Sunrise Communications AG Class A · SIX:SUNN

Sunrise Communications AG Class A — Merger or Acquisition (September 2019)

16 slides from Sunrise Communications AG Class A's merger presentation, Sep 30, 2019

  1. Slide 1: Update on acquisition of UPC Switzerland

    1 Update Q1 2019on acquisition of Financial UPC Switzerland Results Update on capital structure 16 September 30 May 2019 2019

  2. Slide 2: Disclaimer

    2 Disclaimer • The information contained in this presentation has not been independently verified and no representation or • The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, in any warranty, express or implied, is made as to, and no relia

  3. Slide 3: New Sunrise – creating the leading fully-integrated Swiss telecommunications challenger

    3 New Sunrise – creating the leading fully-integrated Swiss telecommunications challenger 1  Creates the leading fully-integrated nationwide challenger – a stronger and more valuable Sunrise Converged customer base with scale  New Sunrise will more than double Sunrise’s current customer base: 3.0

  4. Slide 4: Update on acquisition of UPC Switzerland

    4 Update on acquisition of UPC Switzerland Management roadshow in September with strong support on the strategic, industrial logic and the significant value creation from 1 clearly identified in-market synergies 2 Approval from the Swiss Competition Commission (WEKO) received on 26 September 2019 wi

  5. Slide 5: Significant cost, capex and revenue synergies

    5 Significant cost, capex and revenue synergies Synergies NPV of ~CHF3.1bn – Sunrise shareholders retain >60% Announcement Feb 2019 Upward revision Aug 19 Cost & Capex synergy NPV ~CHF2.4bn +0.3bn ~CHF2.7bn Total synergy NPV ~CHF2.8bn +0.3bn ~CHF3.1bn Includes incremental ~CHF30m one-off costs to in

  6. Slide 6: Revised funding mix – CHF2.8bn rights issue

    6 Revised funding mix – CHF2.8bn rights issue CHF1.3bn reduction in rights issue size, with higher leverage supported by higher synergies and lower blended WACD1) CHFbn Sources Feb-19 Revised Uses Feb-19 Revised Rights Issue 4.1 2.8 Cash payment to LGI 2.7 2.7 UPC Switzerland net debt contributed2)

  7. Slide 7: Dividend guidance and policy

    7 Dividend guidance and policy CHF350-370m FY'19 total dividend and continued progressive dividend policy FY'19 dividend amount in the range of CHF350-370m based on the higher number of shares expected to be outstanding 1 post the rights issue At the 2020 AGM, Sunrise shareholders will be given a ch

  8. Slide 8: ~3.6x Jun-19 leverage post run-rate cost synergies

    8 1) ~3.6x Jun-19 leverage post run-rate cost synergies Reported leverage below 3.0x post achieving run-rate synergies, thereafter targeting below 2.5x LTM Jun-19 leverage post run-rate cost synergies1) 2) 3) Medium-to-long term reported leverage2) 4.2x 0.1x 4.0x 3.6x 0.1x 3.5x Assuming 50% of share

  9. Slide 9: Key dates and next steps

    9 Key dates and next steps Date Milestone 30 September 2019 Publication of EGM invitation on the website of Sunrise 30 September 2019 Publication of Shareholder Information Document 1 October 2019 Publication of EGM invitation in official gazette (Schweizer Handelsamtsblatt) 2 October 2019 Dispatch

  10. Slide 10: Appendix

    10 Appendix

  11. Slide 11: Substantial and actionable synergies with NPV of CHF 3.1bn

    11 Substantial and actionable synergies with NPV of CHF 3.1bn Run-rate synergy estimates (CHFm) +~5 +~30 +~5 +~40 +~5 +~45 ~50 ~280 ~40 ~230 ~45 ~40 ~35 ~90 ~10 ~235 ~90 ~190 ~60 ~55 COGS SG&A Other Opex Capex Cost & Capex Revenue Total • Fixed network • Removing • Central allocations • IT & network

  12. Slide 12: Synergies supported by industry benchmarks

    12 Synergies supported by industry benchmarks UPC Switzerland MVNO and TSA charges plus Sunrise fixed access costs underpin saving opportunity Cost & Capex synergies as % of combined cost base (COGS + Opex + Capex) 7.5% 9.0% 2.6% 5.1% 3.8% 4.8% 3.9% 4.8% 5.4% 6.8% 8.0% 11.7% 4.2%1) na Synergies supp

  13. Slide 13: Attractive valuation compared to precedents

    13 Attractive valuation compared to precedents Favourable multiples relative to precedent convergence transactions even when based on trough FY’19 financials and more so when considering low Swiss interest and tax rates EV / EBITDA1) – UPC Switzerland EV / OpFCF1) – UPC Switzerland ~11.0x ~22.5x 9.9

  14. Slide 14: Overview of combined capital structure (1/2)

    14 Overview of combined capital structure (1/2) Feb-19 Revised CHFbn Amount Pro forma leverage1) Amount Pro forma leverage1) UPC Switzerland net debt contributed 3.5 2.9x 3.5 2.9x Sunrise Term Loan B ("TLB") 0.5 0.4x 1.4 1.2x Incremental Sunrise Term Loan B ("TLB") - - 0.3 0.2x Sunrise CHF notes - -

  15. Slide 15: Overview of combined capital structure (2/2)

    15 Overview of combined capital structure (2/2) Sunrise Combined CHFm, unless stated otherwise (H1'19) Adjustments (H1'19) Maturity Cost of debt Maturity profile (CHFm) Sunrise Term Loan B (“TL B”) 2.00%2) 1’910 Sunrise 1,410 300 1,710 2024 RCF 200 Sunrise CHF notes 200 (200) - UPCB Finance IV Ltd 5

  16. Slide 16: Pro forma simplified structure at closing

    16 Pro forma simplified structure at closing cash LG CE Holding BV Sunrise Communications (seller) Group AG shares LGE Mobile Challenger Financing B.V. Intermediate Group S.A. UPC Senior UPC Sunrise Communications Sunrise TL B Notes Holding B.V. Holdings S.A. 99% UPC UPC Holding II UPC Broadband Sun

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