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Continued growth due to strong performance

·9-min read

Sunrise UPC GmbH / Key word(s): Quarter Results
Continued growth due to strong performance
11.05.2022 / 06:58

  • Sunrise UPC continues to grow due to strong performance in Q1 2022 and increases customer numbers again: net increase of +44,800 mobile postpaid1) and +24,300 broadband and digital TV subscriptions.

  • Net increase of +58,800 broadband, TV and mobile RGUs in the first three months of 2022.

  • Continued growth also in fixed-mobile convergence (FMC). As of March 31, 2022, 56.7% of fixed broadband customers also use a mobile postpaid offer (+1.8% YoY).

  • Growth was supported in particular by new Sunrise offers and by the stronger positioning of yallo as a full-service provider.

  • Revenue2) increased by +1.0% to CHF 758.7 million compared to the same period of the previous year on a rebased basis.

  • Significant increase in Adjusted EBITDA2) of +9.6% to CHF 278.2 million YoY on a rebased basis including costs to capture3). Also strong increase in Adjusted EBITDA less P&E Additions 2)4) with growth of +26.9% YoY on a rebased basis to CHF 145.7 million.

  • Market momentum will be driven in 2022 with initiatives that offer customers greater added value ("Sunrise Fresh" youth offer, "Sunrise Moments" loyalty program).

  • Sunrise UPC once again wins the connect mobile phone hotline test with a record-beating result, receiving the top score of "OUTSTANDING" and leaving all other providers in Germany, Austria and Switzerland behind.

Commenting on the results, André Krause, CEO of Sunrise UPC, said: "Demand for our offerings remains solid. We continued our commercial momentum in Q1 2022 and delivered strong growth in Adjusted EBITDA. Our world-class customer service was recognized again and as 'outstanding'. We continue to focus on the execution of our integration plan and at the same time on offering customers a clear added value that differentiates us from the competition. The Sunrise Fresh youth offer and the Sunrise Moments loyalty program are initial examples, as is the strengthening of yallo as a full-service provider. This performance makes me confident for the current year."

Operational results

Sunrise UPC continued to maintain commercial momentum and achieved robust customer growth in a competitive environment, supported by continued strong demand for mobile postpaid1) subscriptions, new B2B offerings and the stronger positioning of yallo as a full-service provider. This resulted in a net increase of +44,800 mobile postpaid1) subscriptions and a total of +24,300 broadband and digital TV subscriptions in Q1 2022. Overall, the company recorded growth of +58,800 broadband, TV and mobile RGUs in Q1 2022. This results in the following totals as of the end of March 2022: 2.647 million Mobile RGUs (3.037 million including second SIM cards), 1.178 million Broadband RGUs (1.232 million including SMEs) and 1.243 million TV RGUs (1.288 million including SMEs).

Customer demand for "one-stop shopping" also continues unabated, as evidenced by the increased FMC penetration in Q1 2022 year-on-year, currently at 56.7% (+1.8% YoY). Sunrise UPC will continue to drive FMC rates through new convergent packages for major and minor brands. However, due to the ongoing competitive market environment, average revenue per user (ARPU) decreased by -2.5% year-on-year to CHF 66.86 on a rebased basis.

B2B area: Further accelerated growth

The growth already achieved in the business area in the previous financial year was further accelerated. Overall, B2B business increased its revenues by +10.2% in the first three months of 2022 and again recorded numerous new contracts and extensions/upgrades of existing mandates, such as the agreement with the energy provider Eni Suisse S.A.. In the coming years, Eni Suisse S.A. intends to drive forward the digitization of its existing service station network in Switzerland, benefiting among other things from faster and more secure data exchange thanks to Sunrise UPC's digital communication solutions.

Financial results

Sunrise UPC increased revenue2) in Q1 2022 by +1.0% year-on-year on a rebased basis to currently CHF 758.7 million. This is primarily due to increased business wholesale voice revenues as well as increased business volumes in the SoHo area and with the second brand yallo. The result is somewhat diminished by a decline in fixed network revenues from residential customers, which is primarily due to the highly competitive environment and the related pressure on ARPU. In detail, the individual areas contributed to total revenue as follows: Consumer Mobile CHF 307.8 million (+3.6% YoY), Consumer Fixed (including Internet, TV and telephone) CHF 306.5 million (-5.0% YoY) and B2B CHF 139.9 million (+10.2% YoY).

Adjusted EBITDA2) increased significantly by +9.6% year-on-year on a rebased basis to CHF 278.2 million, including CHF 5.0 million costs to capture3). This increase is primarily due to higher revenue, MVNO and labor cost synergies as well as lower marketing expenses, which are expected to increase in subsequent quarters.

Adjusted EBITDA less P&E Additions 2)4) on a rebased basis increased by +26.9% YoY to a total of CHF 145.7 million; primarily due to the above-mentioned sales increase and despite the negative impact of costs to capture3) in the amount of CHF 21.8 million.

3 months as of March 31, 2022

In million CHF, exept % amounts

rebased in %2)

Revenue2)

758.7

1.0%

- Consumer Fixed

306.5

(5.0%)

- Consumer Mobile

307.8

3.6%

- B2B

139.9

10.2%

- Other

4.5

-----

Segment Adjusted EBITDA2)

278.2

9.6%

Adjusted EBITDA less P&E Additions2)4)

145.7

26.9%

The detailed financial results of Sunrise UPC can be found in the UPC Holding Q1 2022 fixed income release.

Focus on customer added value

The continued growth shows that Sunrise UPC is successfully implementing its strategy of offering customers of the main brands significant added value and at the same time strengthening the position of the secondary brand yallo in the price-sensitive «no frills» segment. With the launch of its cable Internet offering, yallo significantly expanded its full service provider position. yallo currently reaches over 80% of Swiss households with gigabit speeds. Customers can choose the best performance for their Internet and TV access via cable, fiber or 5G mobile.

For young people under 30, Sunrise UPC launched Sunrise Fresh, a completely new product concept that offers young adults a carefree package of services that seamlessly covers their mobile communication and entertainment needs. With new services for unlimited connectivity and always with unlimited data usage on the award-winning Sunrise UPC 5G network.

With Sunrise Moments, Sunrise UPC has been offering existing customers an exclusive loyalty offer with numerous exclusive benefits at music and sports events since this spring. With Sunrise starzone, Ticketcorner and Sunrise UPC launched a new online portal dedicated to music, and thanks to the new premium partnership with the Hallenstadion Zurich, Switzerland's largest and most important event venue, the company underscores its leading position in the Swiss entertainment market.

The consistent focus on the needs of customers is reflected in continued growth as well as in the results of the connect mobile phone hotline test 2022. As part of this independent customer service hotline assessment for the DACH region, Sunrise UPC was awarded the top score of "OUTSTANDING" as the test winner, achieving a record score of 476 out of a maximum of 500 points. With this performance, Sunrise UPC's customer service left all other providers in Germany, Austria and Switzerland behind.

Extensive measures to support refugees of the Ukraine conflict

In solidarity with the refugees from the Ukraine conflict, Sunrise UPC has implemented numerous support measures with the Sunrise UPC for Ukraine program. Free SIM cards for registered refugees including unlimited calls, SMS and mobile data in Switzerland and unlimited calls from Switzerland to Ukraine. Waive cost of mobile subscriptions and fixed-line calls from Switzerland to Ukraine and from Ukraine to Switzerland for residential customers. Free roaming calls from Ukraine to Switzerland. Data roaming and SMS services within Ukraine are also not charged. The cost of data roaming and SMS with Ukrainian SIM cards on the Sunrise UPC network is being waived for the time being until May 31, 2022. In addition, employees and management of Sunrise UPC have to date donated around CHF 115,000 for those displaced by the conflict.

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1) including B2B and second SIM cards.

2) The results on a rebased basis are consistent with the results presented by the parent company. These non-GAAP measures should be considered in addition to, and not as a substitute for, the U.S. GAAP measures included in the parent company's financial statements. For definitions and adjustments, please consult the UPC Holding Q1 2022 fixed income release.

3) "costs to capture" generally include incremental, third-party operating and capital costs directly associated with integration activities, restructuring measures and certain other costs associated with aligning an acquired business with the business processes of the parent to achieve synergies. These costs are necessary to align the operations of a business to be acquired (or a joint venture to be formed) with those of the parent company, or are associated with the acquisition. As a result, the costs to be recognized may include certain (i) operating costs included in Adjusted EBITDA, (ii) capital-related costs included in additions to property, plant and equipment and Adjusted EBITDA excluding additions to property, plant and equipment4) , and (iii) certain integration-related restructuring costs not included in Adjusted EBITDA or Adjusted EBITDA excluding additions to property, plant and equipment4) . As the achievement of synergies occurs over time, certain of the costs to be recognized are recurring in nature and are generally incurred within a few years of the closing of the transaction.

4) Due to a comment letter from the U.S. Securities and Exchange Commission SEC, Liberty Global changed the previously used term "OFCF" to "Adjusted EBITDA excluding additions to property, plant and equipment" from Q3/21.

Press release (pdf)

Sunrise UPC
Media Relations
media@sunrise.net
Phone: 0800 333 000
Outside Switzerland: +41 58 777 76 66


End of Media Release

Language:

English

Company:

Sunrise UPC GmbH

Thurgauerstrasse 101b

8152 Glattpark (Opfikon)

Switzerland

Phone:

0800 333 000

E-mail:

sunrisemediaservice@sunrise.net

Internet:

www.sunrise.ch und www.upc.ch

EQS News ID:

1348921


 

End of News

EQS News Service

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