Sunrise Communications Ag Class A · SIX:SUNN
Sunrise Communications Ag Class A — Q1 2017 Earnings Presentation
24 slides from Sunrise Communications Ag Class A's earnings presentation, May 11, 2017
Slide 1: Q1'17 financial results
Sunrise Communications Group AG Q1’17 financial results – 11 May 2017
Slide 2: Agenda
Agenda 1 Summary & operational update O. Swantee (CEO) 2 Financials A. Krause (CFO) 3 Conclusion O. Swantee (CEO) 4 Q&A 2
Slide 3: Q1 summary
Q1 summary • Continued subscriber growth momentum in key focus areas • Uptake of Sunrise ONE good so far, limited ARPU dilution as expected • Accelerated mobile postpaid (6.5% YoY) growth • Accelerated internet (10.7% YoY) and TV (25.2%) growth • Revenue trend further stabilized to -1.0% YoY (MTR ad
Slide 4: Continued momentum in mobile postpaid subscriptions
Continued momentum in mobile postpaid subscriptions Postpaid mobile net adds (‘000) Prepaid mobile net adds (‘000) 26 25 22 18 20 10 12 -7 10 5 Secondary 10 Primary -20 12 15 16 13 8 -27 -34 Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 -37 Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 • Postpaid with solid customer in-take despit
Slide 5: TV subscriptions with strongest momentum since 2013
TV subscriptions with strongest momentum since 2013 Internet net adds (‘000) TV net adds (‘000) 14 13 11 9 8 7 6 7 7 5 Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 • Internet with accelerated net adds, leading to 386k • TV with highest net adds since 2013, leading to 176k total subscr
Slide 6: ARPU trends continuing
ARPU trends continuing Blended mobile service ARPU (CHF) • Blended mobile ARPU down CHF -0.6 YoY (MTR adj.1)) 33,4 31,4 32,2 31,8 • Postpaid down CHF -1.7 YoY (MTR adj.1)) mainly due to 2nd SIM dilution, 29,4 Freedom HW unwind and value mix; eased pressure compared to Q4 (CHF -2.5) supported by less
Slide 7: Agenda
Agenda 1 Summary & operational update O. Swantee (CEO) 2 Financials A. Krause (CFO) 3 Conclusion O. Swantee (CEO) 4 Q&A 7
Slide 8: MTR change impacts Revenue, but is largely neutral on Gross Profit
MTR change impacts Revenue, but is largely neutral on Gross Profit Total Revenue (CHFm) • Mobile Termination Rates 1) change as per -3,3% 1 January 2017 negatively impacts Revenue, MTR adj: -1.0% but is largely neutral on Gross Profit level – as 446 announced on 20 Oct 2016; effect (10) 431 (4) inco
Slide 9: Overview: Higher adj. EBITDA and GP further stabilizing
Overview: Higher adj. EBITDA and GP further stabilizing Revenue (CHFm) • Revenue down -1.0% (MTR1) adj.) softening from -2.3% (Q4) Revenue: Service revenue 2): • Service Revenue 2) down -1.4% (MTR adj.) with subscriber -15 (-3.3%) -15 (-4.1%) momentum offset by lower ARPUs and less Revenue in a low-
Slide 10: Focus on Q1 Revenue
Focus on Q1 Revenue Q1’17 Revenue bridge (CHFm) Q4’16 YoY Q1’16 Revenue 446 • Hubbing: international trading business which is volatile by nature Δ hubbing +3.6 5.2 • Mobile HW: Revenue depends on handset innovations / launches, which vary 0% across quarters leading to revenue volatility Δ mobile HW
Slide 11: GP further stabilized - continued cost containment
GP further stabilized - continued cost containment Gross Profit (CHFm) Adjusted Opex1) (CHFm) -5 -11% (-1.6%) 170 291 286 157 -5% 149 151 143 145 144 144 81.2% 142 79.1% Q1’16 Q1’17 Q1’15 Q1’16 Q1’17 Service Gross Margin 2) • Gross Profit decline moderated to -1.6% in Q1 • Adj. Opex down 5% YoY due
Slide 12: Improved eFCF, in-line with company expectation
Improved eFCF, in-line with company expectation Cash flow ‘Last Twelve Months’ (CHFm) Net debt reduction QoQ (CHFm) Q1’17 LTM FY’16 Reported EBITDA 601 599 • Improved eFCF supported by different NWC Tax (23) (30) seasonality than last year; FY’17 eFCF Interest (49) (51) expectation remains 2 unchang
Slide 13: Agenda
Agenda 1 Summary & operational update O. Swantee (CEO) 2 Financials A. Krause (CFO) 3 Conclusion O. Swantee (CEO) 4 Q&A 13
Slide 14: On-track with key priorities
On-track with key priorities Connect score 2016 Max 1000 • Outstanding mobile network; on-track to reach 92% geographic 4G coverage by year-end and to reach speeds of up to 900 Mbit/s in five Network largest cities; launched VoLTE & WiFi calling 951 933 quality 878 • Fastest mobile surfing speed in
Slide 15: Q1 conclusion
Q1 conclusion Q1 recap Outlook • Continued subscriber momentum in focus areas • Service Revenue (MTR adj.) and Gross Profit trends further stabilized • FY’17 guidance reiterated • Continued Opex improvement YoY as expected, leading to slight adj. EBITDA increase • Equity free cash flow in-line with
Slide 16: Agenda
Agenda 1 Summary & operational update O. Swantee (CEO) 2 Financials A. Krause (CFO) 3 Conclusion O. Swantee (CEO) 4 Q&A 16
Slide 17: Appendix
Appendix Sunrise
Slide 18: Income Statement
Income Statement P&L (CHFm) Q1 2017 Q1 2016 Mobile services 279 297 thereof mobile postpaid 181 185 thereof mobile prepaid 30 42 thereof hardware 48 52 Landline services 95 97 thereof landline voice 37 39 thereof hubbing 31 26 Landline internet & TV 57 52 Total revenue 431 446 % YoY growth (3.3%) Se
Slide 19: Cash Flow Statement
Cash Flow Statement Cash Flow (CHFm) Q1 2017 Q1 2016 EBITDA 141 139 Change in net working capital (14) (64) thereof handset receivable factoring impact - (17) Movement in pension and provisions 1 (3) Interest paid (14) (15) Corporate income and withholding tax paid (7) (13) Cash flow from operating
Slide 20: Reduction in net debt
Reduction in net debt March 31, December 31, March 31, Net debt (CHFm) 2017 2016 2016 Senior Secured Notes issued February 2015 500 500 500 Term loan B 1'360 1'360 1'360 Total cash-pay borrowings 1'860 1'860 1'860 Financial lease 15 17 21 Total debt 1'875 1'877 1'881 Cash & Cash Equivalents (242) (2
Slide 21: Bridge adjusted to reported EBITDA
Bridge adjusted to reported EBITDA Q1’17 EBITDA bridge (CHFm) Adj. EBITDA Q1’17 143 Share based payment • Share-based payment provisions for multi-year 0 expenses compensation plans • Prior year related events mainly include Prior year events 2 adjustments of provisions/accruals based on newly avail
Slide 22: Thank you for your interest in Sunrise
Thank you for your interest in Sunrise Thank you for your interest in Sunrise 22
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
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 2017 Earnings Presentation on 6ix