2025 Interim Report

KPIs Group

KPIs Segments

Summary

Group revenue decreased by 1.2% year-on-year to CHF 3,759 million. Operating income before depreciation and amortisation after lease expense (EBITDAaL) fell by 6.6% to CHF 1,277 million. The change in the EUR exchange rate on reported revenue and EBITDAaL development was minor as the EUR average exchange rate remained fairly stable (–0.3% compared to the same quarter in the previous year). Revenue in the Switzerland segment fell by 1.2% and those in the Italy Segment by 0.4% (in EUR).

EBITDAaL development in 2025 was negatively impacted by non-recurring items in connection with the integration of Vodafone Italia in the amount of CHF 6 million and the reconciliation of pension costs of CHF 4 million. In the previous year, non-recurring items related to legal proceedings in the amount of CHF 24 million and the reconciliation of pension costs of CHF 4 million had a positive impact on EBITDAaL while non-recurring costs in connection with the preparation of the acquisition of Vodafone Italia of CHF 6 million had a negative impact on EBITDAaL. Without these non-recurring items and with a constant EUR exchange rate, this resulted in a drop in EBITDAaL of CHF 58 million (–4.2%). CHF 51 million (–10.8%) of this drop is attributable to the Italy segment. EBITDAaL of Switzerland remained stable (–0.3%). Net income fell by CHF 88 million compared to the prior year to CHF 367 million (–19.3%). The decrease in net income is due, among other things, to the decline in revenue in Switzerland and higher cost in connection with the acquisition of Vodafone Italia, which, as expected, are not yet offset by any synergies.

The Group’s capital expenditure decreased by 13.2% in a year-on-year comparison to CHF 779 million. Capital expenditure for Switzerland decreased by 4.9%, and for Italy by 19.9% (in EUR). In the first quarter of 2025, the capital expenditures in Italy included EUR 8 million due to the consolidation of INWIT mobile towers (prior year EUR 46 million) and EUR 3 million in expenditure on integration cost. Without these non-recurring items, the Group’s capital expenditure decreased by 9.8% and in Italy by 13.9%. Operating free cash flow increased by CHF 28 million or 6.0% year-on-year to CHF 498 million. The decrease in capital expenditure overcompensated the decrease in EBITDAaL. Free cash flow of CHF 471 million was up CHF 273 million year-over-year. In the first quarter of 2025 net working capital decreased by CHF 54 million and positively impacted the free cash flow, whereas in the prior year an increase in net working capital of CHF 226 million negatively affected the free cash flow.

The number of Swisscom employees decreased year-on-year by 643 FTEs or 2.6% to 23,717 FTEs. The decrease in Italy amounts to 417 FTE (–5.5%) and was driven by Vodafone Italia throughout 2024. In Switzerland, headcount decreased by 109 FTEs or 0.8% to 13,280 FTEs as human resources in the areas of customer care and IT business were reduced. In the first quarter of 2025, the reduction in the number of Swisscom employees amounts to 0.5% or 122 FTE (compared to year end of 2024), of which 39 FTEs (–0.3%) result from Switzerland and 31 FTEs (–0.4%) in Italy.

The financial outlook for the 2025 financial year remains unchanged. Swisscom expects revenue of around CHF 15.0–15.2 bil­lion, EBITDAaL of around CHF 5.0 bil­lion, capital expenditures of CHF 3.1–3.2 bil­lion and an operating free cash flow of CHF 1.8–1.9 bil­lion. Subject to achieving its targets, Swisscom plans to propose the payment of an increased dividend of CHF 26 per share for the 2025 financial year at the 2026 Annual General Meeting.

Switzerland

Switzerland’s revenue decreased by 1.2% or CHF 24 million to CHF 1,962 million. Revenue from residential customers dropped by CHF 6 million to CHF 1,064 million (–0.6%). The decrease is mainly due to decline in telecommunications services (CHF 11 million or –1.1%). In the business customer area revenue fell by CHF 25 million to CHF 740 million (–3.3%). The decline in telecommunication services of CHF 16 million (–4.2%) was partly compensated by higher revenue from IT services (+2.4% to CHF 304 million). In an intense market environment, there was a reduction in the number of connections for broadband (–1.9%) and TV (–2.9%), while the number of connections for mobile postpaid telephony increased (+2.8%). In mobile communications, the customer structure changed due to an increase in postpaid lines (+151,000) and a decrease in prepaid lines (–55,000). The share of secondary and third-party brands in the residential customers area rose from 32% to 35%. The number of connections for fixed network telephony dropped (–7.9%) as a result of its substitution with mobile telephony.

The operating expense decreased slightly by 0.3% or CHF 3 million. Direct costs fell by CHF 13 million or 3.4%. There was a drop in both the cost of purchasing merchandise and in subscriber acquisition and subscriber retention costs. Indirect costs increased by CHF 10 million (+1.4%) but decreased by CHF 8 million on an adjusted basis. In telecommunications, cost savings of CHF 9 million were realised through efficiency improvement measures. Headcount decreased by 0.8% year-on-year to 13,280 FTEs as a result of increased efficiency. Operating income before depreciation and amortisation after lease expense (EBITDAaL) decreased by CHF 21 million to CHF 865 million. After adjustments by non-­recurring items, EBITDAaL remained fairly stable (–0.3%). Cost-cutting measures partly compensated for the decline in revenue from telecommunications services. Capital expenditure decreased by 4.9% or CHF 22 million to CHF 423 million despite higher investment in the wireline access network in order to step up the expansion of optical fibre. The investments in the mobile network and in IT were lower because the prior year included non-recurring investments for telco cloud assets and licenses. Swisscom plans to increase fibre-optic coverage (FTTH) to around 57% by the end of 2025, and to 75–80% by the end of 2030.

Italy

The revenue of the Italy segment decreased year-on-year slightly by 0.4% or EUR 8 million to EUR 1,818 million. Revenue from residential customers decreased by 2.6% or EUR 23 million to EUR 854 million. The lower revenue of telecommunications services due to a declining customer base could not be compensated. Revenue from business customers increased by 2.8% or EUR 22 million to EUR 799 million, mainly driven by the higher revenue from IT services and sales of hardware and software. Revenue from wholesale business decreased by 4.1% or EUR 7 million to EUR 164 million. Higher revenue due to the increasing number of wholesale lines was over­compensated by lower non-core revenue. Competition in the Italian markets remained fierce. The number of mobile access lines stayed almost stable at 20.2 million. The decreasing residential customer base (–428,000) was compensated by the increasing business customer base (+469,000). The customer base in the broadband retail business dropped by 3.4% or 209,000 to 5.8 million. The challenging market environment led to a decrease of 206,000 in the residential customer base, whereas the business customer base remained nearly stable (–0.3%). The number of wholesale broadband lines provided to other operators rose by 34.4% or 248,000 to 968,000.

Operating expenses increased by EUR 50 million (+3.7%). Direct costs grew by EUR 33 million or 4.0% driven by higher revenue for IT services and hardware and software sales as well as higher costs for the use of networks from other operators. Indirect costs increased by EUR 17 million or 3.3% due to higher fees and higher network costs. In the first quarter of 2025 operating expenses included integration costs in the amount of EUR 6 million. The operating result before depreciation and amortisation after lease expense (EBITDAaL) adjusted for this amount decreased by EUR 52 million (–10.8%) as a result of higher operating expenses. Capital expenditure decreased by EUR 95 million or 19.9% to EUR 382 million. In the first quarter of 2025 capital expenditure included EUR 8 million due to the consolidation of INWIT mobile towers (prior year: EUR 46 million) and EUR 3 million in expenditure on integration costs. Adjusted by those items, capital expenditure decreased by EUR 60 million or 13.9%, mainly as a result of lower IT investments.

Others

Revenue in the Others segment was up by 2.8% or CHF 7 million year-on-year to CHF 259 million, due primarily to higher revenue for cablex construction services. The operating result before depreciation and amortisation after lease expense (EBITDAaL) increased by 3.3% or CHF 1 million to CHF 31 million. The profit margin increased slightly to 12.0% (prior year: 11.9%).

Depreciation and amortisation, non-operating results

Net income fell by CHF 88 million compared to the prior year to CHF 367 million (–19.3%). The decrease is due, among other things, to a lower contribution from Switzerland (CHF –30 million) as a result of a decline in revenue and one-off items in the previous year (CHF –22 million). In addition, higher net interest expense on debt (CHF –39 million) and on lease liabilities (CHF –14 million) as a result of the acquisition of Vodafone Italia reduced net income. The contribution from Italy (CHF +52 million) was compensated by the amortisation of intangible assets recognised as part of the provisional purchase price allocation (CHF –63 million). Income tax expense amounted to CHF 75 million (prior year: CHF 99 million), which corresponds to an effective income tax rate of 17.0% (previous year: 17.9%).

Cash flows

Operating free cash flow rose by CHF 9 million to CHF 498 million (+1.8%). Free cash flow grew by CHF 273 million to CHF 471 million due to an improvement in net working capital. Net working capital improved mainly as a result of a decrease in trade receivables and an increase in trade payables. In the previous year, exceptional effects (prepayments for maintenance contracts and licences and increase in inventory) as well as an increase in trade receivables and a decrease in trade payables deteriorated the net working capital.

Net asset position

Net operating assets remain unchanged at CHF 28.9 bil­lion compared with the end of 2024. The CHF 0.4 bil­lion increase in equity to CHF 12.6 bil­lion corresponds to the net income for the first quarter of 2025. The equity ratio rose from 32.3% to 33.8% compared with the end of 2024. On 26 March 2025, the Annual General Meeting of Swisscom Ltd approved the payment of an unchanged dividend of CHF 22 gross per share. A total dividend amount of CHF 1,140 million was paid out on 1 April 2025.

Net debt

Net debt consists of financial liabilities and lease liabilities less cash and cash equivalents, listed debt instruments and derivative financial instruments.

As at 31 March 2025, the average interest expense on financial liabilities was 1.95%, the average residual term to maturity was 5.6 years, and the share of fixed-interest-bearing financial liabilities was 93%. Swisscom also has two committed credit lines totalling CHF 2.9 bil­lion, which have not been used. At the end of 2024, the pro forma ratio net debt/EBITDA amounted to 2.4x. Swisscom expects its leverage ratio to remain unchanged at 2.4x at the end of 2025.

Consolidated statement of comprehensive income (unaudited)