• Strong continued customer momentum as Sunrise UPC achieved a total of +40,500 mobile postpaid net adds and +6,100 broadband net adds in Q2'21.
• Gain of +57,800 broadband, TV and mobile RGUs in total and a further reduced churn rate.
• Revenue1) up by +1.3% YoY to CHF 751.7 million. Adjusted EBITDA1) performance further stabilized to -3.1% YoY, including costs to capture2) synergies. OFCF1) increased by +0.6% YoY.
• Continued growth of the fixed mobile convergence (FMC) ratio, resulting in 56%
  (+ 6.4% YoY) of fixed broadband customers opting for mobile postpaid subscriptions - strongly supported by the 'Together more Wow' promotional offers.
• Harmonized B2B portfolio successfully launched, also supporting the uptick of mobile subscriptions and broadband Internet connections.
• Organizational restructuring for 2021 completed, all integration workstreams on track and additional synergies identified.
• Strong partnership with Swiss Ski and renewal of the broadcasting rights of the National League (ice hockey) for MySports.

André Krause, CEO of Sunrise UPC, says:

«Despite an increasingly competitive market environment, we achieved strong results in Q2 and managed to continue our considerable market momentum from Q1. Our operational KPIs show that we are gaining market shares and delivering on financial KPIs as expected. With our harmonized B2B portfolio, our strong partnerships in the sports domain, our synergy projects and future developments such as a combined residential portfolio, we will continue to set new benchmarks in the Swiss market.»

Operational results

The strong momentum in RGU additions continued across the entire product portfolio. Sunrise UPC achieved a total of +40,500 mobile postpaid net adds and +6,100 broadband net adds in Q2'21. The strong performance was driven by residential (incl. second brands) and B2B customer growth as well as a further improved churn rate.

The net adds in mobile, broadband, and enhanced TV also resulted in a higher combined FMC penetration of 56% (+6.4% YoY). However, there is still a large opportunity ahead to cross-sell and upsell bundles with increased value propositions and to drive the uptake of fixed broadband among the mobile subscriber base.

As a result, the company is reporting a gain of +57,800 broadband, TV and mobile RGUs in total and an actual count of 2.525 million mobile RGUs (2.890 million including secondary SIM cards), 1.153 million broadband RGUs (1.200 million including SMEs) and 1.240 million TV RGUs (1.280 million including SMEs) as per the end of Q2'21. 

By the end of Q2'21, a total of 221,000 Sunrise UPC customers were already using Internet access with a capacity of 1 Gbit/s or higher. These substantial increases were supported by bundled offers (e.g., the 'Together more Wow' campaign), attractive My Sports TV content, a focus on service excellence and dedicated promotions.

Sunrise UPC's business customer unit once again supported the overall growth across all segments. In addition, the provision of wholesale voice services recovered slightly in line with the improved pandemic situation. In Q2'21, Sunrise UPC gained numerous new contracts and extensions/upgrades of existing customer relationships. These include Glas Trösch Holding AG, Sika AG, Visana Services AG and the sportswear manufacturer On.

Financial results

Sunrise UPC's revenue increased by +1.3% YoY to CHF 751.7 million on a rebased basis, largely due to higher consumer mobile service revenues, to a great extent offset by lower handset sales. Revenue growth was further supported by B2B wholesale and mobile roaming revenues that recovered slightly in line with the relaxation of Covid restrictions in various counties. Broken down into the individual product areas, these contributed to the total Q2'21 revenue as follows: mobile CHF 277.8 million (+ 0.4% YoY), fixed line CHF 316.6 million (+ 0.2% YoY) and B2B CHF 151.2 million (+ 6.1% YoY).

The adjusted EBITDA further stabilized to -3.1% YoY on a rebased basis, including CHF 8.3 million costs to capture2) synergies. This was largely driven by the higher revenues, but still influenced by growth-related OPEX and an increase in marketing spending.

Rebased Operating Free Cash Flow (OFCF) increased by +0.6% YoY due to impressive RGU growth as well as increasingly normalized investments, including the adverse impact of CHF 19.5 million costs to capture2).

Fast integration on track, first synergy projects executed

The ambitious program to integrate Sunrise and UPC is progressing as planned. The definitive impact on the future was published in April, announcing job cuts totaling 650 jobs over the course of 2021 and 2022. Following the delisting of Sunrise Communications Group AG shares from the SIX Swiss Exchange on April 6, 2021, the former legal Sunrise entities were transferred into «Sunrise UPC GmbH» as of May 1, 2021.

Combined B2B campaign

With the slogan «Our business: To be there for your business», the Sunrise UPC business unit launched a comprehensive 360° marketing campaign in June 2021 directed at all existing and potential B2B customers, from small businesses to large customers. The focus: the combined power of Switzerland's leading gigabit fiber optic cable network and one of the best mobile networks in the world. This is combined with the expertise, flexibility, and service readiness of the employees on the sales and service front.

Strong positioning in the sports domain underpins market ambitions

Following the positive experience with Roger Federer as a brand ambassador, Sunrise UPC succeeded in securing several additional sports commitments during Q2'21.

Thanks to an , the media partnership that has been in place since 2017 to broadcast all matches of the top division in Swiss ice hockey was prolonged and expanded by a further 5 years until the end of the 2026/2027 season. Together with the new MySports anchor Jann Billeter, this is a fundamental step towards establishing as the «Home of Hockey» in Switzerland in the long term.

In June, Sunrise UPC announced its starting from the 2022/2023 season. The sponsorship commitment was concluded over a period of ten years and, in addition to sponsorship for the World Cup team, also includes extensive activities in junior and popular sports. As the of the Athletes Network () - a platform that supports former pro athletes in their post-athletic careers - Sunrise UPC optimally rounds off its commitment to the sports sector.

Financial results

Sunrise UPC's detailed financial results are included in the

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1) Rebase results are consistent with those as presented by our parent company. These non-GAAP measures should be viewed as supplement to, and not a substitute to U.S.GAAP measures included in our parent company's financial statements, please see the UPC Holding Q2 2021 earnings release for definitions and reconciliations as applicable.

2) Costs to capture generally include incremental, third-party operating and capital related costs that are directly associated with integration activities, restructuring activities, and certain other costs associated with aligning an acquiree to our business processes to derive synergies. These costs are necessary to combine the operations of a business being acquired (or joint venture being formed) with ours or are incidental to the acquisition. As a result, costs to capture may include certain (i) operating costs that are included in Adjusted EBITDA, (ii) capital related costs that are included in property and equipment additions and OFCF and (iii) certain integration related restructuring expenses that are not included within Adjusted EBITDA or OFCF. Given the achievement of synergies occurs over time, certain of our costs to capture are recurring by nature, and generally incurred within a few years of completing the transaction.