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Summary

Thanks to a solid performance, Swisscom’s operating results were within expectations in the first nine months of 2018. Net revenue rose year-on-year by 1.0% or CHF 85 million to CHF 8,689 million and was on a par with the prior year on the basis of constant exchange rates (–0.1%). Operating income before depreciation and amortisation (EBITDA) fell as a result of non-recurring items by 3.7% or CHF 123 million to CHF 3,231 million; on a like-for-like basis and at constant exchange rates, it remained stable (–0.2%). Net profit decreased in the first nine months of 2018 by CHF 56 million or 4.4% to CHF 1,213 million, due primarily to the non-recurring items. The financial outlook for 2018 remains unchanged.

In the Swiss core business, revenue decreased on the back of market saturation and strong competition by CHF 144 million or 2.2%. Revenue from telecommunications services fell by CHF 179 million or 3.7%, which can be attributed to the downward trend in fixed-line telephony and pressure on prices. The number of revenue generating units (RGU) dropped by 1.5% compared with the previous year to 12 million. At Fastweb, customer growth led to increased revenue in local currency of EUR 102 million or 7.2%. In the broadband business, Fastweb saw its number of subscribers rise year-on-year by 4.0% to 2.5 million, and in mobile telephony by 34% to 1.3 million.

EBITDA for the previous year included one-off income from legal disputes at Fastweb of EUR 95 million (CHF 102 million). Furthermore, the year-on-year development of EBITDA was impacted by new requirements governing the revenue recognition of customer contracts (IFRS 15). In the Swiss core business, EBITDA fell by 2.8% on a like-for-like basis, while at Fastweb it rose in local currency by 5.0% on a like-for-like basis as a result of the growth in revenue. The decline in the Swiss core business was largely offset through rigorous cost management, with Swisscom on course to achieve its target of cutting the annual cost base in Switzerland by CHF 100 million.

Swisscom’s capital expenditure rose by 2.1% to CHF 1,621 million; on the basis of constant exchange rates, it remained virtually stable (+0.4%). Progress continues to be made on expanding the broadband networks. At the end of September 2018, Swisscom had connected around 4.1 million households and businesses in Switzerland with ultra-fast broadband (with speeds of more than 50 Mbps), around 2.8 million of which benefit from speeds of more than 100 Mbps. Operating free cash flow declined by CHF 357 million to CHF 1,315 million, primarily due to seasonal effects on net working capital. At CHF 7,641 million, net debt is CHF 227 million lower compared with a year ago. Headcount at Swisscom contracted by 854 FTEs or 4.1% year-on-year to 19,850 FTEs. In comparison with the previous year, headcount in Switzerland fell by 712 FTEs to 17,165 FTEs as a result of the declining core business.

For the 2018 financial year, Swisscom still expects net revenue of around CHF 11.6 bil­lion, EBITDA of around CHF 4.2 bil­lion and capital expenditure of less than CHF 2.4 bil­lion. Subject to achieving its targets, Swisscom will propose payment of an unchanged dividend of CHF 22 per share for the 2018 financial year at the 2019 Annual General Meeting.