In CHF million, except where indicated   2019   2018   Change
Net revenue   11,453   11,714   –2.2%
Operating income before de­pre­ci­a­tion and amor­ti­sa­tion (EBITDA) 1   4,358   4,213   3.4%
EBITDA as % of net revenue   38.1   36.0    
Operating income (EBIT)   1,910   2,069   –7.7%
Net income   1,669   1,521   9.7%
Earnings per share (in CHF)   32.28   29.48   9.5%
Operating free cash flow proxy   1,626   1,809   –10.1%
Capital ex­pen­di­ture   2,438   2,404   1.4%
Net debt incl. lease liabilities 1   8,785   7,393   18.8%
Equity ratio 1   36.6   36.3    
Full-time equivalent employees at end of year   19,317   19,845   –2.7%
1 Swisscom has been applying IFRS 16 “Leases” since 1 January 2019. The prior year’s figures have not been adjusted. As a con­se­quence of the first-time
ap­pli­ca­tion of IFRS 16, ad­di­tional lease liabilities and right-of-use assets of
CHF 1,238 million were reported with effect from 1 January 2019. As a result, the equity ratio fell to 34.4% as at 1 January 2019. EBITDA of the previous year includes expenses of CHF 207 million from operating leasing in accordance with IAS 17.

Swisscom’s net revenue decreased by 2.2% to CHF 11,453 million. On the basis of constant exchange rates, the decrease was 1.5%. The year-on-year comparison of operating income before de­pre­ci­a­tion and amor­ti­sa­tion (EBITDA) is affected by the ap­pli­ca­tion of new re­quire­ments for the recognition of leases (IFRS 16). At CHF 4,358 million, reported EBITDA was up by 3.4% or CHF 145 million, and was unchanged from the previous year on an adjusted basis and at constant exchange rates (+0.1%). Net income increased by 9.7% to CHF 1,669 million due to one-off effects in income tax expense. Payment of an unchanged dividend of CHF 22 per share for the 2019 financial year will be proposed to the Annual General Meeting.

In the Swiss core business, revenue fell by CHF 243 million or 2.8% to CHF 8,563 million as a result of ongoing price pressure and the decline in the number of con­nec­tions in fixed-line tele­phony. The number of revenue generating units (RGU) dropped by 1.7% compared with the previous year to 11.5 million. In contrast, revenue at Italian subsidiary Fastweb increased in local currency by EUR 114 million or 5.4% to EUR 2,218 million, driven by revenue growth in business with residential and business cus­tomers. The number of cus­tomers in the broad­band business rose by 3.5% to 2.64 million and in mobile tele­phony by 26.1% to 1.81 million.

In the Swiss core business, EBITDA decreased by 2.4% to CHF 3,491 million; on an adjusted basis the decline was 0.6%. This decrease, which is attributable to lower revenue, was largely offset by ongoing cost-cutting mea­sures. At Fastweb, EBITDA rose in local currency by 7.8% to EUR 750 million as a result of the growth in revenue; on an adjusted basis the increase was 5.2%.

Swisscom’s capital ex­pen­di­ture increased by 1.4% or CHF 34 million to CHF 2,438 million. This figure includes CHF 196 million paid for mobile radio fre­quen­cies which Swisscom acquired at auction in Switzer­land. The fre­quen­cies were allocated in April 2019 and will remain with Swisscom until 2034. Due to the expenses for the mobile fre­quen­cies acquired, capital ex­pen­di­ture rose in Switzer­land to CHF 1,770 million. At Fastweb, capital ex­pen­di­ture decreased by 8.8% or EUR 58 million to EUR 599 million. The previous year’s figure included expenses of EUR 64 million for the acquisition of mobile radio fre­quen­cies.

Operating free cash flow proxy declined by CHF 183 million or 10.1% to CHF 1,626 million, mainly as a result of expenses of CHF 196 million for mobile radio fre­quen­cies in Switzer­land. Net debt including lease liabilities amounted to CHF 8,785 million, while the net debt/EBITDA ratio remained stable at 2.0.

The number of employees declined by 2.7% year-on-year, to 19,317 FTEs. In Switzer­land, headcount fell by 519 FTEs or 3.0% to 16,628 FTEs as a result of the declining core business. Over half of the reduction was achieved through natural fluctuation and vacancy management.

For 2020, Swisscom expects net revenue of around CHF 11.1 bil­lion, EBITDA of around 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 2020 financial year at the 2021 Annual General Meeting.