Swisscom’s operating results were within expectations in the first half of 2018. Net revenue increased by 2.0% or CHF 115 million to CHF 5,805 million. Due to one-off items, operating income before depreciation and amortisation (EBITDA) fell 5.2% or CHF 117 million to CHF 2,143 million while net income declined 6.2% or CHF 52 million to CHF 787 million. On a like-for-like basis, EBITDA dropped by CHF 13 million or 0.6%. The financial outlook for 2018 remains unchanged.
The growth in net revenue of CHF 115 million is mainly comprised of a decline in the Swiss core business of CHF 87 million and growth at Italian subsidiary Fastweb of CHF 185 million. In the Swiss core business, revenue decreased on the back of the continuing drop-off in fixed-line telephony connections and pressure on prices. The higher revenue at Fastweb is attributable on the one hand to currency translation effects (CHF 90 million) resulting from the higher EUR exchange rate, and on the other to growth in local currency (CHF 95 million or EUR 88 million) in all segments, driven primarily by customer growth. In the broadband business, Fastweb saw its number of subscribers increase year-on-year by 3.7% to 2.5 million, and in mobile telephony by 45% to 1.3 million. In the first half of 2017, Fastweb EBITDA included one-off income from legal disputes amounting to EUR 95 million (CHF 102 million). Furthermore, the year-on-year development of EBITDA was impacted by new requirements governing the revenue recognition of customer contracts (IFRS 15). In the Swiss core business, EBITDA fell by 2.8% on a like-for-like basis, while at Fastweb it rose in local currency by 4.9% on a like-for-like basis as a result of the growth in revenue.
Swisscom’s capital expenditure rose by 1.1% to CHF 1,069 million; on the basis of constant exchange rates, it fell by 1.4%. Investment in Switzerland remained virtually unchanged at 721 million (–1.0%). Capital expenditure at Fastweb remained at a high level, totalling EUR 297 million (–1.7%). Operating free cash flow declined by CHF 261 million to CHF 751 million, primarily due to seasonal effects of the net working capital. At CHF 8,146 million, net debt is CHF 295 million lower compared with a year ago. Headcount at Swisscom contracted by 880 FTEs or 4.2% year-on-year to 19,895 FTEs. In comparison with the previous year, headcount in Switzerland fell by 771 FTEs to 17,203 FTEs as a result of the declining core business.
For the 2018 financial year, Swisscom still expects 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 dividend of CHF 22 per share for the 2018 financial year at the 2019 Annual General Meeting.