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3rd Interim Report 2024
3rd Interim Report 2024
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3rd Interim Report 2024
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Table of contents for the 3rd Interim Report 2024 report

3rd Interim Report 2024
KPIsFinancial review
SummarySegment resultsDepreciation and amortisation, non operating resultsCash flowsNet asset positionOutlook
Consolidated interim financial statements
Consolidated statement of comprehensive income (unaudited)Consolidated balance sheet (unaudited)Consolidated statement of cash flows (unaudited)Consolidated statement of changes in equity (unaudited)
Notes to the interim financial statements
About this report1 Accounting policies2 Segment information3 Operating costs4 Dividend5 Financial liabilities6 Financial result7 Net current operating assets8 Provisions and contingent liabilities9 Company acquisition of Vodafone Italia10 Sale of shares in FiberCop
Alternative performance measures
Reconciliation of alternative performance measures
Further Information
Share informationQuarterly review 2023 and 2024Forward looking statements
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Segment results


In CHF million
  3rd quarter
2024
  3rd quarter
2023
 
Change
  1.01.–30.09.
2024
  1.01.–30.09.
2023
 
Change
                         
Revenue 1
Residential Customers   1,090   1,111   –1.9%   3,247   3,347   –3.0%
Business Customers   752   765   –1.7%   2,310   2,293   0.7%
Wholesale   133   142   –6.3%   395   411   –3.9%
Infrastructure & Support Functions   19   19   –%   57   57   –%
Intersegment elimination   (16)   (14)   14.3%   (43)   (41)   4.9%
Swisscom Switzerland   1,978   2,023   –2.2%   5,966   6,067   –1.7%
Fastweb   654   637   2.7%   1,940   1,873   3.6%
Other Operating Segments   283   266   6.4%   820   761   7.8%
Intersegment elimination   (196)   (174)   12.6%   (553)   (499)   10.8%
Total revenue   2,719   2,752   –1.2%   8,173   8,202   –0.4%
                         
Operating income before depreciation and amortisation (EBITDA) 1
Residential Customers   757   760   –0.4%   2,249   2,262   –0.6%
Business Customers   331   338   –2.1%   976   1,010   –3.4%
Wholesale   57   53   7.5%   215   219   –1.8%
Infrastructure & Support Functions   (239)   (239)   –%   (716)   (719)   –0.4%
Intersegment elimination   –   1   –100.0%   –   1   –100.0%
Swisscom Switzerland   906   913   –0.8%   2,724   2,773   –1.8%
Fastweb   219   221   –0.9%   619   614   0.8%
Other Operating Segments   41   42   –2.4%   112   93   20.4%
Reconciliation pension cost 2   5   9   –44.4%   14   28   –50.0%
Intersegment elimination   (12)   (11)   9.1%   (31)   (31)   –%
Total EBITDA   1,159   1,174   –1.3%   3,438   3,477   –1.1%
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.
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.

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. This business division 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
  3rd quarter
2024
  3rd quarter
2023
 
Change
  1.01.–30.09.
2024
  1.01.–30.09.
2023
 
Change
                         
Revenue and operating income before depreciation and amortisation (EBITDA)
Telecom services   1,328   1,352   –1.8%   3,976   4,054   –1.9%
IT services   296   287   3.1%   897   854   5.0%
Merchandise   169   191   –11.5%   551   583   –5.5%
Wholesale   131   139   –5.8%   388   402   –3.5%
Revenue other   39   40   –2.5%   109   130   –16.2%
External revenue   1,963   2,009   –2.3%   5,921   6,023   –1.7%
Intersegment revenue   15   14   7.1%   45   44   2.3%
Revenue   1,978   2,023   –2.2%   5,966   6,067   –1.7%
Direct costs   (398)   (428)   –7.0%   (1,180)   (1,243)   –5.1%
Indirect costs   (674)   (682)   –1.2%   (2,062)   (2,051)   0.5%
Operating expense   (1,072)   (1,110)   –3.4%   (3,242)   (3,294)   –1.6%
EBITDA   906   913   –0.8%   2,724   2,773   –1.8%
Margin as % of revenue   45.8   45.1       45.7   45.7    
                 
Operating free cash flow
EBITDA   906   913   –0.8%   2,724   2,773   –1.8%
Lease expense   (59)   (58)   –%   (174)   (169)   3.0%
EBITDA after lease expense (EBITDAaL)   847   855   –0.9%   2,550   2,604   –2.1%
Capital expenditure   (437)   (376)   16.2%   (1,302)   (1,197)   8.8%
Operating free cash flow   410   479   –14.4%   1,248   1,407   –11.3%
                 
Operational data in thousand and headcount
Fixed telephony access lines               1,159   1,249   –7.2%
Broadband access lines retail               1,973   2,009   –1.8%
TV access lines               1,499   1,541   –2.7%
Mobile access lines               6,279   6,264   0.2%
Access lines wholesale               722   683   5.7%
Full-time equivalent employees               13,400   13,218   1.4%

Swisscom Switzerland’s revenue decreased by 1.7% or CHF 101 million to CHF 5,966 million. Revenue from telecoms services declined by 1.9% or CHF 78 million to CHF 3,976 million. Of this decline, CHF 44 million (–1.5%) was attributable to the Residential Customers segment and CHF 34 million (–2.9%) to the Business Customers segment. Revenue from merchandise dipped by CHF 32 million or 5.5% to CHF 551 million. Of this decline, CHF 38 million (–11.1%) was attributable to the Residential Customers segment due to the lower number of smartphones sold. The Business Customers segment reported a slight increase of CHF 6 million (+2.5%). Revenue from IT services rose by 5.0% to CHF 897 million. In an intense market environment, there was a reduction in the number of connections for broadband (–1.8%) and TV (–2.7%), 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 (–87,000). The share of secondary and third-party brands in the Residential Customers segment rose from 30% to 33%. The number of connections for fixed network telephony dropped (–7.2%) as a result of its substitution with mobile telephony.

The operating expense decreased by 1.6% or CHF 52 million. Direct costs fell by CHF 63 million or 5.1%. There was a drop in both the cost of purchasing merchandise, and subscriber acquisition and customer loyalty costs. Indirect costs rose by CHF 11 million (+0.5%), or by CHF 7 million if non-recurring items are left out of the equation. In telecommunications, cost savings of CHF 23 million were realised through efficiency improvement measures. By contrast, indirect costs in the area of IT services increased by CHF 30 million. Headcount increased by 1.4% year-on-year to 13,400 FTEs as a result of company acquisitions. Operating income before depreciation and amortisation (EBITDA) decreased by 1.8% or by CHF 49 million to CHF 2,724 million. The EBITDA decline was CHF 45 million (–1.6%) without taking non-recurring items in account. Cost-cutting measures partly compensated for the decline in revenue from telecoms services. Capital expenditure increased by 8.8% or CHF 105 million to CHF 1,302 million mainly due to higher capital expenditure in the expansion of the access network with optical fibre and increased 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
  3rd quarter
2024
  3rd quarter
2023
 
Change
  1.01.–30.09.
2024
  1.01.–30.09.
2023
 
Change
                         
Revenue and operating income before depreciation and amortisation (EBITDA)
Residential customers   292   289   1.0%   870   869   0.1%
Corporate customers   304   287   5.9%   883   814   8.5%
Wholesale   92   83   10.8%   273   224   21.9%
External revenue   688   659   4.4%   2,026   1,907   6.2%
Intersegment revenue   3   1   200.0%   5   4   25.0%
Revenue   691   660   4.7%   2,031   1,911   6.3%
Direct costs   (348)   (315)   10.5%   (996)   (887)   12.3%
Indirect costs   (112)   (116)   –3.4%   (387)   (397)   –2.5%
Operating expense   (460)   (431)   6.7%   (1,383)   (1,284)   7.7%
EBITDA   231   229   0.9%   648   627   3.3%
Margin as % of revenue   33.4   34.7       31.9   32.8    
                 
Operating free cash flow
EBITDA   231   229   0.9%   648   627   3.3%
Lease expense   (13)   (14)   –7.1%   (38)   (41)   –7.3%
EBITDA after lease expense (EBITDAaL)   218   215   1.4%   610   586   4.1%
Capital expenditure   (144)   (148)   –2.7%   (451)   (445)   1.3%
Operating free cash flow   74   67   10.4%   159   141   12.8%
           
Operational data in thousand and headcount
Broadband access lines retail               2,548   2,613   –2.5%
Broadband access lines wholesale               832   579   43.7%
Mobile access lines               3,816   3,428   11.3%
Full-time equivalent employees               3,266   3,146   3.8%

Fastweb’s revenue rose year-on-year by 6.3% or EUR 120 million to EUR 2,031 million. Competition remained fierce. The customer base in the fixed-network business (retail and wholesale) grew by 5.9% overall to 3.38 million. While the customer base in the retail segment fell by 2.5% to 2.55 million due to the challenging market environment, the number of ultra-fast broadband connections provided by Fastweb to other operators (wholesale business) rose to 832,000 (+43.7%). Among retail customers, the share of ultra-fast broadband connections increased by two percentage points to 91%. The number of mobile access lines increased by 388,000 (+11.3%) to 3.82 million, with bundled offerings continuing to play an important role here. 44% of broadband customers used a bundled offering combining fixed network and mobile. At EUR 870 million, residential customer revenue remained at almost the same level year-on-year (+0.1%). The lower revenue in the fixed-network business was offset by an increase in the mobile business due to the larger customer base. Revenue from business customers increased by 8.5% or EUR 69 million to EUR 883 million, driven by higher revenue in IT services. Revenue from wholesale business increased by 21.9% or EUR 49 million to EUR 273 million due to broadband access growth.

Operating expenses increased by EUR 99 million (+7.7%). 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. Without these items, the operating expense increased by EUR 112 million (+8.8%) and operating income before depreciation and amortisation (EBITDA) by EUR 8 million (+1.3%), largely due to revenue growth. Capital expenditure increased by 1.3% to EUR 451 million due to an increase in customer-driven investment. Headcount increased by 3.8% or 120 FTEs to 3,266 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
  3rd quarter
2024
  3rd quarter
2023
 
Change
  1.01.–30.09.
2024
  1.01.–30.09.
2023
 
Change
                         
Revenue and operating income before depreciation and amortisation (EBITDA)
External revenue   103   107   –3.7%   316   310   1.9%
Intersegment revenue   180   159   13.2%   504   451   11.8%
Revenue   283   266   6.4%   820   761   7.8%
Operating expense   (242)   (224)   8.0%   (708)   (668)   6.0%
EBITDA   41   42   –2.4%   112   93   20.4%
Margin as % of revenue   14.5   15.8       13.7   12.2    
                 
Operating free cash flow
EBITDA   41   42   –2.4%   112   93   20.4%
Lease expense   (3)   (3)   –%   (8)   (8)   –%
EBITDA after lease expense (EBITDAaL)   38   39   –2.6%   104   85   22.4%
Capital expenditure   (11)   (10)   10.0%   (28)   (28)   –%
Operating free cash flow   27   29   –6.9%   76   57   33.3%
           
Headcount
Full-time equivalent employees               3,314   3,322   –0.2%

Revenue in Other Operating Segments was up by 7.8% or CHF 59 million to CHF 820 million compared to the previous year, due primarily to higher revenue for cablex construction services. Operating income before depreciation and amortisation (EBITDA) was up by 20.4% or CHF 19 million to CHF 112 million due to one-off charges in connection with customer projects in the prior-year period. The profit margin stood at 13.7% (previous year: 12.2%). Headcount was at 3,314 full-time equivalents, almost on a par with the previous year (–0.2%).