Sunrise Communications Ag Class A · SIX:SUNN

Sunrise Communications Ag Class A — Q3 2015 Earnings Presentation

29 slides from Sunrise Communications Ag Class A's earnings presentation, Nov 9, 2015

  1. Slide 1: Sunrise Communications Group AG Q3'15 Financial Results

    Sunrise Communications Group AG Q3’15 Financial Results © Sunrise 09.11.2015 1

  2. Slide 2: Agenda

    Agenda 1 Q3’15 Highlights Libor Voncina (CEO) 2 Operational Update Q3’15 Libor Voncina (CEO) 3 Financials Q3’15 André Krause (CFO) 4 Conclusion Libor Voncina (CEO) 5 Q&A © Sunrise 09.11.2015 2

  3. Slide 3: Q3'15 highlights

    Q3’15 highlights Strong subscriber momentum and financials as expected • Sunrise continues to grow subscribers in its focus areas • Mobile postpaid recorded highest net adds since Q4’13 • Internet and IPTV subscribers continue to grow in a seasonally weak quarter • Improved customer churn driven by

  4. Slide 4: Agenda

    Agenda 1 Q3’15 Highlights Libor Voncina (CEO) 2 Operational Update Q3’15 Libor Voncina (CEO) 3 Financials Q3’15 André Krause (CFO) 4 Conclusion Libor Voncina (CEO) 5 Q&A © Sunrise 09.11.2015 4

  5. Slide 5: Solid Q3 subscriber momentum

    Solid Q3 subscriber momentum Postpaid mobile quarterly net adds (‘000) Prepaid mobile quarterly net adds (‘000) 25 24 21 -3 -6 3 -13 -17 11 17 16 3 -28 -31 15 13 1 0 14 -48 -55 6 1 2 Secondary 21 16 19 Primary 15 14 11 12 12 Q4’13 Q1’14 Q2’14 Q3’14 Q4’14 Q1’15 Q2’15 Q3’15 Q4’13 Q1’14 Q2’14 Q3’14 Q4’

  6. Slide 6: Strong mobile postpaid subscriber momentum

    Strong mobile postpaid subscriber momentum Mobile subscriptions (‘000) Blended mobile ARPU (CHF) 2′496 2′465 2′440 2′424 2′433 +1,1 (3%) 37,0 38,1 1′193 1′145 1′078 1′061 36,9 1′090 1,0 35,5 35,4 3,9 3,4 Δ +2.9 1,8 2,7 32,7 30,6 Δ -2.1 30,2 29,1 29,7 1′104 1′120 1′132 1′151 1′172 199 200 202 205 207

  7. Slide 7: Continued Sunrise Home subscriber momentum

    Continued Sunrise Home subscriber momentum Landline internet subscriptions (‘000) Landline internet ARPU (CHF) +10 -1.5 (+3%) (-3%) 329 333 336 326 327 -3.3 (-8%) 47.2 47.2 45.7 45.8 45.7 211 209 39.9 39.3 220 214 37.5 37.1 36.6 229 54% 48% 39% 30% 15% 127 107 115 122 97 Q3’14 Q4’14 Q1’15 Q2’15 Q3’1

  8. Slide 8: Organizational streamlining implemented

    Organizational streamlining implemented • Organizational streamlining announced on 22nd September 2015, enabling further simplification and digitalization • Commercial and service activities reorganized across the residential and business segments, forming one commercial and one customer service org

  9. Slide 9: Customer focused investments are paying off

    Customer focused investments are paying off Connect Hotline-Test 2015 Bilanz Telecom Rating 2015 416 397 Max: 500 pts 381 Sunrise Swisscom Salt • Sunrise has “with top advisors the best customer • Sunrise with the best result of the “nationwide” service” in Switzerland telecom providers in the resid

  10. Slide 10: Agenda

    Agenda 1 Q3’15 Highlights Libor Voncina (CEO) 2 Operational Update Q3’15 Libor Voncina (CEO) 3 Financials Q3’15 André Krause (CFO) 4 Conclusion Libor Voncina (CEO) 5 Q&A © Sunrise 09.11.2015 10

  11. Slide 11: Lower revenue with improving margin

    Lower revenue with improving margin Q3’15 Revenue (CHFm) Q3’15 EBITDA (CHFm) Reported EBITDA Adjusted EBITDA 2) -45 (-8,5%) 533 -17 -14 487 (-9,6%) (-7,5%) 181 182 164 169 37.2% 37.0% 36.8% 36.1% Q3’14 Q3’15 Q3’14 Q3’15 Q3’14 Q3’15 Margin (excl. hubbing) • Hubbing and mobile hardware revenues negati

  12. Slide 12: Focus on Q3'15 revenue

    Focus on Q3’15 revenue Q3’15 revenue bridge (CHFm) Q3’14 revenue 533 Hubbing: international trading business, done in foreign currencies, negatively Δ hubbing -6 impacted by recently strengthened CHF -3% Mobile HW: revenues dependent on handset innovations and launches, Δ mobile HW -11 strengthened

  13. Slide 13: Cost containment supporting adjusted EBITDA margin

    Cost containment supporting adjusted EBITDA margin Adjusted Opex1) (CHFm) Adjusted EBITDA1) margin (excl. hubbing) (%) 32.2% 32.7% -6% 170 +0.2% 159 162 157 149 37.0% 37.2% % OPEX of revenue 76 70 78 70 Commercial 66 Non-commercial 89 85 94 88 83 Q3’14 Q4’14 Q1’15 Q2’15 Q3’15 Q3’14 Q3’15 • Adj. OPEX

  14. Slide 14: Adjusted to reported EBITDA bridge

    Adjusted to reported EBITDA bridge Q3’15 EBITDA adjustment bridge (CHFm) Adj. EBITDA Q3’15 169 Restructuring expenses (20) • Restructuring expenses of CHF 19.7m were recorded in Q3’15, further one-off expenses of about CHF 1.0 -1.5m expected in Q4’15 • Reduced headcount leads to a reduced pension IA

  15. Slide 15: Solid eFCF leading to net debt reduction

    Solid eFCF leading to net debt reduction Cash Flow Q3’15 (CHFm) Reduced Capex YTD (CHFm) 257 Reported 177 164 153 EBITDA Mobile 112 Landline Tax (15) 86 IT, Shops & 48 Other 18 17 Interest (16) 9m’14 9m’15 Δ NWC • Q3’15 Capex of CHF 72m compared to CHF 144m in 19 (before factoring) Q3’14 Factoring (

  16. Slide 16: Agenda

    Agenda 1 Q3’15 Highlights Libor Voncina (CEO) 2 Operational Update Q3’15 Libor Voncina (CEO) 3 Financials Q3’15 André Krause (CFO) 4 Conclusion Libor Voncina (CEO) 5 Q&A © Sunrise 09.11.2015 16

  17. Slide 17: Conclusion

    Conclusion • Continued Q3’15 operating momentum • Strong subscriber growth and improved churn in mobile postpaid and landline businesses • Organizational streamlining implemented, cost base improved • Investments in network and customer service are paying off (strong BILANZ telecom rating and Connec

  18. Slide 18: Agenda

    Agenda 1 Q3’15 Highlights Libor Voncina (CEO) 2 Operational Update Q3’15 Libor Voncina (CEO) 3 Financials Q3’15 André Krause (CFO) 4 Conclusion Libor Voncina (CEO) 5 Q&A © Sunrise 09.11.2015 18

  19. Slide 19: Appendix

    Appendix © Sunrise 09.11.2015 19

  20. Slide 20: Overview of results – Income Statement

    Overview of results – Income Statement Financial Results Q3 YTD 2015 Q3 YTD 2014 Q3 2015 Q3 2014 CHF million Mobile 966 984 325 354 Landline Services 349 383 113 127 of which hubbing 106 116 34 40 Landline Internet 149 153 50 51 Total revenues 1'464 1'520 487 533 % yoy growth (3.7%) (8.5%) Revenues

  21. Slide 21: Overview of results – Cash Flow Statement

    Overview of results – Cash Flow Statement Cash Flow Q3 YTD 2015 Q3 YTD 2014 Q3 2015 Q3 2014 CHF million EBITDA 450 472 164 181 Change in net working capital (54) (82) 1 51 thereof handset receivable factoring impact 55 - (18) - Movement in pension and provisions 4 (1) 2 (1) Interest (paid) / receive

  22. Slide 22: Cash generation compensating for lower EBITDA

    Cash generation compensating for lower EBITDA September 30, Net debt June 30, 2015 Dec 31, 2014 2015 CHF million Senior Secured Notes - - 746 Senior Secured Notes issued July 2012 - - 520 Senior PIK Toggle Notes - - 631 Floating Rate Notes issued July 2012 - - 201 Senior Unsecured Notes - - 675 Util

  23. Slide 23: Freedom tariff – P&L impact

    Freedom tariff – P&L impact Postpaid ARPU Postpaid P&L CHF 53.6 55.7 54.0 55.9 52.9 52.9 52.6 Service ARPU CHFm Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 • Pre Freedom tariffs: Service revenue and hardware P&L Revenue revenue component recognition Postpaid Service 202 206 211 195 188 193 201 Q2 YoY

  24. Slide 24: Sunrise BILANZ Telecom Ranking 2015

    Sunrise BILANZ Telecom Ranking 2015 Sunrise with best results of «big providers» in Bilanz telecom ranking 2015 for the residential market Mobile experience Full service (quad-play) experience Quality 5 Mobile 23 Support Innovation 3 Fixed Voice 17 Internet Flexibility Price TV Sunrise Swisscom Salt

  25. Slide 25: Prepaid customer development

    Prepaid customer development Market and performance update • Prepaid revenues are declining as smartphone penetration increases data consumption. This has in turn driven pre-to postpaid migration in a number of market segments • Migration strategy focused on maximizing value through attractive postp

  26. Slide 26: Analyst expectations

    Analyst expectations FY15 sell side analyst consensus (CHFm) Min Mean Max Q3'15 adjusted EBITDA 168 FY'15 adjusted EBITDA 615 626 638 • Sell side consensus collected by Sunrise 1) • Contributors: Barclays, Berenberg, Citigroup, Deutsche Bank, Mirabaud, Morgan Stanley, New Street Research, RBC Capita

  27. Slide 27: Thank you

    Thank you © Sunrise 09.11.2015 27

  28. Slide 28: Contact information

    Contact information Investor contact Media contact Sunrise Communications Group AG Sunrise Communications Group AG Uwe Schiller Stefan Kern Head of Investor Relations Head of Corporate Communications uwe.schiller@sunrise.net stefan.kern@sunrise.net +41 58 777 96 86 +41 800 333 000 Thank you for your

  29. Slide 29: 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 2015 Earnings Presentation on 6ix