Sunrise Communications AG (SUNN) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Sunrise Third Quarter 2026 Financial Results Conference Call and Live Webcast. I am Matilda, the Chorus Call operator. [Operator Instructions] The conference is being recorded. The conference must not be recorded for publication or broadcast. Page 2 of the presentation details the company's safe harbor statement regarding forward-looking statements. Today's presentation may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including Sunrise's expectations with respect to its outlook and future growth prospects and other information and statements that are not historical facts. These forward-looking statements involve certain risks that could cause actual results to differ materially from those expressed or implied by these statements. These risks include those detailed in Sunrise's filings with the Securities and Exchange Commission, including its most recently filed 20-F. Sunrise disclaims any obligation to update any of these forward-looking statements to reflect any change in its expectations or in the conditions on which any such statement is based. At this time, it's my pleasure to hand over to Alex Herrmann, Vice President, Investor Relations, Corporate Finance and Treasury. Please go ahead.

Thank you, Matilda. Good morning, ladies and gentlemen, and welcome to our third quarter 2026 financial results call. Thank you for joining us today. With me today are Andre Krause, our CEO; and for the first time, Andreas Tolpeit, who has taken over as CFO of Sunrise as of 1st of September. Andre and Andreas will lead you through the presentation, which will be followed by a Q&A session. With that, I'd like to directly hand it over to Andre. Please go ahead.

Yes. Thanks, Alex, and good morning, everyone. And let me crack off by talking you through the summary of our today's presentation. So firstly, we have continued our focus on customer lifetime value, product innovation and quality. We have been seeing a growing Sunrise Rewards and Device as a Service adoption, supporting our main brand customer lifetime value. We have also just recently yesterday launched a new native flanker brand, AI native flanker brand called five, talk about that in a minute. We've also launched in the quarter a business AI assistant and also a new SME Connect -- SecureConnect solution. We are also using our partner, PHOENIQS to do so. We'll talk about that as well. And we have all seen strong recognition as part of the Connect results that we received in the quarter for fixed network quality, customer services and shops. Secondly, we have seen robust subscriber trends despite the fact that the quarter -- the summer quarter is seasonally usually is somewhat softer, and we have been dealing with a price increase in the quarter as well. Our financial results have been in line with our expectations. We have seen that the price increase has benefited our moderating Q3 revenue and adjusted EBITDA declines as we expected. And on the basis of that, we are fully confirming our 2026 guidance, including the growing dividend towards CHF 3.49 per share. We also, in the quarter, executed our debt repayment of approximately CHF 110 million, which now also pushed out all of the remaining maturities to 2031 and gives us quite some clear visibility on our debt structure. Thirdly, we have started a significant exercise to transform our operating model. This is going to be a multiyear exercise. And we have seen this year the front end of that, which has been 2 sets of cuts of employee reductions, which we have implemented while we are speaking. This transformation is set to prepare Sunrise for a future that is a lot more focused, a lot more streamlined and also an AI-enabled business across. We expect the resulting cost savings of this transformation to be utilized to absorb the remaining fixed ARPU headwinds, cost step-ups, enable reinvestments and support our commitment to growing free cash flow, further delevering and also growing dividend per share. On that basis, we also are expecting to give you a broader update on how our business is going to look like in the future as part of our Q4 results, and we'll talk about that a bit more later on. Now with that, let's talk about the commercial performance of the quarter. And I'd like to start with some of the consumer main brand activities that have defined the success of the quarter. I spoke already about Sunrise Rewards, which was up for a strong start. We launched it, as you remember, in May. Since then, customers are benefiting automatically if they are a Sunrise subscriber from the program. So all of our customers have access to the program, and we have seen, in the meantime, more than 100,000 redemptions, which we think is a very strong indication of the attractiveness of the program, and that's working pretty well. You see some of the examples of offers that we make to our customers on the left-hand side of the page. I'd like to flesh out the one on the bottom, which was a large music concert from a very popular Swiss band called Hecht, which is happening only next year, but the sales -- the ticket sales were happening just a few weeks ago. Sunrise customers have the opportunity to benefit in our Sunrise Rewards program of the ability to have a presale that was sold out pretty quickly. And this is just one example of how we try to come up with something that money can't buy that is unique, and therefore, sharpens the attractiveness of the Sunrise Rewards offering. Now not only Sunrise Rewards, but also Q3 is always a quarter that is determined by new phone launches from Apple. This year, quite a particular launch. We have seen the Pro and Pro Max series happening in September, while the more volume drivers are only happening in Q1. And we have seen a new device, the iPhone Duo coming in, in October. Now interestingly, we have seen very strong recognition of our Device as a Service proposition. We meanwhile have seen that more of 75% of the iPhone sales are linked to our Device as a Service offerings, which are smart and flex upgrades. So we think that's a very strong sign of the attractiveness of that program. We also launched -- relaunched the Iconic Bundle, which we already launched last year, but we sharpened the proposition in line with our premiumization strategy that we have on Sunrise and have seen a very strong attach rate of the tool, and we have seen a more than double-digit percentage take-up of iPhone sales with that Iconic Bundle proposition. Now as I said yesterday, we launched an exciting and innovative new flanker offer called five. The uniqueness of five is that this one is really the first, at least in the Swiss market, and we believe probably in a broader telco environment, the first AI native proposition. What does this mean? This product has been developed and is run constantly on an AI platform. And also the user front end is quite different because essentially, this is not a predefined tariff of product that the customer is buying, but it's an interface that allows the customer to actually define their own product by using AI, meaning this is a full customization, personalization of the offer that is actually working for the customer. And this is not only a onetime customization, but the AI is then constantly helping the customer to optimize that product as he starts using it. Now this is not only just a mobile tariff, but it also comes with an AI assistant embedded. So it actually makes the necessity to have another AI subscription unnecessary and it actually offers a variety of models underneath that can be used by the customer. This is actually enabled also through our PHOENIQS partnership on the back end. And I think it demonstrates the ability that this is not only a very flexible tool, but also a fully sovereign product that is a hosted fully in Switzerland and is fully run in Switzerland. Now I think this product has a number of legs and it's kind of really a new exercise that will give us lots of learning opportunities, understanding how hyper-personalization for customers can actually work. And we have chosen to launch this as a new brand to actually take this as clean learnings despite actually having it as an on top layer, which may be a solution for other brands in the future to come. This is only just the front of that product. So if you are interested to learn more about it, you'll on the bottom right also find the link to the product page where you can explore the offering yourself. Now as I said, this was also built with the partnership that we have with PHOENIQS. It's not the only thing that we launched on the back of that. We also launched the Sunrise Business AI Assistant in September this year. And again, this is a fully Swiss sovereign solution. No data is leaving Switzerland. All of the operating platform is fully owned by PHOENIQS, so no access to any third party. And that is the uniqueness of the offering that we're having, which means that this AI assistant is actually making the use of AI for businesses worry-free. So no necessity to worry about where does my data go? Does anybody have to have -- can have access to it and so on. So it reduces the hurdle really for small and medium-sized businesses to AI adoption and not only limited to that, also for large enterprises, we think it's a very attractive proposition. We have also added our SME SecureConnect solution on top of that, meaning that not only the AI assistant is fully secure and sovereign, but also the connectivity as such is fully protected against any cyber risks. On the back of this launch, we have seen a very strong pipeline building up, and we are quite excited about what this could yield going forward. But of course, as we launched only at the second half of September, it's still very early days. And as you know, B2B business usually has some lead time to action. So we see this as a future prospect to help support our B2B growth in the coming quarters. And clearly, this also is a next step in our journey to strengthen our ICT capabilities in the B2B segment, which is an important element of our strategy going forward. Not only on the commercial side, we have seen a lot of activity, but we have also worked on further cost efficiencies. And this is not just further cost efficiencies, but we have done or we have started to do a full review of our operating model, which will lead to a multiyear operating model transformation. As I said already, the front end of that is also significant head count reduction, which in '26 happened in 2 ways. As you remember, we had a first layoff that happened in Q1. And we have already executed the second tranche of that layoff in Q4 -- sorry, in Q3. So you see the total impact of that is the terminations of roughly 500 employees, which is leading to a run rate saving of CHF 70 million, which we expect to be fully effective in 2028. Now most of the terminations have already happened. Hence, there is going to be an upside to be expected in '27. But of course, there's also restructuring costs against that, and we'll talk about that later on in our presentation today. Now the multiyear transformation is really focused on making sure that we become more focused, meaning working on a lower number of priorities that we really land towards the financial impact, which means reduction of projects that we are running. We are also changing our governance and how we work, making sure that we spend more time on execution and less time on analysis and decision-making, which is also already supported by the use of AI. And then in the implementation side of things, we will also increase technology usage in order to get faster and cheaper in everything that we do, not only internally, but also we are expecting a reduction of external costs, and we are also expecting a reduction of external resources required to actually run our business. So as you can see from that, we are expecting a significant change into our operating model, and we are expecting that those savings will help us to absorb remaining fixed ARPU headwinds that we see. We are also expecting some cost step-ups that need to be offset, and we are fully committed to continue to deliver growing free cash flows, further delever our business and provide a growing dividend for our shareholders. Now as you can see, this is a major change to our business, and we will provide a broader update on our business outlook as part of our Q4 results in February next year. And we ask you to bear with us to give us the time to actually fully work through the numbers, but also make sure that we understand the landing of this year to give you then a good outlook going forward. Now with that, let me talk about the commercial performance of the quarter. As said, very much in line with our expectations. Talking about net adds, we have seen 19,000 net adds on the mobile postpaid side. That's pretty much in line with what we have seen in Q2, but also what we have seen in prior year. And that's on the back of somewhat seasonally lower activity usually in summer, but also the price increase happening in August. Also on the Internet side of things, you see that we are flattish for the quarter, which is somewhat softer than what we have seen in Q2. But again, we have also seen a bit of an increase of churn quarter-on-quarter. Nevertheless, we have seen significantly better performance in Q3 last year where we were declining. And in comparison to last year, also our churn rate has improved, never mind the fact that we had somewhat more churn quarter-on-quarter because of the price increase. Our FMC quota continues to crawl up. We are now at 61.5%, and we are expecting that to further improve. Going on to ARPU, you see the mobile ARPU is nearly stable. It has been benefiting, of course, from the price increase in August, but it's also benefiting from the FMC allocation that is happening from an accounting perspective. So that's what we can see on the mobile side. On the fixed side, we have also seen a softened decline, which is still driven largely by the difference between the front book intake and the back book pricing, but it's also impacted by some mix effect that is coming from the different brands that we are selling and of course, also some FMC discount allocation also on this side of the equation. Now the price increase is partially offsetting that, and that's what we see here that we are further expecting as we have outlined before, that the revenue evolution in Q4 is further improving as expected. All right. That's pretty much my part of the presentation. And with that, the premier of Andreas now. Andreas, over to you for the financials.

Yes. Thank you, Andre, and good morning, everyone. This is my first call as the new CFO of Sunrise, and I'm truly delighted to be here. Since joining in August, I spent a lot of time getting to know the team, the business and our operations. I also got the chance to meet many of the analysts that are on the call today and some of our investors through conferences and initial meetings, and I'm looking forward to meeting many more in the future. In this context, I'd also like to thank Yannick for a very structured handover in the course of August. I'm joining at an inflection point for our industry. Technology, customer expectations and the economics of connectivity are shifting. And that changes how we create value for our shareholders. Sunrise is a strong company with an outstanding team and attractive prospects to capitalize on the opportunities that lie ahead. Having worked across many different industries, I've used the last months to look at the business with fresh eyes, bringing a new perspective, always with a focus around how we can further improve our profitability and cash flow generation. There are some interesting opportunities ahead for Sunrise, and we will look to unlock them in the quarters ahead, starting with the operating model transformation Andre walked you through in the previous section. I look forward to shaping the next phase of Sunrise together with Andre and the entire team. Today, I'll walk you through the quarter's financial performance, our cash flow and net debt position as well as our outlook before handing back to Andre for his closing remarks. In line with the outlook around the performance shape throughout 2026, the revenue decline narrowed to 1.2% in Q3 after a 2.6% decline in Q2. This underpins the U-shaped recovery Yannick was referring to in the call in August. So what is behind it? The fixed ARPU development is supported by the price increase in August, which landed really well across our brands. Secondly, we have seen strong hardware sales supported by our attractive Device as a Service offerings as well as continued B2B and wholesale growth. Continued cost and lease optimization has helped to contain the adjusted EBITDAaL decline to about 2% for the quarter and minus 1.2% for the year-to-date period. CapEx is down 17% year-over-year, benefiting from past network investments, a more focused IT development road map as well as some phasing. And this is driving adjusted EBITDAaL less P&E additions of plus 7.7% for the quarter and plus 8.3% on a year-to-date basis. Free cash flow for Q3 is slightly down versus last year by CHF 4 million, which, however, is entirely driven by phasing, and we will unpack a little later in the presentation. Looking at the year-to-date period, we are very pleased with our free cash flow development as we are CHF 52 million ahead of last year as we remain focused on flattening the cash flow generation over the course of the financial year. Let's double-click on revenue on the next page. The top line decline moderated, in fact, to 1.2% in Q3, which is a strong improvement versus Q2 and in line with the U-shaped performance trajectory we are observing in 2026. When it comes to residential subscription revenue, price increases are successfully softening the existing fixed ARPU pressure caused by the continuous narrowing of the front-to-back book gap. The mobile subscription revenue, on the other hand, was basically stable despite variable usage headwinds from roaming. Non-subscription and other revenue benefited from the Device as a Service driven hardware sales. This was partly offset by a tougher fee revenue comparison with Q3 last year being exceptionally strong when it comes to those fees. We also continue to generate growth through our B2B and wholesale business, both on the subscription side as well as across other revenue streams. The underlying drivers are strong mobile volumes, support from selective price increases as well as higher fees. Page 13. Adjusted EBITDAaL declined by about 2% in the quarter, reflecting lower residential fixed subscription revenue flowing through to gross profit where the compensation from higher hardware sales is less effective. This was partly set off by gross profit growth in B2B and wholesale as well as continued external cost optimization, including network and IT and lower lease expenses from contract optimization and favorable phasing. After P&E additions, we turned to strong year-on-year growth in Q3. CapEx was down by CHF 80 million or 17% in the quarter, and that is driven by 2 material drivers. Firstly, on the network side, we see lower mobile capacity requirements following past investments as well as lower coverage requirements after significant B2B spend in the prior year. Secondly, on the IT side, we pursue a more focused IT development road map and benefit from some project phasing as well. As a result, the adjusted EBITDAaL less P&E additions grew by 7.7% in the quarter, supporting our cash generation. Q3 adjusted free cash flow landed at CHF 33 million versus CHF 37 million last year. The small decline in absolute terms is driven by significant phasing effects and some exceptionals. Firstly, the interest payment increases year-on-year due to the refinancing transactions in its early 2025, which triggered earlier interest payments last year and disturbs the year-on-year comparison in Q3. Secondly, there is an overseas cash tax inflow from the Netherlands, which crystallized in Q3. And finally, we faced some higher lease payments on a cash basis associated with excess costs, which are effectively some prepayments. And on a year-to-date basis, on the right-hand side of the slide, you see that these phasing effects largely wash out. The upside on the CapEx and tax remains though and results in very strong adjusted free cash flow of CHF 126 million on a year-to-date basis, which means an improvement of 71% year-over-year. Moving on to debt and leverage. This slide provides an overview of our net debt position as of end of September, and I'd like to highlight 3 points in this context. Firstly, we repaid about CHF 110 million of gross debt last Monday, including derivative terminations, which represent about CHF 12 million out of the CHF 110 million. This is consistent with our capital allocation policy of using excess cash to reduce our gross debt position. Secondly, after this repayment, which addressed the senior secured notes maturing in 2029, we have extended our third-party debt maturities to 2031 and beyond. And actually, if you look at the chart on the lower left-hand side of the page, 3/4 of our debt actually matures in 2032 and thereafter. Thirdly and finally, our debt stack is, a, fully swapped into Swiss francs, so no currency exposure; and b, fully hedged against interest rate risks where we have some because we have largely fixed income instruments. And both of these result in an attractive weighted average cost of debt of 2.8%. As we are potentially entering a higher for longer interest rate environment, I want to particularly stretch the latter point around the interest rate hedges. So in summary, we remain committed to reducing our gross debt over time, in line with our capital allocation policy and the leverage guidance provided, and we benefit from a sustainable, fully hedged and long-term debt structure. As far as our guidance for 2026 is concerned, we are confirming the existing guidance provided. When it comes to Q4, we would like to highlight, in particular, the following. On the revenue side, the Q4 will benefit on a full quarter basis from the price increase communicated in August. We're also expecting the improving subscriber momentum to continue into that next quarter. On the flip side, we also see some nuance from the unusual iPhone launch this year and we face delivery dates as well as some supply constraints we observed in Switzerland, but also globally. For example, we are having an order backlog on the Duo of about 5,000 positions. On the EBITDAaL and cash flow targets, we'd like to flag the following. The continued cost discipline supports our adjusted EBITDAaL target of CHF 1 billion despite some phasing reversals and expected commercial investments coming up. And in terms of adjusted free cash flow, we also reconfirmed the previously communicated range of CHF 380 million to CHF 400 million. And this is despite a low single-digit million amount of that negative impact on 2026 free cash flow from our Q4 restructuring. When it comes to the guidance for 2027, we will provide that together with the Q4 results in February per the existing practice. Ahead of February and as new incoming CFO, I would like to reiterate also from my side, our commitment towards growing free cash flow generation, deleveraging and a progressive dividend per share policy. As part of the Q4 results call, which is scheduled for the 17th of February, 2027, we will also provide a broader business and strategy update, providing further detail on our operating model transformation and the associated financial outlook for the midterm. With that, back to you, Andre.

Well, thanks a lot, Andreas. And let me summarize the key takeaways of today's presentation. So firstly, commercially, we stay very focused on our customer lifetime value focus, driving product innovations and quality. You have seen Rewards and Device as a Service are gaining traction, and you have also seen new AI proposition that we have launched in the quarter. Secondly, our results are fully in line with our expectations. We have seen robust subscriber trends in the third quarter. On that basis, we are fully reiterating our guidance for 2026. You have also seen our debt repayment that we completed in line with our capital allocation policy, and Andreas was alluding to the strength of our debt structure and the maturities and the attractive interest. Thirdly, we've also talked about the start of our multiyear operating model transformation that we have launched in order to drive further efficiencies, absorb headwinds and enable reinvestments and supporting our commitment to growing free cash flows, further delevering the business and also growing DPS in the future. With that, I conclude the presentation and hand over for the Q&A now.

[Operator Instructions] The first question comes from the line of Polo Tang from UBS.

I have 2. The first one is just about competitive dynamics. Can you talk about how the Black Friday sales period is shaping up? And how does pricing compare to last year? And second question is just really around cost savings. So you've outlined CHF 70 million of cost savings from FTE reductions. You've been clear the full benefit on free cash flow is only going to come in 2028 because you've got restructuring costs. But how should we think about the benefit on EBITDA in 2026 and 2027? So I estimate around 1/3 of the CHF 70 million of FTE savings is already in your stable EBITDA guidance for '26, but potentially 2/3 of the CHF 70 million is new incremental savings that could potentially benefit EBITDA in '27. So does this sound about right? And can I clarify that in terms of these cost-saving measures that you've announced and the further cost savings are yet to come, do you need these cost savings to hit the consensus numbers of flat EBITDA and flat free cash flow midterm? Or do you think these savings enable you to achieve growing EBITDA and growing free cash flow?

Well, thanks, Polo, for your questions. Let me start with the competitive dynamics and then I'll give Andreas the opportunity also to comment on the savings. So firstly, on the competitive dynamics in regards to the Black Friday, which has just launched a week ago, unfortunately, we have seen again a black November and not just the Black Friday, and we have been reacting to competitors moving in. As I said, we believe that we would all be better off if this would be just a couple of days and not a full month. However, when the exercise takes place, you have to participate in order not to get hit harder. On the pricing levels that we are observing, I'm not seeing any materially different price points to what we have seen a year ago. Of course, the different brands are still working in the different price bands. But essentially, the offerings are very much in line with what we have seen in the prior year. On our Sunrise main brand, we are also more focusing on benefits that are around hardware than necessarily price. And so far, that had good traction. But again, it's early days, but no further deterioration of market pricing in the Black Friday period as we can analyze it by now. Before I hand over to Andreas for the cost savings, Polo, we will refrain today from giving any forward-looking statements or guidance. As we said, we're going to do that as part of our Q4 results. But of course, we can illuminate a bit the cost saving structure that we are expecting.

Yes. I will start exactly there. So we're not giving guidance today. Now I think what you said, Polo, is largely correct. I would say, 20% of the full envelope of CHF 70 million is kind of already included in the 2026 guidance. This is the lion's share of the first wave that we have executed in Q1. The second wave, which is effectively the vast majority of the CHF 70 million, about 3/4, we just executed last week. So we are already in Q4 with that. And so the impact for 2026 is quite limited. Now as we look ahead for the next year, I would say that you've got to balance those effects with some also headwinds that continue on the back-to-front book side, on the fixed residential side, leases are stepping up, but also some reinvestments that we are going to make to achieve this transformation going forward. So yes, I hope this addresses your point.

The next question comes from the line of Robert Grindle from Deutsche Bank.

Welcome, Andreas. Following up on Polo's questions, you launched five yesterday, and that sort of is in the Black Friday promotional period. Is that all a bit of a coincidence because the technology is available and that's the right thing to do? Or are you effectively hitting the market with a new brand like you did last year to avail of liquidity? And then my second question is about your relationship with PHOENIQS. Obviously, five is very AI-heavy. Broadly, how does that work? Is that sort of customer-driven, token usage driven? Do you have material upfront costs? Just a bit of color there would be helpful.

Yes. Thank you very much, Robert, for your question. So launch timing of five, I think a bit of both, what you alluded to. So on the one hand side, it was available right now. So we actually built it only in less than 6 weeks' time. So it happened pretty quickly, which was a bit of a surprise to us that we could do it that quickly. And then we were considering also the moment of the Black Friday period where it is just more liquidity in the market as a good moment to launch. Now to be clear, this is not a product that is very price aggressive. It's a product that is innovative. And from a price positioning, it's rather a position between the flanker brand and the main brand. So it's between the B and the A segment. So it's not bottom fishing. It's more focused on the innovativeness that actually sits in that proposition. To the economics and the relationship with PHOENIQS, so essentially, we have built this product fully ourselves, excluding any support from the PHOENIQS colleagues. What we are doing is that the AI assistant that is connected is ultimately used on the PHOENIQS and it's paid through the tokens that are actually being used. That's the commercial proposition. But it is very attractive, and we don't think that there is any obstacle to the profitability of the product, which in itself is extremely lean given the fact that it's fully AI-based and AI native.

We now have a question from the line of Joshua Mills from BNP Paribas.

A couple from my side. The first one was just around this update you're planning to give at the full year results. I know that we'll have to wait until then to get more explicit detail, but it sounds like one of the positive elements you'll be discussing is the cost cutting side. I think you've also lowered the CapEx sales targets since we had the last CMD in 2024. Can I just ask if there's any new information or new view we should be taking when it comes to things like cash taxes, which has been a debate recently on your free cash flow development? How are we looking at cash taxes going forward? Is there more pressure to offset those as part of these new initiatives? And then secondly, if I could maybe ask about the leverage. You made some comments there about your commitment to leverage ratios, the refinancing element, the fact you've termed out debt. But we are looking at leverage now above the high end of the previous guidance range, and we have a spectrum auction coming up in the second quarter of next year. So how are you looking at different financing options? Are hybrids something you'd consider? Is that something that you consider to be outside your leverage target? Any early thoughts on that would be very helpful.

Yes. Thanks for your questions, Joshua, and Andreas will support on some of the topics that you raised. On the update, let me just be explaining why we actually talk about that in -- with the Q4 results in February. Number one, while we are speaking, we are doing a lot of work still on how this operating transformation will go into the end and what the impact of that over time could look like. So there is still work being done to get you a better understanding of what this implies. And secondly, we definitely want to see the Q4 results to understand our run rate landing for 2027. That, of course, has an impact on the outlook for next year and also the dynamics that we are expecting. So we need that time really to actually work through those results. However, with what we can say and see, as we said, we are very much confirming our commitment to drive growing free cash flows to delever and also to drive DPS. Now to your questions on cash tax, Andreas can elaborate further, but there is no material change to that. So that is not a driver of any offsetting required. In regards to leverage, obviously, that is, to a certain extent, linked to the outcome of the spectrum auction. However, we are continuing to expect a rational outcome around the reserve prices that in our cases for the spectrum that we want to acquire are around the CHF 246 million of the reserve prices. So that is not a massive impact on that number, also provided that we are driving quite some free cash generation beyond the dividend that we are paying that can be used to deliver within the year. I think that are probably my remarks to your questions, and I hand over for Andreas for any further detail.