Sunrise Communications Ag Class A · SIX:SUNN
Sunrise Communications Ag Class A — Q1 2018 Earnings Presentation
27 slides from Sunrise Communications Ag Class A's earnings presentation, May 3, 2018
Slide 1: Sunrise Communications Group AG Q1 2018 financial results
Sunrise Communications Group AG Q1 2018 financial results – 3 May 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: Entering gross profit growth mode in Q1, after stabilization in 2017
Summary: Entering gross profit growth mode in Q1, after stabilization in 2017 • Customer growth momentum in key focus areas continued • Strong growth in mobile postpaid (+7.6% YoY), internet (+11.6% YoY) and TV (+25.7%) • Q1 with refresh of mobile tariffs after 2014 launch; ‘more for more’ landline
Slide 4: Strongest postpaid net adds since 2011
Strongest postpaid net adds since 2011 Postpaid mobile net adds (‘000) Prepaid mobile net adds (‘000) 30.6 31.1 25 26 27 6 11 11 8 -6 -9 12 Secondary Primary 19 21 20 20 13 -30 -30 Q1’17 Q2’17 Q3’17 Q4’17 Q1’18 -40 Q1’17 Q2’17 Q3’17 Q4’17 Q1’18 • Postpaid driven by primary SIMs, leading to 1.63m • P
Slide 5: Growing Internet and TV customer base
Growing Internet and TV customer base Internet net adds (‘000) • Internet customer base continues to grow: Sunrise 14 now has 431k internet subscriptions 12 12 12 9 • Converged tariff ‘Sunrise ONE’ supported growth: 54k or 36% of billed 4P customer base already on Sunrise ONE (Q4: 46k or 32%) Q1’17
Slide 6: ARPU trends continuing
ARPU trends continuing Incl. IFRS 15 1) Blended mobile ARPU (CHF) Blended mobile ARPU: • Blended mobile ARPU up CHF +0.2 YoY due to growing postpaid subscribers, which have a higher ARPU than decreasing prepaid subscribers 33.0 30.3 32.0 31.5 30.5 • Postpaid down CHF -1.0 YoY mainly due to 2nd SIM d
Slide 7: B2B transformation on-track
B2B transformation on-track Product strategy Positive B2B momentum B2B 1 yr order value YoY 1) : B2B gross profit YoY Evolving into a managed service provider (excl. IFRS 15): Mobile 106% 70% 0% Best mobile solutions for people and 9% …… -7% -6% things - ultra-fast data connections -33% and voice ba
Slide 8: Commercial update mobile: Refresh of 'Freedom' mobile tariffs in Q1
Commercial update mobile Refresh of ’Freedom’ mobile tariffs in Q1 ‘Freedom’ launched in 2014 ‘Freedom’ refresh in 2018 • First Swiss mobile tariff without fixed Balanced refresh with fine-tuning of contract duration pricing, roaming and data buckets • Supported 27% postpaid customer Replacing ‘Max’
Slide 9: Commercial update landline: Refresh of internet tariffs with 'more for more'
Commercial update landline Refresh of internet tariffs with ‘more for more’ Sunrise landline approach Rising speeds and pricing in Q2 / Q3’18 • Follow quality strategy and • Increasing speeds for focus on high-end customers, e.g. new (July) and existing with unlimited tariff ‘Sunrise ONE’ 50.- 70.-
Slide 10: Financials
Financials A. Krause (CFO) 10
Slide 11: IFRS 15 update
IFRS 15 update Q1’18 without and with IFRS 15 IFRS 15 reporting at Sunrise Revenue Q1’18 with IFRS 15 +6.4% +6.3% 431 459 431 458 -0.4 • Q1’18 in this presentation is based on numbers without IFRS 15, except where indicated differently Gross Profit • IFRS report focuses primarily on IFRS 15; +2.9% +
Slide 12: Financial Overview excl. IFRS 15
Financial Overview excl. IFRS 15 1) Revenue (CHFm) Total revenue: Service revenue 2): • Revenue up +6.4% due to service and hardware revenue +6.4% +3.0% • Service revenue up +3.0%, an acceleration compared to Q4 (+0.9% MTR adj.) supported by B2B and growth momentum 431 459 352 363 Q1’17 Q1’18 Q1’17
Slide 13: Revenue driven by postpaid, internet and TV
Revenue driven by postpaid, internet and TV Revenue bridge (CHFm) Q1’17 Revenue 431 • Mobile hardware: revenue depends on handset innovations / Δ mobile hw (low-margin) 17 launches, which vary across quarters leading to revenue volatility +4% Δ hubbing 0 • Hubbing: international trading business whi
Slide 14: Accelerated gross profit, partly reinvested into growth momentum
Accelerated gross profit, partly reinvested into growth momentum Gross profit Adjusted Opex Growth YoY Growth YoY excl. tower 2.9% 2.4% 3.1% 1.0% 0.3% 0.2% 0.3% -0.9% -1.6% -5.0% Q1’17 Q1’18 Q1’17 Q1’18 +8.3 +4.5 In CHFm In CHFm Tower adj. 295 157 286 144 9 Tower 81.2% 81.2% Service GM 1) effect 148
Slide 15: eFCF and leverage as expected
eFCF and leverage as expected Equity Free Cash Flow (CHFm) 1) Capex (CHFm) Q1’18 LTM Q4’17 LTM 315 327 21 21 44 44 Reported 46 45 Landline access 588 592 • EBITDA impacted by tower EBITDA disposal Customer growth 217 Innovation & Development 205 • Capex in-line with company Infrastructure & Δ NWC Δ
Slide 16: Conclusion
Conclusion O. Swantee CEO Sunrise 16
Slide 17: Investing into strategic growth priorities
Investing into 3 strategic growth priorities Leading European network quality 1) • Outstanding mobile network with leading dropped call ratios, 44 Mbit/s average experienced download speed, VoLTE launched, and Network Sunrise 99.9%/95.2% LTE population/geographic coverage covering 70% YoY quality da
Slide 18: Q1 conclusion: Gross Profit acceleration after 2017 stabilization
Q1 conclusion Gross Profit acceleration after 2017 stabilization • Continued strong subscriber growth in mobile Customers postpaid, internet and TV FY’18 guidance reiterated • Service Revenue growth accelerated driven by • Revenue: CHF 1,830-1,870m Revenue B2B and growth momentum • Adj. EBITDA: CHF
Slide 19: Q&A
oid y Q&A ~ Sunrise 19
Slide 20: Appendix
w a ho r= 3 7) Appendix 20
Slide 21: Income Statement
Income Statement Q1 2018 Q1 2018 Q1 2017 P&L (CHFm) incl. IFRS 15 excl. IFRS15 excl. IFRS 15 Mobile services 302 303 279 thereof mobile postpaid 190 191 181 thereof mobile prepaid 25 25 30 thereof hardware 66 65 48 Landline services 89 89 95 thereof landline voice 32 32 37 thereof hubbing 31 31 31 L
Slide 22: Cash Flow Statement
Cash Flow Statement Q1 2018 Q1 2018 Q1 2017 Cash Flow (CHFm) incl. IFRS 15 excl. IFRS 15 excl. IFRS 15 EBITDA 137 135 141 Change in net working capital (15) (13) (14) Movement in pension and provisions 1 1 1 Interest paid (6) (6) (14) Corporate income and withholding tax paid (23) (23) (7) Cash flow
Slide 23: Deleveraging YoY driven by tower proceeds
Deleveraging YoY driven by tower proceeds March 31, December 31, March 31, Net debt (CHFm) 2018 2017 2017 Senior Secured Notes issued February 2015 500 500 500 Term loan B 910 910 1'360 Total cash-pay borrowings 1'410 1'410 1'860 Financial lease 8 9 15 Total debt 1'418 1'419 1'875 Cash & Cash Equiva
Slide 24: Bridge adjusted to reported EBITDA
Bridge adjusted to reported EBITDA Q1’18 EBITDA bridge Adj. EBITDA Q1’18 140 • Share-based payment provisions for multi-year compensation plans Share based payment 0 expenses • Prior year related events mainly include adjustments of provisions/accruals based on Prior year events 1 newly available in
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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