Sunrise Communications Holdings S.A. Financial results January June 2013

Transcription

1 Sunrise Communications Holdings S.A. Financial results January June 2013

2 Key Messages Q In line with our guidance and in a competitive market environment, Sunrise LTM EBITDA as of June 2013 declined 3.2% to CHF million from CHF million as of Dec 2012; Q revenues declined y-o-y CHF 16 million to CHF 498 million (-3.1%) mostly due to ongoing migration effects towards lower, competitive price plans and roaming out Driven by cost improvement measures implemented in the second half of 2012, recurring Q EBITDA grew slightly CHF +1.4 million YoY to CHF 154 million (+0.9%) Adjusted for accrued interest payments, cash inflow increased strongly by CHF 90 million to CHF 127 million in H1 2013, mostly due to net working capital savings and lower cash taxes CapEx increased by 41% to CHF 98 million mainly driven by the completion of the UMTS 900 swap, upgraded capacity and the accelerated LTE roll-out In July Sunrise acquired Lebara Switzerland and Treternity Ortel Mobile thereby further strengthening our prepaid mobile offerings for internationally calling customers 2

3 Mobile subscribers and ARPU development Mobile subscribers ( 000) Blended ARPU (CHF) 2,117 2,141 2,141 2,132 2, ,146 1,167 1,181 1,191 1, Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q2 12 Q2 13 Postpaid Prepaid Termination Origination +45.6k postpaid subscribers YoY of which +0.4k in Q2 13 Price reduction impacts QoQ ARPU, majority of subscribers already on new price plans 3

4 Pro-forma mobile prepaid subscriber statistics 12 month activity rule For transparency reasons, pro-forma mobile prepaid subscribers based on a 12 month activity rule instead of Sunrise s 3 month activity rule are provided Sunrise still believes, that the 3 month activity rule is a fairer representation of the prepaid market Pro-forma prepaid subscribers ( 000) Pro-forma market share as of March 31, ,492 1,484 1, % Sunrise Swisscom* 57.0% 18.7% Orange* Q4 12 Q1 13 Q2 13 Based on 12 month activity, Sunrise does not count marketing SMS sent to subscribers as an activity Network market share excluding MVNOs (pre-acquisition of Lebara GmbH, Switzerland and Treternity Ortel Mobile); Sunrise does not count M2M SIM cards into the subscriber base * Source: Financial statements of Swisscom and Orange 4

5 Landline internet subscribers and ARPU development Subscribers ( 000) Internet and Sunrise TV ARPUs (CHF) % +3% Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q2 12 Q1 13 Q2 13 Internet Sunrise TV Internet only Blended Internet+TV Declining double-play internet subscriber base partly compensated by triple-play Sunrise TV subscribers Increase of internet-only ARPU; Sunrise TV bundles are positively impacting blended ARPU 5

6 Overview of results Financial Results H H1-2012* Q2'2013 Q2'2012* CHF Million Mobile Landline Services of which hubbing Landline Internet Total revenues 984 1' % yoy growth (3.8%) (3.1%) Revenues (excl. hubbing) % yoy growth (4.2%) (3.5%) Gross profit % margin 68.5% 68.7% 67.9% 68.8% % yoy growth (4.1%) (4.4%) EBITDA % margin (excluding hubbing revenues) 31.9% 32.6% 32.7% 33.3% % yoy growth (6.2%) (5.1%) EBITDA recurring % yoy growth (2.9%) 0.9% Capex (98) (70) (59) (43) % Capex-to-revenues (excl. hubbing revenues) 10.7% 7.3% 12.8% 9.1% EBITDA-Capex Change in working capital (22) (119) (1) (5) Operating free cash flow * including retrospective application of IAS 19R (employee benefits) 6

7 Cash and cash equivalents bridge CHF million Cash balance Dec 31, 2012 PIK repayment Cash flow before NWC, Capex and interests Change in NWC Capex Capital leases Net interest * Cash balance June 30, 2013 * Net interest affected by bank holiday convention. Bond interest for H of CHF 77.4 million paid on July 1, 2013 Strong cash inflow of CHF million in H1 13, CHF 50.0 million pro-forma for bond interest payments (an YoY increase of CHF 90.0 million), primarily driven by net working capital and tax improvements End of July 13 cash balance was CHF million, after bond interest payments H1 2013, purchase price payments for the acquisitions of Lebara and Ortel Mobile, the redemption of CHF FRN s amounting to CHF 175 million and the utilization of CHF 95 million RCF 7

8 Net debt and leverage ratio CHF million Net Debt July 31, 2013 June 30, 2013 Dec 31, 2012 Senior Secured Notes Senior Secured Notes issued July Floating Rate Notes issued July Senior Unsecured Notes Revolving Credit Facility Total cash-pay borrowings 1) 2'269 2'349 2'327 Fair value of cross currency swaps Financial lease Total debt 2'421 2'502 2'503 Cash & Cash Equivalents 2) (107) (222) (171) Net debt 2'315 2'280 2'332 Net debt / EBITDA 3.7x 3.8x Pro-forma Net debt / EBITDA 3) 3.7x n/a n/a Senior PIK Toggle Notes MCIG 4) net debt /EBITDA 4.8x 3.8x Pro-forma MCIG net debt /EBITDA 3) 4.8x n/a n/a Net Income Basket (NIB) Balance at BoP 21.4 Utilised (20.6) Additions 35.0 Balance at EoP ) Excluding capitalized debt issuance cost 2) June 30, 2013 cash balance adjusted for shifted bond interest payment of CHF 77.4 million to July 1 st, ) Pro-forma for the acquisition of Lebara Switzerland and Ortel Mobile Switzerland 4) Mobile Challenger Intermediate Group S.A. 8

9 Capital expenditure breakdown CHF million +40% H1 12 H1 13 Mobile network investments * Includes customer premises equipment for Sunrise TV Landline network investments* 12 IT investments Status of network program Rollout of UMTS/HSPA 97% of population covered by End of June 2013 Swap to new technology U900 swap completed, new mobile base station technology rolled-out Fiber connections to base stations Roll-out accelerated LTE launched on Coverage 20% of customer base CHF million Capex investments expected in

10 Fiber 4G/LTE Capacity Upgrade Network Updates Network Customer Experience 1 National roll-out new technologies -Network swap -UMTS 900 rollout -MSR Swap > finalized Q2/2013 -improvement indoor cov. sub-urban areas -UMTS/HSPA coverage -> 97% pop 2 Network improvement -IP Backhaul -Expand capacity -Base station LTE ready -Backhaul capacity improved by fiber -Throughput increased with MW upgrades 3 LTE Trial - LTE launch by Several major Swiss cities (ZH,BS,GE,Lau) -Coverage of 50% of the customer base until October FTTH -Sunrise TV ZH,St.Gallen,Geneva,Fribourg -LOI Luzern, Winterthur -Quadruple play offers (bundle) -DSL / kbit/s (up/down) -Other cities until EoY 10

11 Acquisition of Lebara and Ortel Mobile in Switzerland Lebara and Ortel service a large and growing segment Segment growth rate > 50k subscribers p.a. Represents already about 1/3 of total Swiss inhabitants Additionally, Switzerland is a very popular tourist destination Sunrise was already active in this segment with its own yallo brand and had a significant market share Sunrise strengthened its position by consolidating the market with the acquisition of Lebara and Ortel Mobile and is now clear market leader for mobile prepaid services to migrant communities within Switzerland With all three brands, our customers will profit from low cost international calls and mobile data to stay in touch with their families and friends abroad and within Switzerland 11

12 Questions & answers 12

13 Thank you 13

14 Disclaimer This presentation and any materials distributed in connection herewith (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 Holdings S.A., 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 Holdings S.A. 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. 14