Sunrise Annual Report 2017

Annual Report

Annual Report 2017 2017 WorldReginfo - 4304bf9e-3269-4430-b6e8-ac0cdaa28d84 (in percent) type Revenue by subscription (in percent) type by subscription Customers Facts &Figures Facts * (in points) since 2011 history test connect network 1000 services scoring system of previous years.scoring systemof The values inthechart havebeenadjustedtothe500-point connect beganusinga1000-pointscoring systemin2016. Mobile Mobile 200 400 600 800 66.4% 68.6% Sunrise 2011

2012 Subscription Swisscom Revenue

2013 type

2014 Salt 13.2% (incl. IPTV) Landline Internet 2015 6.2% TV 12.9% network Landline 20.4% (incl. voice) services Landline

2016* 12.3% Internet

2017

1,713 3.426 91 million 29% and Lugano. and employees (1,645 FTEs) are women. Approxi women. are (1,645 FTEs) employees With With With more than 3.4 million customers, Sunrise Sunrise customers, million 3.4 than more With Customers Offices and retail stores retail and Offices five apprenticeship programs. programs. five apprenticeship part-time. Sunrise trains 122 apprentices in in 122 trains apprentices Sunrise part-time. network sectors. Additionally, Sunrise is the the is Sunrise Additionally, sectors. network mately mately Employees in Switzerland, both in the mobile and landline landline and mobile the in both in Switzerland, provider telecom alternative is the leading is headquartered in Zurich and has additional additional has and Zurich in is headquartered Company The Switzerland. of regions all in business offices in Prilly, Geneva, Bern, Basel Basel Bern, Geneva, Prilly, in offices business third largest provider of landline network, network, landline of provider third largest Internet and TV services. TV and Internet of the total number of 1,713 of number total the of Sunrise 85 85 14% retail locations, Sunrise has a presence apresence has Sunrise locations, retail of Sunrise employees work work employees Sunrise of

WorldReginfo - 4304bf9e-3269-4430-b6e8-ac0cdaa28d84 Content

2 Message to 67 Compensation Report Shareholders 68 Introduction 69 Compensation Governance 71 Compensation System 7 Financial and 77 Board of Directors Compensation 79 Executive Leadership Team Operational KPIs Compensation 8 Financial KPIs 82 Shareholdings of the Board of Directors and Executive Leadership 9 Operational KPIs Team 83 Audit Report

11 Operational and Financial Review 85 Consolidated Financial 12 Business Activities Statements 12 Sunrise Strategy 86 Consolidated Statements of Income 14 Customers 87 Consolidated Statements of 15 Market Environment Comprehensive Income 16 Products, Services and Sales Channels 88 Consolidated Statements of Financial 21 B2B Position 21 Network 90 Consolidated Statements of Cash Flow 23 Regulatory Environment 91 Consolidated Statements of Changes in Equity 25 Corporate Responsibility 92 Notes to the Consolidated 27 Employees Financial Statements 30 Environment 142 Audit Report 32 Community 32 Major Events 32 Financial Review 147 Statutory Financial 36 Risks 38 Additional Disclosures Statements 39 Outlook 148 Income Statement 149 Balance Sheet 150 Notes to the Statutory Financial Statements 41 Corporate Governance 156 Appropriation of Available Earnings and Capital Reserves 42 Group Structure and Shareholders 158 Audit Report 42 Capital Structure 44 Board of Directors 57 Executive Leadership Team 63 Compensation, Shareholdings and Loans 63 Shareholders’ Participation Rights 64 Change of Control Provision 64 Auditor 65 Information Policy 65 Subsequent Events after December 31, 2017

Content | Sunrise 1 WorldReginfo - 4304bf9e-3269-4430-b6e8-ac0cdaa28d84 Message to Shareholders

Message to Shareholders

Peter Kurer Chairman of the Board (right) Dear Shareholders, Olaf Swantee Chief Executive Officer (left) Fiscal year 2017 was a positive and successful year for Sunrise. We were able to stabilize organic adjusted EBITDA, and our share price rose by 33%. Thanks to a number of initia