Segment results
In CHF million |
2nd quarter 2024 |
2nd quarter 2023 |
Change |
1st half-year 2024 |
1st half-year 2023 |
Change |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue 1 | ||||||||||||
| Residential Customers | 1,079 | 1,099 | –1.8% | 2,157 | 2,236 | –3.5% | ||||||
| Business Customers | 785 | 760 | 3.3% | 1,558 | 1,528 | 2.0% | ||||||
| Wholesale | 126 | 135 | –6.7% | 262 | 269 | –2.6% | ||||||
| Infrastructure & Support Functions | 19 | 19 | –% | 38 | 38 | –% | ||||||
| Intersegment elimination | (14) | (14) | –% | (27) | (27) | –% | ||||||
| Swisscom Switzerland | 1,995 | 1,999 | –0.2% | 3,988 | 4,044 | –1.4% | ||||||
| Fastweb | 663 | 617 | 7.5% | 1,286 | 1,236 | 4.0% | ||||||
| Other Operating Segments | 285 | 255 | 11.8% | 537 | 495 | 8.5% | ||||||
| Intersegment elimination | (192) | (168) | 14.3% | (357) | (325) | 9.8% | ||||||
| Total revenue | 2,751 | 2,703 | 1.8% | 5,454 | 5,450 | 0.1% | ||||||
| Operating income before depreciation and amortisation (EBITDA) 1 | ||||||||||||
| Residential Customers | 744 | 748 | –0.5% | 1,492 | 1,502 | –0.7% | ||||||
| Business Customers | 320 | 330 | –3.0% | 645 | 672 | –4.0% | ||||||
| Wholesale | 65 | 86 | –24.4% | 158 | 166 | –4.8% | ||||||
| Infrastructure & Support Functions | (256) | (248) | 3.2% | (477) | (480) | –0.6% | ||||||
| Intersegment elimination | 1 | (1) | –% | – | – | –% | ||||||
| Swisscom Switzerland | 874 | 915 | –4.5% | 1,818 | 1,860 | –2.3% | ||||||
| Fastweb | 218 | 206 | 5.8% | 400 | 393 | 1.8% | ||||||
| Other Operating Segments | 38 | 19 | 100.0% | 71 | 51 | 39.2% | ||||||
| Reconciliation pension cost 2 | 5 | 10 | –% | 9 | 19 | –% | ||||||
| Intersegment elimination | (11) | (11) | –% | (19) | (20) | –5.0% | ||||||
| Total EBITDA | 1,124 | 1,139 | –1.3% | 2,279 | 2,303 | –1.0% | ||||||
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1 As of 1 January 2024 Swisscom has made adjustments to the financial management. The previous year's figures have been adjusted accordingly. For further information, see note 2 to the interim financial statements.
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2 Operating income of segments includes ordinary employer contributions as pension fund expense. The difference to the pension cost according to IAS 19 is recognised as a reconciliation item.
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Swisscom’s reporting focuses on the operating divisions Swisscom Switzerland and Fastweb. The other business divisions are grouped together under Other Operating Segments. Swisscom Switzerland comprises the customer segments Residential Customers, Business Customers and Wholesale, along with the Infrastructure & Support Functions business division. Fastweb is a telecommunications provider for residential and business customers in Italy. Other Operating Segments primarily comprises Swisscom Directories Ltd (localsearch), Swisscom Broadcast Ltd (radio transmitters) and cablex Ltd (network construction and maintenance).
The Infrastructure & Support Functions business division does not charge any network costs or management fees to other segments for its services. The remaining services between the segments are charged at market prices. Network costs in Switzerland are budgeted, monitored and controlled by the Infrastructure & Support Functions segment, which is managed as a cost centre. For this reason, no revenue is credited to the Infrastructure & Support Functions segment within the segment reporting, with the exception of the rental and administration of buildings and vehicles. The results of the Residential Customers, Business Customers and Wholesale segments thus correspond to a contribution margin before network costs.
Swisscom Switzerland
In CHF million, except where indicated |
2nd quarter 2024 |
2nd quarter 2023 |
Change |
1st half-year 2024 |
1st half-year 2023 |
Change |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue and operating income before depreciation and amortisation (EBITDA) | ||||||||||||
| Telecom services | 1,324 | 1,348 | –1.8% | 2,648 | 2,702 | –2.0% | ||||||
| IT services | 304 | 284 | 7.0% | 601 | 567 | 6.0% | ||||||
| Merchandise | 195 | 175 | 11.4% | 382 | 392 | –2.6% | ||||||
| Wholesale | 123 | 132 | –6.8% | 257 | 263 | –2.3% | ||||||
| Revenue other | 35 | 45 | –22.2% | 70 | 90 | –22.2% | ||||||
| External revenue | 1,981 | 1,984 | –0.2% | 3,958 | 4,014 | –1.4% | ||||||
| Intersegment revenue | 14 | 15 | –6.7% | 30 | 30 | –% | ||||||
| Revenue | 1,995 | 1,999 | –0.2% | 3,988 | 4,044 | –1.4% | ||||||
| Direct costs | (402) | (392) | 2.6% | (782) | (815) | –4.0% | ||||||
| Indirect costs | (719) | (692) | 3.9% | (1,388) | (1,369) | 1.4% | ||||||
| Operating expense | (1,121) | (1,084) | 3.4% | (2,170) | (2,184) | –0.6% | ||||||
| EBITDA | 874 | 915 | –4.5% | 1,818 | 1,860 | –2.3% | ||||||
| Margin as % of revenue | 43.8 | 45.8 | 45.6 | 46.0 | ||||||||
| Operating free cash flow | ||||||||||||
| EBITDA | 874 | 915 | –4.5% | 1,818 | 1,860 | –2.3% | ||||||
| Lease expense | (57) | (55) | 3.6% | (115) | (111) | 3.6% | ||||||
| EBITDA after lease expense (EBITDAaL) | 817 | 860 | –5.0% | 1,703 | 1,749 | –2.6% | ||||||
| Capital expenditure | (420) | (427) | –1.6% | (865) | (821) | 5.4% | ||||||
| Operating free cash flow | 397 | 433 | –8.3% | 838 | 928 | –9.7% | ||||||
| Operational data in thousand and headcount | ||||||||||||
| Fixed telephony access lines | 1,181 | 1,271 | –7.1% | |||||||||
| Broadband access lines retail | 1,982 | 2,012 | –1.5% | |||||||||
| TV access lines | 1,511 | 1,549 | –2.5% | |||||||||
| Mobile access lines | 6,270 | 6,259 | 0.2% | |||||||||
| Access lines wholesale | 712 | 682 | 4.4% | |||||||||
| Full-time equivalent employees | 13,361 | 13,061 | 2.3% | |||||||||
Swisscom Switzerland’s revenue decreased by 1.4% or CHF 56 million to CHF 3,988 million. Revenue from telecoms services decreased by 2.0% or CHF 54 million to CHF 2,648 million. Of this decline, CHF 31 million (–1.6%) was attributable to the Residential Customers segment and CHF 23 million (–3.0%) to the Business Customers segment. Revenue from merchandise dipped by CHF 10 million or 2.6% to CHF 382 million. Of this decline, CHF 29 million (–12.4%) was attributable to the Residential Customers segment due to the lower number of smartphones sold. The Business Customers segment reported an increase of CHF 19 million (+11.9%) due to customer projects. Revenue from IT services rose by 6.0% to CHF 601 million. In an intense market environment, there was a reduction in the number of connections for broadband (–1.5%) and TV (–2.5%), while the number of connections for mobile telephony increased slightly (+0.2%). In mobile communications, the customer structure changed due to an increase in postpaid lines (+102,000) and a similarly pronounced decrease in prepaid lines (–91,000). The share of secondary and third-party brands in the Residential Customers segment rose from 30% to 32%. The number of connections for fixed network telephony dropped (–7.1%) as a result of its substitution with mobile telephony.
The operating expense decreased by 0.6% or CHF 14 million. Direct costs fell by CHF 33 million or 4.0%. There was a drop in both the cost of purchasing merchandise, and subscriber acquisition and customer loyalty costs. Indirect costs rose by CHF 19 million (+1.4%), or by CHF 20 million if non-recurring items are left out of the equation. In telecommunications, cost savings of CHF 9 million were realised through efficiency improvement measures. By contrast, indirect costs in the area of IT services fell by CHF 29 million. Headcount increased by 2.3% year-on-year to 13,361 FTEs as a result of company acquisitions. Operating income before depreciation and amortisation (EBITDA) decreased by 2.3% or CHF 42 million to CHF 1,818 million. The cost-cutting measures partly compensated for the decline in revenue from telecoms services. A non-recurring item in the previous year also contributed to the drop in EBITDA. In the first half of 2023, provisions for legal proceedings in the amount of CHF 10 million (net) were reversed with an effect on EBITDA in the Wholesale segment. Capital expenditure increased by 5.4% or CHF 44 million to CHF 865 million mainly due to measures to step up the expansion of the access network with optical fibre and greater investment in the mobile network. 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.
Fastweb
In EUR million, except where indicated |
2nd quarter 2024 |
2nd quarter 2023 |
Change |
1st half-year 2024 |
1st half-year 2023 |
Change |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue and operating income before depreciation and amortisation (EBITDA) | ||||||||||||
| Residential customers | 290 | 291 | –0.3% | 578 | 580 | –0.3% | ||||||
| Corporate customers | 295 | 266 | 10.9% | 579 | 527 | 9.9% | ||||||
| Wholesale | 97 | 70 | 38.6% | 181 | 141 | 28.4% | ||||||
| External revenue | 682 | 627 | 8.8% | 1,338 | 1,248 | 7.2% | ||||||
| Intersegment revenue | – | 1 | –100.0% | 2 | 3 | –33.3% | ||||||
| Revenue | 682 | 628 | 8.6% | 1,340 | 1,251 | 7.1% | ||||||
| Direct costs | (328) | (282) | 16.3% | (648) | (572) | 13.3% | ||||||
| Indirect costs | (129) | (136) | –5.1% | (275) | (281) | –2.1% | ||||||
| Operating expense | (457) | (418) | 9.3% | (923) | (853) | 8.2% | ||||||
| EBITDA | 225 | 210 | 7.1% | 417 | 398 | 4.8% | ||||||
| Margin as % of revenue | 33.0 | 33.4 | 31.1 | 31.8 | ||||||||
| Operating free cash flow | ||||||||||||
| EBITDA | 225 | 210 | 7.1% | 417 | 398 | 4.8% | ||||||
| Lease expense | (12) | (14) | –14.3% | (25) | (27) | –7.4% | ||||||
| EBITDA after lease expense (EBITDAaL) | 213 | 196 | 8.7% | 392 | 371 | 5.7% | ||||||
| Capital expenditure | (150) | (144) | 4.2% | (307) | (297) | 3.4% | ||||||
| Operating free cash flow | 63 | 52 | 21.2% | 85 | 74 | 14.9% | ||||||
| Operational data in thousand and headcount | ||||||||||||
| Broadband access lines retail | 2,557 | 2,631 | –2.8% | |||||||||
| Broadband access lines wholesale | 778 | 532 | 46.2% | |||||||||
| Mobile access lines | 3,724 | 3,343 | 11.4% | |||||||||
| Full-time equivalent employees | 3,251 | 3,117 | 4.3% | |||||||||
Fastweb’s revenue rose year-on-year by 7.1% or EUR 89 million to EUR 1,340 million. Competition remained fierce. The customer base in the fixed-network business (retail and wholesale) grew by 5.4% overall to 3.34 million. While the customer base in the retail segment fell by 2.8% to 2.56 million due to the challenging market environment, the number of ultra-fast broadband connections provided by Fastweb to other operators (wholesale business) rose to 778,000 (+46.2%). Among retail customers, the share of ultra-fast broadband connections increased by 2 percentage points to 90%. The number of mobile access lines increased by 381,000 (+11.4%) to 3.72 million, with bundled offerings continuing to play an important role here. 43% of broadband customers used a bundled offering combining fixed network and mobile. Revenue from residential customers was almost unchanged year-on-year at EUR 578 million (–0.3%). The lower revenue in the fixed-network business was offset by an increase in the mobile communications segment due, with its larger customer base. Revenue from business customers increased by 9.9% or EUR 52 million to EUR 579 million, driven by the higher revenue from IT services. Revenue from wholesale business increased by 28.4% or EUR 40 million to EUR 181 million due to growth in broadband connections.
Operating expenses increased by EUR 70 million (+8.2%). Operating expenses in the previous year had been influenced by the recognition of provisions for legal proceedings in the first half of 2023 in the amount of EUR 13 million. Excluding this effect, operating expenses rose by EUR 83 million (+9.9%) and operating income before depreciation and amortisation (EBITDA) by EUR 6 million (+1.5%) due to revenue growth. Capital expenditure increased by 3.4% to EUR 307 million due to an increase in customer-driven investment. Headcount increased by 4.3% or 134 FTEs to 3,251 FTEs as the company took on external staff and the growth created a need for more personnel.
Other Operating Segments
In CHF million, except where indicated |
2nd quarter 2024 |
2nd quarter 2023 |
Change |
1st half-year 2024 |
1st half-year 2023 |
Change |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue and operating income before depreciation and amortisation (EBITDA) | ||||||||||||
| External revenue | 109 | 104 | 4.8% | 213 | 203 | 4.9% | ||||||
| Intersegment revenue | 176 | 151 | 16.6% | 324 | 292 | 11.0% | ||||||
| Revenue | 285 | 255 | 11.8% | 537 | 495 | 8.5% | ||||||
| Operating expense | (247) | (236) | 4.7% | (466) | (444) | 5.0% | ||||||
| EBITDA | 38 | 19 | 100.0% | 71 | 51 | 39.2% | ||||||
| Margin as % of revenue | 13.3 | 7.5 | 13.2 | 10.3 | ||||||||
| Operating free cash flow | ||||||||||||
| EBITDA | 38 | 19 | 100.0% | 71 | 51 | 39.2% | ||||||
| Lease expense | (2) | (3) | –33.3% | (5) | (5) | –% | ||||||
| EBITDA after lease expense (EBITDAaL) | 36 | 16 | 125.0% | 66 | 46 | 43.5% | ||||||
| Capital expenditure | (9) | (10) | –10.0% | (17) | (18) | –5.6% | ||||||
| Operating free cash flow | 27 | 6 | 350.0% | 49 | 28 | 75.0% | ||||||
| Headcount | ||||||||||||
| Full-time equivalent employees | 3,324 | 3,319 | 0.2% | |||||||||
Revenue in Other Operating Segments was up by 8.5% or CHF 42 million year-on-year to CHF 537 million, due primarily to higher revenue for cablex construction services. Operating income before depreciation and amortisation (EBITDA) was up by 39.2% or CHF 20 million to CHF 71 million due to one-off charges in connection with customer projects in the prior-year period. The profit margin rose to 13.2% (previous year: 10.3%). Headcount was at 3,324 full-time equivalents, almost on a par with the previous year (+0.2%).