Sunrise Communications Ag Class A · SIX:SUNN
Sunrise Communications Ag Class A — Q3 2019 Earnings Presentation
30 slides from Sunrise Communications Ag Class A's earnings presentation, Nov 16, 2019
Slide 1: Q3 2019 Financial Results
1 Q3 2019 Q1 Financial Results 16 November 13 May 2019 2019
Slide 2: Agenda
2 Agenda Summary Operational Update Financials Conclusion Q&A
Slide 3: Summary
3 Summary Olaf Swantee CEO +2.0% adj EBITDA growth with cont. strong commercial momentum
Slide 4: Summary
4 Summary • Customer growth and market share gains in key focus • Adj. EBITDA up +2.0%; B2B transition on-track with GP areas continued and EBITDA in growth territory • Mobile postpaid (+10% YoY), internet (+9%), TV (+14%) • 2019 guidance reiterated • Supported by B2B commercial momentum: won ‘GF Ma
Slide 5: Operational Update
5 Operational Update Olaf Swantee CEO Market share gains continued in Q3
Slide 6: Postpaid customer base up 10% YoY
6 Postpaid customer base up 10% YoY Postpaid mobile net adds (‘000) Prepaid mobile net adds (‘000) 42 43 41 40 Secondary -1 14 12 11 -6 31 15 (data) -10 8 28 31 30 Primary -30 23 26 Q3’18 Q4’18 Q1’19 Q2’19 Q3’19 -50 Q3’18 Q4’18 Q1’19 Q2’19 Q3’19 • Postpaid with +10% subscription growth YoY, leading
Slide 7: Continued internet and TV customer growth
7 Continued internet and TV customer growth Internet net adds (‘000) TV net adds (‘000) 15 11 Base 12 9 3 redefinition 8 9 Base 7 6 redefinition 6 6 1 OTT (since Q2) 10 8 6 5 Classic Q3’18 Q4’18 Q1’19 Q2’19 Q3’19 Q3’18 Q4’18 Q1’19 Q2’19 Q3’19 • Internet continues to grow customer base despite • TV w
Slide 8: ARPU trends continuing
8 ARPU trends continuing • Blended mobile ARPU relatively stable YoY, as increasing Blended mobile ARPU postpaid subscriptions have higher ARPU than decreasing Blended mobile ARPU (CHF): -1.6 32.9 prepaid subscriptions 31.7 31.1 31.8 32.3 • Postpaid decreased CHF -2.2 YoY due to 2nd SIM dilution, Yo
Slide 9: Becoming the best Swiss telco in the eyes of our customers
9 Becoming the best Swiss telco in the eyes of our customers Residential marketing campaign with real Again strong in 2019 BILANZ B2B marketing campaign with customer feedback on customer service telecom ranking customer references Exzellenter Service braucht Sunrise, an important partner for sich n
Slide 10: Confirms investments into strategic priorities
10 Confirms investments into 3 strategic priorities Network quality Customer interface Innovative converged products • 5G in 309 cities / villages by start Oct; • Improving NPS and propensity to call • Launch of 5G MBB in Q3, primarily in selected strong 5G spectrum position supported by good end-to
Slide 11: Q3 Financials
11 Q3 Financials André Krause CFO +2% growth in service revenue and adj EBITDA
Slide 12: Financial Overview Q3
12 Financial Overview Q3 excl. IFRS 16 1) Total revenue: Service revenue 2): Revenue • Revenue up 1.0% driven by service revenue, partly (CHFm) offset by lower revenues from mobile hardware and +1.0% +2.0% hubbing (both low margin) 469 474 385 393 • Service revenue up +2.0% driven by customer growth
Slide 13: Service revenue growth driven by postpaid and internet/TV
13 Service revenue growth driven by postpaid and internet/TV Revenue bridge (CHFm) Q3’18 Revenue 469 • Mobile hardware: depends on handset innovation, launches, Δ mobile hw pricing and attachment rate; variations across quarters lead to -1 (low-margin) -1% revenue volatility Δ hubbing -2 • Hubbing:
Slide 14: GP growth partly reinvested into operational momentum
14 GP growth partly reinvested into operational momentum Growth YoY 2) Gross profit Growth YoY excl. tower 2) Adjusted Opex 4.2% 4.9% 3.7% 2.6% 3.4% 1.9% 1.4% 1.5% 1.8% 1.7% Q3’18 Q3’19 Q3’18 Q3’19 5,9 316 +2,7 310 In CHFm In CHFm 152 155 80.5% 80.4% Service GM 1) Q3’18 Q3’19 Q3’18 Q3’19 • Gross pro
Slide 15: eFCF impacted by spectrum and landline access
15 eFCF impacted by spectrum and landline access Q3 LTM equity FCF (CHFm) 1) Capex (CHFm) 426 415 Q2: Reported 91 91 Spectrum 670 650 EBITDA Landline Access 98 99 Δ NWC 8 1 • EBITDA supported by underlying growth 36 Customer growth 38 in Q3 50 Innovation & Development 53 Capex (415) (426) • NWC posi
Slide 16: Dividend guidance not impacted by SPA cancelation
16 Dividend guidance not impacted by SPA cancelation SPA cancelation Deal related one-off costs CHFm • Share purchase agreement with Liberty Global terminated on Nov 12th, 2019 Termination fee 50 • Termination triggers penalty payment of CHF 50m • Total one-off costs of CHF 120-125m expected: Integr
Slide 17: Conclusion
17 Conclusion Olaf Swantee CEO Solid growth confirms strategic focus on quality
Slide 18: Strategic initiatives
18 Proven standalone quality track record to be cont. Network • Continuous WW and Swiss leadership awards quality • 2019: 4G outstanding & 5G leadership Sunrise defining market pace • Strategic initiatives Service Secured real customer service differentiation quality • Total transformation of the st
Slide 19: Q3 conclusion
19 Q3 conclusion • Strong subscriber growth in postpaid, internet and Customers TV – supported by investments into quality • 5G coverage in 309 cities /villages by start Oct • Continued service revenue growth driven by FY’19 guidance confirmed customer momentum Revenue • Ongoing service revenue dive
Slide 20: Q&A
20 Q&A ?&!
Slide 21: Appendix
21 Appendix
Slide 22: IFRS 16 update
22 IFRS 16 update IFRS 16 accounting standard Impact on Sunrise • Introduced as per Jan 2019, replacing previous • EBITDA: CHF +40m to CHF +45m positive impact is standards (e.g. IAS 17); impact on: expected in FY’19 • P&L lease recognition: reallocation from COGS • Net debt: CHF 257m impact as per
Slide 23: Bridge adjusted to reported EBITDA
23 Bridge adjusted to reported EBITDA Q3 EBITDA bridge (excl. IFRS 16) Adj. EBITDA Q3’19 161 • Share-based payment provisions for multi-year Share based payment compensation plans (1) expenses • Non-recurring / non-operating events mainly represent costs for one-time events, e.g. advisory fees relat
Slide 24: Again strong in BILANZ telecom ranking 2019
24 Again strong in BILANZ telecom ranking 2019 1) 1) Mobile experience : Full service experience (4P) : Quality 5 Mobile 23 Support Innovation • B2B: Sunrise was rated best universal provider for telco services 3 • Residential: Sunrise again strong Landline 17 Internet (see charts) voice • Results c
Slide 25: Income Statement
25 Income Statement Q 3 2 0 19 Q 3 2 0 19 Q 3 2 0 18 Cha nge CHF million with without without with July 1 - September 30 IFRS 16 IFRS 16 IFRS 16 IFRS 16 (% ) Re ve nue Mobile services 325 325 321 1.3 - Thereof mobile postpaid 215 215 208 3.8 - Thereof mobile prepaid 19 19 25 (22.9) - Thereof mobile
Slide 26: Cash Flow Statement
26 Cash Flow Statement Q 3 2 0 19 Q 3 2 0 19 Q 3 2 0 18 Cha nge CHF million with without without with July 1 - September 30 IFRS 16 IFRS 16 IFRS 16 IFRS 16 (% ) Ca sh flow Reported EBITDA 175 163 154 Change in NWC 13 18 7 Net interest (9) (6) (6) Tax (21) (21) (20) CAPEX (65) (65) (76) Repayments of
Slide 27: Leverage ratio
27 Leverage ratio September 30, June 30, December 31, Net debt (CHFm) 2019 2019 2018 Senior Secured Notes issued February 2015 0 0 0 Term loan B 1’410 1’410 1’410 Senior Secured Notes issued June 2018 200 200 200 Total cash-pay borrowings 1’610 1’610 1’610 Operational lease 259 266 5 Total debt 1’86
Slide 28: Have a sunny day
Have a sunny day
Slide 29: Contact Information
29 Contact Information Investor Relations Uwe Schiller uwe.schiller@sunrise.net Stephan Gick stephan.gick@sunrise.net Contact www.sunrise.ch/ir investor.relations@sunrise.net +41 58 777 96 86
Slide 30: Disclaimer
30 Disclaimer • This document and any materials distributed in connection herewith (including • Statements made in this Presentation may include forward-looking statements. any oral statements) (together, the “Presentation”) do not constitute or form a These statements may be identified by the fact
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