Value-oriented business management
The ratio is primarily driven by revenue and margins as well as the growth expectations of equity investors. The remuneration system for Group Executive Board members contains a variable performance-related component, of which 25% is paid out in Swisscom shares subject to a three-year blocking period. Group Executive Board members may opt to receive up to 50% of the performance-related component in the form of shares. The variable performance-related component is based on factors including financial targets such as net revenue, EBITDA margin and operating free cash flow. The financial targets that determine the variable performance-related salary component and the Management Incentive Plan ensure that the interests of management are kept aligned with those of the shareholders.
|In CHF million, except where indicated||31.12.2015||31.12.2014|
|Non-controlling interests in subsidiary companies||5||3|
|Enterprise value (EV)||34,103||35,190|
|Operating income before depreciation and amortisation (EBITDA)||4,098||4,413|
|Ratio enterprise value/EBITDA||8.3||8.0|
With a ratio of 8.3 or 8.0, respectively, Swisscom’s relative market valuation is well above the average for comparable companies in Europe’s telecoms sector. The higher ratio is supported by the solid market position Swisscom has achieved thanks to a high level of investment and an attractive dividend policy, as well as the general business conditions in Switzerland such as lower interest rates and lower corporate income tax rates as compared to other European countries.