Release Date: May 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sunrise Communications AG (SNRE, Financial) reported continued customer growth in Q1 2025, with new technical and product launches.
- The company launched a new product portfolio, Swiss Connect, focusing on customer loyalty and offering more roaming services.
- Sunrise Communications AG (SNRE) successfully launched its 5G stand-alone technology, covering 99.5% of Switzerland.
- The company confirmed its full-year guidance, including a 2.7% increase in dividend per share for 2025.
- Sunrise Communications AG (SNRE) demonstrated technology leadership by being the first in Switzerland to launch a 5G stand-alone network.
Negative Points
- Revenues declined by 3.3% in Q1 2025, impacted by lower hardware sales and increased replacement cycles.
- The company experienced softer trading in Q1 due to reduced promotional activities and price rises.
- Adjusted free cash flow was lower than the previous year, driven by higher CapEx and supplier payment phasings.
- The company expects softer trading to continue in Q2, impacting net additions.
- Non-subscription revenue, including handsets and hardware, saw a decline, affecting overall revenue performance.
Q & A Highlights
Q: Can you discuss the broader competitive environment and how competitors have responded to your price adjustments, particularly in residential mobile and fixed?
A: Andre Krause, CEO: We have observed that net prices in mobile have increased post-Black Friday, indicating some rationalization. Smaller players still operate at low price points, but there's a general understanding that prices can't continue to decline. On the fixed side, promotional intensity has remained stable, with little movement in net prices due to the wholesale nature of fiber networks. Overall, the competitive environment is fragile, with a shift towards innovation, service, and loyalty rather than just price.
Q: Why was there a reduction in promotional spend during the price rise process, and should we expect it to increase in Q2?
A: Jany Fruytier, CFO: During a price increase, we typically reduce promotional intensity to avoid offering discounts that contradict the price rise. Approximately CHF 3.5 million of the lower spend in Q1 is expected to return throughout the year, with marketing campaigns being a significant part of that.
Q: You mentioned softer trading in Q2. Does this refer to net ads, and how will revenues benefit from price rises and the new portfolio?
A: Andre Krause, CEO: The softer trading remark refers to physical trading, not revenue. Revenue will benefit from the full impact of price rises in Q2. While liquidity is slightly down due to reduced promotional activity and higher prices, we expect revenue generation to benefit from the price measures.
Q: How should we think about the evolution of non-subscription revenues, particularly handsets and hardware, in the next few quarters?
A: Jany Fruytier, CFO: The decline in non-subscription revenues in Q1 was significant, partly due to weaker new launches from providers. We expect this decline to normalize throughout the year, with potential impacts from new product launches like Apple's later this year.
Q: Regarding the delisting of ADSs in August, will there be notable savings from reduced reporting requirements, and how quickly will this impact numbers?
A: Jany Fruytier, CFO: Yes, there will be savings, but they will first appear in 2026. The deregistration process involves three steps: delisting from Nasdaq, retracting sponsorship, and deregistering from SEC obligations, which can only occur 12 months after delisting.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
