Value-oriented business management

Key per­for­mance indicators for planning and managing business op­er­a­tions are revenue, operating income before de­pre­ci­a­tion and amor­ti­sa­tion (EBITDA) and capital ex­pen­di­ture. The enterprise value/EBITDA ratio also permits comparisons of Swisscom’s enterprise value derived from the share price on the balance sheet date with that of its peers (European telecom­mu­ni­ca­tions com­pa­nies) and with its own figure for the prior year. The members of the Board of Directors and Group Executive Board are paid a portion of their re­mu­ner­a­tion in the form of Swisscom shares, which are blocked for a period of three years. They are also subject to a minimum share­hold­ing requirement. Variable re­mu­ner­a­tion based on financial and non-financial targets, the partial settlement of re­mu­ner­a­tion in shares and the minimum share­hold­ing requirement ensure that the financial interests of management are aligned with the interests of shareholders.

In CHF million, except where indicated   31.12.2021   31.12.2020
Enterprise value
Market capitalisation   26,657   24,715
Net debt incl. lease liabilities   7,706   8,206
Defined benefit assets and obligations, net   13   795
Income tax assets and liabilities, net   835   643
Equity-accounted investees and other non-current financial assets   (459)   (233)
Non-controlling interests   2   1
Enterprise value (EV)   34,754   34,127
Operating income before de­pre­ci­a­tion and amor­ti­sa­tion (EBITDA)   4,478   4,382
Ratio enterprise value/EBITDA   7.8   7.8

Swisscom’s enterprise value increased by 1.8% or CHF 0.6 bil­lion to CHF 34.8 bil­lion in 2021. The main reason for this was the increase of CHF 1.9 bil­lion in the company’s market capitalisation to CHF 26.7 bil­lion. The ratio of enterprise value to EBITDA remained at 7.8 on higher EBITDA. Swisscom’s relative market valuation is therefore well above the average for comparable com­pa­nies in Europe’s telecoms sector. The higher relative valuation is supported by Swisscom’s solid market position and attractive dividend. In addition, the lower interest rates and lower income tax rates in Switzer­land compared with other European countries have a positive effect.