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Summary

Swisscom’s net revenue declined by CHF 35 million or 0.3% year-on-year to CHF 11,643 million. Revenue in the Swiss core business decreased by CHF 105 million or 1.1% to CHF 9,440 million. While revenue from telecommunications services fell by CHF 124 million or 1.8% as a result of increasing competitive pressure and falling roaming prices, revenue in the solutions business with corporate customers reported an increase of CHF 31 million or 2.9%. The number of revenue generating units (RGU) in Swiss core business fell by 96,000 or 0.8% to 12.4 million as a result of market saturation. Nevertheless, the company maintained or, as in the case of Swisscom TV, even increased its market shares. As a result of customer growth, the revenue of Italian subsidiary Fastweb was EUR 59 million or 3.4% higher at EUR 1,795 million. The number of subscribers to Fastweb’s broadband business grew by 154,000 or 7.0% year-on-year to 2.4 million.

Operating income before depreciation and amortisation (EBITDA) was CHF 195 million or 4.8% higher at CHF4,293million. Excluding non-recurring itemsand on the basis of constant exchange rates, EBITDA fell by CHF 54 million or 1.2%. On a like-for-like basis, EBITDA in the Swiss core business decreased by CHF125million or 3.2%, and at Fastweb it rose by EUR 45 million or 8.0%. Net income increased by CHF 242 million or 17.8% to CHF 1,604 million, largely due to non-recurring items. Payment of an unchanged dividend of CHF 22 per share for the 2016 financial year will be proposed to the Annual General Meeting.

At CHF 2,416 million, capital expenditure was nearly on a par with the previous year (+0.3%). In Switzerland, capital expenditure declined by CHF 48 million or 2.6% to CHF 1,774 million. At the end of 2016, more than 3.5 million homes and businesses had been connected to ultrafast broadband (speeds in excess of 50Mbps). At Fastweb, capital expenditure increased by EUR 40 million or 7.4% to EUR 581 million due to the continuing expansion of the broadband network.

Operating free cash flow declined by CHF 53 million or 2.9% to CHF 1,791 million. This decline was mainly due to the payment of the Competition Commission penalty of CHF 186 million imposed as part of the ongoing proceedings regarding broadband services. Excluding this payment, operating free cash flow would have risen by CHF 133 million or 7.2%. Net debt decreased by CHF 196 million or 2.4% to CHF 7,846 million as compared to the end of 2015. The ratio of net debt to EBITDA declined from 2.0 to 1.8.

Headcount at Swisscom was reduced by 510 full-time equivalent positions or 2.4% year-on-year to 21,127 FTEs. The workforce in Switzerland declined by 593 FTEs or 3.1% to 18,372 FTEs, with the reduction attributable to efficiency measures more than offsetting the increase in the number of positions in the solutions business with corporate customers as well as the recruitment of external workforce. Fastweb increased its workforce by 2.8% to 2,468 FTEs.

For 2017, Swisscom expects net revenue of around CHF 11.6 bil­lion, EBITDA of around CHF 4.2 bil­lion and capital expenditure of some CHF 2.4 bil­lion. For Swisscom (excluding Fastweb), a slight decline in revenue is expected due to high competition and price pressure. A slight increase in revenue is expected for Fastweb. EBITDA for Swisscom, excluding Fastweb, is expected to be around CHF 100 million lower year-on-year. The reduction in EBITDA is attributable to price pressure and declines in the number of fixed-line telephony connections. In addition, the costs for roaming are expected to increase. EBITDA will be positively affected by cost savings. Fastweb’s EBITDA is expected to be slightly higher. Capital expenditure in Switzerland and at Fastweb is expected to be on a par with the prior year. Subject to achieving its targets, Swisscom will propose payment of an unchanged dividend of CHF 22 per share for the 2017 financial year at the 2018 Annual General Meeting.