Sunrise Communications Ag Class A · SIX:SUNN

Sunrise Communications Ag Class A — Q2/H1 2015 Earnings Presentation

25 slides from Sunrise Communications Ag Class A's earnings presentation, Aug 20, 2015

  1. Slide 1: Sunrise Communications Group AG Q2/H1'15 Financial Results

    Sunrise Communications Group AG Q2/H1’15 Financial Results

  2. Slide 2: Highlights

    Highlights • Accelerated subscriber momentum in mobile postpaid and internet • Mobile postpaid customers +21k net adds in Q2’15 (YoY growth of +67k, +5%) • Internet +5k net adds in Q2’15 (YoY growth of +3k, +1%) • IPTV subscriptions +7k net adds in Q2’15 (YoY growth of +33k, +37%) • Revenue of CHF 4

  3. Slide 3: Agenda

    Agenda 1 Market Update Libor Voncina (CEO) 2 Results Q2/H1’15 André Krause (CFO) 3 Outlook Libor Voncina (CEO) 4 Q&A © Sunrise 20.08.2015 3

  4. Slide 4: Strong subscriber momentum …

    Strong subscriber momentum … Postpaid mobile quarterly net adds (‘000) Prepaid mobile quarterly net adds (‘000) 25 21 -3 Free SIM Exit -6 -13 11 17 15 16 3 13 14 -28 -31 1 0 6 1 2 -48 -55 Secondary 16 19 15 11 12 14 12 Primary Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q

  5. Slide 5: … but value conversion becoming more challenging

    … but value conversion becoming more challenging • Macroeconomic environment less favorable following removal of currency peg • Swiss GDP growth expected to remain positive at +0.4% in 2015, though below +1.9% expected in December 2014 1) • Consumer goods pricing narrowing with EU, mainly impacting

  6. Slide 6: Sunrise initiated a review to become simpler & more digital

    Sunrise initiated a review to become simpler & more digital CUSTOMER BEHAVIOR IS … AND SUNRISE NEEDS TO INCREASINGLY BECOMING BECOME SIMPLER AND MORE ONLINE CENTRIC… DIGITAL “Average minutes spent on phones daily” 90 • Supporting better customer experience Simplification • Simplification is a “Avera

  7. Slide 7: Agenda

    Agenda 1 Market Update Libor Voncina (CEO) 2 Results Q2/H1’15 André Krause (CFO) 3 Outlook Libor Voncina (CEO) 4 Q&A © Sunrise 20.08.2015 7

  8. Slide 8: Growth driven by postpaid subscriptions

    Growth driven by postpaid subscriptions Mobile subscriptions (‘000) Blended ARPU (CHF) 2′487 2′496 2′465 2′424 2′433 +1.5 + 4.1% 37.0 36.9 1′199 1′193 1′145 1′090 1′078 35.4 35.5 35.4 Δ CHF -2.0 29.7 32.7 30.2 29.1 31.7 1′090 1′104 1′120 1′132 1′151 2.7 3.4 Δ CHF +3.2 0.2 1.0 1.8 198 199 200 202 205

  9. Slide 9: Continued Sunrise Home momentum

    Continued Sunrise Home momentum Subscriptions (‘000) Internet and Sunrise TV ARPUs (CHF) +1.0 +1.9 +4.5 -0.6 333 -1% 330 326 327 329 -2.6 -7% 46.4 47.2 47.2 45.7 45.8 214 211 241 229 220 39.7 39.9 39.3 48% 37.5 37.1 39% 30% 15% 107 115 122 89 97 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15 Q2’14 Q3’14 Q4’14 Q1’15

  10. Slide 10: Lower revenue partly offset by improving margin

    Lower revenue partly offset by improving margin Q2’15 Revenue and EBITDA 1) (CHFm) LTM Q2’15 Revenue and EBITDA 1) (CHFm) Reported growth in CHFm Reported growth in CHFm -36.0 -5.6 -2.6 -11.5 -4.3 +3.6 -6.9% -3.5% -1.6% -0.6% -0.7% +0.6% 524 2’075 2’064 488 159 153 158 155 639 635 638 642 34.2% 33.7

  11. Slide 11: Freedom creating value despite short-term P&L volatility

    Freedom creating value despite short-term P&L volatility Postpaid ARPU Postpaid P&L CHF 53.6 55.7 54.0 52.9 52.9 52.6 CHFm Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Service ARPU • Pre Freedom tariffs: Service 2) P&L Revenue revenue and hardware revenue component recognition Postpaid Service 202 206 211 19

  12. Slide 12: Improved margin driven by cost containment

    Improved margin driven by cost containment Adjusted OPEX1) (CHFm) Adjusted EBITDA1) margin (excl. hubbing) (%) +160 bps -13 +360 bps (-8%) 170 34.2% 157 32.6% 30.6% 76 70 ● Normalized marketing expenses 94 ● Efficiency 88 initiatives Q1’15 Q2’15 Q2’14 Q1’15 Q2’15 Commercial Non-commercial ● EBITDA m

  13. Slide 13: Overview of results – Income Statement

    Overview of results – Income Statement Financial Results H1 - 2015 H1 - 2014 Q2'2015 Q2'2014 CHF million Mobile 641 630 321 344 Landline Services 237 256 117 128 of which hubbing 72 76 34 39 Landline Internet 99 103 50 51 Total revenues 976 988 488 524 % yoy growth (1.2%) (6.9%) Revenues (excl. hubb

  14. Slide 14: Strong improvement in equity free cash flow YoY

    Strong improvement in equity free cash flow YoY Equity free cash flow bridge Q2’15 vs. Q2’14 (CHFm) 120 57 63 21 67 -6 -7 -12 Q2’14 Δ EBITDA Δ CAPEX Δ Interests Δ NWC Q2’15 eFCF Factoring Q2’15 eFCF (excl. factoring) before Factoring eFCF & Δ other CHF 132 million improved eFCF in Q2’15 YoY • Lower

  15. Slide 15: FY15 CAPEX guidance remains unchanged

    FY15 CAPEX guidance remains unchanged CAPEX development (CHFm) Adj. EBITDA – CAPEX (CHFm) +12 -9 (+7.0%) (-7.8%) 114 188 105 176 73 62 Mobile 27 31 Landline IT, Shops & 14 11 Other H1’14 H1’15 H1’14 H1’15 • Focus on LTE coverage expansion and LTE-Advanced introduction, with data growth remaining a k

  16. Slide 16: Overview of results – Cash Flow Statement

    Overview of results – Cash Flow Statement Cash Flow H1 - 2015 H1 - 2014 Q2'2015 Q2'2014 CHF million EBITDA 286 291 153 159 Change in net working capital (55) (133) 55 (34) thereof handset receivable factoring impact 72 - 57 - Movement in pension and provisions 2 (1) 1 (0) Interest (paid) / received,

  17. Slide 17: Stable leverage ratio, despite spectrum payment

    Stable leverage ratio, despite spectrum payment Net debt June 30, 2015 March 31, 2015 Dec 31, 2014 CHF million Senior Secured Notes - - 746 Senior Secured Notes issued July 2012 - - 520 Senior PIK Toggle Notes - - 631 Floating Rate Notes issued July 2012 - - 201 Senior Unsecured Notes - - 675 Utiliz

  18. Slide 18: Agenda

    Agenda 1 Market Update Libor Voncina (CEO) 2 Results Q2/H1’15 André Krause (CFO) 3 Outlook Libor Voncina (CEO) 4 Q&A © Sunrise 20.08.2015 18

  19. Slide 19: Outlook

    Outlook • Revenues softer than expected, now indicating a low-to-mid single digit YoY decline for FY’15: • Despite accelerated customer growth, increased headwinds on revenue due to intensified price pressure at the value end of the market • Adjusted EBITDA guidance reiterated, FY’15 expected to be

  20. Slide 20: Agenda

    Agenda 1 Market Update Libor Voncina (CEO) 2 Results Q2/H1’15 André Krause (CFO) 3 Outlook Libor Voncina (CEO) 4 Q&A © Sunrise 20.08.2015 20

  21. Slide 21: Appendix

    Appendix © Sunrise 20.08.2015 21

  22. Slide 22: Prepaid customer development

    Prepaid customer development Market and performance update • Prepaid revenues are declining as smartphone penetration increases data consumption. This has in turn driven pre-to postpaid migration in a number of market segments • Migration strategy focused on maximizing value through attractive postp

  23. Slide 23: Thank you

    Thank you © Sunrise 20.08.2015 23

  24. Slide 24: Contact information

    Contact information Investor Contact Media contact Sunrise Communications Group AG Sunrise Communications Group AG Uwe Schiller Stefan Kern Head of Investor Relations Head of Corporate Communications uwe.schiller@sunrise.net stefan.kern@sunrise.net +41 58 777 96 80 +41 58 777 76 66 Thank you for you

  25. Slide 25: Disclaimer

    Disclaimer This presentation and any materials distributed in connection herewith (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 for any securities, and nei

Sunrise Communications Group — Q2/H1 2015 Earnings Presentation on 6ix