ABB's Growth Strategy for MetroCast
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US$ DEBT REDUCES FREE CASH FLOW FX EXPOSURE
Cogeco is naturally hedged from a free cash flow perspective as US$ EBITDA exposure is mostly offset by
interest expense on U.S. denominated debt and capex
ESTIMATED PRO FORMA IMPACT OF A 10% DEPRECIATION OF THE CND$ RELATIVE TO US$ AND GBP IN
FY2016(1)
Favorable/(Unfavorable) Impact
(CND$ IN MILLIONS)
Cogeco last twelve-
MetroCast
months Feb. 2017
2017E(2)
Pro Forma
Impact
Revenue
$77.3
$30.6
$107.9
Adjusted EBITDA
$30.2
$16.1
$46.3
Financial expense
($7.8)
($6.8)
($14.5)
Other items (3)
$0.2
$0.2
Capex(4)
($19.4)
($6.0)
($25.4)
Free Cash Flow impact
$3.2
$3.4
$6.6
Free Cash Flow
$384.4
$33.7
$418.1
As a % of FCF
0.8%
1.6%
(1)
FX impact related to revenue, adjusted EBITDA and CAPEX is disclosed on page 32 of Cogeco's 2016 annual report and on page 15
of Cogeco's Q2 FY2017 and FY2016 shareholders' report. The impact on financial expense can be derived from the long-term debt
note disclosure on page 92 of the 2016 annual report.
(2)
Assumes that MetroCast is converted into CND$ at CND$/US$ rate of 1.33.
(3)
Other items include the impact of integration, restructuring and acquisition costs, current income taxes and the amortization of deferred
costs and discounts on long-term debt related to ABB and Cogeco Peer 1.
(4)
Assumes that MetroCast's capital intensity is similar to ABB's FY2016 intensity of 19.5%.
ATLANTIC (C) COGECO
broadband
24
COMMUNICATIONS
a Cogeco companyView entire presentation