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Summary

Swisscom’s operating results were within expectations in the first half of 2019. Net revenue of Swisscom fell by CHF 142 million or 2.4% to CHF 5,663 million; at constant exchange rates, net revenue declined by 1.7%. 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 2,240 million, reported EBITDA was up by 4.5% or CHF 97 million, and 0.5% on a comparable basis. Net income decreased by 0.9% or CHF 7 million to CHF 780 million. The financial outlook for the 2019 financial year remains unchanged.

In the Swiss core business, revenue fell by CHF 139 million (–3.2%) as a result of ongoing price pressure and the decline in the number of connections in fixed-line telephony. In contrast, currency-adjusted revenue at Fastweb increased by CHF 44 million (+3.8%), driven by the revenue growth in business with residential and business customers. The number of customers with Fastweb increased year-on-year, by 4.0% to 2.6 million in the broadband business and by 27.3% to 1.6 million in mobile telephony. In the Swiss core business, EBITDA declined by 1.6% as a result of lower revenue, but was largely offset by the ongoing measures to reduce costs. At Fastweb, EBITDA rose in local currency by 6.6% as a result of the growth in revenue.

Swisscom’s capital expenditure increased by 21.3% or CHF 228 million to CHF 1,297 million. This figure includes CHF 196 million paid for mobile radio frequencies which Swisscom acquired at auction in Switzerland. The frequencies were allocated in April 2019 and will remain with Swisscom until 2034. Due to the expenses for the mobile frequencies acquired and higher investments in the expansion of broadband networks, capital expenditure rose in Switzerland by 33.3% to CHF 961 million. Capital expenditure at Fastweb was stable at the high prior-year level of EUR 297 million.

Operating free cash flow proxy declined by CHF 268 million to CHF 806 million, primarily as a result of the CHF 196 million spent on mobile radio frequencies. Net debt climbed in the first half of 2019 by CHF 835 million to CHF 9,542 million. The main reason for the increase in net debt was the dividend payment of CHF 1,140 million made in April 2019. The number of employees at Swisscom declined by 1.7% year-on-year, to 19,564 FTEs. In Switzerland, headcount decreased by 332 FTEs to 16,871 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 2.5 bil­lion (including costs of CHF 196 million for mobile radio 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.