Sunrise Communications Ag Class A · SIX:SUNN

Sunrise Communications Ag Class A — Q2 2019 Earnings Presentation

14 slides from Sunrise Communications Ag Class A's earnings presentation, September 2019

  1. Slide 1: Q2 2019 Financial Results Roadshow presentation

    1 Q2 2019 Q1 Financial Results Roadshow presentation 16 May 2019 September 2019

  2. Slide 2: Q2'19 update

    2 Q2’19 update FY’19 guidance range tightened at high end to adj. EBITDA CHF 618 – 628m1) Postpaid customer base up 10% YoY Double digit internet and TV net adds Net adds (000) Net adds (000) 42 43 • 40 9 6 8 9 11 TV Strong subscriber growth in mobile postpaid, internet and TV 30 12 31 14 Customers

  3. Slide 3: New Sunrise – Transforming the Swiss telecoms market

    3 New Sunrise – Transforming the Swiss telecoms market 1  The acquisition of UPC Switzerland creates a fully-converged challenger nationwide with scale – a stronger and more valuable Sunrise Converged customer base and scale  Ability to provide fully-convergent fixed, mobile, internet and TV solut

  4. Slide 4: UPC H1 in-line with Liberty's turnaround plan

    4 UPC H1 in-line with Liberty’s turnaround plan Ahead of Sunrise expectations leading to CHF 10 - 15m higher FY’19 OpFCF expectation 2) UPC Switzerland revenue (CHFm) • RGU net adds, revenue, OCF targets achieved 315 316 Turnaround plan • Success in major investments in UPC TV, 1 Gbps and digitisati

  5. Slide 5: Revised expected cost, capex and revenue synergies ~CHF280m run-rate in 2023

    5 Revised expected cost, capex and revenue synergies estimated at ~CHF280m run-rate in 2023 Run-rate synergy estimates (CHFm) +~5 +~30 +~5 +~40 +~5 +~45 ~50 ~280 ~40 ~230 ~45 ~40 ~35 ~90 ~10 ~235 ~90 ~190 ~60 ~55 COGS SG&A Other Opex Capex Cost & Capex Revenue Total • Fixed network • Removing • Cent

  6. Slide 6: Revised expected total run-rate synergies resulting in a CHF0.3bn increase in NPV to CHF3.1bn

    6 Revised expected total run-rate synergies resulting in a CHF0.3bn increase in NPV to CHF3.1bn Announcement Feb 2019 Upward revision Aug 19 Cost & Capex synergy NPV ~CHF2.4bn +0.3bn ~CHF2.7bn Total synergy NPV ~CHF2.8bn +0.3bn ~CHF3.1bn Includes incremental ~CHF30m one-off costs to integrate headqu

  7. Slide 7: Attractive valuation compared to precedents

    7 Attractive valuation compared to precedents Favourable multiples relative to precedent convergence transactions even when based on trough FY’19 financials and more so when considering low Swiss interest and tax rates EV / EBITDA1) – UPC Switzerland EV / OpFCF1) – UPC Switzerland ~11.0x ~22.5x 9.9x

  8. Slide 8: Appendix

    8 Appendix

  9. Slide 9: Sunrise Board concludes UPC transaction in the best interest of all shareholders

    9 Sunrise Board concludes UPC transaction in the best interest of all shareholders  Lowest cable M&A multiples paid in recent years when adjusting for synergies and Swiss tax and interest: ~6x adj. EBITDA, ~7x adj. OpFCF for 2018 and ~6.5x adj. EBITDA, ~9.5x adj. OpFCF for 2019E  Valuation support

  10. Slide 10: Synergies supported by industry benchmarks

    10 Synergies supported by industry benchmarks UPC Switzerland MVNO and TSA charges plus Sunrise fixed access costs underpin saving opportunity Cost & Capex synergies as % of combined cost base (COGS + Opex + Capex) 7.5% 9.0% 2.6% 5.1% 3.8% 4.8% 3.9% 4.8% 5.4% 6.8% 8.0% 11.7% 4.2%1) na Synergies supp

  11. Slide 11: EV / RGU and EV / Customer multiples justified by UPC Switzerland's higher value

    11 EV / RGU and EV / Customer multiples clearly justified by UPC Switzerland’s higher value Swiss customers while EBITDA and OpFCF metrics compares even more favourably RGU = Individual service Customer = Unique Customer Relationship, OpFCF / RGU (CHF) subscriber Average OpFCF / Customer (CHF) irres

  12. Slide 12: EV/Customer regression against revenue, EBITDA per RGU and customer

    12 UPC’s EV / RGU and EV / Customer are in line with precedents based on customer value and at a discount when adjusting for the Swiss premium Regression against EV / RGU Regression against EV / Customer 3,000 6,000 UPC Switzerland UPC Switzerland EV/Customer 2,500 R2= 95.5% 5,000 R2= 96.3% UPC Swit

  13. Slide 13: Leverage of listed European Telecom peers

    13 Leverage of listed European Telecom peers Net debt1) / EBITDA LTM 6.4x 4.5x 4.3x Average cable peers: 4.1x 3.6x 3.2x 3.2x 3.1x Overall average: 3.0x 2.9x 2.7x Average WEPIT: 2.4x 2.3x 2.1x 2.0x 2.0x 1.9x 2.0x 1.4x 2) 3) 3) 1) Net debt as of latest financial reporting 2) Based on LTM Jun-19 EBITDA

  14. Slide 14: Disclaimer

    14 Disclaimer • The information contained in this investor presentation has not been independently verified and no representation or • The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, in any warranty, express or implied, is made as to, an

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