Sunrise Communications Ag Class A · SIX:SUNN
Sunrise Communications Ag Class A — Q3 2020 Earnings Presentation
29 slides from Sunrise Communications Ag Class A's earnings presentation, Nov 5, 2020
Slide 1: Q3 2020 Financial Results
Q3 2020 Financial Results 5 November 2020
Slide 2: Agenda
2 Agenda Summary Operational Update Q3 Financials Outlook Q&A
Slide 3: Strong Q3 results
3 Strong Q3 results André Krause CEO
Slide 4: Summary Q3
4 Summary Q3 Customer growth driving financial growth Confirm guidance Financial +1.9% +1.2% +2.0% Service Gross profit Adj. EBITDA Strong Q3 growth YoY revenue financials … Customer +46k +26k +8k +4k … enable FY’20 Q3 Postpaid Prepaid Internet TV guidance growth confirmation Strategic +90% total Ne
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 to acquire 100% of Sunrise’s share at an offer price of CHF110 1 per share and an enterprise value of CHF6.8bn 1) The offer price implied a 32% premium to
Slide 6: Highest postpaid net adds in years; successfully launched new portfolio
6 Highest postpaid net adds in 10 years; successfully launched new portfolio André Krause CEO
Slide 7: Strongest postpaid net adds since 2010
7 Strongest postpaid net adds since 2010 Postpaid mobile net adds Prepaid mobile net adds (‘000) (‘000) 46 26 41 38 10 Data 11 34 34 9 Sim 11 10 -1 Voice 36 -28 -31 30 29 24 & data 23 -55 Q3’19 Q4’19 Q1’20 Q2’20 Q3’20 Q3’19 Q4’19 Q1’20 Q2’20 Q3’20 ▪ Postpaid with +8% subscription growth YoY leading
Slide 8: Solid internet and TV market share gains
8 Solid internet and TV market share gains Internet net adds TV net adds (‘000) (‘000) 11 11 9 10 8 6 6 7 7 1 10 7 4 5 OTT 5 4 3 1 2 Classic 0 Q3’19 Q4’19 Q1’20 Q2’20 Q3’20 Q3’19 Q4’19 Q1’20 Q2’20 Q3’20 ▪ Internet with strong growth despite lower seasonality during ▪ TV continued to grow: Sunrise no
Slide 9: Softening postpaid ARPU decrease
9 Softening postpaid ARPU decrease Mobile postpaid Mobile prepaid Internet & TV ARPU ARPU ARPU Postpaid down CHF -2.2 YoY including temporary Prepaid up CHF +0.1 YoY (Q2: CHF -1.1) due to Internet down CHF –0.8 COVID-19 effect (roaming, MTR); ARPU decrease temporary change in customer composition ad
Slide 10: Continued focus on strategic priorities …
10 Continued focus on strategic priorities … Network Customer Innovative quality interface converged products Leading 5G and fastest internet Continued top ratings Launch of new portfolio ▪ Leading in ultrafast Internet network test Customer orientation Shop test ▪ New mobile, internet and TV mobile
Slide 11: … leading to strong BILANZ rating, again
11 … leading to strong BILANZ rating, again Best Universal Provider in all customer categories B2B Enterprise 68 66 63 61 Quality B2B strategy SME 65 63 64 paying off 60 Residential 92 91 83 81 Sunrise Salt Swisscom UPC BILANZ 09/2020
Slide 12: Sunrise well positioned for Q4
12 Sunrise well positioned for Q4 5G handsets European 5G Converged 5G gaining traction leadership portfolio ready Ready to ride the next big wave
Slide 13: Higher service revenue and adj. EBITDA
13 Higher service revenue and adj. EBITDA Uwe Schiller CFO
Slide 14: Financial Overview Q3
14 Financial Overview Q3 ▪ Revenue down -0.5% driven by Total revenue CHF m Service revenue hubbing (low margin) +1.9% Service ▪ Service revenue up +1.9% as 474 -0.5% 400 471 revenue strong customer growth over 392 compensated for lower ARPUs / roaming revenue Q3’19 Q3’20 Q3’19 Q3’20 Gross profit Ad
Slide 15: Service revenue growth despite roaming headwinds …
15 Service revenue growth despite roaming headwinds … CHF m ▪ Hardware: Volatile as it depends on innovation, launches, pricing and attachment rate Q2 YoY 7 (3) (2) (5) 3 4 (2) ▪ Hubbing: International trading business with continued focus on profitable volumes -2% +2% 474 ▪ Postpaid: Strong custome
Slide 16: … leading to GP growth
16 … leading to GP growth Gross profit regaining Continued careful momentum cost management GP growth YoY GP CHF m Adj. Opex growth YoY 2) Adj. Opex CHF m +3.8 320 316 1.7% 3.4% 2.3% 0.8% 148 148 1.9% Service 144 1.2% 80.5% GM 1) 80.0% 0.2% 143 144 -0.5% -1.1% -1.3% Q3’19 Q3’20 Q3’19 Q3’20 Q3’19 Q3’
Slide 17: Focus on eFCF and leverage
17 Focus on eFCF and leverage Equity Capex FCF and Leverage Q3 LTM CHF m Capex CHF m 578 (55) Infrastructure Innovation Growth Landline ▪ 2020 eFCF impacted by accelerated Q2’20 Capex (5G and 4G+), as guided; 240 47 36 39 361 LTM Incl. 2019 reiterate 2021 Capex normalization Incl. 5G M&A push to CHF
Slide 18: Q3 with growing financials and record customer growth in postpaid
18 Q3 with growing financials and record customer growth in postpaid André Krause CEO
Slide 19: Strong Q3 – confirm guidance
19 Strong Q3 – confirm guidance ▪ Continued market share gains including strongest postpaid net adds in ten years Customers ▪ Leading 5G coverage in >621 cities / villages and >90% pop coverage (low band) by Oct; fastest internet in Switzerland 2020 guidance reiterated Revenue ▪ Service revenue up +
Slide 20: Achievements since IPO in February 2015
20 Achievements since IPO in February 2015 André Krause CEO
Slide 21: Transformed Sunrise and delivered returns
21 Transformed Sunrise and delivered returns We have delivered strong growth … +90% shareholder return … with dedicated IR Subscriber growth Q1’15 to Q3’20 Dividend growth Shareholder value generation ▪ More than 1’100 investor meetings including ~40 conferences and ~50 roadshows +50% +90% 129 ▪ Con
Slide 22: Sunri
® 2 Sunri
Slide 23: Appendix
Sunrise Appendix
Slide 24: Adjusted to reported EBITDA bridge
24 Adjusted to reported EBITDA bridge EBITDA bridge CHF m 176 -1 0 0 175 Adj. EBITDA Acquisition and integration Restructuring costs Non-recurring / Reported EBITDA Q3’20 Q3’20 costs of new businesses non-operating events
Slide 25: Income Statement
25 Income Statement CHF million Cha nge Cha nge July 1 - September 30 Q3 2020 Q 3 2 0 19 CHF million % Re ve nue Mobile services 321 325 (4) (1.2) - Thereof mobile postpaid 221 215 5 2.4 - Thereof mobile prepaid 16 19 (3) (15.6) - Thereof mobile hardware 57 64 (7) (10.9) - Thereof other 28 27 1 3.6
Slide 26: Cash Flow Statement
26 Cash Flow Statement CHF million Cha nge Cha nge July 1 - September 30 Q3 2020 Q 3 2 0 19 CHF million % Ca sh flow Reported EBITDA 175 175 0 0.3 Change in NWC (15) 13 (28) (214.2) Net interest (9) (9) (0) 5.4 Tax (8) (21) 13 (60.6) CAPEX (126) (65) (62) 95.0 Repayments of lease liabilities (8) (5)
Slide 27: Leverage ratio
27 Leverage ratio September 30, June 30, September 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 100 100 0 Total cash-pay borrowings 1’710 1’710 1’610 Operational lease 248 250 259 Total debt 1’958 1’960 1’869 Cash & Cash Equiva
Slide 28: Investor Relations
28 Investor Relations Stephan Gick stephan.gick@sunrise.net +41 58 777 96 86 investor.relations@sunrise.net www.sunrise.ch/ir
Slide 29: Disclaimer
29 Disclaimer This document and any materials distributed in connection herewith (including any oral Statements made in this Presentation may include forward-looking statements. These statements statements) (together, the “Presentation”) do not constitute or form a part of, and should not be may be
Sunrise Communications — Q3 2020 Earnings Presentation on 6ix