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2 Segment information

General information

WSGE_DP_GR_Swisscom_Segmente

Reporting is divided into the segments “Residential Customers”, “Enterprise Customers”, “Wholesale”, and “IT, Network & Infrastructure”, which are grouped under Swisscom Switzerland, as well as “Fastweb” and “Other Operating Segments”. In addition, “Group Headquarters”, which includes non-allocated costs, is disclosed separately in segment reporting. Various areas were transferred between the segments of Swisscom Switzerland as at 1 January 2019. The prior year’s figures have been restated accordingly.

Group Headquarters does not charge any management fees to other segments for its financial management services, nor does the IT, Network & Infrastructure segment charge any network costs to other segments. The remaining services between the segments are recharged at market prices. The results of the Residential Customers, Enterprise Customers and Wholesale segments thus correspond to a contribution margin before network costs.

Indirect costs include personnel expense, other operating expense less capitalised costs of self-constructed assets and other income. Pension cost includes ordinary employer contributions. The difference between the ordinary employer contributions and the pension cost as provided for under IAS 19 is reported in the column “Eliminations”. In the first half of 2019, an expense of CHF 29 million is disclosed under “Eliminations” as a pension cost reconciliation item in accordance with IAS 19 (prior year: CHF 29 million).

Leases between the segments are not recognised in the balance sheet in accordance with IFRS 16. The reported lease expense of the segments in 2019 comprises depreciation and interest on the right-of-use asset and the accounting for the rental of buildings between segments. The lease expense of assets of low value is reported as direct costs. The lease expense of the segments in 2018 comprises the expense for operating and finance leases in accordance with IAS 17 and the accounting for the rental of buildings between segments. The reconciliation of the indirect costs of the segments to the consolidated values is reported in the column “Eliminations”. For the first six months of 2018, an expense of CHF 99 million is disclosed under “Eliminations” as an indirect cost reconciliation item.

Swisscom Switzerland sells some mobile handsets on a subsidised basis in a bundled offering with a mobile communications contract. As a result of the reallocation of revenue over the pre-delivered components (mobile handset), revenue is recognised earlier than the date of invoicing. This results in the recognition of contract assets deriving from this business. In segment reporting of Swisscom Switzerland, the recognition and dissolution of these contract assets is reported as other revenue. The amounts invoiced are reported under revenue from telecommunications services or merchandise.

Segment information 2019


1st half-year 2019, in CHF million
 
Swisscom
Switzerland
 

Fastweb
  Other
Operating
Segments
 
Group
Headquarters
 

Elimination
 

Total
Residential Customers   2,777   611         3,388
Enterprise Customers   1,121   469   266       1,856
Wholesale customers   320   99         419
Net revenue from external customers   4,218   1,179   266       5,663
Net revenue from other segments   38   4   196     (238)  
Net revenue   4,256   1,183   462     (238)   5,663
Direct costs   (885)   (440)   (28)     14   (1,339)
Indirect costs 1   (1,533)   (360)   (336)   (39)   184   (2,084)
Segment result before depreciation and amortisation   1,838   383   98   (39)   (40)   2,240
Lease expense   (113)   (18)   (6)   (1)   1   (137)
Depreciation and amortisation of property, plant and equipment and intangible assets   (770)   (309)   (35)     3   (1,111)
Segment result   955   56   57   (40)   (36)   992
Interest expense on lease liabilities                       15
Operating income                       1,007
Financial income and financial expense, net                       (71)
Result of equity-accounted investees                       2
Income before income taxes                       938
Income tax expense                       (158)
Net income                       780
                         
Segment result before depreciation and amortisation   1,838   383   98   (39)   (40)   2,240
Lease expense   (113)   (18)   (6)   (1)   1   (137)
Capital expenditure in property, plant and equipment and intangible assets   (954)   (335)   (19)     11   (1,297)
Operating free cash flow proxy   771   30   73   (40)   (28)   806
1 Including capitalised costs of self-constructed assets and other income.

Segment information Swisscom Switzerland 2019


1st half-year 2019, in CHF million
 
Residential
Customers
 
Enterprise
Customers
 

Wholesale
 
IT, Network &
Infrastructure
 

Elimination
  Total
Swisscom
Switzerland
Telecom services   2,524   471         2,995
Solution business     499         499
Merchandise   237   128         365
Wholesale       320       320
Revenue other   16   11     12     39
Net revenue from external customers   2,777   1,109   320   12     4,218
Net revenue from other segments   41   54   144   32   (233)   38
Net revenue   2,818   1,163   464   44   (233)   4,256
Direct costs   (583)   (397)   (194)   (6)   295   (885)
Indirect costs 1   (485)   (411)   (8)   (566)   (63)   (1,533)
Segment result before depreciation and amortisation   1,750   355   262   (528)   (1)   1,838
Lease expense   (26)   (14)     (73)     (113)
Depreciation and amortisation of property, plant and equipment and intangible assets   (56)   (35)     (680)   1   (770)
Segment result   1,668   306   262   (1,281)     955
                         
Capital expenditure in property, plant and equipment and intangible assets   (10)   (19)     (925)     (954)
1 Including capitalised costs of self-constructed assets and other income.

Segment information 2018


1st half-year 2018, in CHF million, adjusted
 
Swisscom
Switzerland
 

Fastweb
  Other
Operating
Segments
 
Group
Headquarters
 

Elimination
 

Total
Residential Customers   2,904   608         3,512
Enterprise Customers   1,169   430   270       1,869
Wholesale customers   286   138         424
Net revenue from external customers   4,359   1,176   270       5,805
Net revenue from other segments   36   4   156   1   (197)  
Net revenue   4,395   1,180   426   1   (197)   5,805
Direct costs   (914)   (463)   (28)     9   (1,396)
Indirect costs 1   (1,613)   (346)   (306)   (53)   52   (2,266)
Segment result before depreciation and amortisation   1,868   371   92   (52)   (136)   2,143
Lease expense   (109)   (10)   (7)   (1)   127  
Depreciation and amortisation of property, plant and equipment and intangible assets   (746)   (291)   (30)     (13)   (1,080)
Segment result   1,013   70   55   (53)   (22)   1,063
Financial income and financial expense, net                       (70)
Result of equity-accounted investees                      
Income before income taxes                       993
Income tax expense                       (206)
Net income                       787
                         
Segment result before depreciation and amortisation   1,868   371   92   (52)   (136)   2,143
Lease expense   (109)   (10)   (7)   (1)   127  
Capital expenditure in property, plant and equipment and intangible assets   (711)   (347)   (19)     8   (1,069)
Operating free cash flow proxy   1,048   14   66   (53)   (1)   1,074
1 Including capitalised costs of self-constructed assets and other income.

Segment information Swisscom Switzerland 2018


1st half-year 2018, in CHF million, adjusted
 
Residential
Customers
 
Enterprise
Customers
 

Wholesale
 
IT, Network &
Infrastructure
 

Elimination
  Total
Swisscom
Switzerland
Telecom services   2,602   527         3,129
Solution business     513         513
Merchandise   232   107         339
Wholesale       286       286
Revenue other   70   12     10     92
Net revenue from external customers   2,904   1,159   286   10     4,359
Net revenue from other segments   41   53   140   30   (228)   36
Net revenue   2,945   1,212   426   40   (228)   4,395
Direct costs   (651)   (367)   (194)   (6)   304   (914)
Indirect costs 1   (510)   (434)   (9)   (584)   (76)   (1,613)
Segment result before depreciation and amortisation   1,784   411   223   (550)     1,868
Lease expense   (25)   (17)     (67)     (109)
Depreciation and amortisation of property, plant and equipment and intangible assets   (77)   (36)     (634)   1   (746)
Segment result   1,682   358   223   (1,251)   1   1,013
                         
Capital expenditure in property, plant and equipment and intangible assets   (21)   (20)     (670)     (711)
1 Including capitalised costs of self-constructed assets and other income.