Segment results
In CHF million |
3. quarter 2021 |
3. quarter 2020 |
Change |
1.01.–30.09. 2021 |
1.01.–30.09. 2020 |
Change |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net revenue | ||||||||||||
| Residential Customers | 1,150 | 1,138 | 1.1% | 3,423 | 3,376 | 1.4% | ||||||
| Business Customers | 748 | 758 | –1.3% | 2,285 | 2,315 | –1.3% | ||||||
| Wholesale 1 | 266 | 278 | –4.3% | 739 | 727 | 1.7% | ||||||
| Infrastructure & Support Functions | 18 | 21 | –14.3% | 57 | 63 | –9.5% | ||||||
| Intersegment elimination | (135) | (149) | –9.4% | (354) | (351) | 0.9% | ||||||
| Swisscom Switzerland | 2,047 | 2,046 | –% | 6,150 | 6,130 | 0.3% | ||||||
| Fastweb | 621 | 613 | 1.3% | 1,914 | 1,792 | 6.8% | ||||||
| Other Operating Segments | 265 | 268 | –1.1% | 770 | 755 | 2.0% | ||||||
| Intersegment elimination | (173) | (169) | 2.4% | (491) | (476) | 3.2% | ||||||
| Net revenue | 2,760 | 2,758 | 0.1% | 8,343 | 8,201 | 1.7% | ||||||
| Operating income before depreciation and amortisation (EBITDA) | ||||||||||||
| Residential Customers | 703 | 683 | 2.9% | 2,108 | 2,069 | 1.9% | ||||||
| Business Customers | 323 | 340 | –5.0% | 988 | 1,016 | –2.8% | ||||||
| Wholesale | 136 | 134 | 1.5% | 398 | 391 | 1.8% | ||||||
| Infrastructure & Support Functions | (282) | (258) | 9.3% | (817) | (797) | 2.5% | ||||||
| Intersegment elimination | (1) | (1) | –% | (1) | – | –% | ||||||
| Swisscom Switzerland | 879 | 898 | –2.1% | 2,676 | 2,679 | –0.1% | ||||||
| Fastweb | 236 | 219 | 7.8% | 656 | 608 | 7.9% | ||||||
| Other Operating Segments | 53 | 56 | –5.4% | 136 | 138 | –1.4% | ||||||
| Reconciliation pension cost 2 | (11) | (16) | –31.3% | 25 | (47) | –153.2% | ||||||
| Elimination | (9) | (9) | –% | (28) | (22) | 27.3% | ||||||
| Operating income before depreciation and amortisation (EBITDA) | 1,148 | 1,148 | –% | 3,465 | 3,356 | 3.2% | ||||||
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1 Including intersegment recharges of services performed by other network providers.
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2 Operating income of segments includes ordinary employer contributions as pension fund expense. The difference to the pension cost according to IAS 19 is recognised as a reconciliation item.
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As of 1 January 2021, Swisscom amended its organisational structure in Switzerland and the segment formerly known as IT, Network & Infrastructure was renamed Infrastructure & Support Functions. The departments with overlapping functions were merged organisationally at Swisscom Switzerland. As a result, Group Headquarters is no longer reported separately in the segment reporting. In addition, Swisscom has transferred various areas among the segments of Swisscom Switzerland and the Other Operating Segments as of 1 January 2021. The prior year’s figures were restated accordingly. Further information can be found in Note 2 in the notes to the consolidated interim financial statements.
Reporting is divided into the segments Residential Customers, Business Customers, Wholesale, and Infrastructure & Support Functions, which are grouped under Swisscom Switzerland, as well as Fastweb and Other Operating Segments. The Infrastructure & Support Functions segment does not charge network costs or management fees to other segments. Any other services between the segments are charged at market prices. The results of the Residential Customers, Business Customers and Wholesale segments thus correspond to a contribution margin before network costs.
Swisscom Switzerland
In CHF million, except where indicated |
3. quarter 2021 |
3. quarter 2020 |
Change |
1.01.–30.09. 2021 |
1.01.–30.09. 2020 |
Change |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net revenue and results | ||||||||||||
| Telecom services | 1,363 | 1,413 | –3.5% | 4,122 | 4,261 | –3.3% | ||||||
| Solutions business | 274 | 259 | 5.8% | 821 | 786 | 4.5% | ||||||
| Merchandise | 181 | 176 | 2.8% | 567 | 526 | 7.8% | ||||||
| Wholesale | 166 | 168 | –1.2% | 498 | 490 | 1.6% | ||||||
| Revenue other | 48 | 17 | –% | 102 | 23 | 343.5% | ||||||
| Revenue from external customers | 2,032 | 2,033 | –% | 6,110 | 6,086 | 0.4% | ||||||
| Intersegment revenue | 15 | 13 | 15.4% | 40 | 44 | –9.1% | ||||||
| Net revenue | 2,047 | 2,046 | –% | 6,150 | 6,130 | 0.3% | ||||||
| Direct costs | (454) | (432) | 5.1% | (1,321) | (1,251) | 5.6% | ||||||
| Indirect costs | (714) | (716) | –0.3% | (2,153) | (2,200) | –2.1% | ||||||
| Segment expenses | (1,168) | (1,148) | 1.7% | (3,474) | (3,451) | 0.7% | ||||||
| Segment result before depreciation and amortisation (EBITDA) | 879 | 898 | –2.1% | 2,676 | 2,679 | –0.1% | ||||||
| Margin as % of net revenue | 42.9 | 43.9 | 43.5 | 43.7 | ||||||||
| Lease expense | (57) | (58) | –1.7% | (174) | (175) | –0.6% | ||||||
| Depreciation and amortisation | (363) | (373) | –2.7% | (1,120) | (1,139) | –1.7% | ||||||
| Segment result | 459 | 467 | –1.7% | 1,382 | 1,365 | 1.2% | ||||||
| Operating free cash flow proxy | ||||||||||||
| Segment result before depreciation and amortisation (EBITDA) | 879 | 898 | –2.1% | 2,676 | 2,679 | –0.1% | ||||||
| Lease expense | (57) | (58) | –1.7% | (174) | (175) | –0.6% | ||||||
| EBITDA after lease expense (EBITDA AL) | 822 | 840 | –2.1% | 2,502 | 2,504 | –0.1% | ||||||
| Capital expenditure | (372) | (410) | –9.3% | (1,125) | (1,186) | –5.1% | ||||||
| Operating free cash flow proxy | 450 | 430 | 4.7% | 1,377 | 1,318 | 4.5% | ||||||
| Operational data in thousand and headcount | ||||||||||||
| Fixed telephony access lines | 1,441 | 1,546 | –6.8% | |||||||||
| Broadband access lines retail | 2,030 | 2,045 | –0.7% | |||||||||
| TV access lines | 1,585 | 1,586 | –0.1% | |||||||||
| Mobile access lines | 6,190 | 6,253 | –1.0% | |||||||||
| Revenue generating units (RGU) | 11,246 | 11,430 | –1.6% | |||||||||
| Broadband access lines wholesale | 588 | 543 | 8.3% | |||||||||
| Full-time equivalent employees | 12,963 | 12,876 | 0.7% | |||||||||
Swisscom Switzerland’s net revenue increased by 0.3% or CHF 20 million to CHF 6,150 million. Revenue from the solutions business rose by 4.5% or CHF 35 million to CHF 821 million. By contrast, ongoing competitive and price pressure caused revenue from telecom services to decline. Revenue from telecom services decreased by 3.3% or CHF 139 million to CHF 4,122 million. Of this decline, CHF 78 million (–2.6%) was attributable to the Residential Customers segment and CHF 61 million (–4.7%) to the Business Customers segment. The market is showing signs of saturation and competitive pressure in the area of mobile communications and fixed-network services. The subscriber base in mobile communications declined by 1.0% or 63,000 year-on-year to 6.19 million. The number of postpaid lines increased by 101,000 year-on-year, while the number of prepaid lines decreased by 164,000. The number of broadband connections fell by 0.7% or 15,000 to 2.03 million within the space of a year. However, the number of inOne customers continues to increase. At the end of September 2021, the Residential Customers segment recorded 2.50 million inOne customers. In this segment, inOne accounts for 67% of postpaid mobile lines and 81% of broadband connections. The number of TV connections remained stable at 1.59 million (–0.1%). The number of fixed telephony access lines fell year-on-year by 6.8% or 105,000 to 1.44 million.
Segment expenses rose by 0.7% or CHF 23 million to CHF 3,474 million. Direct costs increased by 5.6% or CHF 70 million to CHF 1,321 million. In addition to higher costs for merchandise, costs for acquiring and retaining customers also rose. Indirect costs decreased by 2.1% or CHF 47 million to CHF 2,153 million. In the first nine months of 2021, indirect costs are impacted by a CHF 52 million increase in provisions for litigation. On a like-for-like basis, indirect costs fell by 4.5% or CHF 99 million. This was chiefly due to ongoing efficiency improvements. Headcount rose as a result of the acquisitions of Webtiser and JLS Digital by 0.7% or 87 FTEs to 12,963 FTEs. The segment result before depreciation and amortisation remained nearly stable at CHF 2,676 million (–0.1%), with an increase of 1.8% on a like-for-like basis. The decline in revenue from telecom services and the higher costs of subscriber acquisition and retention were offset thanks to ongoing efficiency improvements. Capital expenditure fell by 5.1% or CHF 61 million to CHF 1,125 million. Capital expenditure in the expansion of broadband networks and mobile communications networks remained stable, while capital expenditure in other infrastructure declined. As at the end of September 2021, 88% of all Swiss homes and offices were connected with ultra-fast broadband exceeding 80 Mbps. 71% of all homes and offices benefited from fast connections at over 200 Mbps.
The Swiss Competition Commission (COMCO) opened an investigation into Swisscom’s optical fibre network in December 2020 and ordered precautionary measures against Swisscom. At the end of September 2021, the Federal Administrative Court confirmed the precautionary measures of December 2020. Until the situation has been cleared up, Swisscom is only building network elements that comply with the P2P network architecture (e.g. feeder into the house). In addition, the impact of the decision on Swisscom’s fibre-optic roll-out strategy and on the fibre-optic partnership with Salt will be reviewed.
Fastweb
In EUR million, except where indicated |
3. quarter 2021 |
3. quarter 2020 |
Change |
1.01.–30.09. 2021 |
1.01.–30.09. 2020 |
Change |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net revenue and results | ||||||||||||
| Residential customers | 282 | 282 | –% | 856 | 844 | 1.4% | ||||||
| Corporate customers | 231 | 226 | 2.2% | 712 | 661 | 7.7% | ||||||
| Wholesale | 60 | 59 | 1.7% | 182 | 164 | 11.0% | ||||||
| Revenue from external customers | 573 | 567 | 1.1% | 1,750 | 1,669 | 4.9% | ||||||
| Intersegment revenue | 1 | 2 | –50.0% | 5 | 5 | –% | ||||||
| Net revenue | 574 | 569 | 0.9% | 1,755 | 1,674 | 4.8% | ||||||
| Segment expenses | (356) | (366) | –2.7% | (1,153) | (1,106) | 4.2% | ||||||
| Segment result before depreciation and amortisation (EBITDA) | 218 | 203 | 7.4% | 602 | 568 | 6.0% | ||||||
| Margin as % of net revenue | 38.0 | 35.7 | 34.3 | 33.9 | ||||||||
| Lease expense | (13) | (13) | –% | (40) | (39) | 2.6% | ||||||
| Depreciation and amortisation | (147) | (146) | 0.7% | (440) | (432) | 1.9% | ||||||
| Segment result | 58 | 44 | 31.8% | 122 | 97 | 25.8% | ||||||
| Operating free cash flow proxy | ||||||||||||
| Segment result before depreciation and amortisation (EBITDA) | 218 | 203 | 7.4% | 602 | 568 | 6.0% | ||||||
| Lease expense | (13) | (13) | –% | (40) | (39) | 2.6% | ||||||
| EBITDA after lease expense (EBITDA AL) | 205 | 190 | 7.9% | 562 | 529 | 6.2% | ||||||
| Capital expenditure | (138) | (134) | 3.0% | (439) | (410) | 7.1% | ||||||
| Operating free cash flow proxy | 67 | 56 | 19.6% | 123 | 119 | 3.4% | ||||||
| Operational data in thousand and headcount | ||||||||||||
| Broadband access lines | 2,768 | 2,704 | 2.4% | |||||||||
| Mobile access lines | 2,316 | 1,889 | 22.6% | |||||||||
| Full-time equivalent employees | 2,741 | 2,634 | 4.1% | |||||||||
Fastweb’s net revenue rose year-on-year by 4.8% or EUR 81 million to EUR 1,755 million. Despite persistently challenging market conditions, Fastweb’s broadband customer base grew by 2.4% or 64,000 year-on-year to 2.77 million. Fastweb is also growing in the fiercely competitive mobile telephony market. The number of mobile access lines increased by 22.6% or 427,000 year-on-year to 2.32 million. Bundled offers continue to play an important role. 37% of broadband customers use a bundled offering combining fixed network and mobile. Residential customer revenue rose by 1.4% or EUR 12 million to EUR 856 million as a result of customer growth. Fastweb is also growing in the business customer market. Revenue from business customers was up by 7.7% or EUR 51 million to EUR 712 million driven by higher revenue from public administrations. Revenue from wholesale business increased by 11.0% or EUR 18 million to EUR 182 million.
The segment result before depreciation and amortisation was 6.0% or EUR 34 million higher at EUR 602 million on the back of the growth in revenue. Capital expenditure increased by 7.1% or EUR 29 million year-on-year to EUR 439 million due to higher customer-driven investments and increased capital expenditure in network infrastructure. Fastweb’s headcount increased by 4.1% or 107 FTEs year-on-year to 2,741 FTEs, mainly as a result of an acquisition and the need for more personnel due to growth.
Other Operating Segments
In CHF million, except where indicated |
3. quarter 2021 |
3. quarter 2020 |
Change |
1.01.–30.09. 2021 |
1.01.–30.09. 2020 |
Change |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net revenue and results | ||||||||||||
| Revenue from external customers | 110 | 114 | –3.5% | 326 | 329 | –0.9% | ||||||
| Intersegment revenue | 155 | 154 | 0.6% | 444 | 426 | 4.2% | ||||||
| Net revenue | 265 | 268 | –1.1% | 770 | 755 | 2.0% | ||||||
| Segment expenses | (212) | (212) | –% | (634) | (617) | 2.8% | ||||||
| Segment result before depreciation and amortisation (EBITDA) | 53 | 56 | –5.4% | 136 | 138 | –1.4% | ||||||
| Margin as % of net revenue | 20.0 | 20.9 | 17.7 | 18.3 | ||||||||
| Lease expense | (3) | (3) | –% | (9) | (9) | –% | ||||||
| Depreciation and amortisation | (13) | (16) | –18.8% | (40) | (46) | –13.0% | ||||||
| Segment result | 37 | 37 | –% | 87 | 83 | 4.8% | ||||||
| Operating free cash flow proxy | ||||||||||||
| Segment result before depreciation and amortisation (EBITDA) | 53 | 56 | –5.4% | 136 | 138 | –1.4% | ||||||
| Lease expense | (3) | (3) | –% | (9) | (9) | –% | ||||||
| EBITDA after lease expense (EBITDA AL) | 50 | 53 | –5.7% | 127 | 129 | –1.6% | ||||||
| Capital expenditure | (10) | (12) | –16.7% | (29) | (30) | –3.3% | ||||||
| Operating free cash flow proxy | 40 | 41 | –2.4% | 98 | 99 | –1.0% | ||||||
| Headcount | ||||||||||||
| Full-time equivalent employees | 3,468 | 3,516 | –1.4% | |||||||||
The net revenue of the Other Operating Segments rose year-on-year by 2.0% or CHF 15 million to CHF 770 million. This was due to higher sales from construction services provided by cablex. The segment result before depreciation and amortisation decreased by CHF 2 million or 1.4% to CHF 136 million and the profit margin declined accordingly to 17.7% (prior year: 18.3%). Headcount declined by 1.4% or 48 FTEs to 3,468 FTEs.