Segment results
In CHF million |
2. quarter 2022 |
2. quarter 2021 |
Change |
1st half-year 2022 |
1st half-year 2021 |
Change |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net revenue 1 | ||||||||||||
| Residential Customers | 1,108 | 1,112 | –0.4% | 2,239 | 2,249 | –0.4% | ||||||
| Business Customers | 766 | 752 | 1.9% | 1,557 | 1,523 | 2.2% | ||||||
| Wholesale | 149 | 158 | –5.7% | 296 | 329 | –10.0% | ||||||
| Infrastructure & Support Functions | 18 | 20 | –10.0% | 36 | 39 | –7.7% | ||||||
| Intersegment elimination | (17) | (19) | –10.5% | (34) | (37) | –8.1% | ||||||
| Swisscom Switzerland | 2,024 | 2,023 | –% | 4,094 | 4,103 | –0.2% | ||||||
| Fastweb | 615 | 659 | –6.7% | 1,230 | 1,293 | –4.9% | ||||||
| Other Operating Segments | 259 | 265 | –2.3% | 500 | 505 | –1.0% | ||||||
| Intersegment elimination | (172) | (167) | 3.0% | (330) | (318) | 3.8% | ||||||
| Revenue from external customers | 2,726 | 2,780 | –1.9% | 5,494 | 5,583 | –1.6% | ||||||
| Operating income before depreciation and amortisation (EBITDA) 1 | ||||||||||||
| Residential Customers | 729 | 736 | –1.0% | 1,474 | 1,464 | 0.7% | ||||||
| Business Customers | 340 | 348 | –2.3% | 693 | 708 | –2.1% | ||||||
| Wholesale | 75 | 75 | –% | 156 | 164 | –4.9% | ||||||
| Infrastructure & Support Functions | (327) | (278) | 17.6% | (576) | (539) | 6.9% | ||||||
| Intersegment elimination | 1 | – | –% | 1 | – | –% | ||||||
| Swisscom Switzerland | 818 | 881 | –7.2% | 1,748 | 1,797 | –2.7% | ||||||
| Fastweb | 222 | 225 | –1.3% | 413 | 420 | –1.7% | ||||||
| Other Operating Segments | 41 | 49 | –16.3% | 83 | 83 | –% | ||||||
| Reconciliation pension cost 2 | (15) | 49 | (30) | 36 | ||||||||
| Intersegment elimination | (12) | (11) | 9.1% | (23) | (19) | 21.1% | ||||||
| Operating income before depreciation and amortisation (EBITDA) | 1,054 | 1,193 | –11.7% | 2,191 | 2,317 | –5.4% | ||||||
|
1 Swisscom has made adjustments to its financial management as of 1 January
2022 and has restated the previous year’s figures accordingly. For further information, see note 2 to the interim financial statements. |
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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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Swisscom’s reporting focuses on the operating divisions Swisscom Switzerland and Fastweb. The other business divisions are grouped together under Other Operating Segments. Swisscom Switzerland comprises the customer segments Residential Customers, Business Customers and Wholesale, along with the Infrastructure & Support Functions business division. Fastweb is a telecommunications provider for residential and business customers in Italy. Other Operating Segments primarily comprises the Digital Business division, Swisscom Broadcast Ltd (radio transmitters) and cablex Ltd (network construction and maintenance).
The Infrastructure & Support Functions business division does not charge any network costs or management fees for its services to other segments. Any other services between the segments are charged at market prices. Network costs in Switzerland are budgeted, monitored and controlled by the Infrastructure & Support Functions segment, which is managed as a cost centre. For this reason, no revenue is credited to the Infrastructure & Support Functions segment within the segment reporting, with the exception of the rental and administration of buildings and vehicles. 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 |
2. quarter 2022 |
2. quarter 2021 |
Change |
1st half-year 2022 |
1st half-year 2021 |
Change |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net revenue and results | ||||||||||||
| Telecom services | 1,357 | 1,376 | –1.4% | 2,722 | 2,766 | –1.6% | ||||||
| Solutions business | 292 | 274 | 6.6% | 589 | 547 | 7.7% | ||||||
| Merchandise | 178 | 174 | 2.3% | 392 | 385 | 1.8% | ||||||
| Wholesale | 146 | 156 | –6.4% | 290 | 325 | –10.8% | ||||||
| Revenue other | 34 | 31 | 9.7% | 69 | 55 | 25.5% | ||||||
| Revenue from external customers | 2,007 | 2,011 | –0.2% | 4,062 | 4,078 | –0.4% | ||||||
| Intersegment revenue | 17 | 12 | 41.7% | 32 | 25 | 28.0% | ||||||
| Net revenue | 2,024 | 2,023 | –% | 4,094 | 4,103 | –0.2% | ||||||
| Direct costs | (413) | (420) | –1.7% | (847) | (867) | –2.3% | ||||||
| Indirect costs | (793) | (722) | 9.8% | (1,499) | (1,439) | 4.2% | ||||||
| Segment expenses | (1,206) | (1,142) | 5.6% | (2,346) | (2,306) | 1.7% | ||||||
| Segment result before depreciation and amortisation (EBITDA) | 818 | 881 | –7.2% | 1,748 | 1,797 | –2.7% | ||||||
| Margin as % of net revenue | 40.4 | 43.5 | 42.7 | 43.8 | ||||||||
| Lease expense | (55) | (59) | –6.8% | (111) | (117) | –5.1% | ||||||
| Depreciation and amortisation | (379) | (383) | –1.0% | (747) | (757) | –1.3% | ||||||
| Segment result | 384 | 439 | –12.5% | 890 | 923 | –3.6% | ||||||
| Operating free cash flow proxy | ||||||||||||
| Segment result before depreciation and amortisation (EBITDA) | 818 | 881 | –7.2% | 1,748 | 1,797 | –2.7% | ||||||
| Lease expense | (55) | (59) | –6.8% | (111) | (117) | –5.1% | ||||||
| EBITDA after lease expense (EBITDA AL) | 763 | 822 | –7.2% | 1,637 | 1,680 | –2.6% | ||||||
| Capital expenditure | (391) | (382) | 2.4% | (755) | (753) | 0.3% | ||||||
| Operating free cash flow proxy | 372 | 440 | –15.5% | 882 | 927 | –4.9% | ||||||
| Operational data in thousand and headcount | ||||||||||||
| Fixed telephony access lines | 1,369 | 1,471 | –6.9% | |||||||||
| Broadband access lines retail | 2,026 | 2,027 | –% | |||||||||
| TV access lines | 1,582 | 1,582 | –% | |||||||||
| Mobile access lines | 6,157 | 6,169 | –0.2% | |||||||||
| Revenue generating units (RGU) | 11,134 | 11,249 | –1.0% | |||||||||
| Access lines wholesale | 692 | 689 | 0.4% | |||||||||
| Full-time equivalent employees | 12,927 | 12,867 | 0.5% |
Swisscom Switzerland’s net revenue decreased by 0.2% or CHF 9 million to CHF 4,094 million. Ongoing competitive and price pressure continued to drive down revenue from telecoms services, which decreased by 1.6% or CHF 44 million to CHF 2,722 million. Of this decline, CHF 6 million (–0.3%) was attributable to the Residential Customers segment and CHF 38 million (–4.6%) to the Business Customers segment. By contrast, revenue from the solutions business rose by 7.7% or CHF 42 million to CHF 589 million. Part of this increase is attributable to the acquisition of the MTF Group companies operating in German-speaking Switzerland and the Principality of Liechtenstein. The decline in Wholesale revenue is partially attributable to the loss of revenue where there is no longer any demand from UPC following the acquisition of Sunrise, and partially attributable to a price-related decline in inbound roaming revenue.
The market is still showing signs of saturation and competitive pressure in the area of mobile communications and fixed-network services. The subscriber base in mobile communications shrank by 0.2% or 12,000 year-on-year to 6.16 million. The number of postpaid lines increased by 180,000 year-on-year, while the number of prepaid lines decreased by 192,000. The number of broadband connections remained stable year-on-year at 2.03 million. Demand for flexible and customisable subscriptions remains high. At the beginning of May 2022, Swisscom digitised the subscription with the launch of Swisscom blue. Options for speed, TV, telephone, roaming, security and entertainment can be customised to meet individual needs. Since the launch of blue, the subscriptions of the inOne predecessor generation have been migrated on an ongoing basis. At the end of June 2022, Swisscom recorded 2.52 million blue/inOne customers in the Residential Customers segment. In this segment, blue/inOne accounts for 65% of postpaid mobile lines and 82% of broadband connections, while 45% use a combined offering. The number of TV connections also remained stable year-on-year at 1.58 million, while the number of fixed-network access lines fell within the same time by 6.9% or 102,000 to 1.37 million.
Segment expense increased by 1.7% or CHF 40 million to CHF 2,346 million. Direct costs fell by 2.3% or CHF 20 million to CHF 847 million. Alongside the decline in subscriber acquisition and retention costs, costs for roaming calls also fell. Indirect costs increased by 4.2% or CHF 60 million to CHF 1,499 million. In the first half of 2022, indirect costs were impacted by an increase in provisions for legal proceedings in the amount of CHF 82 million. Provisions for this were also increased in the previous year, by CHF 22 million. Adjusted for these provisions, indirect costs remained stable. The decrease in costs due to efficiency improvements was offset by additional costs resulting from the acquisition of companies of the MTF Group. The number of employees increased by 0.5% or 60 full-time equivalents to 12,927 within the year due to the hiring of external staff and the acquisition of companies of the MTF Group. The segment result before depreciation and amortisation decreased by 2.7% or CHF 49 million to CHF 1,748 million; adjusted for the aforementioned provisions the result was an increase of 0.6%. The decline in revenue from telecoms services was more than offset by growth in the solutions business and ongoing efficiency improvement measures.
Capital expenditure was almost unchanged at CHF 755 million (+0.3%). Capital expenditure on the expansion of broadband and mobile networks decreased, while capital expenditure on other infrastructure increased. As at the end of June 2022, 90% of all Swiss homes and offices were connected with ultra-fast broadband exceeding 80 Mbps. 76% of all homes and offices benefited from fast connections of over 200 Mbps. Swisscom aims to double the rolling out of the fibre-optic network to homes and offices (FTTH) to around 60% in Switzerland by 2025 using P2MP (point-to-multipoint) architecture. The Competition Commission questioned the network architecture and imposed precautionary measures in December 2020, which the Federal Administrative Court confirmed in 2021. Swisscom is interested in a rapid solution; to this end, it is holding in-depth discussions with the Competition Commission.
Fastweb
In EUR million, except where indicated |
2. quarter 2022 |
2. quarter 2021 |
Change |
1st half-year 2022 |
1st half-year 2021 |
Change |
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|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net revenue and results | ||||||||||||
| Residential customers | 287 | 288 | –0.3% | 572 | 574 | –0.3% | ||||||
| Corporate customers | 250 | 244 | 2.5% | 497 | 481 | 3.3% | ||||||
| Wholesale | 64 | 66 | –3.0% | 126 | 122 | 3.3% | ||||||
| Revenue from external customers | 601 | 598 | 0.5% | 1,195 | 1,177 | 1.5% | ||||||
| Intersegment revenue | 3 | 2 | 50.0% | 4 | 4 | –% | ||||||
| Net revenue | 604 | 600 | 0.7% | 1,199 | 1,181 | 1.5% | ||||||
| Segment expenses | (386) | (395) | –2.3% | (796) | (797) | –0.1% | ||||||
| Segment result before depreciation and amortisation (EBITDA) | 218 | 205 | 6.3% | 403 | 384 | 4.9% | ||||||
| Margin as % of net revenue | 36.1 | 34.2 | 33.6 | 32.5 | ||||||||
| Lease expense | (15) | (13) | 15.4% | (29) | (27) | 7.4% | ||||||
| Depreciation and amortisation | (152) | (147) | 3.4% | (299) | (293) | 2.0% | ||||||
| Segment result | 51 | 45 | 13.3% | 75 | 64 | 17.2% | ||||||
| Operating free cash flow proxy | ||||||||||||
| Segment result before depreciation and amortisation (EBITDA) | 218 | 205 | 6.3% | 403 | 384 | 4.9% | ||||||
| Lease expense | (15) | (13) | 15.4% | (29) | (27) | 7.4% | ||||||
| EBITDA after lease expense (EBITDA AL) | 203 | 192 | 5.7% | 374 | 357 | 4.8% | ||||||
| Capital expenditure | (142) | (147) | –3.4% | (299) | (301) | –0.7% | ||||||
| Operating free cash flow proxy | 61 | 45 | 35.6% | 75 | 56 | 33.9% | ||||||
| Operational data in thousand and headcount | ||||||||||||
| Broadband access lines retail | 2,712 | 2,774 | –2.2% | |||||||||
| Broadband access lines wholesale | 386 | 190 | 103.2% | |||||||||
| Mobile access lines | 2,805 | 2,188 | 28.2% | |||||||||
| Full-time equivalent employees | 2,880 | 2,750 | 4.7% |
Fastweb’s net revenue rose year-on-year by 1.5% or EUR 18 million to EUR 1,199 million. Competitive dynamics remain high. Due to the very challenging market environment, the broadband customer base decreased by 2.2% or 62,000 to 2.71 million within the year. However, the share of ultra-fast broadband connections grew by 8 percentage points year-on-year to 85%. The number of mobile lines increased by 28.2% or 617,000 year-on-year to 2.81 million. Bundled offerings continue to play an important role. 40% of subscribers use a bundled offering combining fixed network and mobile. Residential customer revenue fell by 0.3% or EUR 2 million to EUR 572 million as a result of strong competition. On the other hand, revenue from business customers rose by 3.3% or EUR 16 million to EUR 497 million, driven by higher revenue from public authorities. Revenue from wholesale business increased by 3.3% or EUR 4 million to EUR 126 million, while the number of wholesale broadband connections rose year-on-year by 103.2% or 196,000 to 386,000.
At EUR 796 million, segment expenses remained at the same level year-on-year (–0.1%). The segment result before depreciation and amortisation increased by 4.9% or EUR 19 million to EUR 403 million as a result of the growth in revenue. Capital expenditure was almost unchanged year-on-year at EUR 299 million (–0.7%). Fastweb’s headcount increased by 4.7% or 130 FTEs to 2,880 FTEs, mainly as a result of the hiring of external staff.
Other Operating segments
In CHF million, except where indicated |
2. quarter 2022 |
2. quarter 2021 |
Change |
1st half-year 2022 |
1st half-year 2021 |
Change |
||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net revenue and results | ||||||||||||
| Revenue from external customers | 106 | 112 | –5.4% | 206 | 216 | –4.6% | ||||||
| Intersegment revenue | 153 | 153 | –% | 294 | 289 | 1.7% | ||||||
| Net revenue | 259 | 265 | –2.3% | 500 | 505 | –1.0% | ||||||
| Segment expenses | (218) | (216) | 0.9% | (417) | (422) | –1.2% | ||||||
| Segment result before depreciation and amortisation (EBITDA) | 41 | 49 | –16.3% | 83 | 83 | –% | ||||||
| Margin as % of net revenue | 15.8 | 18.5 | 16.6 | 16.4 | ||||||||
| Lease expense | (2) | (3) | –33.3% | (5) | (6) | –16.7% | ||||||
| Depreciation and amortisation | (12) | (14) | –14.3% | (23) | (27) | –14.8% | ||||||
| Segment result | 27 | 32 | –15.6% | 55 | 50 | 10.0% | ||||||
| Operating free cash flow proxy | ||||||||||||
| Segment result before depreciation and amortisation (EBITDA) | 41 | 49 | –16.3% | 83 | 83 | –% | ||||||
| Lease expense | (2) | (3) | –33.3% | (5) | (6) | –16.7% | ||||||
| EBITDA after lease expense (EBITDA AL) | 39 | 46 | –15.2% | 78 | 77 | 1.3% | ||||||
| Capital expenditure | (8) | (10) | –20.0% | (14) | (19) | –26.3% | ||||||
| Operating free cash flow proxy | 31 | 36 | –13.9% | 64 | 58 | 10.3% | ||||||
| Headcount | ||||||||||||
| Full-time equivalent employees | 3,260 | 3,493 | –6.7% |
The net revenue of the Other Operating Segments remained largely unchanged year-on-year at CHF 500 million (–1.0%). The segment result before depreciation and amortisation also remained steady year-on-year at CHF 83 million. The profit margin stood at 16.6% (previous year: 16.4%). The headcount decreased by 6.7% or 233 FTEs to 3,260 FTEs, mainly as a result of the sale of the French subsidiary local.fr.