Sunrise Communications Ag Class A · SIX:SUNN

Sunrise Communications Ag Class A — Q2 2016 Earnings Presentation

33 slides from Sunrise Communications Ag Class A's earnings presentation, Aug 25, 2016

Slide 1: Sunrise Communications Group AG Q2'16 financial results
Sunrise Communications Group AG Q2’16 financial results – 25 August 2016
Slide 2: Agenda
Agenda 1 First impressions of new CEO Olaf Swantee (CEO) 2 Summary & operational update Olaf Swantee (CEO) 3 Financials André Krause (CFO) 4 Conclusion Olaf Swantee (CEO) 5 Q&A 2
Slide 3: Strong 1st impressions - solid base to build on for the future
Strong 1st impressions - solid base to build on for the future Innovative products via diversified channels • Maintain innovation capacity supported by strategic partnerships • Diversified distribution channels with upside in online channel Challenges Convergent offering • Structural declines in pre
Slide 4: Reinforce our position as the leading challenger
Reinforce our position as the leading challenger Solid base Reinforcement focus Continue focus on • Brand awareness Multi brands • Customer experience & digitalization Distribution & Customer care • Innovative products • Network quality Mobile - Internet - TV Increase focus on • Customer base value
Slide 5: Agenda
Agenda 1 First impressions of new CEO Olaf Swantee (CEO) 2 Summary & operational update Olaf Swantee (CEO) 3 Financials André Krause (CFO) 4 Conclusion Olaf Swantee (CEO) 5 Q&A 5
Slide 6: Q2 summary: Subscriber momentum alongside cost containment
Q2 summary Subscriber momentum alongside cost containment • Continued subscriber growth momentum in key focus areas • Another strong quarter for mobile postpaid with 6.2% YoY growth, despite competitive environment • Accelerated internet growth of 7.3% YoY alongside 20.4% YoY IPTV growth • Revenue o
Slide 7: Continued growth momentum in wireless
Continued growth momentum in wireless Postpaid mobile net adds (‘000) Prepaid mobile net adds (‘000) 24 21 21 22 3 18 3 3 10 -7 10 Secondary -13 -17 19 21 18 Primary 12 8 -34 Q2’15 Q3’15 Q4’15 Q1’16 Q2’16 -47 Q2’15 Q3’15 Q4’15 Q1’16 Q2’16 • Postpaid supported by Freedom and yallo portfolios, • Prepa
Slide 8: Broadband momentum is improving
Broadband momentum is improving Internet net adds (‘000) TV net adds (‘000) 9 7 7 7 7 7 5 5 5 3 Q2’15 Q3’15 Q4’15 Q1’16 Q2’16 Q2’15 Q3’15 Q4’15 Q1’16 Q2’16 • Internet with strongest net adds in more than five • TV net adds supported by enhanced Sunrise Smart TV years, leading to 357k total subscribe
Slide 9: ARPU trends continuing, partly driven by temporary promotions and HW unwind
ARPU trends continuing, partly driven by temporary promotions and HW unwind Blended mobile service ARPU (CHF) • Blended mobile down CHF -1.3 YoY 33,5 34,2 32,7 31,4 32,2 • Postpaid down CHF -3.6 (Q1: CHF -3.7) partly driven 2nd SIM dilution and by temporary promotions 1) and Freedom HW unwind -1.7 -
Slide 10: Agenda
Agenda 1 First impressions of new CEO Olaf Swantee (CEO) 2 Summary & operational update Olaf Swantee (CEO) 3 Financials André Krause (CFO) 4 Conclusion Olaf Swantee (CEO) 5 Q&A 10
Slide 11: Fading revenue pressure
Fading revenue pressure Revenue (CHFm) • Revenue down -3.2% compared to -8.8% in Q1’16 -16 primarily supported by improved development of low- (-3.2%) margin HW and hubbing revenue 488 472 • Moderating service revenue 1) decrease of -4.1% compared to -4.4% in Q1’16; continued subscriber growth momen
Slide 12: Focus on Q2 revenue
Focus on Q2 revenue Q2’16 revenue bridge (CHFm) Q2’15 revenue 488 Δ hubbing -12.9 1.4 • Hubbing: international trading business which is volatile by nature 0% • Mobile HW: revenues are dependent on handset innovations / launches; Q2’16 Δ mobile HW -13.2 -1.5 with lower mobile HW gross margin YoY Ser
Slide 13: Continued cost containment
Continued cost containment Adjusted Opex1) (CHFm) Adjusted EBITDA1) margin (excl. hubbing) (%) 34.7% % OPEX of revenue (excl. hubbing) 33.1% -8% +0.2% 157 149 151 34.2% 34.4% 143 145 Q2’15 Q3’15 Q4’15 Q1’16 Q2’16 Q2’15 Q2’16 • Adj. Opex down 8% YoY supported by organizational • Improved margin suppo
Slide 14: Equity FCF in-line with expectations
Equity FCF in-line with expectations Cash flow LTM Q2’16 (CHFm) Reduced Capex H1’16 (CHFm) = LTM Q1’15 105 85 Reported 623 617 62 EBITDA 55 Mobile Tax (46) (35) 31 Landline 25 IT, Shops & Other 11 5 Interest (52) (52) H1’15 H1’16 • Reiterating CHF 220-230m Capex guidance Δ NWC (46) (48) (before fact
Slide 15: Agenda
Agenda 1 First impressions of new CEO Olaf Swantee (CEO) 2 Summary & operational update Olaf Swantee (CEO) 3 Financials André Krause (CFO) 4 Conclusion Olaf Swantee (CEO) 5 Q&A 15
Slide 16: Conclusion
Conclusion Q2 recap Outlook • Continued subscriber growth momentum in focus areas • Moderation in service revenue decrease alongside stabilization in low-margin areas HW and hubbing • FY’16 guidance is reiterated • Continued Opex improvement YoY as expected, compensating revenue headwinds to a large
Slide 17: Agenda
Agenda 1 First impressions of new CEO Olaf Swantee (CEO) 2 Summary & operational update Olaf Swantee (CEO) 3 Financials André Krause (CFO) 4 Conclusion Olaf Swantee (CEO) 5 Q&A 17
Slide 20: Overview of results – Income Statement
Overview of results – Income Statement P&L (CHF million) H1 2016 H1 2015 Q2 2016 Q2 2015 Mobile services 608 641 311 321 thereof hardware 112 126 60 61 Landline services (incl. voice) 205 237 108 117 thereof hubbing 61 72 35 34 Landline internet & TV 104 99 52 50 Total revenues 917 976 472 488 % YoY
Slide 21: Overview of results – Cash Flow Statement
Overview of results – Cash Flow Statement Cash Flow (CHF million) H1 2016 H1 2015 Q2 2016 Q2 2015 EBITDA 287 286 148 153 Change in net working capital (68) (55) 33 55 thereof handset receivable factoring impact 21 72 38 57 Movement in pension and provisions (6) 2 (2) 1 Interest (paid) / received, ne
Slide 22: Leverage ratio slightly up in Q2 due to dividend pay-out
Leverage ratio slightly up in Q2 due to dividend pay-out June 30, March 31, December 31, June 30, Net debt (CHF million) 2016 2016 2015 2015 Senior Secured Notes issued February 2015 500 500 500 500 Term loan B 1'360 1'360 1'360 1'360 Total cash-pay borrowings 1) 1'860 1'860 1'860 1'860 Financial le
Slide 23: Freedom tariff – P&L impact
Freedom tariff – P&L impact Postpaid ARPU Postpaid P&L CHF 55.7 55.9 52.9 53.6 52.9 54.0 53.9 53.3 52.6 52.5 CHFm Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Service ARPU • Pre Freedom tariffs: P&L Revenue Service revenue and recognition hardware revenue Postpaid Service 202 206 211
Slide 24: Prepaid subscriptions based on 3 and 12 month activity rule
Prepaid subscriptions based on 3 and 12 month activity rule Market and performance update • Decreasing prepaid customers as a result of pre- to postpaid migration: postpaid flat rate plans providing similar cost control like prepaid; demand for high value smart phone instalment plans which are not a
Slide 26: Innovative products for at home and on the go
Innovative products for at home and on the go Simple and convergent telecom offering • Simplicity is a key characteristic of the product portfolio - we provide products which are easy to understand, to buy and to use • Innovative products with Freedom mobile tariffs having no fixed contract duration
Slide 27: Diversified distribution channel mix
Diversified distribution channel mix 91 Sunrise POS across Switzerland • Direct/indirect sales ratio with direct channel of above 50% for Sunrise and MTV brands • 91 POS with good footprint across Switzerland • Digital channels with lower share compared to other countries - providing upside • Indire
Slide 28: Strongly improved customer service with further upside
Strongly improved customer service with further upside • Customer oriented company culture with NPS embedded in incentive schemes, supporting strong improvements since 2013 • Mobile already on strong levels, with further upside primarily in fixnet related to its higher complexity • Drive further sim
Slide 29: Increasing focus on B2B
Increasing focus on B2B • Sunrise represents the credible B2B challenger with a complete mobile and landline offering, as well as a strong network and customer service • Good B2B product portfolio with relevant value proposition • Sunrise with prominent customer portfolio including Swiss Post and Zu
Slide 30: Among the best networks in the DACH area
Among the best networks in the DACH area 98.7% LTE (4G) population coverage 1) • Number 1 Swiss mobile operator in terms of voice quality for 2nd time in a row, with high mobile data speeds available 2) • Above 3600 of mobile sites • Mobile data throughput of 22.3 Gbit/s measured in June 2016 3) • 1
Slide 32: Contact information
Contact information Investor contact Uwe Schiller Stephan Gick uwe.schiller@sunrise.net stephan.gick@sunrise.net investor.relations@sunrise.net +41 58 777 96 86 32 © Sunrise
Slide 33: 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 — Q2 2016 Earnings Presentation on 6ix

Sunrise Communications Ag Class A — Q2 2016 Earnings Presentation

Slide 1: Sunrise Communications Group AG Q2'16 financial results

Slide 2: Agenda

Slide 3: Strong 1st impressions - solid base to build on for the future

Slide 4: Reinforce our position as the leading challenger

Slide 5: Agenda

Slide 6: Q2 summary: Subscriber momentum alongside cost containment

Slide 7: Continued growth momentum in wireless

Slide 8: Broadband momentum is improving

Slide 9: ARPU trends continuing, partly driven by temporary promotions and HW unwind

Slide 10: Agenda

Slide 11: Fading revenue pressure

Slide 12: Focus on Q2 revenue

Slide 13: Continued cost containment

Slide 14: Equity FCF in-line with expectations

Slide 15: Agenda

Slide 16: Conclusion

Slide 17: Agenda

Slide 18: Appendix

Slide 19: Appendix

Slide 20: Overview of results – Income Statement

Slide 21: Overview of results – Cash Flow Statement

Slide 22: Leverage ratio slightly up in Q2 due to dividend pay-out

Slide 23: Freedom tariff – P&L impact

Slide 24: Prepaid subscriptions based on 3 and 12 month activity rule

Slide 25: Appendix

Slide 26: Innovative products for at home and on the go

Slide 27: Diversified distribution channel mix

Slide 28: Strongly improved customer service with further upside

Slide 29: Increasing focus on B2B

Slide 30: Among the best networks in the DACH area

Slide 31: Thank you for your interest in Sunrise

Slide 32: Contact information

Slide 33: Disclaimer