Sunrise Communications Ag Class A · SIX:SUNN

Sunrise Communications Ag Class A — Q2 2020 Earnings Presentation

27 slides from Sunrise Communications Ag Class A's earnings presentation, Aug 27, 2020

  1. Slide 1: Q2 2020 Financial Results

    Q2 2020 Financial Results 27 August 2020

  2. Slide 2: Agenda

    2 Agenda Summary Operational Update Q2 Financials Outlook Q&A

  3. Slide 3: Q2 with underlying growth; Liberty Global's offer recognizes strong track-record since IPO

    3 Q2 with underlying growth; Liberty Global’s offer recognizes strong track-record since IPO André Krause CEO

  4. Slide 4: Summary Q2

    4 Summary Q2 Resilient underlying growth offset by roaming in Q2 Confirm guidance Financial -0.6% -1.3% -1.4% 180m Temporary Service Gross profit Adj. EBITDA Adj. eFCF growth YoY revenue LTM slowdown due to global pandemic Customer +34k -55k +9k +7k See gradual Postpaid Prepaid Internet TV growth Q2

  5. Slide 5: Transaction update and milestones

    5 Transaction update and milestones Creating a fully converged national champion On 12 August, Liberty Global announced an all cash tender offer for all publicly held shares of Sunrise; the offer was recommended 1 by the Sunrise Board of Directors 2 The offer price of CHF110 per share implied a 32%

  6. Slide 6: Strong value generation since IPO

    6 Strong value generation since IPO Accelerated customer growth Network quality Net adds 163 39 +90% return 33 36 since IPO 62 -21 2014 2019 2014 2019 2014 2019 Customer Total shareholder return interface +90% Accelerated financial growth 129 110 Div Service revenue Adj. EBITDA Dividend 86 68 3.3% 3

  7. Slide 7: Continued market share gains

    7 Continued market share gains André Krause CEO

  8. Slide 8: COVID-19 update

    8 COVID-19 update Resilient underlying business Q2 financials impacted by roaming  Strong net adds in Q2  Travel bans weighed on supported by online, telesales metered roaming-off revenue in and slightly lower churn, partly Q2; roaming-in revenue and offset by shop closures roaming-off costs large

  9. Slide 9: Continued focus on strategic priorities

    9 Continued focus on strategic priorities Network Customer Innovative converged quality interface products Continued 5G rollout Top customer satisfaction in Q2 Enhancing B2B and TV proposition  Leading in 3.5 Ghz, One of the world’s Mobile Internet  New 5G B2B offer which is available in >595 best

  10. Slide 10: Market share gains in postpaid

    10 Market share gains in postpaid Postpaid mobile net adds Prepaid mobile net adds (‘000) (‘000) 40 41 38 11 34 34 -1 15 9 Data -6 11 10 Sim -28 -31 26 30 29 Voice 23 24 & data -55 Q2’19 Q3’19 Q4’19 Q1’20 Q2’20 Q2’19 Q3’19 Q4’19 Q1’20 Q2’20  Postpaid with +8% subscription growth YoY driven by  Glo

  11. Slide 11: Continued internet and TV customer growth

    11 Continued internet and TV customer growth Internet net adds TV net adds (‘000) (‘000) 12 11 11 11 10 9 3 6 6 7 1 7 7 10 8 5 OTT 5 3 1 2 Classic Q2’19 Q3’19 Q4’19 Q1’20 Q2’20 Q2’19 Q3’19 Q4’19 Q1’20 Q2’20  Internet continues to grow to 516k internet subscriptions;  TV with solid growth: Sunrise

  12. Slide 12: Postpaid ARPU impacted by travel bans

    12 Postpaid ARPU impacted by travel bans Mobile postpaid Mobile prepaid Internet & TV ARPU ARPU ARPU Postpaid down CHF -3.4 YoY (Q1: CHF -1.5) due Prepaid down CHF -1.1 YoY (Q1: CHF -0.8) Internet down CHF –0.9 (Q1: -1.0) to temporary COVID-19 effect (roaming, MTR) Value measures have been put in pl

  13. Slide 13: Broadly stable adj. EBITDA supported by cost containment

    13 Broadly stable adj. EBITDA supported by cost containment Uwe Schiller CFO

  14. Slide 14: Financial Overview Q2

    14 Financial Overview Q2  Revenue up +0.3% driven by mobile Total revenue CHF m Service revenue hardware +0.3% -0.6%  Service revenue down -0.6% as 383 Revenue customer growth was offset by lower 455 456 381 roaming revenue and less project driven ‘Integration’ business Q2’19 Q2’20 Q2’19 Q2’20  G

  15. Slide 15: Service revenue impacted by COVID-19

    15 Service revenue impacted by COVID-19  Hardware: supported by Service revenue affected accessories and strong handset by roaming due to travel bans sales in June  Hubbing: International trading business with continued focus on profitable volumes CHF m +1%  Postpaid: Strong customer growth drive

  16. Slide 16: Careful cost management

    16 Careful cost management Modest gross profit …largely compensated by careful decline… cost management GP growth YoY GP CHF m Adj. Opex growth YoY 2) Adj. Opex CHF m -3.9 311 -1.6 307 1.8% 1.7% 3.4% 2.6% 2.3% 0.8% 148 1.9% Service 146 148 81.2% 80.7% 143 144 GM 1) -0.5% -1.1% -1.3% Q2’19 Q2’20 Q2’1

  17. Slide 17: Focus on eFCF and leverage

    17 Focus on eFCF and leverage Equity FCF Capex and Leverage Q2 LTM CHF m Capex CHF m 578 (27) Infrastructure Innovation Growth Landline Spectrum Q1’20 188 54 38 39 91 409 LTM Incl. 2019 M&A Incl. 5G push Q2’20 one-off 240 47 36 39 361 LTM Leverage ratio Incl. 2019 M&A 91 180  Net debt / adj. EBITDA

  18. Slide 18: Solid underlying growth – confirm guidance

    18 Solid underlying growth – confirm guidance André Krause CEO

  19. Slide 19: Cont. operational momentum – confirm guidance

    19 Cont. operational momentum – confirm guidance  Customer growth and market share gains in postpaid, internet and TV supported by online, telesales and slightly lower churn Customers  5G coverage in >595 cities / villages by Aug 2020 guidance reiterated  Customer momentum offset by roaming due t

  20. Slide 20: Q&A

    Sunrise Q&A

  21. Slide 21: Appendix

    Sunrise Appendix |

  22. Slide 22: Adjusted to reported EBITDA bridge

    22 Adjusted to reported EBITDA bridge EBITDA bridge CHF m 163 0 -5  Acquisition and integration costs of new businesses with a small gain caused by the release of an accrual 159  No restructuring costs in Q2  Non-recurring / non-operating events driven by CHF -4.3m effect of employee share partic

  23. Slide 23: Income Statement

    23 Income Statement CHF million Cha nge Cha nge April 1 - June 30 Q2 2020 Q 2 2 0 19 CHF million % Re ve nue Mobile services 305 302 2 0.8 - Thereof mobile postpaid 206 208 (2) (1.0) - Thereof mobile prepaid 15 20 (5) (24.9) - Thereof mobile hardware 60 53 7 13.9 - Thereof other 24 23 2 8.4 Landline

  24. Slide 24: Cash Flow Statement

    24 Cash Flow Statement CHF million Cha nge Cha nge April 1 - June 30 Q2 2020 Q 2 2 0 19 CHF million % Ca sh flow Reported EBITDA 159 157 2 1.2 Change in NWC (1) (20) 18 (92.7) Net interest (12) (12) (0) 0.6 Tax (2) (1) (1) 160.8 CAPEX (95) (143) 48 (33.3) Repayments of lease liabilities (8) (6) (2)

  25. Slide 25: Leverage ratio

    25 Leverage ratio June 30, March 31, June 30, Leverage 2020 2020 2019 Term loan B 1’410 1’410 1’410 Senior Secured Notes issued June 2018 200 200 200 RCF drawn 100 0 0 Total cash-pay borrowings 1’710 1’610 1’610 Operational lease 250 253 266 Total debt 1’960 1’863 1’876 Cash & Cash Equivalents (233)

  26. Slide 26: Investor Relations

    26 Investor Relations Stephan Gick stephan.gick@sunrise.net +41 58 777 96 86 investor.relations@sunrise.net www.sunrise.ch/ir

  27. Slide 27: Disclaimer

    27 Disclaimer This document and any materials distributed in connection herewith (including any oral statements) Statements made in this Presentation may include forward-looking statements. These statements (together, the “Presentation”) do not constitute or form a part of, and should not be constru

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