33
Sunrise Communications Group AG FY’15 financial results – 10 March 2016
Sunrise Communications Group AGFY’15 financial results – 10 March 2016
Agenda
1 Q4’15 Highlights Libor Voncina (CEO)
2 2015 Review Libor Voncina (CEO)
3 Financials André Krause (CFO)
4 Outlook Libor Voncina (CEO)
5 Q&A
2
Highlights Strong subscriber momentum and eFCF growth
• Sunrise continues to grow subscriptions in its focus areas
• Mobile postpaid with another strong quarter despite competitive environment (+6.0% YoY)
• Internet (+4.5% YoY) and IPTV (+25.0% YoY) subscriber growth with another strong quarter
• Customer churn improvements continue, supported by customer experience
• Q4’15 revenue down 7.7% YoY (FY 2015: -4.8%)
• Mobile hardware and hubbing revenues negatively impacted by stronger Swiss Franc
• Structural declines in prepaid mobile, landline retail voice and Freedom hardware unwind 1) partially mitigated by customer growth in mobile postpaid, internet and IPTV
• Q4’15 adj. EBITDA stable YoY (FY 2015: -1.8%), with margin up 190bps
• Cost efficiencies further compensating revenue headwinds
• Improved Q4’15 net profit and equity free cash flow
• Reduced interest expenses
• Cash balance of CHF 244m slightly improves leverage ratio to 2.6x
• Financial strength underpins commitment to our dividend guidance
• Proposed dividend of CHF 3 per share (CHF 135m)
1) Pre-Freedom service revenues contain subsidized hardware component which is unwinding as customers migrate to Freedom offering3
Agenda
1 Q4’15 Highlights Libor Voncina (CEO)
2 2015 Review Libor Voncina (CEO)
3 Financials André Krause (CFO)
4 Outlook Libor Voncina (CEO)
5 Q&A
4
2015: Strategic levers initiated in 2013 are paying off …
• Internet net add turnaround supported by new Smart TV launch and increased speeds at attractive prices
• Freedom mobile tariff since Q2’14: handset and service contracts separated, no fixed contract duration
• Network investment ramp-up led to strongest mobile network quality improvement since 2012 – confirmed by independent “Connect test”
• Capex-light landline access strategy with increased broadband speeds
• Introduction of Net Promoter Score in 2013 with closed loop feedback process led to strong improvements
• Independent “Connect Hotline Test” and “Golden Headset Award” confirm strongly improved customer experience
• Refocused the brand as premium challenger in Q2’14 and engaged Roger Federer as brand ambassador since Q4’14, perfectly matching our corporate values of fairness, transparency and customer orientation
• Multi-brand strategy continued and yallo postpaid well-positioned in market
92
SaltSwisscomSunrise
18 24
Connect test improvement 2012-15
416397
SwisscomSunrise Salt
381
Connect hotline test 2015
27
Mobile postpaid
Internet TV
15
80
2015 customer net adds
Networkquality
Customer experience
Innovative products
Brand awareness
5
… but are not yet sufficient to offset headwinds
-5
Prepaid Landline voice
-1
-3
Prepaid
-131
Landline voice
Structural customer declines
Structural ARPU declines
Freedom hardware unwind
Market environment
6
• Prepaid down due to ongoing pre- to postpaid migration
• Landline voice with fixed to mobile/OTT migration resulting in decreasing voice usage
• Freedom required a change in revenue recognition leading to immediate hardware upfront and subsequent lower mobile service revenue recognition 1)
• Unwind effect to largely fade by year-end 2016-10-12
Q4Q3
• Stronger CHF negatively impacted hubbing and handset sales
• Roaming price change as well as higher liquidity and more attractive offers at the value end of the market had negative ARPU impacts
2015 customer net adds (‘000)
2015 ARPU decline (CHF)
YoY revenue & EBITDA impact 2015 (CHFm)
1,6
0,8
1,2
EUR CHF exchange rate
Removal of EUR peg
Jan 2015 Dec 2015
1) Pre-Freedom service revenues contain subsidized hardware component which is unwinding as customers migrate to Freedom offering
619684
FY’14
-9,5%
FY’15
Hence, cost efficiency measures accelerated
35.8%
% OPEX of revenueexcl. hubbing
1) Total adjustments to reported EBITDA / Opex include out-of-period income and expenses, such as prior year related events, non recurring and/or non operating events and cost related to share-based payment.
33.7%• Organizational streamlining announced in 2015
enabling further simplification and digitalization
• Commercial and service activities reorganized across the residential and business segments, forming one commercial and one customer service organization
• 160 headcounts have been reduced, not affecting front line employees in sales and service
• Reduction in SARC YoY due to the introduction of the Freedom offering in April 2014
adj. Opex
Adjusted Opex1) (CHFm)
7
Opex levers
Equity FCF acceleration well on track despite headwinds –CHF 3 dividend proposal
1) Total adjustments to reported EBITDA include out-of-period income and expenses, such as prior year related events, non recurring and/or non operating events and cost related to share-based payment.
1'9762'075
-99(-4,8%)
FY’15FY’14
627638
FY’15FY’14
-11(-1,8%)
Strong subscriber momentumdriven by growth levers, but offset by headwinds
Strong cost focus enabled lower decline in adj. EBITDA vs. revenue
Revenue (CHFm)
Adjusted EBITDA (CHFm) 1)
153
-4
+157
FY’15FY’14
Equity free cash flow (CHFm)
Equity FCF acceleration driven by Capex reduction following investment ramp-up and reduced interest expenses following debt refinancing
8
Dividend proposal of CHF 3 per share (CHF 135m)
1
2
3
4
Agenda
1 Q4’15 Highlights Libor Voncina (CEO)
2 2015 Review Libor Voncina (CEO)
3 Financials André Krause (CFO)
4 Outlook Libor Voncina (CEO)
5 Q&A
9
Stable Q4’15 EBITDA despite lower revenue
1) Pre-Freedom service revenues contain subsidized hardware component which is unwinding as customers migrate to Freedom offering2) Total adjustments to reported EBITDA include out-of-period income and expenses, such as prior year related events, non recurring and/or non operating events and cost related to share-based payment.
512555
Q4’15Q4’14
-43(-7,7%)
165167
Q4’15
-1(-0,7%)
Q4’14
Margin (excl. hubbing)
• Revenue down -7.7% in Q4 compared to -8.5% in Q3
• Strong subscriber momentum driven by growth levers
• Offset by headwinds: lower hubbing and mobile hardware (CHF strength); structural declines in prepaid mobile and landline retail voice; fading Freedom hardware unwind 1)
• Stable EBITDA despite lower revenue
• Driven by strong cost focus and mix effect (hubbing and hardware with below average margin)
Revenue (CHFm)
Adjusted EBITDA (CHFm) 2)
34.7%32.8%
10
143162
Q4’15Q4’14
-19(-11,8%)
Adjusted Opex (CHFm) 2)
• Strong reduction in adjusted Opex
• Supported by organizational streamlining announced in September, other efficiencies and lower marketing expenses
Maintained subscriber momentum in postpaid in Q4’15
• Postpaid net adds remain at high levels despite competitive environment
• Supported by pre- to postpaid migration and investments into quality, innovation, brand and service experience
Postpaid mobile subscriber base (‘000)
2014
1.320
Q4
16
Q3
15
Q2
13
24
Q2
21
Q1
14
21
Q4
1.400
2015
+11%
1.258
2013
17
Q1 Q3 Q4
-48
Q3
-6
Q2
-3
Q1
-31
2013
1.233
-13
Q1
-55
2014
1.145
2015
-18%
1.014
Q4
-47
Q3
-17
Q2
Prepaid mobile subscriber base (‘000)
• Prepaid with ongoing structural pre- to postpaid migration
• Q4 weaker than previous quarters as Sunrise recalibrated its commercial spend in the declining prepaid market
11
Q4 acceleration in broadband
• TV net adds supported by enhanced Sunrise TV offering launched in Nov’15
• Sunrise entered the TV market in 2012 and has consistently grown its customer base since then
• Internet experiencing strongest increase in more than five years in Q4
• 2015 turnaround supported by attractive ‘Home’ tariffs since Q3’14, convergence benefit, increased broadband speeds and the enhanced Sunrise TV offering
TV subscriber base (‘000)Internet subscriber base (‘000)
134
107
74
+80%
2015Q4
7
Q3
5
Q2
7
Q1
8
2014Q4
10
Q3
8
Q2
6
Q1
9
2013
342327
348
5
Q3
3
Q2
5
Q12013
-2%
2015Q4Q1
-10
Q2
-5
Q3
1
Q4 2014
2
-8
12
Fading ARPU pressure in Q4
1) Excluding installment ARPU; ARPU including installment ARPU increasing 5% YoY driven by increasing postpaid share
-1,7
Q1’15
-2,2
Q2’15
-1,8
-1,0
Q3’15 Q4’15
• ARPU down 3% (CHF -1.0) to CHF 32.7: Pressure mainly from mobile postpaid as a result of Freedom HW unwind, roaming and value mix
• ARPU pressure is fading supported by reduced Freedom HW unwind effect
• ARPU down 2% (CHF -0.9) to CHF 46.3: impacted by migrations to Sunrise ‘Home’ portfolio launched in Q3’14
• Dynamics going forward supported by enhanced Sunrise TV with new features at a higher price and ‘Home’ share already reaching 62%
Blended mobile service ARPU 1) : ∆ YoY (CHF)
Blended internet & IPTV ARPU: ∆ YoY (CHF)
13
Landline voice ARPU: ∆ YoY (CHF)
• ARPU down 12% (CHF -4.8) to CHF 34.0: Fixed to mobile/OTT migration resulting in decreasing voice usage
-5,2
Q1’15
-4,0
Q2’15
-5,0 -4,8
Q3’15 Q4’15
-0,6
Q1’15
0,4
Q2’15
-1,5-0,9
Q3’15 Q4’15
Focus on Q4 revenue
12
6
512
500
503
523
555
-3
Other
Δ retail voice
Δ roaming & postpaid value mix
-6
Δ prepaid -10
Δ postpaid Freedom hardware unwind
-10
Service revenue
Δ mobile HW -21
Δ hubbing -11
Q4’14 revenue
Q4’15 revenue
-7.7%
Δ postpaid subs. & landline internet
Hubbing: international trading business, done in foreign currencies, negatively impacted by recently strengthened CHF
Mobile HW: revenues dependent on handset innovations and launches
Postpaid Freedom hardware unwind: Freedom required a change in revenue recognition leading to immediate hardware upfront and subsequent lower mobile service revenue recognition
Prepaid: Decline mainly due to pre to postpaid migration (e.g. yallo postpaid)
Retail voice: Structural decline due to fixed to mobile substitution, migration to flat rates as part of fixed bundles, and OTT applications
Postpaid value mix & roaming: Higher liquidity and more attractive offers at the value end of the market and roaming price change with negative ARPU impacts
Postpaid subscription: Positive impact of increased customer base driven by investments in customer service, innovation, brand and network
Landline internet: Subscriber growth in internet and TV largely offset by negative ARPU impacts due to Home migration
Q4’15 revenue bridge (CHFm)
14
-12
-10
-7
-9
+11
= Q3’15 YoY deviation
-8.5%
-6
-11
0
85 94 88 83
7876
7066
66
77
149
Q1’15
170
Q2’15
157
Q3’15
143
Q4’15
-11,9%
162
Q4’14
Cost containment supporting Q4 adjusted EBITDA margin
32.8%
Q4’14 Q4’15
34.7%
+1.9%
31.9%
% OPEX of revenue
• Improvement driven by reduced adj. Opex
• Gross margin (excl. hubbing) flat, supported by lower HW revenues offsetting higher international termination rates, Freedom HW unwind and year end higher sales of hardware within the integration business
1) Total adjustments to reported EBITDA include out-of-period income and expenses, such as prior year related events, non recurring and/or non operating events and cost related to share-based payment.
30.0%
• Adj. Opex down 12% YoY driven by lower marketing spending, organizational streamlining and below 100% target achievement
• Average quarterly Opex of slightly below CHF 150m is expected for coming quarters as a portion of the recent savings will be reinvested in commercial spending
• Further cost opportunities identified based on simplifying and digitizing processes and customer interactions
Non-commercial
Commercial
Adjusted Opex1) (CHFm) Adjusted EBITDA1) margin (excl. hubbing) (%)
15
Solid Q4 eFCF leading to net debt reduction
43
55
22
166
(4)
Reported EBITDA
eFCF
Other financing activities
(6)
Capex (99)
Factoring (13)
Δ NWC (before factoring)
Interest (12)
Tax
Total cash flow
Other (13)
1'639
1'684
Q4’15 net debt
Repayment of financial lease, FX
-2
Increasein cash
-43
Q3’15 net debt
Cash Flow Q4’15 (CHFm)
Improved net debt QoQ (CHFm)
Reduced Capex FY15 (CHFm)
• Capex reduction well on track after peak year 2014, despite ongoing LTE rollout in 2015
• Net debt reduction leading to sequentially slightly improved net debt / EBITDA ratio at 2.6x (Q3: 2.7x)
119 75
213
174
276
26
FY’14
24
356
FY’15
16
Mobile
Landline
IT, Shops & Other
Strong cash flow generation in 2015
244
120
122
153
616
Capex (276)
2
Other financing activities
FX effect on cash
Other
(45)
Interest (97)
Tax (34)
Reported EBITDA
(6)
Financing
Cash balance EoP’15
Cash balance EoP’14
Δ NWC (incl. factoring)
eFCF
(25)
(11)
Total cash flow
Interest significantly down YoY benefitting from reduced debt and lower cost of debt capital following IPO & debt refinancing; further reduction in 2016 expected
Capex down from CHF 356m in 2014, with further normalization expected in 2016
Δ NWC negatively impacted by further build-up of handset receivables, partly mitigated by monetization of those receivables
Financing impacted by IPO, refinancing activities and 2nd
installment of mobile license (incl. accrued interest)
17
Cash Flow FY’15 (CHFm)
Agenda
1 Q4’15 Highlights Libor Voncina (CEO)
2 2015 Review Libor Voncina (CEO)
3 Financials André Krause (CFO)
4 Outlook Libor Voncina (CEO)
5 Q&A
18
Strategic outlook
Follow multi-brand strategy
• Differentiate Sunrise brand as the premium challengerthrough improved quality and brand experience, customer service, as well as relevant and innovative convergent offerings at a non-monopolistic price with no hidden costs
• Use multi-brand approach to compete in Budget and Ethno segments
• Further increase awareness for Sunrise B2B and provide simple and relevant solutions based on business customer needs
19
• Increase awareness of the Sunrise brand, its high quality, and convergent offerings via brand ambassador
• Follow a segmented go to market approach by utilizing multi brands
• Focus on growth within mobile postpaid, internet and TV as well as B2B
• Drive further cost efficiencies and increase customer experience
• Maintain high quality mobile and backbone network with high data capacity available, finalize LTE roll out
• Follow capex-light landline access strategy with access to all bandwidths (Fibre, G.fast, VDSL)
• Use simplification and digitalization to improve customer experience whilst increasing cost efficiency
• Further efficiency potential across service, IT and back-office functions identified
• Postpaid with no fixed contract duration; more value with WhatsApp; new smart TV launched, new 4K enabling set top box to follow; bundled products for small businesses
Drive innovation
Increase cost efficiency
Maintain and extend network quality
Financial outlook 2016
Revenue headwinds expected to fade in 2016
• We expect continued momentum in mobile postpaid, internet, and TV
• Current revenue headwinds expected to fade, but not yet fully offset by growth drivers
• Higher international termination rates since Q4’15, expected to negatively impact gross margins also in 2016
20
Continued focus on costs in 2016
• 2016 cost base will benefit from organizational streamlining announced in September 2015
• Sunrise will further monitor and identify cost opportunities in the context of digitalization and simplification
eFCF acceleration expected in 2016
• Capex and interest expenses are expected to normalize in 2016 supporting further equity free cash flow improvement
million CHF
Revenue 1’890-1’930
Adjusted EBITDA 600-620
Capex 220-230
Cash taxes 45-50
Guidance 2016
Dividend policy of at least 65% eFCFpay-out reiterated
• Upon meeting guidance a dividend of CHF 3.24 to CHF 3.36 per share is expected to be proposed to the AGM
Agenda
1 Q4’15 Highlights Libor Voncina (CEO)
2 2015 Review Libor Voncina (CEO)
3 Financials André Krause (CFO)
4 Outlook Libor Voncina (CEO)
5 Q&A
21
Appendix
22
Update on partial revision of telecommunication act
• Content up for discussion includes
• Regulation regarding access to operators’ in house cabling and ducts, roaming, spectrum liberalization, network neutrality, product unbundling, consumer protection, ex-ante/ex-officio elements
• Sunrise’s position concerning broadband access
• No ex-ante/ex-officio regulation required since current system is working well with ex-post …
• … but empower federal council to include optical fibre into the ex-post scope in case of market failure
• Such a light fibre regulation approach is in line with ComCom and ensures attractive access conditions long-term
• Expected time line
• Public consultation running from 11 December 2015 to 31 March 2016
• Next steps include government proposal and debate in 1st and 2nd chamber starting 2017
• Final implementation of law expected earliest 2018 or beyond
Regulatory overview on broadband technology access
25
1’000
500
up to LLU
VDSL & other 1)
Fibre 2)
• Regulated since 2007
• Full service currently not regulated• Copper from curb/street to home
included in ex-post scope • Demand covered via BBCS
• Currently not regulated; Sunrise strives this to be covered in TCA revision
Multiple devices
Video quality
Individual content
Dem
and f
or
bandw
idth
now
Simultaneousaccess
yesterday
Increasing demand for bandwidth
Mbit/s download
up to
up to
1) Including copper coupled to FTTC, FTTS and FTTB; G.fast roll out to increase copper speed up to 500Mbit/s 2) Including FTTH
23
Overview of results – Income Statement
1) Purchase Price Allocation (PPA) effect of fair value adjustments resulting from the acquisition of Sunrise Communications AG in 2011 & embedded derivatives on the condensed consolidated interim statements of income
Financial Results FY 2015 FY 2014 Q4 2015 Q4 2014
CHF million
Mobile 1'304 1'350 338 367
Landline Services 472 521 123 138
of which hubbing 142 163 36 47
Landline Internet 200 204 51 51
Total revenues 1'976 2'075 512 555
% yoy growth (4.8%) (7.7%)
Revenues (excl. hubbing) 1'834 1'913 477 508% yoy growth (4.1%) (6.2%)
COGS (733) (754) (204) (227)
Gross profit 1'244 1'321 308 329% margin 62.9% 63.7% 60.2% 59.2%
% yoy growth (5.9%) (6.2%)
Opex (628) (682) (142) (161)
EBITDA 616 639 166 167% margin 31.2% 30.8% 32.4% 30.1%
% margin (excluding hubbing revenues) 33.6% 33.4% 34.8% 32.9%
% yoy growth (3.6%) (0.8%)
Adjusted EBITDA 627 638 165 167% margin (excluding hubbing revenues) 34.2% 33.4% 34.7% 32.8%
% yoy growth (1.8%) (0.7%)
Depreciation and amortization (472) (461) (118) (132)% yoy growth (2.4%) 10.8%
Operating income 144 177 48 35
Net financial items (235) (276) (13) (96)
Income taxes (22) (16) (10) 2
Net (loss) / income (113) (115) 25 (60)
Thereof (before tax impact)
IPO & refinancing transaction (157) - - -
PPA effect 1)
(147) (152) (33) (38)
24
Overview of results – Cash Flow Statement
Cash Flow FY 2015 FY 2014 Q4 2015 Q4 2014CHF million
EBITDA 616 639 166 167
Change in net working capital (45) (53) 9 29
thereof handset receivable factoring impact 42 - (13) -
Movement in pension and provisions (6) (3) (10) (1)
Interest (paid) / received, net incl. foreign currency impact (97) (219) (12) (77)
thereof IPO and refinancing transaction impacts (29) - - -
Corporate income and withholding tax (paid) / received (34) (9) (4) (15)
Cash flow from operating activities 434 356 150 103
Capex (276) (356) (99) (99)
% Capex-to-revenues (excl. hubbing revenues) 28.3% 36.1% 20.3% 18.9%
Cash flow after investing activities 158 (0) 51 4
Repayment other financing items (11) (6) (5) (2)
Proceeds / (repayments) from debts, net (986) (27) (2) (8)
thereof payment of 2 nd installment of mobile license (105) - - -
Settlement of derivatives (348) 2 - 0
Proceeds from initial public offering, net 1'309 - (1) 0
Total cash flow 122 (32) 43 (6)
Cash and cash equivalents as of BoP 120 150 201 126
Foreign currency impact on cash 2 2 1 0
Cash and cash equivalents as of December 31 244 120 244 120
Equity Free Cash Flow FY 2015 FY 2014 Q4 2015 Q4 2014CHF million
EBITDA 616 639 166 167Change in net working capital (45) (53) 9 29
Interest (paid) / received, net incl. foreign currency impact (97) (219) (12) (77)
Corporate income and withholding tax (paid) / received (34) (9) (4) (15)
Capex (276) (356) (99) (99)
Other financing activities (11) (6) (5) (2)
Equity free cash flow 153 (4) 55 3
25
1) Nominal amounts, i.e. excluding capitalized debt issuance cost
Leverage ratio at 2.6x
26
Net debtDecember 31,
2015
September 30,
2015Dec 31, 2014
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
Utilized RCF - - 73
Senior Secured Notes issued February 2015 500 500 -
Term loan B 1'360 1'360 -
Total cash-pay borrowings 1) 1'860 1'860 2'846
Fair value of cross currency swaps - - 149
Financial lease 23 25 30
Total debt 1'883 1'885 3'025
Cash & Cash Equivalents (244) (201) (120)
Net debt 1'639 1'684 2'905
Net debt / EBITDA 2.6x 2.7x 4.6x
Adjusted to reported EBITDA bridge 2015
16
(3)
Share based paymentexpenses
Reported EBITDA FY’15 616
Prior-year related eventsand other
Adj. EBITDA FY’15 627
(20)Restructuring expenses
IAS 19 curtailment gain
(4)
• Restructuring expenses of CHF 20m were recorded in H2’15
• Reduced headcount led to a reduced pension liability, resulting in an IAS 19 curtailment gain of CHF 16.4m
• Share-based payment provisions for multi-year compensation plans
• Prior year related events mainly include adjustments of provisions/accruals based on newly available information
FY’15 EBITDA adjustment bridge (CHFm)
27
Freedom tariff – P&L impact
Q4’15
53.9
7.8
46.1
Q1’14
52.9
0.0
52.947.6
Q4’14
52.9
3.4
49.5
Q3’14
55.7
1.8
53.9
Q2’14
53.6
0.5
53.1
Q3’15
55.9
7.0
48.9
Q2’15
54.0
6.0
48.0
Q1’15
52.6
5.0
Additional statistics:
• Total postpaid SIM only share of 37%5) as of Q4’15
• Below 150k subscribers left on pre-Freedom, subsidized rate plans
• Negative YoY postpaid service revenue due to pre-Freedom hardware unwind 4), fading as migration nears completion in 2016
Installment ARPU
• Freedom tariffs: Hardware installments (provided in this chart to allow for better ARPU comparison)
P&L recognition in the respective period
Full upfront recognition of HW price in P&L
285422
524 605 679
150
756
+77
Q4’15
+74+81+102
+137
+135
Q3’15Q2’15Q1’15Q4’14Q3’14Q2’14Q1’14
Freedom base
Q4 YoY-3m
1) Freedom are postpaid mobile rate plans launched in April 2014 (see Q1’15 results report for more information)
CHF
2) Mobile HW revenue increased in Q2’14 supported by upfront recognition
Service ARPU
• Pre Freedom tariffs: Service revenue and hardware revenue component
• Freedom tariffs: Service revenue
3) Shift of HW costs from SARC to COGS as of Q2’14 (both times fully recognized upfront); Q2’14 EBITDA positively impacted by upfront recognition of HW
2)
3)
Postpaid ARPU Postpaid P&L
Freedom1) subscriber development (‘000)
4) i.e. pre-Freedom hardware revenue component is not existent under Freedom any longer
CHFm Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15
Revenue
Postpaid Service 202 206 211 195 188 193 201 192
Total Mobile Hardware 16 70 66 100 65 61 55 78
of which Freedom related 51 49 73 48 48 42 60
EBITDA contributions
Postpaid Service Gross Profit 176 179 183 169 165 168 172 162
Mobile Hardware (0) 3 2 3 1 2 2 3
Postpaid SARC (41) (21) (13) (16) (13) (14) (12) (14)
EBITDA impact 135 161 172 156 152 157 163 151
Q4 YoY-5m
5) Restated Q3’15 number amounts to 33%
28
Prepaid customer development
1'014 1'061 1'078 1'090
1'145 -17
-55-13
Q3’15Q2’15Q1’15Q4’14 Q4’15
- 47 • For transparency reasons, prepaid customers based on a 12 month activity rule are provided
• 3 month activity rule is a better representation of the prepaid market
1'663 1'738
1'812 1'877 1'912
Q3’15Q2’15Q1’15Q4’14 Q4’15
- 74- 35
- 75- 66
• Decreasing prepaid customers as a result of pre- to postpaid migration: postpaid flat-rate plans provide similar cost control like prepaid, furthermore prepaid rate plans are less suitable in a market with a high adoption of smart phones requiring mobile data plans
• Migration strategy focused on maximizing value through attractive postpaid SIM-only offers (Freedom, yallo postpaid)
Market and performance update
Prepaid customers: 3 month rule Pro-forma prepaid customers: 12 month rule
29
Analyst expectations
• Sell side consensus collected by Sunrise as per 1 March 2016 1)
• Contributors: Barclays, Berenberg, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Kepler Cheuvreux, Mirabaud, Morgan Stanley, New Street Research, RBC Capital Markets, Redburn, UBS, Vontobel
Sell side analyst consensus (CHFm)
1) The consensus is derived by taking analysts into account who update their estimates on a regular basis and make them available to Sunrise every quarter
30
Mean
Q4'15 revenue 502
Q4'15 adjusted EBITDA 161
FY'15 revenue 1’966
FY'15 adjusted EBITDA 622
FY'16 revenue 1’925
FY'16 adjusted EBITDA 613
Thank you for your interest in Sunrise
31
Contact information
Corporate CommunicationsStefan [email protected]+41 800 333 000
Investor RelationsUwe Schiller Stephan [email protected] [email protected]
[email protected]+41 58 777 96 86
Investor contact Media contact
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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 for any securities, and neither this Presentation nor anything contained herein shall form the basis of, or be relied upon in connection with, or act as an inducement to enter into, any contract or commitment whatsoever.
The information contained in this Presentation has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness, reasonableness or correctness of the information or opinions contained herein. None of Sunrise Communications Group AG, its subsidiaries or any of their respective employees, advisers, representatives or affiliates shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this Presentation. The information contained in this Presentation is provided as at the date of this Presentation and is subject to change without notice.
Statements made in this Presentation may include forward-looking statements. These statements may be identified by the fact that they use words such as “anticipate”, “estimate”, “should”, “expect”, “guidance”, “project”, “intend”, “plan”, “believe”, and/or other words and terms of similar meaning in connection with, among other things, any discussion of results of operations, financial condition, liquidity, prospects, growth, strategies or developments in the industry in which we operate. Such statements are based on management’s current intentions, expectations or beliefs and involve inherent risks, assumptions and uncertainties, including factors that could delay, divert or change any of them. Forward-looking statements contained in this Presentation regarding trends or current activities should not be taken as a representation that such trends or activities will continue in the future. Actual outcomes, results and other future events may differ materially from those expressed or implied by the statements contained herein. Such differences may adversely affect the outcome and financial effects of the plans and events described herein and may result from, among other things, changes in economic, business, competitive, technological, strategic or regulatory factors and other factors affecting the business and operations of the company. Neither Sunrise Communications Group AG nor any of its affiliates is under any obligation, and each such entity expressly disclaims any such obligation, to update, revise or amend any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on any such forward-looking statements, which speak only as of the date of this Presentation.
It should be noted that past performance is not a guide to future performance. Please also note that interim results are not necessarily indicative of full-year results.
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