Sunrise Communications Ag Class A · SIX:SUNN
Sunrise Communications Ag Class A — Q3 2017 Earnings Presentation
26 slides from Sunrise Communications Ag Class A's earnings presentation, Nov 9, 2017
Slide 1: Sunrise Communications Group AG Q3'17 financial results
Sunrise Communications Group AG Q3’17 financial results – 9 November 2017
Slide 2: Agenda
Agenda 1 Summary and operational update O. Swantee (CEO) 2 Financials A. Krause (CFO) 3 Conclusion O. Swantee (CEO) 4 Q&A 2
Slide 3: Summary: Q3 with continued commercial momentum and GP stabilization
Summary: Q3 with continued commercial momentum and GP stabilization • Customer growth momentum in key focus areas continued • Strong growth in mobile postpaid (+7.2% YoY), internet (+12.9% YoY) and TV (+32.3%) • Continued success with Sunrise ONE: +32% growth YoY of 4P customers, 22% of Sunrise ONE
Slide 4: Leading BILANZ telecom ranking 2017
Leading BILANZ telecom ranking 2017 Mobile 1) Points reached (max 30) Sunrise 23 Swisscom 20 Salt 19 Internet 1) • Sunrise was rated the best universal Sunrise 23 provider for mobile, internet, TV and Swisscom 21 landline voice in residential and SME categories UPC 21 • Network investments are payin
Slide 5: Acceleration of customer momentum in mobile postpaid
Acceleration of customer momentum in mobile postpaid Postpaid mobile net adds (‘000) Prepaid mobile net adds (‘000) 26 26 27 1 25 20 8 6 10 -6 5 12 -9 Secondary 19 21 Primary -30 15 16 13 Q3’16 Q4’16 Q1’17 Q2’17 Q3’17 -57 Q3’16 Q4’16 Q1’17 Q2’17 Q3’17 • Postpaid driven by primary SIMs, leading to 1.
Slide 6: Internet and TV momentum defying low trading summer months
Internet and TV momentum defying low trading summer months Internet net adds (‘000) TV net adds (‘000) 14 12 12 13 13 11 12 8 6 5 Q3’16 Q4’16 Q1’17 Q2’17 Q3’17 Q3’16 Q4’16 Q1’17 Q2’17 Q3’17 • Internet continues with double digit net adds: • TV with solid growth despite summer months which Sunrise no
Slide 7: ARPU trends continuing
ARPU trends continuing Blended mobile ARPU (CHF) Blended mobile ARPU: • Blended mobile ARPU up CHF +0.1 YoY (MTR adj.1)) due to growing postpaid -1.3 subscribers, which have a higher ARPU than decreasing prepaid subscribers MTR adjusted: +0.1 • Postpaid down CHF -1.0 YoY (MTR adj.1)) mainly due to 2
Slide 8: Agenda
Agenda 1 Summary and operational update O. Swantee (CEO) 2 Financials A. Krause (CFO) 3 Conclusion O. Swantee (CEO) 4 Q&A 8
Slide 9: Financial Overview
Financial Overview Revenue (CHFm) • Revenue down -1.2% (MTR1) adj.) due to low-margin Total Revenue: Service revenue 2): hardware and hubbing -18 (-3.7%) -3 (-0.9%) • Service Revenue 2) up +2.3% (MTR adj.) with customer MTR adj. (-1.2%) MTR adj. (+2.3%) growth partly offset by lower ARPUs 478 460 38
Slide 10: Service Revenue improving
Service Revenue improving Q3’17 Revenue bridge (CHFm) Q2’17 YoY Q3’16 Revenue 478 Δ hubbing -5.6 -5,7 • Hubbing: international trading business which is volatile by nature -3% • Mobile HW: Revenue depends on handset innovations / launches, which vary Δ mobile HW -0.2 -8,6 across quarters leading to
Slide 11: Q3 Gross Profit confirming stabilization trend
Q3 Gross Profit confirming stabilization trend Gross Profit (CHFm) Adjusted Opex (CHFm) -3% +3% +1 151 (+0.2%) 149 149 145 144 144 145 Tower 306 306 143 142 6 effect 80.6% 79.7% 143 Q3’16 Q3’17 Q3’15 Q4’15 Q1’16 Q2’16 Q3’16 Q4’16 Q1’17 Q2’17 Q3’17 Service Gross Margin 1) • Gross Profit +0.2% in Q3,
Slide 12: eFCF and deleveraging as expected
eFCF and deleveraging as expected Cash flow ‘Last Twelve Months’ (CHFm) Net debt QoQ (CHFm) Q3’17 LTM Q2’17 LTM Reported 600 602 EBITDA Tax (34) (25) • eFCF LTM up supported by no factoring pay-back in Interest (38) (47) 2017, reduced interest 451 -1.151 expenses, and NWC 98 Δ NWC 50 33 -1.700 (befo
Slide 13: Agenda
Agenda 1 Summary and operational update O. Swantee (CEO) 2 Financials A. Krause (CFO) 3 Conclusion O. Swantee (CEO) 4 Q&A 13
Slide 14: Becoming the key quality challenger in Switzerland
Becoming the key quality challenger in Switzerland LTE geographic coverage • Outstanding mobile network with leading dropped call ratios, 36 In % Mbit/s average experienced download speed across 2-4G, and VoLTE recently launched Network 94 81 • Current 99.9% LTE population coverage and 94.3% LTE geo
Slide 15: Q3 conclusion: Financial stabilization through commercial momentum
Q3 conclusion Financial stabilization through commercial momentum • Continued strong subscriber growth in mobile Customers postpaid, internet and TV FY’17 Guidance reiterated • Service Revenue (MTR adj.) further improved, Revenue 2nd consecutive quarter with growth • Revenue: CHF 1’820-1’860m • Adj.
Slide 16: Agenda
Agenda 1 Summary and 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) 9m 2017 9m 2016 Q3 2017 Q3 2016 Mobile services 890 932 309 324 thereof mobile postpaid 574 575 201 201 thereof mobile prepaid 94 125 31 41 thereof hardware 160 174 53 62 Landline services 275 305 89 100 thereof landline voice 104 114 33 37 thereof hubbing 87 93 27 32 Lan
Slide 19: Cash Flow Statement
Cash Flow Statement Cash Flow (CHFm) 9m 2017 9m 2016 Q3 2017 Q3 2016 EBITDA 444 444 154 156 Change in net working capital 44 (34) 26 (14) thereof handset receivable factoring impact - (1) - (22) Movement in pension and provisions 1 (2) 0 3 Interest paid (28) (40) (7) (15) Corporate income and withho
Slide 20: Q3 deleveraging supported by tower proceeds
Q3 deleveraging supported by tower proceeds September 30, June 30, December 31, September 30, Net debt (CHFm) 2017 2017 2016 2016 Senior Secured Notes issued February 2015 500 500 500 500 Term loan B2 910 1'360 1'360 1'360 Total cash-pay borrowings 1'410 1'860 1'860 1'860 Financial lease 11 12 17 18
Slide 21: Tower transaction successfully closed
Tower transaction successfully closed Closing and deleveraging in August Normalised annual eFCF impact (CHFm) 1) -35 10 1 11 • Transaction closed on 3 August 2017; deconsolidation of passive infrastructure as of closing • IFRS gain of CHF 420m in P&L, eFCF pre Opex Interest Capex Tax savings eFCF po
Slide 22: 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) 2) -3,7% MTR adj: -1.2% • Mobile Termination Rates 1) change as per 478 1 January 2017 negatively impacts Revenue, (12) 460 (6) but is largely neutral on Gross Profit level – as announced on 20 Oct 2016; effect i
Slide 23: Bridge adjusted to reported EBITDA
Bridge adjusted to reported EBITDA Q3’17 EBITDA bridge Adj. EBITDA Q3’17 158 • Share-based payment provisions for multi-year Share based payment compensation plans (1) expenses • Prior year related events mainly include adjustments of provisions/accruals based on Prior year events 1 newly available
Slide 24: Thank you for your interest in Sunrise
Thank you for your interest in Sunrise Thank you for your interest in Sunrise 24
Slide 25: 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 25
Slide 26: 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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