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Summary

Swisscom’s operating results were within expectations in the first quarter. Revenue was up by 1.9% or CHF 54 million to CHF 2,885 million, while operating income before depreciation and amortisation (EBITDA) fell by 1.4% or CHF 15 million to CHF 1,058 million. Net income rose by 1.6% to CHF 379 million. The financial outlook for the 2018 financial year remains unchanged.

The growth in revenue of CHF 54 million is comprised a decline in the Swiss core business of CHF 40 million and growth at Italian subsidiary Fastweb of CHF 90 million. In the Swiss core business, revenue decreased on the back of the continuing drop-off in fixed-line telephony connections, lower income from roaming and increased price reductions. The higher revenue at Fastweb is attributable on the one hand to currency translation effects (CHF 47 million) resulting from the higher EUR exchange rate, and on the other to growth in local currency (CHF 43 million or EUR 39 million) in all segments, driven primarily by customer growth. In the broadband business, Fastweb saw its number of subscribers increase year-on-year by 3.5% to 2.5 million, and in mobile telephony by 55% to 1.2 million. The year-on-year development of EBITDA is being impacted by new requirements governing the reporting of customer contracts (IFRS 15). In the Swiss core business, EBITDA fell by 2.9% on a like-for-like basis, while at Fastweb it rose in local currency by 4.8% on a like-for-like basis as a result of the growth in revenue.

Swisscom’s capital expenditure fell by 5.3% to CHF 501 million. In Switzerland, this decline was due primarily to delayed investments, down by 13.0% to CHF 315 million. At Fastweb, capital expenditure remained high at EUR 159 million (+2.6%). Operating free cash flow declined by CHF 104 million to CHF 359 million, owing to seasonal effects. At CHF 7,294 million, net debt is CHF 395 million lower compared with a year ago. Headcount at Swisscom contracted by 3.6% year-on-year to 20,326 FTEs. In comparison with the previous year, headcount in Switzerland fell by 669 FTEs to 17,611 FTEs as a result of the declining core business. In Switzerland, the reduction in the first quarter of 2018 totalled 77 FTEs.

For the 2018 financial year, Swisscom still expects unchanged net revenue of around CHF 11.6 bil­lion, EBITDA of around CHF 4.2 bil­lion and capital expenditure of less than CHF 2.4 bil­lion. Subject to achieving its targets, Swisscom will propose payment of an unchanged, attractive dividend of CHF 22 per share for the 2018 financial year at the 2019 Annual General Meeting.