What is Sunrise (UPC) really worth after its “return to the stock market”?

Sunrise’s return to the stock market raises many questions about the real value of this operator. With a valuation of around 3.2 billion francs at the end of the week, a far cry from the 6.8 billion spent by the American Liberty Global to absorb this brand in 2020 and merge it with UPC, we can wonder about the financial relevance of this operation.

This “new” Sunrise no longer has much to do with the company purchased 4 years ago. The integration of UPC has profoundly modified its profile and its corporate culture, making the former mobile challenger the main cable operator in the country, with synergies that remain to be demonstrated for the end customer, who continues to be cleared with heavy mowing for the benefit of the owners.

A worrying debt

The colossal debt inherited from the takeover by Liberty Global seems to weigh heavily on the accounts. Despite the efforts announced to reduce it by 1.5 billion, it constitutes a burden which limits investment capacities, which are nevertheless crucial in such a competitive sector. We are thinking in particular of the company’s aging cable that the financial management is struggling to renew.

Recent financial results could give rise to discussion, with turnover down 1.3% in the third quarter. We are far from this leading competitor who was supposed to do battle with Swisscom! The promise of a dividend of 240 million from 2025 may therefore seem very optimistic given the situation. Obviously, financial management can still try to cut to the chase. She won’t hesitate.

An uncertain future

Operationally, Sunrise (UPC) is really struggling to stand out from the competition. Its mobile network, once the company’s flagship, has lost its luster and will require significant investments to support competition from the former monopolist Swisscom and the dynamic Salt, while its fixed offer via cable appears less and less competitive. facing the optical fiber.

In this context, this kind of “return to the stock market” looks more like a dubious financial transaction than a real new beginning. Potential new investors would do well to look beyond the marketing veneer to assess the real prospects for growth and profitability of this operator which has been fairly emptied of its substance for the benefit of its various owners.

Xavier Studer