Sunrise UPC GmbH
01.11.2023 - 07:00:19Q3 2023: Continued growth in mobile postpaid and further improvement in financial trends
| Sunrise UPC GmbH / Key word(s): 9 Month figures 01.11.2023 / 07:00 CET/CEST Lower commercial activity following the inflation-related price increase in parallel with intensified competition for fewer customers has softened commercial momentum and financial performance in Q3 2023. The Q3 2023 results showed continued growth (YoY) in the mobile postpaid segment with a net gain of +29,200 mobile postpaid1) subscriptions. The flanker brands (yallo, Lebara, swype) also made a strong contribution to this growth. Due to reduced promotional activity for the main brand, there was a net decrease of -7,400 Internet subscriptions (YoY) in the broadband segment in Q3 2023. Fixed-mobile convergence (FMC) continued to grow. As of 30 September 2023, 58% of fixed broadband customers were also using a mobile postpaid offer (+0.6% YoY). In Q3 2023, on a rebased basis and compared to the same period last year: Revenue2) decreased slightly by -0.8% to CHF 759.1 million. Segment Adjusted EBITDA2) decreased by -3.4% and reached CHF 274.9 million (including costs to capture3)). Adjusted EBITDA less P&E additions2) 4) increased by +9.4% and reached CHF 155.2 million. Sunrise continued its high levels of investment, investing CHF 119.7 million into infrastructure, product innovations and digital services. Inclusive services for roaming, lower mobile-device sales and softened commercial momentum impacted the Q3 2023 financial results compared to the same period last year. In comparison to the first half of 2023, the Q3 2023 financial results showed continued improvement in financial trends. Guidance for the 2023 financial year is confirmed unchanged. «Due to the inflation-related price increase and the focus on retaining value in the customer base, we restrained ourselves from making aggressive promotions. Nevertheless, we recorded solid mobile postpaid customer growth. The fact that this growth is not yet fully reflected in the financial results is related, among other things, to the customer-friendly inclusive services for roaming, which led to lower roaming revenue. Lower mobile-device sales also had an impact. At the same time, we have seen a stable trend in total revenue and a recovery trend in fixed-line revenue, supported by the price increase and higher fixed-line equipment revenues», comments André Krause, CEO of Sunrise, on the results. «Compared to the first half of the year, we see another improvement in financial trends and remain on track after nine months. Looking ahead, we expect much stronger commercial momentum in Q4, as headwinds from Q3 will disappear. Therefore, we confirm the full-year guidance for 2023 unchanged.» Operating results Sunrise continued to grow its mobile postpaid customer base in Q3 2023, with a net increase of +29,200 mobile postpaid1) subscriptions. The lower net growth in mobile postpaid compared to the same period of the previous year is primarily due to the reduced promotional activity for the main brand aimed at new customers. At the same time, innovations such as Flex Upgrade are increasing customer loyalty and the value of the existing customer base. Sunrise thereby continues to execute its strategy consistently, remaining focused on maintaining and increasing value in all areas. The decrease of -7,400 broadband Internet subscriptions compared to the same period last year is also primarily related to reduced promotional activity, coupled with intensified competition for fewer customers during the summer months. The inflation-related price adjustment for fixed-line and mobile postpaid subscriptions as of 1 July 2023 did not have a significant impact on either the gain or the loss of customers in Q3 2023. The overall impact on the customer base was fully in line with expectations. As of the end of September 2023, there were a total of 2.839 million mobile RGUs (3.281 million including second SIM cards), 1.180 million Internet RGUs (1.248 million including SMEs) and 1.217 million TV RGUs (1.273 million including SMEs). FMC penetration reached 58%, an increase of +0.6% compared to the same period last year. Growth of the FMC rate continues to be driven by sales (upselling and cross-selling) of convergent products within the existing customer base. Quality and innovation for further growth in all segments With its main brand, Sunrise is focusing on the highest quality levels in all areas as well as innovative services that further increase growth and customer loyalty: In Q3 2023, Sunrise received several awards for quality: one for the best customer service, winning the 2023 connect landline hotline test once again; and one for the «outstanding» Internet that Sunrise offers its customers, according to the connect broadband test. With Flex Upgrade, Sunrise launched an innovative device-as-a-service offer, which provides the exclusive option of exchanging a device for a new one as often as desired and at no additional cost, or of having the new device repaired as often as desired at moderate cost in order to maximise its service life. In combination with the residual value of an old device (Buyback) and a 25% discount on the list price (Smart Upgrade), Sunrise offers the new iPhone 15 as a unique service package at the lowest monthly rates, and this is in high demand among customers. For the flanker brands (yallo, Lebara, swype), the swype offering was further expanded. swype is the innovative carefree package with maximum cost control thanks to simple flat rates and the purely digital activation and deactivation of rates. As a result, swype is particularly popular with the young, price-conscious and digitally savvy generation, who can take advantage of a new monthly roaming flat rate for Switzerland and Europe as of Q3 2023 and enjoy surfing at 5G speeds on the largest 5G network in Switzerland. With its offer, as a full-service provider for price-conscious, digitally savvy customers who primarily want essential services, the yallo brand in particular also contributed to growth. Once again, Sunrise Business was able to agree numerous new contracts as well as contract renewals/upgrades: for example, the contract renewal with Touring Club Switzerland TCS, which obtains its mobile services from Sunrise Business. A contract with Swiss International Air Lines AG (for mobile services) was also renewed and a further example is the new business agreed with Kantonsspital Baden (a contract for the Cisco solution Unified Communication & Collaboration and the Sunrise Benefit Program for employees). Furthermore, Sunrise Business attracted considerable attention in the industry with its 5G proof-of-concept cases relating to MPN solutions (mobile private network) and provided groundbreaking insights into the potential of new technologies for innovation and transformation. Financial results In Q3 2023, revenue declined slightly to CHF 759.1 million (-0.8%) on a rebased basis compared to the same quarter last year. This decline is attributable to lower revenues in the Consumer Mobile segment (-2.3%). Here, lower revenues from the variable hardware business, roaming and value-added services were offset by growth in subscription revenue. In the Consumer Fixed segment, the YoY decline in revenue (-0.6%) was significantly lower compared to the previous quarter, underlining the YoY impact of the July price increase and the fading effect of rightpricing in the fixed-line customer base. The B2B segment had stable revenue YoY. The individual business units contributed to the quarterly results as follows: Consumer Mobile CHF 312.0 million (-2.3% YoY on a rebased basis), Consumer Fixed (including Internet, TV, telephony and other services) CHF 292.1 million (-0.6% YoY on a rebased basis), B2B CHF 144.0 million (-0.2% YoY on a rebased basis) and other revenue CHF 11.0 million (+33.3% YoY on a rebased basis). Segment Adjusted EBITDA2) decreased by -3.4% YoY in Q3 2023 on a rebased basis and reached CHF 274.9 million, including CHF 2.5 million of costs to capture3). The decrease in Segment Adjusted EBITDA2) on a rebased basis is mainly due to higher hardware and access costs in the fixed-line segment. These were partially offset by slightly lower operating costs (OPEX), although there were also higher costs for network maintenance and energy. Adjusted EBITDA less P&E additions2)4) increased by +9.4% YoY on a rebased basis to a total of CHF 155.2 million in Q3 2023, including CHF 11.7 million of costs to capture. This was primarily due to lower capital expenditure (CAPEX) on a rebased basis because of lower costs to capture. Sunrise continued to make high levels of investments, amounting to CHF 119.7 million (15.8% of revenue), in networks, product innovation and digital services, including CHF 9.2 million of costs to capture in P&E additions this quarter.
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| 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: | 1762091 |
| End of News | EQS News Service |
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