2 Segment information
Changes in segment reporting
As of 1 January 2020, Swisscom amended its organisational structure in Switzerland and renamed the former “Enterprise Customers” segment “Business Customers”. In order to provide all business customers with a customer experience tailored to their needs, Swisscom merged the SME segment and the corporate customer segment. As a result, the telecommunications and solutions business with small and medium-sized enterprises is now reported in the Business Customers segment (previously Residential Customers) in segment reporting. In addition, Swisscom has bundled its Customer Field Services at its subsidiary cablex with effect from 1 January 2020. This makes it possible to create even more customer experiences and to be even closer to customers. In addition, various areas were transferred between the segments of Swisscom Switzerland and Group Headquarters as of 1 January 2020. The prior-year amounts were restated as follows:
| In CHF million | Reported | Adjustment | Restated | |||
|---|---|---|---|---|---|---|
| Net revenue Financial year 2019 | ||||||
| Residential Customers | 5,691 | (955) | 4,736 | |||
| Business Customers (former Enterprise Customers) | 2,312 | 928 | 3,240 | |||
| Wholesale | 968 | – | 968 | |||
| IT, Network & Infrastructure | 85 | – | 85 | |||
| Elimination | (493) | 37 | (456) | |||
| Swisscom Switzerland | 8,563 | 10 | 8,573 | |||
| Fastweb | 2,468 | – | 2,468 | |||
| Other Operating Segments | 929 | 150 | 1,079 | |||
| Group Headquarters | 1 | – | 1 | |||
| Elimination | (508) | (160) | (668) | |||
| Total net revenue | 11,453 | – | 11,453 | |||
| Segment result Financial year 2019 | ||||||
| Residential Customers | 3,265 | (631) | 2,634 | |||
| Business Customers (former Enterprise Customers) | 603 | 673 | 1,276 | |||
| Wholesale | 524 | (14) | 510 | |||
| IT, Network & Infrastructure | (2,642) | (33) | (2,675) | |||
| Swisscom Switzerland | 1,750 | (5) | 1,745 | |||
| Fastweb | 155 | – | 155 | |||
| Other Operating Segments | 114 | (1) | 113 | |||
| Group Headquarters | (74) | 6 | (68) | |||
| Elimination | (77) | – | (77) | |||
| Total segment result | 1,868 | – | 1,868 | |||
General information
Reporting is divided into the segments “Residential Customers”, “Business Customers”, “Wholesale”, and “IT, Network & Infrastructure”, which are grouped under Swisscom Switzerland, as well as “Fastweb” and “Other Operating Segments”. “Group Headquarters”, which includes non-allocated costs, is reported separately.
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, Business Customers and Wholesale segments thus correspond to a contribution margin before network costs.
Segment expense encompasses the direct and indirect costs, which include personnel expense, other operating expense less capitalised 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 “Elimination”. In the first three months of 2020, an expense of CHF 15 million is disclosed under “Elimination” as a pension cost reconciliation item in accordance with IAS 19 (prior year: CHF 14 million).
Leases between the segments are not recognised in the balance sheet in accordance with IFRS 16. The reported lease expense of the segments comprises depreciation and interest on leases excl. depreciation of indefeasible rights of use (IRU) of CHF 6 million (prior year: CHF 7 million) and the accounting for the rental of buildings between segments. The lease expense of assets of low value is reported as direct costs.
Capital expenditure consists of the purchase of property, plant and equipment and intangible assets and payments for indefeasible rights of use (IRU). In general, IRUs are paid in full at the beginning of the use and are classified as leases under IFRS 16. From an economic point of view, IRU payments will be considered as capital expenditure in the segment information. Capital expenditure in the first three months of 2020 includes IRU payments of CHF 3 million (prior year: CHF 2 million).
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 contract assets deriving from this business being recognised. In the 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 2020
2020, in CHF million |
Swisscom Switzerland |
Fastweb |
Other Operating Segments |
Group Headquarters |
Elimination |
Total |
||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Residential customers | 1,120 | 300 | – | – | – | 1,420 | ||||||
| Business customers | 766 | 225 | 109 | – | – | 1,100 | ||||||
| Wholesale customers | 164 | 53 | – | – | – | 217 | ||||||
| Net revenue from external customers | 2,050 | 578 | 109 | – | – | 2,737 | ||||||
| Net revenue from other segments | 21 | 2 | 134 | – | (157) | – | ||||||
| Net revenue | 2,071 | 580 | 243 | – | (157) | 2,737 | ||||||
| Direct costs | (405) | (212) | (17) | – | 8 | (626) | ||||||
| Indirect costs | (743) | (187) | (184) | (14) | 128 | (1,000) | ||||||
| Segment result before depreciation and amortisation | 923 | 181 | 42 | (14) | (21) | 1,111 | ||||||
| Lease expense | (58) | (14) | (3) | (1) | 1 | (75) | ||||||
| Depreciation and amortisation | (377) | (153) | (15) | – | 2 | (543) | ||||||
| Segment result | 488 | 14 | 24 | (15) | (18) | 493 | ||||||
| Interest expense on lease liabilities | 11 | |||||||||||
| Operating income | 504 | |||||||||||
| Financial income and financial expense, net | (37) | |||||||||||
| Result of equity-accounted investees | 1 | |||||||||||
| Income before income taxes | 468 | |||||||||||
| Income tax expense | (74) | |||||||||||
| Net income | 394 | |||||||||||
| Segment result before depreciation and amortisation | 923 | 181 | 42 | (14) | (21) | 1,111 | ||||||
| Lease expense | (58) | (14) | (3) | (1) | 1 | (75) | ||||||
| Capital expenditure | (367) | (148) | (7) | – | 6 | (516) | ||||||
| Operating free cash flow proxy | 498 | 19 | 32 | (15) | (14) | 520 |
Segment information Swisscom Switzerland 2020
2020, in CHF million |
Residential Customers |
Business Customers |
Wholesale |
IT, Network & Infrastructure |
Elimination |
Total Swisscom Switzerland |
||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed-line | 505 | 226 | – | – | – | 731 | ||||||
| Mobile | 497 | 196 | – | – | – | 693 | ||||||
| Revenue other | – | 15 | – | – | – | 15 | ||||||
| Telecom services | 1,002 | 437 | – | – | – | 1,439 | ||||||
| Solutions business | – | 267 | – | – | – | 267 | ||||||
| Merchandise | 120 | 55 | – | – | – | 175 | ||||||
| Wholesale | – | – | 164 | – | – | 164 | ||||||
| Revenue other | (2) | 1 | – | 6 | – | 5 | ||||||
| Net revenue from external customers | 1,120 | 760 | 164 | 6 | – | 2,050 | ||||||
| Net revenue from other segments | 18 | 19 | 61 | 16 | (93) | 21 | ||||||
| Net revenue | 1,138 | 779 | 225 | 22 | (93) | 2,071 | ||||||
| Direct costs | (249) | (197) | (89) | (3) | 133 | (405) | ||||||
| Indirect costs | (186) | (246) | (4) | (266) | (41) | (743) | ||||||
| Segment result before depreciation and amortisation | 703 | 336 | 132 | (247) | (1) | 923 | ||||||
| Lease expense | (11) | (8) | – | (39) | – | (58) | ||||||
| Depreciation and amortisation | (16) | (20) | – | (341) | – | (377) | ||||||
| Segment result | 676 | 308 | 132 | (627) | (1) | 488 | ||||||
| Capital expenditure | (5) | (9) | – | (353) | – | (367) |
Segment information 2019
2019, in CHF million, restated |
Swisscom Switzerland |
Fastweb |
Other Operating Segments |
Group Headquarters |
Elimination |
Total |
||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Residential customers | 1,169 | 304 | – | – | – | 1,473 | ||||||
| Business customers | 816 | 228 | 138 | – | – | 1,182 | ||||||
| Wholesale customers | 158 | 47 | – | – | – | 205 | ||||||
| Net revenue from external customers | 2,143 | 579 | 138 | – | – | 2,860 | ||||||
| Net revenue from other segments | 23 | 2 | 127 | – | (152) | – | ||||||
| Net revenue | 2,166 | 581 | 265 | – | (152) | 2,860 | ||||||
| Direct costs | (462) | (208) | (12) | – | (1) | (683) | ||||||
| Indirect costs | (776) | (191) | (203) | (17) | 129 | (1,058) | ||||||
| Segment result before depreciation and amortisation | 928 | 182 | 50 | (17) | (24) | 1,119 | ||||||
| Lease expense | (56) | (13) | (3) | (1) | 5 | (68) | ||||||
| Depreciation and amortisation | (381) | (156) | (18) | – | 1 | (554) | ||||||
| Segment result | 491 | 13 | 29 | (18) | (18) | 497 | ||||||
| Interest expense on lease liabilities | 8 | |||||||||||
| Operating income | 505 | |||||||||||
| Financial income and financial expense, net | (20) | |||||||||||
| Result of equity-accounted investees | 2 | |||||||||||
| Income before income taxes | 487 | |||||||||||
| Income tax expense | (104) | |||||||||||
| Net income | 383 | |||||||||||
| Segment result before depreciation and amortisation | 928 | 182 | 50 | (17) | (24) | 1,119 | ||||||
| Lease expense | (56) | (13) | (3) | (1) | 5 | (68) | ||||||
| Capital expenditure | (353) | (161) | (8) | – | 4 | (518) | ||||||
| Operating free cash flow proxy | 519 | 8 | 39 | (18) | (15) | 533 |
Segment information Swisscom Switzerland 2019
2019, in CHF million, restated |
Residential Customers |
Business Customers |
Wholesale |
IT, Network & Infrastructure |
Elimination |
Total Swisscom Switzerland |
||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed-line | 514 | 244 | – | – | – | 758 | ||||||
| Mobile | 520 | 217 | – | – | – | 737 | ||||||
| Revenue other | – | 16 | – | – | – | 16 | ||||||
| Telecom services | 1,034 | 477 | – | – | – | 1,511 | ||||||
| Solutions business | – | 257 | – | – | – | 257 | ||||||
| Merchandise | 122 | 75 | – | – | – | 197 | ||||||
| Wholesale | – | – | 158 | – | – | 158 | ||||||
| Revenue other | 13 | 1 | – | 6 | – | 20 | ||||||
| Net revenue from external customers | 1,169 | 810 | 158 | 6 | – | 2,143 | ||||||
| Net revenue from other segments | 21 | 22 | 63 | 17 | (100) | 23 | ||||||
| Net revenue | 1,190 | 832 | 221 | 23 | (100) | 2,166 | ||||||
| Direct costs | (273) | (231) | (87) | (3) | 132 | (462) | ||||||
| Indirect costs | (195) | (245) | (8) | (295) | (33) | (776) | ||||||
| Segment result before depreciation and amortisation | 722 | 356 | 126 | (275) | (1) | 928 | ||||||
| Lease expense | (13) | (7) | – | (36) | – | (56) | ||||||
| Depreciation and amortisation | (25) | (21) | – | (335) | – | (381) | ||||||
| Segment result | 684 | 328 | 126 | (646) | (1) | 491 | ||||||
| Capital expenditure | (3) | (11) | – | (339) | – | (353) |