Sunrise Communications Ag Class A · SIX:SUNN
Sunrise Communications Ag Class A — Q2 2018 Earnings Presentation
27 slides from Sunrise Communications Ag Class A's earnings presentation, Aug 23, 2018
Slide 1: Sunrise Communications Group AG Q2 2018 financial results
Sunrise Communications Group AG Q2 2018 financial results – 23 August 2018
Slide 2: Agenda
Agenda 1 Summary & operational update O. Swantee (CEO) 2 Financials A. Krause (CFO) 3 Conclusion O. Swantee (CEO) 4Q&A 2
Slide 3: Summary: Q2 confirms strong start to the year – raising FY'18 guidance
Summary Q2 confirms strong start to the year – raising FY’18 guidance • Customer growth momentum in key focus areas continued • Strong growth in mobile postpaid (+7.7% YoY), internet (+11.0% YoY) and TV (+22.3%) • Supported by continued B2B customer wins (Q2: McDonald’s, BERNMOBIL and Sympany) and c
Slide 4: Strong postpaid customer growth continues
Strong postpaid customer growth continues Postpaid mobile net adds (‘000) Prepaid mobile net adds (‘000) 31 31 30 26 27 6 11 11 9 8 -6 -9 Secondary 21 Primary 19 21 20 20 -30 -40 -39 Q2’17 Q3’17 Q4’17 Q1’18 Q2’18 Q2’17 Q3’17 Q4’17 Q1’18 Q2’18 • Postpaid driven by primary SIMs, leading to 1.66m • Pre
Slide 5: Growing internet and TV customer base
Growing internet and TV customer base Internet net adds (‘000) TV net adds (‘000) 12 12 12 11 13 13 12 9 9 7 Q2’17 Q3’17 Q4’17 Q1’18 Q2’18 Q2’17 Q3’17 Q4’17 Q1’18 Q2’18 • Internet continues to grow customer base: Sunrise • TV with solid growth: Sunrise now has 229k TV now has 442k internet subscript
Slide 6: ARPU trends continuing
ARPU trends continuing Incl. IFRS 15 1) Blended mobile ARPU (CHF) Blended mobile ARPU: • Blended mobile ARPU up CHF +0.3 YoY due to growing postpaid subscribers, which have a higher ARPU than decreasing prepaid subscribers 33.0 32.0 31.5 30.5 32.3 • Postpaid CHF -0.8 YoY (Q1 CHF -1.0 YoY) mainly due
Slide 7: Spectrum auction scheduled for 2019
Spectrum auction scheduled for 2019 Spectrum in place (MHz) Incremental spectrum to be allocated (MHz) Competitors 150 300 Sunrise 130 120 110 80 70 60 100 40 45 90 40 60 40 50 45 30 15 10 20 20 0 700 MHz SDL 700 MHz 1400 MHz SDL 2600 MHz 3500 - 3800 800 MHz 900 MHz 1800 MHz 2100 MHz 2600 MHz 2600 M
Slide 8: Financials
Financials A. Krause (CFO) Sunrise
Slide 9: Financial Overview excl. IFRS 15
Financial Overview excl. IFRS 15 1) Revenue (CHFm) Total revenue: Service revenue 2): • Revenue up +2.0% due to service revenue +2.0% +2.9% • Service revenue up +2.9% driven by mobile postpaid and internet/TV; Q2 run rate roughly in-line with Q1 (+3.0%) 453 462 364 375 Q2’17 Q2’18 Q2’17 Q2’18 Gross
Slide 10: Revenue driven by postpaid, internet and TV
Revenue driven by postpaid, internet and TV Revenue bridge (CHFm) Q2’17 Revenue 453 • Mobile hardware: depends on handset innovation, launches and Δ mobile hw (low-margin) 5 pricing; variations across quarters lead to revenue volatility 0% Δ hubbing -7 • Hubbing: international trading business which
Slide 11: Gross profit growth partly reinvested into operational momentum
Gross profit growth partly reinvested into operational momentum Gross profit Adjusted Opex Growth YoY Growth YoY excl. tower 3.1% 2.9% 2.4% 2.2% 1.6% 0.3% 1.0% 0.2% 0.3% -0.9% Q2’17 Q2’18 Q2’17 Q2’18 +6.5 +2.3 In CHFm 304 In CHFm Tower adj. 298 156 145 9 Tower 81.8% 81.2% Service GM 1) effect 147 Q2
Slide 12: eFCF driven by NWC as expected
eFCF driven by NWC as expected Equity Free Cash Flow (CHFm) 1) Capex (CHFm) Q2’18 LTM Q1’18 LTM 327 322 21 31 44 45 Reported 45 Landline access 586 588 • EBITDA impacted by tower 46 EBITDA disposal, largely offset by Customer growth underlying growth 217 201 Innovation & Development Δ NWC (16) 31 In
Slide 13: Successful debt refinancing in Q2
Successful debt refinancing in Q2 Maturity profile (CHFm) 1) As per 31 Mar 2018 1,410 • Extended maturity profile Term loan Bond 910 • Weighted average cost of debt reduced from 1.9% to 1.5% based on leverage of 2.0-2.5x 2) 500 • Expecting slightly lower underlying annual 2019 2020 2021 2022 cash in
Slide 14: Renewed landline access agreement with Swisscom
Renewed landline access agreement with Swisscom Customers per Swisscom access renewal Sunrise with diversified landline access technology FTTH • Access via local utilities and Renewed commercial agreement for access to FTTH Swisscom and xDSL at roughly similar • Expected increasing share, with econo
Slide 15: Conclusion
Conclusion O. Swantee CEO Sunrise 15
Slide 16: Investing into strategic growth priorities
Investing into 3 strategic growth priorities Leading European network quality 1) • Outstanding mobile network with leading dropped call ratios, 30 Mbit/s average experienced download speed, and 99.9%/95.4% LTE population/geographic coverage covering 68% YoY data growth Network Sunrise • First 5G ant
Slide 17: Q2 conclusion: Raising and tightening FY'18 EBITDA guidance
Q2 conclusion Raising and tightening FY’18 EBITDA guidance Revised FY’18 guidance • Continued strong subscriber growth in mobile Customers postpaid, internet and TV; supported by B2B • Revenue: CHF 1,830-1,870m • New adj. EBITDA: CHF 595-605m • Service Revenue growth driven by customer • Capex 1): C
Slide 18: Q&A
oid y Q&A ~ Sunrise 18
Slide 19: Appendix
w a ho r= 3 7) Appendix 19
Slide 20: IFRS 15 update
IFRS 15 update Q2’18 without and with IFRS 15 Expected FY’18 impact Revenue Q2’18 with IFRS 15 • At Sunrise, the 2018 impact of IFRS 15 is +2.0% +2.1% mainly related to the capitalization of costs to obtain a contract, resulting in a 453 462 453 463 +0.2 positive Opex effect • The 2018 adj. EBITDA u
Slide 21: Income Statement
Income Statement Q2 2018 Q2 2018 Q2 2017 P&L (CHFm) incl. IFRS 15 excl. IFRS 15 excl. IFRS 15 Mobile services 315 315 303 thereof mobile postpaid 203 203 192 thereof mobile prepaid 25 25 32 thereof hardware 65 65 60 Landline services 79 79 91 thereof landline voice 31 31 35 thereof hubbing 23 23 30
Slide 22: Cash Flow Statement
Cash Flow Statement Q2 2018 Q2 2018 Q2 2017 Cash Flow (CHFm) incl. IFRS 15 excl. IFRS 15 excl. IFRS 15 EBITDA 147 145 149 Change in net working capital (15) (13) 32 Movement in pension and provisions 1 1 0 Interest paid (12) (12) (8) Corporate income and withholding tax paid (5) (5) (5) Cash flow fr
Slide 23: Q2 leverage up due to dividend payment
Q2 leverage up due to dividend payment June 30, March 31, December 31, June 30, Net debt (CHFm) 2018 2018 2017 2017 Senior Secured Notes issued February 2015 - 500 500 500 Term loan B 1'410 910 910 1'360 Senior Secured Notes issued June 2018 200 - - - Total cash-pay borrowings 1'610 1'410 1'410 1'86
Slide 24: Bridge adjusted to reported EBITDA
Bridge adjusted to reported EBITDA Q2’18 EBITDA bridge Adj. EBITDA Q2’18 148 • Share-based payment provisions for multi-year compensation plans Share based payment (1) expenses • Prior year related events mainly include adjustments of provisions/accruals based on Prior year events 0 newly available
Slide 25: Thank you
Thank you Sunrise
Slide 26: Contact information
Contact information Investor contact Uwe Schiller Stephan Gick uwe.schiller@sunrise.net stephan.gick@sunrise.net investor.relations@sunrise.net +41 58 777 96 86 26
Slide 27: Disclaimer
Disclaimer This document and any materials distributed in connection herewith (including any oral statements) (together, the “Presentation”) do not constitute or form a part of, and should not be construed as, an offer for sale or subscription of or solicitation of any offer to purchase or subscribe
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