Sunrise Communications AG (SNRE) 2025 Q2 法說會逐字稿

Good morning, ladies and gentlemen, and thank you for joining us today. I would like to welcome you to our second-quarter 2025 results call.

With me today are André Krause, our CEO; as well as Jany Fruytier, our CFO. As per usual, we'll start the call with a presentation that you also find online -- it's on the web -- which will then be followed by a Q&A session.

Let me now hand over to André. Please go ahead.

Thanks, Alex, and good morning, everyone. I will kick off the presentation with a quick overview of the key takeaways of today's presentation.

So firstly, operationally, we have switched off our 3G network and has become the first mobile operator that has switched off 2G and 3G and is moving to the most modern 4G and 5G SA technology on our entire network. We also have launched a number of new product offerings. We have refreshed and expanded our Yallo portfolio, and we have completed the UPC customer base migration.

Given the fact that we did a price increase in the second quarter, we have also reduced our commercial activity a bit. And hence, we have seen some softer net adds in the second quarter, while at the same time, the ARPU trends have been improving.

Secondly, financially, we are seeing the Q2 revenue trend sequentially improving. And of course, that is driven also by the price increase, continued momentum and growth on the B2B side and, I would say, temporary recovery on hardware sales, given the fact also that through the 3G switch-off, some customers needed to switch devices. And that gave a bit of an uptick on the hardware demand.

EBITDAal improved to 1.9% year-on-year growth, also helped by further cost optimizations that we could lend. And on the back of the financial trajectory, we are confirming our guidance today, also including a DPS growth of 2.7% for the year.

Thirdly, also, we have been able to refinance an existing term loan and have brought in a new EUR550 million senior secured note, which is further optimizing our average cost of debt. And also according to our plan, we have switched off our ADS listing on the 15 -- on the Nasdaq on August 15. And we are continuing to follow our path to stop the sponsored ADS program by mid of November this year.

Now with that, let me move to a bit more detail on the commercial performance. And let me give one sentence before I jump on to that slide because the slide is talking about the mobile market as such. On the fifth slide, we are seeing the competitive environment pretty stable evolution. So no real movements on promotional activities or on price points.

And the established, I would say, market is carrying on as we have seen it in the previous quarters. On mobile, we wanted to show because it's always an important question that you raise, what is the competitive environment and where are we going. I wanted to share what's our perspective on how we look at the mobile market at this moment in time.

Generally, we see a three-tier market structure that has established itself. We see a Premium segment that is the largest segment in the market, covering 50% or slightly above of the customers, has fully integrated high-quality offerings and individualized services. So it has a very broad range of products and services that customers are receiving on those offers.

And in this market, the price points are somewhat higher, usually starting above CHF40. And what we are seeing is an increasingly rational behavior if it comes to promotional activities. The main brands active in this is, of course, our main brand, Sunrise. And we also see mainly Swisscom operating in here.

We see liquidity in this segment slightly reducing, mainly on the back of the fact that customers have already benefit in the past years from substantial price improvements. And hence, their personal motivation to go to a further improvement is limited. So they are more valuing the benefit of having the broad range of services and the quality of services instead of necessarily just a lower-priced simple offer.

On the Smart Shopper segment, where we are operating with our brand, Yallo, and we see also our competitors mainly Salt and Wingo, price range is probably in the CHF20 to CHF40. We are continuing to see a very promotional-driven market, but in that pricing range.

So we are not seeing the offerings in this range going lower than the CHF20 at this moment in time. And we see liquidity slightly moderating. Because we are also seeing a Budget segment underneath the Smart Shopper segment, which has a size of roughly 40% of the market from our expectation.

And we see a Budget segment underneath that has established and is around 10% today. Now here, we see price points that are ranging between CHF10 and CHF20 for typical, I would say, Swiss flat rate, but also very reduced offerings and range also compared to the Smart Shopper segment, where we do see a broader range of offers, also fixed and mobile offerings. Whereas we do see in the Budget segment simple tariffs that are only focused on mobile only, usually also only with an online presence and without any physical assistance to customers.

Now why is this important? Number one, because we, overall, are seeing that the market is having less liquidity. And as I said, we think this is driven by the fact that customers have enjoyed substantial price improvements over time.

Let's not forget, the average household income in Switzerland is double the size of Germany at around CHF9,000. And hence, the reality for Swiss households is that a price that is in the Premium segment, like CHF40 or above, is already a pretty decent offering.

So if customers are happy, the necessity to improve has substantially reduced over the last couple of years. So we are seeing, in this segment, liquidity reducing. We do see that the Smart Shopper segment is increasingly attacked because the Smart Shopper segment, of course, has more price-sensitive customers.

Hence, customers are rather moving from the Smart Shopper segment to the Budget segment, while the Smart Shopper segment is a bit fueled by the Premium segment. But that's kind of the evolution that we are seeing. Overall, as I said, liquidity reducing. Most liquidity in the market is probably sitting in the Budget segment, where we also see a lot of activities going on.

Now we, at Sunrise, feel that we are very well positioned with our multi-brand strategy. And that allows us really to compete and tap into the liquidity that does exist across the segments. And hence, we think in this market structure and in the competitive environment that we are seeing, we will be able to compete well and also drive our top line going forward.

Now with that, let me talk about some of the commercial launches that we had in the second quarter. We already talked about our new Swiss Connect portfolio that we launched at the beginning of Q2 in our Q1 results. That, of course, is an important launch that we did, which gave more roaming inclusions to all of the mobile tariffs on the Sunrise side.

We have added now in the quarter also our first insurance product, the travel and cyber insurance. This is, at this moment, exclusively sold to our existing customers. So we are a bit, if you want, in soft launch mode still. We are not providing those insurances ourselves.

But we have collaborations with expert insurance providers, which are on the back end, providing those services. At this moment, we had a good start. But I would say also the volumes, given the fact that it was kind of a soft launch to our own customers, have been limited at this moment in time.

On the Yallo side, we have not only refreshed, but also expanded our portfolio -- our product portfolio. We have now more roaming plans that allows us to cover the segment needs of the Smart Shoppers quite a bit more. We have also increased our top speeds on the fixed side to 2 gig. And also on the 5G side, customers have access to the 5G network. We also added a smartwatch option so that we feel that we are well positioned to cover all of the segment's need on the Smart Shopper side.

Also on B2B, as you know, an important segment if it comes to growth for us. We have improved our SME portfolio with a number of packages that allow customers to have not only connectivity but also having access to ICT services, like cybersecurity.

We have brought in most modern technologies, also like cloud calling. So with that, I think we have a well-rounded offering now for the SME side. And that will allow us also to drive further growth in the B2B segment in the quarters to come.

Now I would also flash a light on the already yesterday announced prolongation of our hockey rights. And I would say that was kind of the final step, if you want, on the strategic intent that we had when we launched MySports back in 2016, 2017.

At that moment in time, the sports rights were largely exclusively held by Swisscom. And hence, because of the exclusivity that Swisscom pursued, gave them the opportunity to drive their broadband growth on the back of this exclusive sports rights.

So the launch at that point in time was intended to break that exclusivity, which ultimately has now come full circle. Because in the meantime, we have seen also verdicts from the Swiss courts that prevent exclusivity on the sports side, number one.

Number two, with the sliver of sports rights that we have, the hockey, which is the second most important sport in Switzerland, allows us to actually well balance the situation that we have. And hence, we now are selling all of the sports rights through our channels, not only hockey, but also the blue packages that include all of the football rights, while we, at the same time, also selling MySports to Swisscom customers as well as to Salt customers.

So with that, I think the situation is now that the sports rights are not preventing customers from choosing a Sunrise broadband connection. And that was the strategic intent. Now the prolongation in this context is important because it's allowed us to improve also the financial situation as the rights went somewhat cheaper.

And from the season '27, '28, when this will become effective, this will allow us to make the MySports business a prospectively profitable business, which I think, hence, is not only a strategic exercise anymore, but it's a real business that makes sense for us. And hence, we are happy that we can secure the rights up until 2035.

Now let me talk also about another very important strategic achievement on our mobile infrastructure. I said at the beginning already, with the 3G switch-off, which ultimately two days ago, where we switched off the last region, we have an exclusively 4G and 5G SA-enabled network.

Now with that, we are able to also move frequency and spectrum to the 4G and 5G sites that we have. As we told you already in Q1, we have since Q1 already a fully 5G SA-enabled network in Switzerland, which is now, I would say, the broadest coverage in any given country in Europe if it comes to 5G SA. And it's the most modern network as it's not customers holding back on any 2G or 3G experience.

The project was pretty brave because at the beginning of the year, we had around 120,000, 130,000 customers still using 3G devices. So there was a lot of activity necessary to enable the switch-off, which has worked out very well. And I'm happy that we really conducted the exercise because we are now in a very strong position.

We already have 350,000 customers that have the devices and the right product enablement to give them access to 5G SA. And we have seen real-time data on how the performance improvements are looking like. What we are really seeing is 15% to 20% performance improvement on the customers that are using the network.

So I have to say I'm really proud, and I'm really happy for our network teams under the leadership of our CTO, Elmar Grasser. This was a milestone achievement. And I think as one expert that looked at the evolution told us, we have probably 5 to 10 years ahead of many other operators in Europe with the state of mobile network that we have achieved right now.

Now of course, this is now an important enabler. And we will fully commercialize the abilities of this network and also incremental innovative services in the quarters to come. With that, let me also summarize what are the commercial results. On the net adds side, as I said already, we have seen some softer evolution as the prior year.

However, we have seen a sequential improvement quarter on quarter to 18,000 net adds on the mobile side and zero net adds on the Internet side, which was largely driven by lower market liquidity, but also price increase-related incremental churn and some of the final phaseout of the UPC customer migration that, as I have said, we have concluded at the second quarter of this year.

Now given the fact that the market is giving lower liquidity at this moment in time, we expect also that the net adds in the quarters -- in the final quarter of this year will probably be moderate, following the lower liquidity. Our fixed mobile convergence has further increased by 1.4% to 58.5%, and we expect that to further improve.

If we look at ARPUs, then on the mobile ARPU side, we have seen a year-over-year decline of 1.6%, but a sequential improvement on the back of the subscription revenues benefiting from the price rises. However, this trend is also continuing to be partially offset by revenue decline that is driven by reduced roaming usage, as we are providing more of the roaming services included in the tariffs.

On the fixed ARPU side, we see also an upward trend as the full impact of the price increases is kicking in. And also, we see sequentially a declining impact from the rate pricing effect of the UPC customer base migration. We, however, also see a continuous growth in the mix of our flanker brand, which is, to a certain extent, also counteracting that trend.

So that is my part of the presentation. And with that, I hand over to Jany for the detailed financials.

Thank you, André, and also welcome from my side, everyone. Let me start with a quick overview, as always. I will focus mostly on Q2 and make some comments around our H1 performance before then going deeper into the individual elements of the P&L. We'll give you an update on our guidance that André referred to, and I'll talk a little bit about the ADS progress and the next steps.

But before we go there, an overview, with revenue down 0.8%, yet significantly stabilizing versus what we saw in Q1. That is on the back of the residential fixed and mobile P&Ls, which are sequentially improving on the back of the price increase, the temporary recovery of the hardware sales -- André spoke about it in relation to the 3G -- and also continued growth on the B2B service revenue.

The overall revenue decline is largely and continues to be largely driven by the residential fixed, which is still impacted by the right pricing effect and the brand mix, which we expect to temper as we get to the end of this year. Gross profit at 0.4%, again, significantly improving versus what we posted in Q1, as the revenue decline is partially compensated by a different phasing of our network-related expenses that sit in our direct cost.

Adjusted EBITDAal, up 1.9% for the quarter as a result of OpEx efficiencies, together with declining lease costs. We'll talk a little bit later about the moving parts on OpEx because it is in part the continuation of our savings programs, but also helped by a number of incidentals.

CapEx reduction for the quarter, 12% down -- sorry -- 8% down, apologies. But you can see in H1, we are more or less flat, pointing to this different phasing between Q1 and Q2. And we're on track for the full-year CapEx guidance that we have given.

That reduced CapEx gets us to 12% growth on adjusted EBITDAal for the quarter and turning down to free cash flow of around CHF150 million in the quarter, which was slightly lower than prior year, which mostly has to do with net working capital. But I'll talk you through that in a second.

If we then zoom into revenue, the picture that you can see is the CHF30 million decline in subscription residential fixed. That is significantly tempered from what we saw in Q1, again, on the back of the price increases and better -- less impact of the right pricing. But as André said, the brand mix does impact this.

The other revenue growth that you see in residential is in part the switch-off of the 3G and the higher devices that we did, plus a number of adjustments on fees that we make. B2B, you see growth on both fixed and mobile, yet slightly lower than what we saw in Q1 because mainly of two reasons.

On the one hand, the large customer deal that we spoke about in '24 has been [lapped] or still some growth, but the majority has been [lapped]. And also, although we're making great progress in SME, we have a slightly slower ramp-up of the rollout of the portfolio as such.

Then if we go to EBITDAal, again, you can see the GP on residential as part of the residential revenue -- fixed revenue also going down to EBITDAal but offset by, again, B2B growth plus infra and support, which is growing. That is mostly phasing of cost, as I spoke about before. And again, it's not something to be expected for the full year.

OpEx down CHF4 million, in part because of the switch-off of the mobile core. So as part of all of the migrations, we are now also starting to switch off the IT systems and the mobile systems that were supported.

And so that is driving cost upside together with lower maintenance cost across, as we continue to focus on that part of our cost base as well as a temporary impact from the share -- employee share program, that André will speak about later. Leasing slightly down on a year-over-year basis, in part because of phasing and in part because of optimization of those costs.

Then when we get to adjusted EBITDAal less P&E additions and adjusted FCF, so as I said, you see the growth on adjusted EBITDAal coming through with a different phasing of CapEx. I think nothing really to call out in terms of year-over-year reductions, purely phasing on the one hand because of CPE.

So it has all to do with delivery. And baseline, what you're seeing here is the phasing out of our cost to capture or our integration spend, if you will, together with a slightly different baseline spend on the network rollouts but for H1, more or less flat.

And when you get to FCF, you can see a decline versus prior year. And the majority of that is in the working capital and other, which is predominantly driven by a different customer collection cycle and a different phasing of our standalone costs. So all in all, in line with expectations and purely phasing between quarters because of working capital.

If we then go to the guidance page, so in general, we're reconfirming all metrics, albeit we're expecting revenue to be at the lower end of the range, in part for two reasons. André mentioned them both. But the first one being a lower -- longer replacement cycles for hardware.

Q2 was slightly better, but that was temporary because of 3G. I think in general, we're seeing a lower replacement trend, and so that is weighing on that lower end. And the other part is the softer liquidity that we're seeing in the market.

But then when we get to adjusted EBITDAal, we're fully able to offset that and confirming our guidance together with CapEx and adjusted free cash flow, which should then drive a 2.7% increase for the dividend over -- and paid in '26 for full-year '25.

Then lastly, the ADS topic. So we did switch off the Nasdaq line. Last week, Friday, was the last day of trading. There is now an OTC market still in the US that has proven liquid so far. We have 87% of the Class A ADSs that have been converted and 98% of Class B. And of course, the underlying Sunrise Class A shares continue to be listed on the SIX, and we're seeing good developments on that line.

Now for next steps, as communicated previously, we are still holding to our planned switch on November 13 of the sponsorships. The Class A and B ADS holders will be accordingly informed by the depository bank, and we're continuing to monitor the progress of conversions, if you will.

And as said, there is at the moment an OTC market which remains liquid. And I think positive to see is that there is no discrepancy in both lines from a pricing perspective. And of course, on the back of us switching off then also the sponsorship of the ADS program, we are then, as soon as the SEC allows, intending to reduce our SEC reporting. But one should expect that only to happen end of '26, early '27.

And with that, let me hand back to you, André, for the final remarks.

Yeah. Thanks, Jany. And before I come to the final remarks, I want to do a bit of a callout on our employee share program. So we have, as part of the listing, had the intention to make more of our employees shareholders of our business, as we believe that a common interest in the evolution of the business is helpful.

And hence, we stood up a program that is depicted on the left-hand side of this chart. So we allow our employees -- and pretty much everybody is eligible, except all of the management layers which are participating in other shareholding programs. So this is mainly all of the employees that could invest.

We allow them to invest up to 20% of their base salary over a period of three or six months. They will get a 33% discount on the share price. It will be determined on the end of the period, going to have a one-year blocking period. And we believe that is a very attractive program.

And I have to say I'm positively surprised about the outcome because we have a participation rate of 50% of our roughly 2,400 eligible employees. And two-thirds of those have chosen to go all in, so exactly six months and 20%.

Now that implies, overall, our employees are investing roughly CHF10 million into Sunrise. And I think this is a significant improvement on the shareholding base that we have now across our employees and a very strong commitment of our employees into our business. And I'm very happy about that outcome.

Now with that, let me come to conclusion of the presentation. What have you heard? So the standout messages from our perspective are the 3G switch-off that is now marking the next step in our 5G standalone journey. And we do strongly believe this is really a unique feature that Sunrise has implemented and is now able to provide to our customers.

Secondly, we have seen a step-up of our commercial activities since the end of the second quarter, coming out of the price rise period. However, we are dealing with a lower market liquidity, and hence, we are expecting trading to remain moderate. And thirdly, the revenue trend in Q2 is sequentially improving, and our financial guidance on the back of that evolution is a full reconfirmation of our guidance.

Now with that, I hand over back for the Q&A.

Thank you, André and Jany, for walking us through the presentation. Operator, now over to you. Please proceed with the Q&A.

(Operator Instructions) [Molly Whitcomb], Goldman Sachs.

Hi, good morning. Thank you for taking my questions. I have a couple, please. Firstly, you've mentioned the impact of the flanker brand. I'm just wondering, have you seen a step-up or acceleration in take-up for Yallo? Just wondering what the division of net adds might look like, or if you could just give us a little bit more color on that, that would be great.

And the second thing, I'm just looking at the cost savings on EBITDA and the UPC migration. So clearly, that's had a benefit over the last couple of quarters. So I'm just wondering how should we think about cost savings going into Q3 and Q4 and into next year, and potential tailwinds from the UPC migration? Should they be less? Just how we should think about this more generally? Thank you.

Thank you for the question. So firstly, we have also seen a price rise and implemented a price rise on our flanker brand in particular in the second quarter. Hence, we have been a bit calmer in the marketplace.

And on the back of that, we have seen a rather stable evolution of the trading. But coming out of the quarter, we are stepping up there. And as we have done in the past, we are not communicating the individual splits of the different brands on the total net add performance of the quarter.

On your second question in regarding to OpEx and impact of the UPC migration going forward, well, first of all, as Jany said, there's a number of OpEx improvements that are of temporary in nature. But there are also a number of them which are of continuing nature.

So hence, we are expecting to maintain a rather flattish or slightly declining OpEx evolution as we go into the second half of the year, and then potentially also in the same sort of direction into the next year. Beyond that, on the UPC moderation, we are expecting a tempering of the ARPU impact towards the second half of the year. And I think that's pretty much all I can say about it. Jany, anything you want to add?

Yeah. On the UPC switch-off of the mobile system, those costs, I think what we're seeing, that was a big chunk, and we needed the time to do that. Then, of course, as we are also now finalizing the fixed customer switch-off, there is still some billing and some system-related costs that will phase out.

Don't expect that for this year, but that's probably early next year and the year after. But as André said, and I think also looking back to our capital markets guidance, we have a flat to slightly down OpEx, which is supported by those. So as such, not a difference of what we have previously guided for.

Very clear. Thank you very much.

Polo Tang, UBS.

Morning, everybody. Thanks for taking the questions. I have three. The first one is just on promotional activity. So you outlined that the bulk of the market is stable to improving when you look at the Premium segment or the Smart Shopper segment.

But you did highlight that the Budget segment is getting more aggressive. But could you clarify which players are being the most aggressive in this segment? And can you also comment on what you're seeing in terms of behavior from Swisscom and Salt?

Second question is, given that you reiterated guidance for the full year, this does suggest improving trends on the top line from here. Can you comment in terms of how we should be thinking about the trajectory of quarterly revenue and quarterly EBITDA growth from here?

Can you maybe talk about or remind us about the tailwinds and headwinds you see? For example, will hardware get worse in Q3 after a temporary boost in Q2? You've previously talked about the lapping of the UPC repricing. But I'm just trying to get a sense if there are any other moving parts?

And my final question is just about the share-based compensation. This stepped up to CHF16 million in Q2 compared to a quarterly run rate of CHF5 million to CHF7 million a quarter previously. So how should we think about the run rate for share-based compensation going forward?

And if employees are swapping salary for stock and your share-based compensation payments are not included in adjusted EBITDA, should we be thinking about upside risk to adjusted EBITDA, but with a higher share count? So any clarification, much appreciated. Thanks.

Yeah. Thanks, Polo. Thanks for your questions. Let me tackle the first one, and then Jany takes the two ones after. So the promotional activity that we're seeing in the Budget segment, I would say at this moment, you can think about the three tiers like swimming lanes of price ranges.

And while we see -- within the Smart Shopper segment, where Yallo is playing, we see the price ranges between CHF20 and CHF40, depending on, of course, what tariff you look at and what promotion you see. But we have hardly seen any of the players operating in there which I would -- next to Yallo, I would see mainly Salt and Wingo.

And hence this segment has quite some size. But if you look at that, then there are -- nobody has really left a swimming lane below that CHF20 at this moment in time. And of course, the reason for that is that those players all have material existing customer bases. And hence, repricing risk is limiting the ability and the interest of potentially going below that range.

On the Budget segment, the price range is really CHF10 to CHF20. So we usually see at the low-end offerings that are starting with CHF9.95. Now I would say that is quite volatile. Who is the one that has something out there that is taking that price point?

I checked this moment -- this morning. I saw an offer from spusu at CHF9.95 for Swiss. I saw an offer from GoMo, which belongs to Salt, which was at CHF12.95. But again, there is some volatility in these offerings. But you also see offerings that are then rather in the range of CHF15 or CHF19 like what you see at Swiss Post or what you see at TalkTalk.

So that's kind of a bit the evolution that we see there. What is important to me, and I think as part of the clarification of how we think about the marketplace, is not each and every customer is just attracted by price, right? So we think that those swimming lanes are important and that this Budget segment is having lots of, if you want, new entrants.

If you think about the last quarters, like spusu was a new entrant. GoMo was a new entrant two years ago. The Post was relaunched just last year. So there is a bit of activity out there. But many of those players are struggling to really get a decent amount of volume over a longer period onto their customer base.

And hence, we see this volatility in the promotional activities, which are intended to, of course, capture some of the interest, but not necessarily can be holding for a long period of time. That, I think, what characterizes the situation of this Budget segment at the best at this moment.

All right, Polo, let me try to walk you through both questions. I'll bring in a bit more detail, but I'll try to balance detail versus not becoming too technical. But let's start with the revenue. So year-to-date, we are down 2.1% or approximately CHF31 million. What you can see in there is that Q1, we were CHF25 million down approximately and Q2, only CHF6 million.

Now to your point around reiterating guidance, I think we are reiterating yet on the lower side. Broadly stable, of course, is a range in itself. But I think, as you said, 2.1% for the full year -- for the year-to-date is definitely not what we would interpret even at the lower end of that range, i.e., improvements are necessary.

Now let me try to help you with sort of what one should expect from that. So Q1, the CHF24 million had a number of impacts. So on the one hand, the rate pricing at its full peak; secondly, a soft hardware quarter; and thirdly, no price increases yet, sort of as special effects that I will zoom in also for Q2 and then the outer quarters.

Now what you're seeing in Q2 is that the price increase is coming through. Some of it was from March; some of it from April, so not fully. And furthermore, the typical optimization effects you see in the first quarter, i.e., the price increases are through, but is still partially impacted by the optimization impact of implementing that.

That means then that from a subscription revenue, you can expect a slight improvement, if you will, going forward. And then what is important to note still -- and I think again, we're in Q3. We're not giving here guidance on Q3 or in general about specific quarters.

But Q3 is typical the roaming quarter. And I think what we have communicated is that in our new bundles, roaming is more included, i.e., the revenue becomes more stable. But in the peaks, one might assume to lose a bit, right? That is there.

Now then lastly -- and I think you asked about the temporary nature of those handsets. So Q1 was particularly soft. Q2 was a bit better on handset. But important to note that Q3, when we did the actual switch-off, because we talked about the switch-off being in sort of July and August, one should expect probably the highest benefit, if you will, from those 3G device switches which then normalizes in Q4. So those are all of the elements that, I think, help you to get to that lower-of-the-range broadly stable revenue.

Then lastly, on the share-based compensation, again, we're getting technical. But let me explain how to read that. So first of all, there are two lines that we report in our financial statements. One is the adjustment to OpEx that we're doing; and secondly is then as part of the labor cost, giving you the total share-based compensation.

Now there is a significant difference between those two because only part -- and I'll talk about in a second which those are -- only part of those share-based compensation is through labor cost or short-term compensation. And by selecting share-based programs, you move it from short term to long term, and as such, you can take them out of OpEx.

So for the quarter, if I'm not mistaken, the adjustment that we're doing to OpEx is approximately CHF4 million. And as you say, the total share-based compensation is CHF16 million. André spoke about the CHF10 million share-based compensation for the employee share price program, which effectively all comes out of OpEx.

And then the other balancing effect is the normal long-term shareholder -- of normal long-term incentivization that management and other selected employees have. That CHF16 million, therefore, on a quarterly base is elevated and is elevated because of the ESPP that we just talked about.

Secondly -- and I think you're comparing the [CHF6 million to CHF7 million] versus prior years -- that was because in the past, when we were still part of Liberty Global, some of the share-based compensation was then recharged back to us through a charging fee. And so therefore, it's not like-for-like.

All to say that the CHF16 million per quarter that we're seeing now is elevated because of the share -- of the employee share program. I think in the past, we have given you around a CHF30 million total year share-based compensation number. So I think, again, this year is probably a bit elevated because of that one-off employee share-based compensation program, but that's how it all ties.

Well, let me just add one thing, which is important. I mean, the employees are investing -- essentially have started to invest in Q2. And they will continue in Q3 and Q4. So there's a bit spread.

And the other thing which is important also as a company, together with our Board, we are, of course, reviewing our share-based compensation programs on a continuous basis. And we haven't taken final decisions for next year, for example. So I think you have to be a bit careful of drawing conclusions on what that necessarily implies for the years to come. Yeah.

And one more point to add. I think when we give guidance on the dividend growth, it's on a diluted basis, of course. So that 2.7% is after dilution. But I think I don't know what the exact dilution is that you're expecting. This doesn't meaningfully impact -- that this shouldn't impact the run rate that you have assumed.

Great. Thank you.

Robert Grindle, Deutsche Bank.

Good morning, and thank you. Three questions from me, too. I was interested in the 15% to 20% improvement seen by 5G SA customers. Is that versus regular 5G? And what's the metric of improvement you're talking about? Is that a latency thing or a throughput thing or whatever?

Secondly, did you consider paying an interim dividend? Are you fixed now that you'll be paying a bullet only from here on in? And thirdly, the whole US delisting and deregistration thing, will it save you any money? It sounds like it's more of a full-year '27 saving. Is that right?

All right. Good morning, Robert. Thanks for your questions. Let me take the first one. On the 15% to 20% performance improvement, that is actually on three parameters. One is latency; the other two are uplink and downlink. So we do see substantial improvement, and this is compared to 5G, right?

So if you're a normal 5G customer and you move to 5G SA, then you actually see that performance improvement. And of course, that is based on the fact that 5G SA is truly based on a 5G base layer. And hence, you don't have that flip-flopping between 4G and 5G. That improves, of course, the latency. And that helps to step up also the performance on uplink and downlink. So I think that sheds a light of the ability.

So yeah, we're really happy with what we have seen so far. And yeah, I think that's a great step, next to the fact that 5G SA then also allows to utilize a number of technical innovations like quality steering and so on, which allows to think about more innovative product features for B2B and for consumer customers.

All right. André, thanks. Let me take the next two questions. So first, on the sort of intermediate dividend or bullet payment. I think couple of things. So first of all, we are, at the moment, evaluating that, and we'll still look at it. There are a number of technicalities under Swiss sort of legal environment that we need to consider. So the ability to just pay dividend is preceded by a number of legal steps that need to happen.

And so as such, it is -- there is a burden on it, if you will. I think we're wanting to go through 2025 as we currently have it. And then we'll sort of evaluate that for '26 after some of the switch-off of the ADSs are done, and we have a stable shareholder base.

So something that is not completely off the table, does pose a number of technicalities that we have to work through. But I think, first, important to make sure that we have a stable investor base, which we'll then engage with to get their feedback on.

On the second question of the lower cost, you are correct; one should expect that really to materialize in 2027. There might be some savings in '26 already. But again, there's a number of technicalities that we have to adhere to before we can retract our SEC reporting, which effectively means that we have to wait 12 months after the switching off of the OTC program before it could become effective, i.e., in November.

So that means then potentially for '26, the requirements fall away. We only know that very late into the year, and so therefore, a number of costs will have already been incurred.

Thank you.

Max Findlay, Rothschild.

Thank you for taking the time to answer our questions this morning. A couple of questions from me. Firstly, your rebased EBITDAal growth for the first half was just over 1%, with growth accelerating in Q2 at 2%.

So just wondering if you think you can maintain this momentum going into the second half? It looks like you got a good setup where revenue is expected to strengthen from here and OpEx to slightly decline perhaps.

Secondly, you mentioned that mobile is still experiencing headwinds from reduced roaming revenues. How much longer should we expect this to be a headwind? For memory, I think your tariffs changed around Q3 last year. So is this something we should expect to tail off from Q4? Thank you.

All right, Max. Thanks for your question. On the roaming question, if I take that first, and then Jany can answer your first question. The way how to look at this is, I think that will take a long time until that variable roaming consumption is fully tailing off. Because the fact that we have introduced tariffs that has the inclusion feature, that means that over time, customers are migrating into those tariffs and are benefiting from that.

We also, of course, have customers in other products like Yallo, for example, where roaming inclusion is not yet fully given on the tariffs. And as such, there is more exposure to reliable consumption. And hence, we also are still seeing a decent use of roaming options that we expect not only in one year to come down, but probably that is a smaller and smaller headwind over the next couple of years.

All right. So then coming to your question on EBITDAal, so broadly stable to low single-digit growth, I think, I would argue that the year-to-date 1.1% is probably spot on in the middle of that guidance. You are correct in saying that there was an acceleration in Q2.

Having said that, that was -- part of not predominantly driven by a reduction of OpEx as GP was down 0.5%. So yes, revenue is expected to improve a bit from here. I think on the back of that with, as we say, the GP also being impacted with phasing of cost, one can take an assumption on what GP does. All to say that then continued growth on EBITDAal comes from OpEx.

And as we said, there is a number of one-off phasings between the quarters. So I'm not going to give you further guidance on where one should expect the full-year EBITDAal to land. But it's those dynamics that make up the year-to-date, if you will, and how you should be thinking about the full year.

Great, thank you.

(Operator Instructions) Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Alex Herrmann for any closing remarks.

Well, to conclude, thank you, all, very much for attending. That actually concludes our second-quarter 2025 results call.

As always, if there are any further questions, please do not hesitate to reach out to our team. And with that, we wish you a lovely day and good rest of the week, and speak soon to everyone. Thank you.

Thanks, everyone.

Have a nice day.