In CHF million, except where indicated   2018   2017   Change
Net revenue 1   11,714   11,662   0.4%
Operating income before depreciation and amortisation (EBITDA) 1   4,213   4,295   –1.9%
EBITDA as % of net revenue   36.0   36.8    
Operating income (EBIT)   2,069   2,131   –2.9%
Net income   1,521   1,568   –3.0%
Earnings per share (in CHF)   29.48   30.31   –2.7%
Operating free cash flow   1,745   2,159   –19.2%
Capital expenditure in property, plant and equipment and intangible assets   2,404   2,378   1.1%
Net debt at end of year   7,393   7,447   –0.7%
Full-time equivalent employees at end of year (number)   19,845   20,506   –3.2%
1 Swisscom has applied IFRS 15 “Revenue from Contracts with Customers” since 1 January 2018. The prior year’s figures have not been adjusted. If IFRS 15 had not been applied, net revenue in 2018 would be CHF 5 million lower and EBITDA CHF 43 million higher.

Swisscom’s net revenue rose by 0.4% to CHF 11,714 million. On the basis of constant exchange rates, it fell by 0.3%. Revenue in the Swiss core business declined as a result of intense competition and market saturation by CHF 241 million or 2.7% to CHF 8,817 million. Revenue from telecommunications services fell by CHF 242 million or 3.7%, which can be attributed to price pressure and declining revenue from fixed-line telephony. The number of revenue generating units (RGU) dropped by 2.3% compared with the previous year to 11.9 million. The Italian subsidiary Fastweb reported strong revenue and customer growth. Revenue rose by EUR 160 million or 8.2% to EUR 2,104 million, while the number of broadband customers increased by 96,000 or 3.9% to 2.55 million and the number of mobile lines climbed by 367,000 or 34.5% to 1.43 million.

Operating income before depreciation and amortisation (EBITDA) declined by 1.9% to CHF 4,213 million. In the previous year, results were impacted by non-recurring items, including one-off income from legal disputes at Fastweb amounting to CHF 102 million and net expenses associated with headcount reductions in the Swiss business of CHF 61 million. Furthermore, in 2018, 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 CHF 137 million or 3.9% on a like-for-like basis. The drop in revenue was partially offset by savings in indirect costs. At Fastweb, EBITDA rose in local currency by 5.6% on a like-for-like basis as a result of the growth in revenue.

Consolidated operating income (EBIT) contracted by CHF 62 million or 2.9% to CHF 2,069 million, while net income was down CHF 47 million or 3.0% to CHF 1,521 million. Payment of an unchanged dividend of CHF 22 per share for the 2018 financial year will be proposed to the Annual General Meeting.

Capital expenditure rose by CHF 26 million or 1.1% to CHF 2,404 million. Progress continues to be made on expanding the broadband networks. In Switzerland, capital expenditure for the expansion of the broadband networks remained at a high level. With other investments declining, capital expenditure in Switzerland fell overall by CHF 33 million or 2.0% to CHF 1,645 million. Capital expenditure at Fastweb rose by EUR 35 million or 5.6% to EUR 657 million. This rise resulted from the acquisition of mobile radio frequencies.

Operating free cash flow declined by CHF 414 million or 19.2% to CHF 1,745 million, mainly due to the movement in net working capital, which, unlike the previous year, was negative. At CHF 7,393 million, net debt was CHF 54 million lower than at the end of 2017, while the ratio of net debt to EBITDA rose from 1.7 to 1.8.

Headcount decreased year-on-year by 661 FTEs or 3.2% to 19,845 FTEs. In Switzerland, headcount fell by 541 FTEs or 3.1% to 17,147 FTEs as a result of the declining core business. Over half of the reduction was offset by natural fluctuation and vacancy management.

For 2019, Swisscom expects net revenue of around CHF 11.4 bil­lion, EBITDA of over CHF 4.3 bil­lion and capital expenditure of around CHF 2.3 bil­lion. Subject to achieving its targets, Swisscom will propose payment of an unchanged attractive dividend of CHF 22 per share for the 2019 financial year at the 2020 Annual General Meeting.