Swisscom’s operating results were within expectations in the first quarter of 2019. Revenue fell by CHF 25 million or 0.9% to CHF 2,860 million; at constant exchange rates, it remained largely stable (–0.2%). The year-on-year comparison of operating income before depreciation and amortisation (EBITDA) is affected by the application of new requirements for the recognition of leases (IFRS 16). At CHF 1,119 million, reported EBITDA was up by 5.8% or CHF 61 million, and 1.4% on a comparable basis. Net income increased by 1.1% or CHF 4 million to CHF 383 million. The financial outlook for the 2019 financial year remains unchanged.

The decline in revenue of CHF 41 million recorded in the Swiss core business was largely offset by currency-­adjusted growth at Italian subsidiary Fastweb (CHF +25 million) and growth in the other segments (CHF +11 million). In the Swiss core business, revenue fell as a result of continuing price pressure and the decline in the number of connections in fixed-line telephony. The increase in revenue at Fastweb was driven by revenue growth in the business with residential and business customers. The number of customers with Fastweb increased year-on-year, by 3.7% to 2.6 million in the broadband business and by 28% to 1.5 million in mobile telephony. In the Swiss core business, EBITDA declined by 0.6% as a result of lower revenue, but was largely offset by the ongoing cost-cutting measures. At Fastweb, EBITDA rose in local currency by 6.1% as a result of the growth in revenue.

Swisscom’s capital expenditure has increased by 3.4% or CHF 17 million to CHF 518 million. In Switzerland, this was primarily due to higher capital expenditure for the expansion of broadband networks, which rose by 13.3% to CHF 357 million. At Fastweb, capital expenditure fell by 10.1% to EUR 143 million as a result of lower levels of investment in network infrastructure. Swisscom acquired mobile communication frequencies for a total amount of CHF 196 million during an auction process in Switzerland. The frequencies were allocated in April 2019 and will remain with Swisscom until 2034.

Operating free cash flow proxy declined by CHF 24 million to CHF 533 million, owing to higher capital expenditure. Net debt fell year-to-date, by CHF 257 million to CHF 8,455 million. The number of employees at Swisscom declined 3.0% year-on-year, to 19,719 FTEs. In Switzerland, headcount decreased by 576 FTEs to 17,035 FTEs. In Switzerland, the reduction in the first quarter of 2019 totalled 112 FTEs.

Swisscom continues to expect net revenue of around CHF 11.4 bil­lion, EBITDA of more than CHF 4.3 bil­lion and capital expenditure of around CHF 2.3 bil­lion (excluding costs of CHF 196 million for mobile communication frequencies in Switzerland) for 2019. Subject to achieving its targets, Swisscom will propose payment of an unchanged, attractive dividend of CHF 22 per share for the 2019 financial year at the 2020 Annual General Meeting.