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2 Segment information

General information

WSGE_DP_GR_Swisscom_Segmente

Reporting is made on the basis of the segments “Residential Customers”, “Enterprise Customers”, “Wholesale”, and “IT, Network & Infrastructure”, which are grouped together as Swisscom Switzerland, as well as “Fastweb” and “Other Operating Segments”. In addition, “Group Headquarters”, which includes non-allocated costs, is reported separately. 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 nine months of 2019, an expense of CHF 44 million is disclosed under “Eliminations” as a pension cost reconciliation item in accordance with IAS 19 (prior year: CHF 46 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 nine months of 2018, an expense of CHF 150 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 formation 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


2019, in CHF million
 
Swisscom
Switzerland
 

Fastweb
  Other
Operating
Segments
 
Group
Headquarters
 

Elimination
 

Total
Residential Customers   4,159   915         5,074
Enterprise Customers   1,661   701   383       2,745
Wholesale customers   489   148         637
Net revenue from external customers   6,309   1,764   383       8,456
Net revenue from other segments   58   6   304     (368)  
Net revenue   6,367   1,770   687     (368)   8,456
Direct costs   (1,356)   (644)   (44)     21   (2,023)
Indirect costs 1   (2,266)   (535)   (499)   (59)   286   (3,073)
Segment result before depreciation and amortisation   2,745   591   144   (59)   (61)   3,360
Lease expense   (168)   (27)   (8)   (2)   (1)   (206)
Depreciation and amortisation of property, plant and equipment and intangible assets   (1,142)   (464)   (50)     7   (1,649)
Segment result   1,435   100   86   (61)   (55)   1,505
Interest expense on lease liabilities                       24
Operating income                       1,529
Financial income and financial expense, net                       (119)
Result of equity-accounted investees                       1
Income before income taxes                       1,411
Income tax expense                       (230)
Net income                       1,181
                         
Segment result before depreciation and amortisation   2,745   591   144   (59)   (61)   3,360
Lease expense   (168)   (27)   (8)   (2)   (1)   (206)
Capital expenditure in property, plant and equipment and intangible assets   (1,324)   (495)   (32)     18   (1,833)
Operating free cash flow proxy   1,253   69   104   (61)   (44)   1,321
1 Including capitalised costs of self-constructed assets and other income.

Segment information Swisscom Switzerland 2019


2019, in CHF million
 
Residential
Customers
 
Enterprise
Customers
 

Wholesale
  IT,
Network &
Infrastructure
 

Elimination
  Total
Swisscom
Switzerland
Telecom services   3,774   698         4,472
Solution business     750         750
Merchandise   366   181         547
Wholesale       489       489
Revenue other   19   14     18     51
Net revenue from external customers   4,159   1,643   489   18     6,309
Net revenue from other segments   61   79   260   47   (389)   58
Net revenue   4,220   1,722   749   65   (389)   6,367
Direct costs   (915)   (582)   (333)   (8)   482   (1,356)
Indirect costs 1   (712)   (608)   (13)   (840)   (93)   (2,266)
Segment result before depreciation and amortisation   2,593   532   403   (783)     2,745
Lease expense   (39)   (21)     (108)     (168)
Depreciation and amortisation of property, plant and equipment and intangible assets   (78)   (52)     (1,011)   (1)   (1,142)
Segment result   2,476   459   403   (1,902)   (1)   1,435
                         
Capital expenditure in property, plant and equipment and intangible assets   (16)   (30)     (1,278)     (1,324)
1 Including capitalised costs of self-constructed assets and other income.

Segment information 2018


2018, in CHF million, restated
 
Swisscom
Switzerland
 

Fastweb
  Other
Operating
Segments
 
Group
Headquarters
 

Elimination
 

Total
Residential Customers   4,361   910         5,271
Enterprise Customers   1,735   647   408       2,790
Wholesale customers   434   194         628
Net revenue from external customers   6,530   1,751   408       8,689
Net revenue from other segments   53   6   248   1   (308)  
Net revenue   6,583   1,757   656   1   (308)   8,689
Direct costs   (1,408)   (682)   (43)     14   (2,119)
Indirect costs 1   (2,388)   (500)   (465)   (72)   86   (3,339)
Segment result before depreciation and amortisation   2,787   575   148   (71)   (208)   3,231
Lease expense   (166)   (15)   (10)   (2)   193  
Depreciation and amortisation of property, plant and equipment and intangible assets   (1,114)   (432)   (43)     (21)   (1,610)
Segment result   1,507   128   95   (73)   (36)   1,621
Financial income and financial expense, net                       (106)
Result of equity-accounted investees                       3
Income before income taxes                       1,518
Income tax expense                       (305)
Net income                       1,213
                         
Segment result before depreciation and amortisation   2,787   575   148   (71)   (208)   3,231
Lease expense   (166)   (15)   (10)   (2)   193  
Capital expenditure in property, plant and equipment and intangible assets   (1,102)   (501)   (31)     13   (1,621)
Operating free cash flow proxy   1,519   59   107   (73)   (2)   1,610
1 Including capitalised costs of self-constructed assets and other income.

Segment information Swisscom Switzerland 2018


2018, in CHF million, restated
 
Residential
Customers
 
Enterprise
Customers
 

Wholesale
  IT,
Network &
Infrastructure
 

Elimination
  Total
Swisscom
Switzerland
Telecom services   3,906   783         4,689
Solution business     758         758
Merchandise   352   160         512
Wholesale       434       434
Revenue other   103   19     15     137
Net revenue from external customers   4,361   1,720   434   15     6,530
Net revenue from other segments   61   78   244   44   (374)   53
Net revenue   4,422   1,798   678   59   (374)   6,583
Direct costs   (1,003)   (553)   (323)   (8)   479   (1,408)
Indirect costs 1   (761)   (628)   (13)   (882)   (104)   (2,388)
Segment result before depreciation and amortisation   2,658   617   342   (831)   1   2,787
Lease expense   (38)   (25)     (102)   (1)   (166)
Depreciation and amortisation of property, plant and equipment and intangible assets   (108)   (54)     (952)     (1,114)
Segment result   2,512   538   342   (1,885)     1,507
                         
Capital expenditure in property, plant and equipment and intangible assets   (30)   (29)     (1,043)     (1,102)
1 Including capitalised costs of self-constructed assets and other income.