Gaspé 19
Slide 20: Cogeco Connexion's financial results overview
Cogeco Connexion’s financial results overview Stable operations with solid adjusted EBITDA margini In $M 1,440 1,393 1,300 2.6% revenue CAGR(1) Revenue 1,295 1,288 since FY2018 FY2018 FY2019 FY2020 FY2021 FY2022 3.3% adjusted EBITDAi 46.1% 775 CAGR(1) since FY2018 751 45.2% 45.8% Adj. EBITDA & A
Slide 21: Cogeco Connexion's highlights
Cogeco Connexion’s highlights Strong Financial Strong adjusted EBITDA margini and 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 in fibre-t
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: $1.1B Breezeline Connecticut MetroCast Sale Ohio (formerly Atlantic DERYtelecom broadband system Acquisition of data Broadband) & Acquisition systems August 31, 2022 Acquisi
Slide 24: Low cost of capital and spread-out maturities
Low cost of capital and spread-out maturities 2023 August August Guidelines 2022 2021 DEBT MATURITIES Average Cost of Debt(1) 4.7% 4.0% 3.3% Excluding credit facilities and lease liabilities(2) $M Average Life 3.8Y 4.0Y 3.2Y Breezeline Cogeco Communications (excluding Breezeline) U.S. subsidiaries(6
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: TSX: CGO
(C; COGECO —_ TSX: CGO
Slide 27: Cogeco TSX: CGO
Cogeco Cogeco TSX: CGO FY2022 Revenue $3.0 B PUBLIC MARKET VALUE OF EQUITY $848 M (15.8M shares at $53.75 (1)) 15.7M shares of CCA 84% Voting Rights 100% Voting Rights 34% Equity 100% Equity Investment in Cogeco Communications TSX: CCA Cogeco Media $65.19 RADIO BROADCASTING $1,029 M FY2022 Revenue $
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 #1English music station in Montréal. ● 96.9 CKOI has the largest reach i
Slide 30: Appendix
Appendix 30
Slide 31: Customer profile
Customer profile August 31, 2022 Cogeco Connexion Breezeline Total Homes passed 1,998,418 1,677,939 3,676,357 Primary service units(1) 1,818,158 1,189,163 3,007,321 Internet service customers(2) 772,600 707,954 1,480,554 Internet penetration(3) 38.7% 42.2% 40.3% Video service customers 652,590 323,0
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