Sunrise Communications Ag Class A · SIX:SUNN

Sunrise Communications Ag Class A — Q1 2016 Earnings Presentation

24 slides from Sunrise Communications Ag Class A's earnings presentation, May 12, 2016

  1. Slide 1: Sunrise Communications Group AG Q1'16 financial results

    Sunrise Communications Group AG Q1’16 financial results – 12 May 2016

  2. Slide 2: Agenda

    Agenda 1 Summary Olaf Swantee (CEO) 2 Operational update Timm Degenhardt (CCO) 3 Financials André Krause (CFO) 4 Conclusion Olaf Swantee (CEO) 5 Q&A 2 © Sunrise

  3. Slide 3: Summary: Solid subscriber momentum and improved eFCF

    Summary Solid subscriber momentum and improved eFCF • Continued subscriber growth momentum in key focus areas • Another strong quarter for mobile postpaid with 6.3% YoY growth, despite competitive environment • Accelerated internet growth of 6.0% YoY alongside 22.1% YoY IPTV growth • Revenue down 8.

  4. Slide 4: Agenda

    Agenda 1 Summary Olaf Swantee (CEO) 2 Operational update Timm Degenhardt (CCO) 3 Financials André Krause (CFO) 4 Conclusion Olaf Swantee (CEO) 5 Q&A 4 © Sunrise

  5. Slide 5: Good postpaid momentum and continued pressure on prepaid in Q1'16

    Good postpaid momentum and continued pressure on prepaid in Q1’16 Postpaid mobile subscriber base (‘000) Prepaid mobile subscriber base (‘000) +6% 1.418 -10% 1.334 21 18 21 24 1.090 981 -13 -17 -47 -34 Q1’15 Q2 Q3 Q4 Q1 Q1’16 Q1’15 Q2 Q3 Q4 Q1 Q1’16 • Postpaid with 18k net adds (Q1’15: 14k) driven b

  6. Slide 6: Continued growth momentum in broadband

    Continued growth momentum in broadband Internet subscriber base (‘000) TV subscriber base (‘000) +6% 329 349 4 3 5 7 +22% 115 140 7 5 7 7 Q1’15 Q2 Q3 Q4 Q1 Q1’16 Q1’15 Q2 Q3 Q4 Q1 Q1’16 • Internet in Q1 experienced the strongest increase in • TV net adds supported by enhanced Sunrise TV subscribers

  7. Slide 7: Q1'16 ARPU: Trends continuing

    Q1’16 ARPU: Trends continuing Blended mobile service ARPU: ∆ YoY (CHF) • ARPU down 4% (CHF -1.2) to CHF 31.4: Pressure mainly from mobile postpaid as a result of Freedom HW unwind, roaming and value effect -1,0 -1,2 -1,7 • Q1’16 ARPU decrease slightly higher than in Q4’15 due to -1,8 temporary impac

  8. Slide 8: Agenda

    Agenda 1 Summary Olaf Swantee (CEO) 2 Operational update Timm Degenhardt (CCO) 3 Financials André Krause (CFO) 4 Conclusion Olaf Swantee (CEO) 5 Q&A 8 © Sunrise

  9. Slide 9: EBITDA slightly up in Q1'16 despite lower revenue

    EBITDA slightly up in Q1’16 despite lower revenue Revenue (CHFm) • Revenue down -8.8% compared to -7.7% in Q4’15 -43 (-8.8%) • Continued subscriber growth momentum in focus areas 489 446 offset by headwinds • Gross profit down -4.9% compared to -6.2% in Q4, representing second quarter of the moderat

  10. Slide 10: Focus on Q1 revenue

    Focus on Q1 revenue Q1’16 revenue bridge (CHFm) = Q4’15 YoY deviation Q1’15 revenue 489 Hubbing: While the international trading business is volatile by nature, Sunrise Δ hubbing -11 -13 has increasingly focused on profitability (stable GP YoY) -5.3% Mobile HW: revenues are dependent on handset inno

  11. Slide 11: Cost containment supporting Q1 adjusted EBITDA margin

    Cost containment supporting Q1 adjusted EBITDA margin Adjusted Opex1) (CHFm) Adjusted EBITDA1) margin (excl. hubbing) (%) 37.8% % OPEX of revenue 36.0% -11% +2.7% 170 33.3% 157 30.6% 149 151 143 Q1’15 Q2’15 Q3’15 Q4’15 Q1’16 Q1’15 Q1’16 • Adj. Opex down 11% YoY supported by organizational • Improved

  12. Slide 12: Equity FCF improvement on track

    Equity FCF improvement on track Cash flow Q1’16 LTM (CHFm) Reduced Capex Q1’16 (CHFm) = FY’15 38 Reported 32 616 623 EBITDA 19 19 Mobile Tax (34) (46) 12 Landline 11 7 IT, Shops & Other Interest (97) 1) (52) 2 • Improved eFCF driven by lower Q1’15 Q1’16 Δ NWC (before factoring) (87) (46) interest: n

  13. Slide 13: Agenda

    Agenda 1 Summary Olaf Swantee (CEO) 2 Operational update Timm Degenhardt (CCO) 3 Financials André Krause (CFO) 4 Conclusion Olaf Swantee (CEO) 5 Q&A 13 © Sunrise

  14. Slide 14: Conclusion

    Conclusion • Continued subscriber growth momentum in key focus areas • Revenues down with more than half of the decrease related to low-margin areas FY’16 guidance is reiterated • Substantial Opex improvement YoY as expected, leading to slightly higher adj. EBITDA • Equity free cash flow improving a

  15. Slide 15: Agenda

    Agenda 1 Summary Olaf Swantee (CEO) 2 Operational update Timm Degenhardt (CCO) 3 Financials André Krause (CFO) 4 Conclusion Olaf Swantee (CEO) 5 Q&A 15 © Sunrise

  16. Slide 16: Appendix

    Appendix 16 © Sunrise

  17. Slide 17: Overview of results – Income Statement

    Overview of results – Income Statement Financial Results Q1 2016 Q1 2015 CHF million Mobile services 297 320 Landline services (incl. voice) 97 119 thereof hubbing 26 39 Landline internet & TV 52 49 Total revenues 446 489 % yoy growth (8.8%) Revenues (excl. hubbing) 420 450 % yoy growth (6.7%) COGS

  18. Slide 18: Overview of results – Cash Flow Statement

    Overview of results – Cash Flow Statement Cash Flow Q1 2016 Q1 2015 CHF million EBITDA 139 133 Change in net working capital (101) (110) thereof handset receivable factoring impact (17) 15 Movement in pension and provisions (4) 1 Interest (paid) / received, net incl. foreign currency impact (15) (60

  19. Slide 19: Stable leverage ratio at 2.6x

    Stable leverage ratio at 2.6x March 31, December 31, March 31, Net debt 2016 2015 2015 CHF million Senior Secured Notes issued February 2015 500 500 500 Term loan B 1'360 1'360 1'360 Total cash-pay borrowings 1) 1'860 1'860 1'860 Financial lease 21 23 28 Total debt 1'881 1'883 1'888 Cash & Cash Equi

  20. Slide 20: Freedom tariff – P&L impact

    Freedom tariff – P&L impact Postpaid ARPU Postpaid P&L CHF 55.7 54.0 55.9 52.9 53.6 52.9 52.6 53.9 52.5 CHFm Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Service ARPU • Pre Freedom tariffs: Service revenue and hardware P&L Revenue revenue component recognition Postpaid Service 202 206 211 1

  21. Slide 21: Prepaid customer development

    Prepaid customer development Market and performance update • Decreasing prepaid customers as a result of pre- to postpaid migration: postpaid flat rate plans provide similar cost control to prepaid; demand for high value smart phone instalment plans which are not available in prepaid • Migration str

  22. Slide 22: Thank you for your interest in Sunrise

    Thank you for your interest in Sunrise 22 © Sunrise

  23. Slide 23: 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 23 © Sunrise

  24. Slide 24: 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

Sunrise Communications Group — Q1 2016 Earnings Presentation on 6ix