Sunrise Communications Ag Class A · SIX:SUNN

Sunrise Communications Ag Class A — Q3 2014 Earnings Presentation

27 slides from Sunrise Communications Ag Class A's earnings presentation, Nov 12, 2014

  1. Slide 1: Financial results Third quarter 2014

    Sunrise Communications Holdings S.A. Financial results Third quarter 2014 1

  2. Slide 2: Q3 Highlights

    Q3 Highlights • Strong growth momentum on the back of Sunrise Freedom’s and Sunrise Home’s success • Freedom – our mobile offer: ~25% of total postpaid customer base as of September 30, 2014 • Home – our fixed bundle: ~45% increase in weekly orders (Q3'14 vs. Q3'13) • Growing subscriber base in Mobi

  3. Slide 3: Agenda

    Agenda 1 Delivering Value 2 Growth Momentum 3 Financial performance © Sunrise 12.11.2014 3

  4. Slide 4: Delivering value - Our approach

    Delivering value - Our approach 1 Invest Invest into mobile and fixed network and customer experience: • >80% LTE pop coverage, further coverage expansion ongoing 3 Growth Momentum 4 Value Creation • 88% mobile data traffic increase from Q3'13 to Q3'14 Growing customer base and converged customers:

  5. Slide 5: Competitive mobile network infrastructure

    Competitive mobile network infrastructure Key considerations 4G population coverage • Dense and advanced network – 3,510 individual macro sites1 – 71% of the sites supported by state-of-the-art backhaul (full IP) 2G – Femto-cells for further enhanced indoor 3G coverage 4G • Excellent population cove

  6. Slide 6: Attractive and unique fixed access strategy

    Attractive and unique fixed access strategy Max download speed Household Coverage Mbits/s State-of-the-art 10,800 km Households 100% nationwide fiber backbone Fully invested LLU network with over 600 20 LLU ~85% PoPs Full and attractive access via 50 VDSL ~80%1 Swisscom BBCS Partnerships with SFN3,

  7. Slide 7: Achieving service excellence

    Achieving service excellence Solving rate and accessibility rate improving Shops and call centre NPS improving 100 140 135 95 130 90 125 120 85 115 80 110 105 75 100 70 95 90 65 85 Indexed to 100% in Q2’13 60 80 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Solving ra

  8. Slide 8: Sunrise Rewards

    Sunrise Rewards Unique & highly innovative loyalty program aligned with group's customer strategy based on transparency, fairness and customer orientation The new loyalty program of Sunrise  Fair: • We reward customer loyalty • Eligible already after one year • All existing customers can benefit im

  9. Slide 9: Sunrise Buyback

    Sunrise Buyback Customer-friendly buyback program to further enhance customer acquisition & retention capabilities Successful customer acquisition & retention tool  Fair: • Buyback offer available to all new and existing customers • Fair phone prices with Buyback  Transparent: • Transparent Buybac

  10. Slide 10: Agenda

    Agenda 1 Delivering Value 2 Growth Momentum 3 Financial performance © Sunrise 12.11.2014 10

  11. Slide 11: Strong take-up of recent innovative offerings

    Strong take-up of recent innovative offerings Freedom driving acceleration in Postpaid Fixed momentum driven by Sunrise Home Postpaid voice gross adds (Q2'13 and Q3'13 rebased to 100) Sunrise Home new customers orders and migrations (average weekly orders / Migrations, Q2’14 rebased to 100) +45% +85

  12. Slide 12: Mobile subscribers and ARPU momentum

    Mobile subscribers and ARPU momentum Mobile subscribers (‘000) Blended ARPU (CHF) 2,494 2,491 2,477 2,487 2,496 2,137 2,142 41.0 41.9 39.6 1,233 1,202 1,199 1,193 36.5 37.0 1,261 34.9 35.4 941 925 36.8 37.5 36.2 33.0 31.5 31.9 33.7 1,053 1,067 1,078 1,090 1,104 1,045 1,049 151 168 180 191 197 198 19

  13. Slide 13: Landline internet subs. and ARPU momentum

    Landline internet subs. and ARPU momentum Subscribers (‘000) Internet and Sunrise TV ARPUs (CHF) +5.1 (+12%) 354 348 340 +2.2 330 326 (+6%) 46.4 47.2 43.7 45.3 42.1 38.3 39.0 39.7 39.9 37.7 289 274 257 241 229 83 89 97 66 74 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Internet only B

  14. Slide 14: Agenda

    Agenda 1 Delivering Value 2 Growth Momentum 3 Financial performance © Sunrise 12.11.2014 14

  15. Slide 15: Reported Revenue and EBITDA trends

    Reported Revenue and EBITDA trends Revenue (CHFm) EBITDA (CHFm) +11 (+2.2%) +11 +28 (+6.3%) (5.6%) +9 (5.7%) 181 520 517 526 531 498 170 470 159 151 151 132 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 • Strong commercial momentum and reduced • Significant EBITDA growth fr

  16. Slide 16: Inflection point reached in H1'14

    Inflection point reached in H1’14 Revenue 1 (CHFm) Recurring EBITDA 3,4 (CHFm) Organic revenues growth2 Organic recurring EBITDA growth2 -31 +16 +13 -16 +2 +11 (-6.8%) (+3.4%) (+2.7%) (-10.9%) (+1.4%) (+6.4%) Reported revenues1 growth Reported recurring EBITDA growth -21 +25 +13 -14 +4 +11 (-4.6%) (

  17. Slide 17: How Freedom impacts mobile revenues

    How Freedom impacts mobile revenues Q1'14 mobile revenues Q2'14 mobile revenues Q3'14 mobile revenues (CHFm) (CHFm) (CHFm) Full value of the handset recognised upfront Backlog of 17k iPhone 6 orders Monthly hardware installments of new Freedom customers no longer recognized in service 346 353 revenu

  18. Slide 18: How Freedom impacts mobile postpaid gross profit

    How Freedom impacts mobile postpaid gross profit Mobile postpaid gross profit (CHFm) Inflection point reached (CHFm) Adjustment for comparison with pre Freedom reported Actuals financials Comparable financials YoY growth (%) (2.8) (0.1) (2.8) (4.1) (6.1) (6.4) (5.1) (5.2) (5.7) 341 1 2 (0.1) 0.0 (2.

  19. Slide 19: Capital expenditure breakdown

    Capital expenditure breakdown Capex as a % of revenues 12.7% 18.3% (excluding hubbing revenues) CHF million 258 45.9% 177 153 1 86 14 5 YTD Q3’13 YTD Q3’14 Mobile network Landline network IT investments Other investments investments • Peak spending year: ~CHF355 million expected for FY’14 due to sub

  20. Slide 20: Overview of results

    Overview of results Financial Results Q3 YTD -13 Q3 YTD -14 Q3'2013 Q3'2014 CHF million Mobile 943 991 330 353 Landline Services 415 383 140 127 of which hubbing 110 116 41 40 Landline Internet 147 153 50 51 Total revenues 1'504 1'527 520 531 % yoy growth 1.5% 2.2% Revenues (excl. hubbing) 1'394 1'4

  21. Slide 21: Net debt and leverage ratio

    Net debt and leverage ratio Net debt Dec 31, 2013 Sept 30, 2014 CHF million Senior Secured Notes 755 747 Senior Secured Notes issued July 2012 523 521 Floating Rate Notes issued July 2012 205 201 Senior Unsecured Notes 689 677 Utilized RCF 95 80 Total cash-pay borrowings 1 2'267 2'226 Fair value of

  22. Slide 22: Appendix – Additional information on Freedom

    Appendix – Additional information on Freedom

  23. Slide 23: Freedom is a change of business towards a lean customer acquisition model

    Freedom is a change of business towards a lean customer acquisition model 24-month illustrative P&L impact of one new customer (indexed on 100) Key considerations Service HW Cost of goods sold 1 revenues 2 revenues 3 and SACs 1 Service revenues 10 141 • Pre Freedom: service revenues 31 131 include m

  24. Slide 24: BACKUP

    BACKUP © Sunrise 12.11.2014 24

  25. Slide 25: Pro-forma mobile prepaid subscriber statistics 12 month activity rule

    Pro-forma mobile prepaid subscriber statistics 12 month activity rule • For transparency reasons, pro-forma mobile prepaid subscribers based on a 12 month activity rule instead of Sunrise’s 3 month activity rule are provided • Sunrise still believes, that the 3 month activity rule is a fairer repres

  26. Slide 26: Thank you

    Thank you © Sunrise 11.11.2014 26

  27. Slide 27: 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 Holdings — Q3 2014 Earnings Presentation on 6ix