Sunrise Communications Ag Class A · SIX:SUNN

Sunrise Communications Ag Class A — Q1 2020 Earnings Presentation

27 slides from Sunrise Communications Ag Class A's earnings presentation, May 14, 2020

  1. Slide 1: Q1 2020 Financial Results

    Q1 2020 Financial Results 14 May 2020

  2. Slide 2: Agenda

    2 Agenda Summary Operational Update Q1 Financials Outlook Q&A

  3. Slide 3: Sunrise continues to define the market pace and grows adj. EBITDA by +5.9% in Q1

    3 Sunrise continues to define the market pace and grows adj. EBITDA by +5.9% in Q1 André Krause CEO

  4. Slide 4: Summary

    4 Summary Strong start to the year with continued growth Expect slowdown Financial +3.6% +3.4% +5.9% 207m Accelerated adj. Service Gross profit Adj. EBITDA Adj. eFCF growth YoY revenue LTM EBITDA growth in Q1 Customer +34k -31k +11k +11k COVID-19 to slow Postpaid Prepaid Internet TV down growth grow

  5. Slide 5: Commercial momentum and 5G leadership in Q1; COVID-19 to slow down growth temporarily

    5 Commercial momentum and 5G leadership in Q1; COVID-19 to slow down growth temporarily André Krause CEO

  6. Slide 6: Operational update on COVID-19

    6 Operational update on COVID-19 Successfully implemented continuity measures Employee  Managed smooth transition with >95% of Sunrise work force in home office as per March 17th High level of health & employee  Ensured home office also at partners abroad; implemented safety engagement safe shop c

  7. Slide 7: Financial update on COVID-19

    7 Financial update on COVID-19 Lockdown Gradual recovery  Shop closures leading to lower  95 of total 95 own shops gross adds and lower churn again open (dir./ind. shops generating >2/3 of intake 1))  B2B intake delayed as cust. Trading delay purchase decisions  Focus on marketing home entertain

  8. Slide 8: Continued focus on strategic priorities

    8 Continued focus on strategic priorities Network Customer Innovative converged quality interface products Accelerated 5G rollout on-track #1 in connect mobile hotline test in Q1 Launched ‘Family Benefit’ in Q1 Leading in 3.5 Ghz, 437 Ongoing shop Cross selling Launched Business Sunrise available in

  9. Slide 9: Gaining market share in postpaid

    9 Gaining market share in postpaid Postpaid mobile net adds Prepaid mobile net adds (‘000) (‘000) 43 40 41 38 12 11 34 -1 15 9 Data -6 11 Sim 31 26 30 29 Voice 23 & data -28 -30 -31 Q1’19 Q2’19 Q3’19 Q4’19 Q1’20 Q1’19 Q2’19 Q3’19 Q4’19 Q1’20  Postpaid with +9% subscription growth YoY, leading to 

  10. Slide 10: Double digit internet and TV net adds

    10 Double digit internet and TV net adds Internet net adds TV net adds (‘000) (‘000) 15 11 11 Base 12 10 redefinition 11 9 3 Base 6 redefinition 1 10 6 7 7 OTT 10 8 6 5 3 1 Classic Q1’19 Q2’19 Q3’19 Q4’19 Q1’20 Q1’19 Q2’19 Q3’19 Q4’19 Q1’20  Internet continues to grow customer base: Sunrise  TV wi

  11. Slide 11: Postpaid ARPU decrease softening

    11 Postpaid ARPU decrease softening Mobile postpaid Mobile prepaid Internet & TV ARPU ARPU ARPU Postpaid down CHF -1.5 YoY (Q4: CHF -1.9), Prepaid down CHF -0.8 YoY (Q4: CHF -0.8) Internet down CHF –1.0 (Q4: -1.1) supported by MTR (COVID-19) and mix Value measures have been put in place 36.0 35.8 35

  12. Slide 12: Customer momentum translating into service revenue and adj. EBITDA growth

    12 Customer momentum translating into service revenue and adj. EBITDA growth Uwe Schiller CFO

  13. Slide 13: Financial Overview Q1

    13 Financial Overview Q1  Revenue up 2.8% driven by increased Total revenue CHF m Service revenue service revenue, while revenues from +2.8% +3.6% hardware and hubbing (both low 459 384 Revenue margin) roughly stable 447 371  Service revenue up +3.6%, lower roaming partially compensated by higher

  14. Slide 14: Service revenue growth …

    14 Service revenue growth …  Hardware: Volatile as it depends on Service revenue driven innovation, launches, pricing and by postpaid and internet/TV attachment rate  Hubbing: International trading business which is volatile by nature +3% CHF m  Postpaid: Strong customer growth 2 459 driven by in

  15. Slide 15: … driving gross profit growth

    15 … driving gross profit growth Gross profit growth… …partly reinvested into operational momentum GP growth YoY GP CHF m Adj. Opex growth YoY 2) Adj. Opex CHF m +10.4 316 +1.1 305 3.4% 4.2% Service 147 146 148 148 3.4% 82.4% 82.2% 143 GM 1) 1.8% 1.7% 2.6% 2.3% 1.9% 0.8% -0.5% Q1’19 Q1’20 Q1’19 Q1’2

  16. Slide 16: Focus on eFCF and leverage

    16 Focus on eFCF and leverage Equity FCF Capex and Leverage Q1 LTM CHF m Capex CHF m 576 (46) 2019 185 54 39 92 91 460 Incl. M&A Q1’20 Incl. spectrum 188 54 38 39 91 409 one-off & 5G push LTM Infrastructure Innovation Growth Landline Spectrum Net debt / adj. EBITDA 189 207 Spectrum, M&A 2.50 2.34 M&

  17. Slide 17: Solid financing with no near-term maturity

    17 Solid financing with no near-term maturity Debt maturity profile as per Q1’20 CHF m 1,410  No refinancing need before June 2023  Drew CHF 100m RCF in Q2 (another CHF 100m available) to de-risk and secure funds, but not for liquidity needs  Fitch upgraded the corporate family rating to ‘BBB-’ w

  18. Slide 18: Strong start to the year – COVID-19 to slow down growth temporarily

    18 Strong start to the year – COVID-19 to slow down growth temporarily André Krause CEO

  19. Slide 19: Strong Q1, temporary slowdown from COVID-19

    19 Strong Q1, temporary slowdown from COVID-19  Strong subscriber growth in postpaid, internet and TV, supported by investments into quality Customers  5G coverage in 535 cities /villages by beginning of May Revenue  Service revenue growth driven by B2B and continued customer Guided 2020 momentum

  20. Slide 20: Q&A

    Sunrise Q&A

  21. Slide 21: 21

    21

  22. Slide 22: Adjusted to reported EBITDA bridge

    22 Adjusted to reported EBITDA bridge EBITDA bridge CHF m 1 -2 168  Acquisition and Integration costs of new businesses with a gain caused by the release -4 of an accrual 162  Restructuring costs have occurred as a one-time adjustment  Non-recurring / non-operating events driven by CHF -4.3m effe

  23. Slide 23: Income Statement

    23 Income Statement CHF million Cha nge Cha nge January 1 - March 31 2020 2 0 19 CHF million % Re ve nue Mobile services 306 302 4 1.4 - Thereof mobile postpaid 210 201 9 4.5 - Thereof mobile prepaid 16 19 (3) (16.6) - Thereof mobile hardware 56 58 (2) (3.7) - Thereof other 23 23 1 2.7 Landline serv

  24. Slide 24: Cash Flow Statement

    24 Cash Flow Statement CHF million Cha nge Cha nge January 1 - March 31 2020 2 0 19 CHF million % Ca sh flow Reported EBITDA 162 175 (12) (7.0) Change in NWC 21 40 (19) (47.8) Net interest (10) (9) (0) 2.2 Tax (4) (21) 17 (82.2) CAPEX (83) (134) 51 (38.1) Repayments of lease liabilities (13) (16) 3

  25. Slide 25: Leverage ratio

    25 Leverage ratio March 31, December 31, March 31, Leverage 2020 2019 2019 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 253 263 269 Total debt 1’863 1’873

  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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