Menu

Segment results


In CHF million
  3. quarter
2021
  3. quarter
2020
 
Change
  1.01.–30.09.
2021
  1.01.–30.09.
2020
 
Change
                         
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%
1 Including intersegment recharges of services performed by other network providers.
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.

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
                         
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
                         
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
                         
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.