Sunrise Communications Ag Class A · SIX:SUNN
Sunrise Communications Ag Class A — Q3 2018 Earnings Presentation
27 slides from Sunrise Communications Ag Class A's earnings presentation, Nov 8, 2018
Slide 1: Sunrise Communications Group AG Q3 2018 financial results
Sunrise Communications Group AG Q3 2018 financial results – 8 November 2018
Slide 2: Agenda
Agenda 1 Summary & operational update O. Swantee (CEO) 2 Financials A. Krause (CFO) 3 Conclusion O. Swantee (CEO) 4Q&A 2
Slide 3: Summary: Q3 with organic EBITDA growth and strong customer momentum, as expected
Summary: Q3 with organic EBITDA growth and strong customer momentum, as expected • Customer growth momentum in key focus areas continued • Strong growth in mobile postpaid (+7.9% YoY), internet (+9.4% YoY) and TV (+17.2%) • Supported by continued B2B customer wins (Q3 includes: Canton Luzern, Edelwe
Slide 4: Strongest primary SIM net adds since 2012
Strongest primary SIM net adds since 2012 Postpaid mobile net adds (‘000) Prepaid mobile net adds (‘000) 31 31 30 31 27 11 11 9 8 Secondary 6 (data) -9 -10 Primary 21 20 20 21 23 -30 -40 -39 Q3’17 Q4’17 Q1’18 Q2’18 Q3’18 Q3’17 Q4’17 Q1’18 Q2’18 Q3’18 • Postpaid driven by primary SIMs, leading to 1.6
Slide 5: Growing internet and TV customer base, with increasing share of fiber
Growing internet and TV customer base, with increasing share of fiber Internet net adds (‘000) • Internet customer base continues to grow: Sunrise 12 12 11 now has 449k internet subscriptions 9 7 • Converged tariff ‘Sunrise ONE’ supported growth: 65k or 39% of billed 4P customer base already on Sunr
Slide 6: ARPU: Mobile impacted by roaming promo – continuation of landline trends
ARPU: Mobile impacted by roaming promo – continuation of landline trends Blended mobile ARPU (CHF, incl. IFRS 15 1)) Blended mobile ARPU: • Blended mobile ARPU stable YoY, as increasing postpaid subscriptions have higher ARPU than decreasing prepaid subscriptions 33.0 32.9 31.5 30.5 32.3 • Postpaid
Slide 7: Again strong score in 2018 BILANZ telecom ranking
Again strong score in 2018 BILANZ telecom ranking Mobile 1) Points reached (max 30) Sunrise 22.5 Swisscom 20.8 Salt 19.7 Internet 1) • Sunrise was once more rated the best Sunrise 23.0 universal provider for mobile, Swisscom 21.0 internet, TV and landline voice in residential and SME categories UPC
Slide 8: B2B transition on-track
B2B transition on-track Major customer wins over past quarters Positive B2B momentum B2B gross profit YoY B2B EBITDA YoY (excl. IFRS 15): (excl. IFRS 15): 5% 9% -1% 5% -11% 0% -16% -6% Q4’17 Q1 Q2 Q3’18 Q4’17 Q1 Q2 Q3’18 • Positive momentum confirmed by improving gross profit and EBITDA trend • Focu
Slide 9: Financials
Financials A. Krause (CFO) Sunrise
Slide 10: Financial Overview
Financial Overview excl. IFRS 15 1) Revenue (CHFm) Total revenue: Service revenue 2): • Revenue up +1.9% due to service revenue and hardware +1.9% +1.4% • Service revenue up +1.4% driven by mobile postpaid and internet/TV; Q3 below Q2 run rate (+2.9% YoY) mainly due to 460 469 380 386 summer roaming
Slide 11: Service revenue growth slowed due to roaming promos
Service revenue growth slowed due to roaming promos Revenue bridge (CHFm) Q3’17 Revenue 460 • Mobile hardware: depends on handset innovation, launches and Δ mobile hw (low-margin) 11 pricing; variations across quarters lead to revenue volatility +1% Δ hubbing -8 • Hubbing: international trading busi
Slide 12: GP growth partly reinvested into operational momentum
GP growth partly reinvested into operational momentum Gross profit Adjusted Opex Growth YoY Growth YoY excl. tower 3.1% 2.9% 2.4% 2.2% 1.6% 1.5% 1.4% 0.2% 0.3% -0.9% Q3’17 Q3’18 Q3’17 Q3’18 +4.3 +2.2 311 Tower adj. In CHFm 306 In CHFm 154 149 3 Tower 80.6% 80.6% Service GM 1) effect 151 Q3’17 Q3’18
Slide 13: eFCF with different Capex seasonality, as expected
eFCF with different Capex seasonality, as expected Equity Free Cash Flow (CHFm) 1) Capex (CHFm) Q3’18 LTM Q2’18 LTM 349 322 39 31 41 Reported 45 586 586 44 Landline access EBITDA 46 • NWC LTM down due to Customer growth Δ NWC (35) (16) higher handset prices and Innovation & Development settlement of
Slide 14: Conclusion
Conclusion O. Swantee CEO Sunrise 14
Slide 15: Investing into strategic growth priorities
Investing into 3 strategic growth priorities Leading European network quality 1) • Outstanding mobile network with leading dropped call ratios, 28 Mbit/s average experienced download speed, and 99.9%/95.8% LTE population/geographic coverage covering 68% YoY data growth Network Sunrise • First 5G ant
Slide 16: Q3 conclusion: Growing GP and customer base – confirming guidance
Q3 conclusion Growing GP and customer base – confirming guidance • Continued strong subscriber growth in mobile Customers postpaid, internet and TV; supported by B2B FY’18 guidance reiterated • Service Revenue growth driven by customer • Revenue: CHF 1,830 - 1,870m Revenue momentum • Adj. EBITDA: CH
Slide 17: Q&A
oid y Q&A ~ Sunrise 17
Slide 18: Appendix
w a ho r= 3 7) Appendix 18
Slide 19: IFRS 15 update
IFRS 15 update Q3’18 without and with IFRS 15 Expected FY’18 impact unchanged Revenue Q3’18 with IFRS 15 • At Sunrise, the 2018 impact of IFRS 15 is mainly related to the capitalization of costs +1.9% +1.9% to obtain a contract, resulting in a positive 460 469 469 460 Opex effect +0.3 • The 2018 adj
Slide 20: Bridge adjusted to reported EBITDA
Bridge adjusted to reported EBITDA Q3’18 EBITDA bridge Adj. EBITDA Q3’18 157 • Share-based payment provisions for multi-year compensation plans Share based payment 0 expenses • Prior year related events mainly include adjustments of provisions/accruals based on Prior year events 0 newly available in
Slide 21: Strong BILANZ telecom ranking 2018
Strong BILANZ telecom ranking 2018 Mobile experience Full service experience (4P) Quality Mobile 5 23 Support Innovation 3 Landline 17 Internet voice Flexibility Price TV Sunrise Swisscom Salt Sunrise Swisscom UPC • 9k telecom users participated in independent annual survey published by magazine BIL
Slide 22: Income Statement
Income Statement Q3 2018 Q3 2018 Q3 2017 P&L (CHFm) incl. IFRS 15 excl. IFRS 15 excl. IFRS 15 Mobile services 321 321 309 thereof mobile postpaid 208 208 201 thereof mobile prepaid 25 25 31 thereof hardware 65 65 53 Landline services 77 77 89 thereof landline voice 31 31 33 thereof hubbing 19 19 27
Slide 23: Cash Flow Statement
Cash Flow Statement Q3 2018 Q3 2018 Q3 2017 Cash Flow (CHFm) incl. IFRS 15 excl. IFRS 15 excl. IFRS 15 EBITDA 154 154 154 Change in net working capital 7 8 26 Movement in pension and provisions 0 0 0 Interest paid (6) (6) (7) Corporate income and withholding tax paid (20) (20) (21) Cash flow from op
Slide 24: Leverage ratio
Leverage ratio September 30, June 30, December 31, September 30, Net debt (CHFm) 2018 2018 2017 2017 Senior Secured Notes issued February 2015 0 0 500 500 Term loan B 1'410 1'410 910 910 Senior Secured Notes issued June 2018 200 200 0 0 Total cash-pay borrowings 1'610 1'610 1'410 1'410 Financial lea
Slide 25: Thank you
Thank you Sunrise
Slide 26: Contact Information
Contact Information Investor Relations Uwe Schiller Stephan Gick uwe.schiller@sunrise.net stephan.gick@sunrise.net www.sunrise.ch/ir investor.relations@sunrise.net +41 58 777 96 86 26
Slide 27: 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
Sunrise Communications Group — Q3 2018 Earnings Presentation on 6ix