Swisscom Ag · SIX:SCMN
Swisscom — FY2015 Earnings Presentation
93 slides from Swisscom's earnings presentation, Feb 4, 2016
Slide 1: FY 2015 results presentation
Walk Talk Focus 2015 2020 2016 FY 2015 results presentation Analyst and investor meeting Zurich, 4 February 2016
Slide 2: Agenda
Agenda 2 1 Welcome and introduction Louis Schmid 2 Highlights Urs Schaeppi 3 Strategic update and focus 2016 Urs Schaeppi 4 Swiss infrastructure Heinz Herren 5 Swiss retail* Marc Werner 6 Enterprise customers Christian Petit 7 Fastweb Alberto Calcagno 8 Financials and guidance Mario Rossi 9 Q&A All
Slide 3: Agenda
Agenda 3 1 Welcome and introduction Louis Schmid 2 Highlights Urs Schaeppi 3 Strategic update and focus 2016 Urs Schaeppi 4 Swiss infrastructure Heinz Herren 5 Swiss retail* Marc Werner 6 Enterprise customers Christian Petit 7 Fastweb Alberto Calcagno 8 Financials and guidance Mario Rossi 9 Q&A All
Slide 4: Financials in a nutshell
Financials in a nutshell Solid underlying performance 4 Revenue YoY comments in CHF bn +0.7% > Underlying revenue up (CHF +83 mn) > Swiss core business up (CHF +57 mn), 11,70 11,68 11,79 mainly driven by service revenue > Fastweb shows growth in all segments Reported 2014 Reported 2015 Comparable 20
Slide 5: Highlights
Highlights Successful execution of strategy 5 Best Best Best growth infrastructure experiences opportunities Ultra broadband Leading services Core business > 2.9 mn homes and > Highest NPS in > Stable market shares businesses supplied with Switzerland > Growth through bundles >50 Mbps > Strong TV 2.
Slide 6: Market position in Switzerland
Market position in Switzerland RGU growth and stable market shares 6 RGUs * Market shares * in k +2,3% +1,4% in % 12’543 68 67 12’097 12’373 70 66 276 218 148 1'573 58 59 59 1'840 60 2'073 542 681 810 50 54 54 54 6'029 40 6'035 5'988 29 30 26 23 574 20 608 558 2’461 1'572 1'971 10 820 1'020 1'216 0
Slide 7: Market position in Italy
Market position in Italy Fastweb with increased BB connections and market shares 7 Broadband connections Market shares * in k +6,2% in % +6,7% 30 2’201 27 2'072 25 1'942 25 23 20 16 14 15 15 10 5 0 YE 13 YE 14 YE 15 2013 2014 2015 Corporate Consumer * Fastweb, competitor radar Q4 2015
Slide 8: Agenda
Agenda 8 1 Welcome and introduction Louis Schmid 2 Highlights Urs Schaeppi 3 Strategic update and focus 2016 Urs Schaeppi 4 Swiss infrastructure Heinz Herren 5 Swiss retail* Marc Werner 6 Enterprise customers Christian Petit 7 Fastweb Alberto Calcagno 8 Financials and guidance Mario Rossi 9 Q&A All
Slide 9: Global environment
Global environment Global trends also impact Switzerland 9 Global competition Disruptive technology Everything connected > Global internet players > Data-driven business > Infrastructure is in B2B & B2C models essential > Potential for > Significant efficiency > Integrated processes, cooperation and
Slide 10: Swiss environment
Swiss environment Local market expected to remain quality focused 10 Local competition Swiss made Telco spending > No market share > High affinity for Swiss > Absolute price level in changes despite high quality services Switzerland high saturation and > Ability and willingness to > Share of wallet
Slide 11: Swisscom strategy
Swisscom strategy We keep our proven strategic direction 11
Slide 12: Best infrastructure
Best infrastructure Building a performant, secure and efficient Swiss infrastructure 12 Ambition > Expand 4G LTE coverage and performance Ambition > Extend FTTS/H coverage > Guarantee and uptake Ultra Infra- operational stability > Increase cost efficiency and security in infrastructure broadband st
Slide 13: Best experiences
Best experiences Delivering superior customer experiences 13 Ambition Ambition > Create better > Extend service leadership experiences (e.g. > Continue service excellence personalised) > Increase cross channel > Strengthen positioning Services Digitalization as digitalisation expert capabilities & s
Slide 14: Best growth opportunities
Best growth opportunities Exploit growth potential in core business, ICT and Fastweb 14 Ambition Ambition > Develop infinity, Vivo bundles & TV 2.0 > Master big data capability > Defend price premium with value strategy > Expand core business Internet Telco core with digital services services busine
Slide 15: Focus 2016
Focus 2016 Five priorities to increase competitiveness and sustain value 15 Priority Strategic levers Ambition 2016 Maximise Maximise > Retain strong core business > Defend market shares in Switzerland market position 1 core > Retain price levels and margins > RGU growth business > Differentiate thr
Slide 16: Focus 2016
Focus 2016 Five priorities to increase competitiveness and sustain value 16 Priority Strategic levers Ambition 2016 Maximise > Provide best customer experience > Achieve 7.5 mn Develop > Seamless connection everywhere HH with UBB 3 core business Fastweb > Increase scale in core and adjacent coverage
Slide 17: Operational excellence
Operational excellence Focus on cost, speed and quality to achieve material cash savings 17 Key factors Initiatives > Headcount reduction, mainly in overhead Cost > Impact of new organisation > Raise CAPEX efficiency > Process and IT optimisation Speed > Benefits through All IP > Reduction of time-t
Slide 18: Business transformation
Business transformation Securing a sustainable future by transforming people, technologies and business models 18 Our organisational Our technological Be prepared for a change change sustainable future > Simplicity > Modern, efficient and > Operational excellence > Strong customer focus effective in
Slide 19: Agenda
Agenda 19 1 Welcome and introduction Louis Schmid 2 Highlights Urs Schaeppi 3 Strategic update and focus 2016 Urs Schaeppi 4 Swiss infrastructure Heinz Herren 5 Swiss retail* Marc Werner 6 Enterprise customers Christian Petit 7 Fastweb Alberto Calcagno 8 Financials and guidance Mario Rossi 9 Q&A All
Slide 20: Highlights
Highlights A year with a number of successes 20 “… and the winner is: Swisscom – in Switzerland as well as in the Three-Country-Benchmark with Germany and Austria” “Ericsson and Swisscom intensify strategic partnership” “Swisscom combines VoLTE, VoWi-Fi in EU first”- Swisscom was the first in Europe
Slide 21: Ultra broadband development
Ultra broadband development On track to cover 85% with 100 Mbps by 2020 21 Ultrabroadband Ultra broadband (>=50 (>50 Mbps) Mbps)footprint 1 Coverage BB connections growth2 2.86 mn 1.3% 23% 2.33 mn > At YE 2015 +0.6%pts > 2 mn connections with 0.7% new fibre technologies 3 > 1.1 mn connections with >
Slide 22: Wireless development
Wireless development Being the technology leader pays off 22 Strong data growth … Our effortspay Investments showoffpositive results Ebyte > Swisscom 1st choice for high-value 4G Data today 15 contracts 3G Data 10 2G Data > Development of infinity subscribers In k 2’500 5 with CHF ≥ 99 1’500 2012 20
Slide 23: Technology developments
Technology developments Our technology as basis for operational excellence and growth 23 > Standardized interfaces (APIs) save IT Application costs & Services > Identity and Best Big Data project1 are cornerstones of our digital strategy Enablers > Application cloud & open innovation Identity Big Da
Slide 24: Technology transformation
Technology transformation Cloud, All IP and agility transform Swisscom sustainably 24 > Highly automated enterprise cloud for Cloud corporate customers > Virtualized network functions increase efficiency and allow new products > Application cloud strengthens developer offering All IP > Higher effici
Slide 25: All IP transformation
All IP transformation On track with the planned All IP transformation till YE 2017 25 TDM connections All IP connections in mn in mn 95% 84% 2 65% Retail 1.09 1 0% Corporate* 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 * voice channels All IP migration proceeding as planned > More than 1mn cus
Slide 26: Operational excellence
Operational excellence Infrastructure efficiency accounts for material cash savings 26 Initiatives Process > Increase efficiency in network rollout optimisation > Setup new collaborations with partners for network rollout > Virtualize IT infrastructure Infrastructure > Virtualize network with new te
Slide 27: Agenda
Agenda 27 1 Welcome and introduction Louis Schmid 2 Highlights Urs Schaeppi 3 Strategic update and focus 2016 Urs Schaeppi 4 Swiss infrastructure Heinz Herren 5 Swiss retail* Marc Werner 6 Enterprise customers Christian Petit 7 Fastweb Alberto Calcagno 8 Financials and guidance Mario Rossi 9 Q&A All
Slide 28: Highlights
Highlights Successful 2015 with RGU growth and continuing bundle migration 28 Another year of RGU growth Total retail* RGUs (k) 11'050 Key levers 2015 +106k 11'013 11'000 > Strengthen product 10'950 10'907 portfolio 10'900 > Execute multi-brand 10'850 approach FY 14 FY 15 > Increase UBB footprint >
Slide 29: Product portfolio
Product portfolio Further strengthening of our offerings achieved 29 Residential: Vivo SME: My SME Office (Wireline bundle) Wireline 3P Offer > 3 packages differentiated > 5 packages, differentiated by speed, TV by speed 2.0 proposition and fixed voice line > Incl. fixed line, business > Value added
Slide 30: Multi-brand approach
Multi-brand approach Effectively address changing customer needs 30 Core Beliefs 1) Majority values quality more than price 2) Market dynamics require more distinction 3) Room for growth by serving distinctive customer needs with different brands 3 brands with different sales proposition to maximise
Slide 31: Wireline performance
Wireline performance Move to bundles and RGU growth continues 31 Fixed line RGUs in bundles & penetration Net adds of wireline RGUs Retail*, in k Retail*, in k 65% 4'000 56% 166 60% IPTV 165 47% 3'000 1'056 68 938 40% BB 78 2'000 806 1'413 -156 1'209 Voice** 1'001 20% -111 1'000 78 947 1'183 Total 7
Slide 32: Drivers in wireline
Drivers in wireline UBB expansion and strong TV proposition stimulate value creation 32 ARPU non-UBB / UBB bundle (CHF) UBB footprint +2.3% > ARPU uplift in UBB turf with CHF 100 higher ARPU > Further TV growth from bundles through superior CHF 80 proposition non-UBB UBB > Ongoing growth of Swiss ho
Slide 33: Wireless performance
Wireless performance Subscriber growth driven by multi-brand strategy 33 Wireless RGU breakdown Net adds of wireless Retail*, in k Retail*, in k +28 5'367 5'395 -39 2014 2015 Prepaid -13 67 Postpaid +200 -39 87 +84 28 -217 Total 74 infinity Liberty, 3rd Brand Prepaid Total -80 -30 20 70 120 Surf, Cl
Slide 34: Drivers in wireless
Drivers in wireless Flat-rate migration continues, but at lower growth rate 34 Share of flat-rate offers (in % of total postpaid) 100% Flat-rate 80% share Maximise 60% increased by 40% 68% flat- > Successful multi-brand core business +5%-points 63% rate approach stimulates 20% offers YOY future grow
Slide 35: Customer satisfaction
Customer satisfaction Highest customer satisfaction among major competitors 35 Key assets Highest customer satisfaction Best Net: 7th time Connect test winner NPS benchmarking (market research, fall 2015) Best Customer Support: Swisscom wins PC-Tipp test among Swiss telcos Best Products: SC wins two
Slide 36: Innovation
Innovation Innovation to maintain best experiences and to sustain growth 36 TV Features Swisscom TV Public CPE > Ultra HD > Commercial use of TV > Smaller TV box > Voice Search 2.0 for SME1 > Better performance > Electronic Sell Through > TV/radio offer2 > New CPE with best in > Gaming > Planned: Ho
Slide 37: Operational excellence
Operational excellence Streamline retail organisation to improve efficiency 37 Initiatives > Streamline overhead functions > Leverage functional synergies Organisational > Focus on efficiency realignment > Field services (one field service) > Reduction of call centers > Reduction of FTEs > Simplify
Slide 38: Agenda
Agenda 38 1 Welcome and introduction Louis Schmid 2 Highlights Urs Schaeppi 3 Strategic update and focus 2016 Urs Schaeppi 4 Swiss infrastructure Heinz Herren 5 Swiss retail* Marc Werner 6 Enterprise customers Christian Petit 7 Fastweb Alberto Calcagno 8 Financials and guidance Mario Rossi 9 Q&A All
Slide 39: Business market overview
Business market overview In a competitive landscape, enterprise customers are well positioned 39 Broad range of customers > Serving ~5,500 customers (almost all enterprise customers in CH) > From 50 employees up to several thousand employees > Some recent deals: Broad competition landscape > From la
Slide 40: Business market environment
Business market environment Challenges for the B2B market in Switzerland 40 Growing cost pressure for our customers > CHF/EUR exchange rate > Export oriented sectors with less growth > Increased European and global competition > Customers start moving production abroad Stronger competition in the in
Slide 41: Highlights
Highlights Another successful year for enterprise customers 41 Successful order entries > CHF 2.65 billion order entries > + 19.7% higher than pervious year > 62% of new contracts or extended scope Customer satisfaction further improved > NPS 2014: 31.8 > NPS 2015: 36.5 Financial review > Net revenu
Slide 42: Customer oriented organisation
Customer oriented organisation Dedicated solution centers enhance effectivity 42 Enterprise Sales & Services ONE face to the customer Network & Mobile Workspace & Banking & Digital enterprise cloud business solutions collaboration other industries solutions > Wireline voice > Mobile access > Enterpr
Slide 43: Integrated Offerings
Unique proposition Addressing all ICT needs of business customers 43 Unique portfolio Broad offering > Plan-Build-Run from one source Vertical Digital Portfolio > From on premise to cloud Solutions > Standardized or specific solutions > From project business to managed services Integrated Offerings
Slide 44: Connectivity business
Connectivity business Retain value through differentiation and technology leadership 44 Connectivity business > Consequent retention, few customer losses Market share > Customer win-backs in 2015 (35 in wireline, 23 in wireless) > Increasing market share > Bundle strategy on a high level > Revenue d
Slide 45: IT & Solutions business
IT & Solutions business Leverage existing customer base with tailored ICT solutions 45 IT & Solutions business > Own cloud stack and data storage in CH > Most significant growth > CMP* for hybrid solutions contributor Cloud > Local system integration capabilities > Solution provide chances > Cloud b
Slide 46: Other business
Other business Expand value creation and benefit from digital revolution 46 Digital portfolio Verticals Strategic goals Digital banking > Growth and retention of core business > Financial sector still strong in Switzerland > Access to new C-levels by consulting > Combine digitalisation with BPO serv
Slide 47: Trends of revenue dynamics
Trends of revenue dynamics Telco business down, solutions & other businesses up, net positive 47 Revenue Q4 2015 FY 2015 Trends Connectivity Solutions & other Total Revenue drivers of higher-margin Revenue drivers of lower-margin Telco business solutions and other business > Cost pressure from custo
Slide 48: Operational excellence
Operational excellence ENT activities to realize significant cash benefits 48 Initiatives > Leaner organisation through reduction of solution centers Organisational and de-layering realignment > Decrease of internal interfaces > Smart integration of Veltigroup Process > Quality and stability improve
Slide 49: Agenda
Agenda 49 1 Welcome and introduction Louis Schmid 2 Highlights Urs Schaeppi 3 Strategic update and focus 2016 Urs Schaeppi 4 Swiss infrastructure Heinz Herren 5 Swiss retail* Marc Werner 6 Enterprise customers Christian Petit 7 Fastweb Alberto Calcagno 8 Financials and guidance Mario Rossi 9 Q&A All
Slide 50: Highlights (1/4)
Highlights (1/4) Fastweb confirmed its leadership in the Italian market… 50 UBB network Innovation WI-FI NGAN rollout > WOW-FI launched in over 40 > 6.3 mn HHs cities covered > The largest WI-FI community in > +15% vs. 2014 Italy > 80% of customers satisfied > +8 p.p. higher NPS vs. non WOW- FI user
Slide 51: Highlights (2/4)
Highlights (2/4) …thanks to growth in all segments… 51 Segment Growing CB Growing revenues Growing market share3 789 CONSUMER +6% vs. 2014 +5% vs. 2014 +1 p.p. vs. 2014 2 2 CORPORATE 1 +2 p.p. vs. 2014 +3% vs. 2014 data services mkt leader (45% share) 1Fastweb ranked first in lot #2 partnering with
Slide 52: Highlights (3/4)
Highlights (3/4) …strong UBB results driven by own NGAN infrastructure… 52 FTTX customer base grew 30% YoY …representing 30% of Fastweb active to approx. 650k… customers…. 650k LLU/BITSTREAM 500k 30% 2.2 mn customers FTTH/FTTS 2014 2015 +30% vs. 2014 …thanks to lower churn and increased sales …over
Slide 53: Highlights (4/4)
Highlights (4/4) … and healthy financial performance 53 Revenues (Euro mn) EBITDA (Euro mn) 1,736 1 576 26 1,688 28 515 1,710 1,660 WHOLESALE 2014 2015 HUBBING 2014 2015 +3% vs. 2014 +12% vs. 2014 Capex (Euro mn) FCF 2 (Euro mn) 562 +77 541 2014 2015 2014 2015 -90 -4% vs. 2014 Euro +167 mn vs. 2014
Slide 54: Strategy
Strategy To confirm Fastweb as the leading growth and quality player in Italy 54 Infrastructure enhancements to further increase service quality and reliability is the core of Fastweb strategy… Infrastructure > Wireline > WI-FI > Full MVNO > Data Centre …and will be complemented by three other strat
Slide 55: Further enhancing infrastructure to speed up performance (1/2)
Further enhancing infrastructure to speed up performance and increase service quality (1/2) Step #1 - Wireline Step #2 - WI-FI 55 Wireline UBB performance enhancement V+ >100 Mbps to entire FTTS customer base Infrastructure > Wireline WI-FI > WI-FI > Full MVNO > Data Centre Proven to be a distinctiv
Slide 56: Further enhancing infrastructure to speed up performance (2/2)
Further enhancing infrastructure to speed up performance and increase service quality (2/2) Step # 3 - Full MVNO 56 Full MVNO with Timing Implementation Service launch Today 4Q 2016 Infrastructure > Wireline Benefits > WI-FI > National coverage (no roaming costs) > 4G > Full MVNO > SIM-based service
Slide 57: Fastweb aims to deliver on three other strategic challenges
Fastweb aims to deliver on three other strategic challenges 57 Digital transformation Growth in adjacent markets > New ‘customer-oriented’ > Enterprise - Grow ICT/VAS IT ecosystem as services up to 50% of total competitive advantage order book by 2020 > Approx. EUR 80 mn (vs. current 32%) positive F
Slide 58: Agenda
Agenda 58 1 Welcome and introduction Louis Schmid 2 Highlights Urs Schaeppi 3 Strategic update and focus 2016 Urs Schaeppi 4 Swiss infrastructure Heinz Herren 5 Swiss retail* Marc Werner 6 Enterprise customers Christian Petit 7 Fastweb Alberto Calcagno 8 Financials and guidance Mario Rossi 9 Q&A All
Slide 59: Reconciliation of key financials
Reconciliation of key financials Revenue and EBITDA impacted by exceptionals 59 in CHF mn +238 11,786 11,703 11,678 -130 (+0.7%) (-0.2%) Revenue FY 2014 FY 2015 M&A Exchange rate FY 2015 reported reported comparable +79 +40 -17 4,516 4,413 +70 +60 (+2.3%) EBITDA +186 4,098 (-7.1%) FY 2014 FY 2015 Pr
Slide 60: Revenue breakdown by segments
Revenue breakdown by segments Underlying net revenue up by CHF +83 mn 60 in CHF mn +50 +40 +83 +28 +17 +17 +2 -3 -18 -18 +3 +0 -10 +22 Q1 Q2 Q3 Q4 -2 -20 +86 +58 +7 -32 +83 -25 -36 -108 Swisscom Switzerland 11,786 11,678 11,703 +57 (+0.7%) (-0.2%) 1 2 3 FY 2014 Residential Enterprise Wholesale, Fast
Slide 61: EBITDA breakdown by segments
EBITDA breakdown by segments Underlying EBITDA increased by +2.3% 61 in CHF mn +20 +29 +17 +32 +31 +11 +13 +13 +12 +14 +25 -4 -8 -6 -15 +15 Q1 Q2 Q3 Q4 +73 +56 +14 -7 -315 -33 +103 (-7.1%) (+2.3%) Swisscom Switzerland -418 4,413 +54 4,516 4,098 1 2 3 FY 2014 Residential Enterprise Wholesale, Fastweb
Slide 62: Net income
Net income EPS of CHF 26.27, lower YOY due to reported EBITDA 62 in CHF mn tax rate EPS 22.7% 26.27 FY 2015 4,098 -2,086 2,012 -189 -83 +23 -401 1,362 -1 1,361 EBITDA Net Other financial Net Depreciation EBIT Tax expenses reported income income Minorities companies Affiliated interest SC Share- resu
Slide 63: Capital expenditures
Capital expenditures CAPEX remain high, further extension with latest technologies 63 in CHF mn 2,436 -1.1% 2,409 CAPEX split – Swisscom Switzerland 2015 Other 682 581 Fastweb* Wireless network; 12% 13% 11% IT systems, All-IP & other; 22% 25% 26% Swisscom 1,744 Switzerland 1,799 Fixed network: Fibre
Slide 64: Operational free cash flow
Operational free cash flow OpFCF 2015 unchanged 64 in CHF mn 4,098 -2,409 45 61 56 FY 2015 -7 1,689 1,844 Δ -315 +27 -288 +212 -27 +78 +9 -16 4,413 -2,436 88 FY 2014 -167 -22 -16 1,977 1,860 EBITDA CAPEX OpFCF Change in Proceeds Change in Dividends to OpFCF proxy NWC* from sale of pension minorities
Slide 65: Net debt and financing overview
Net debt and financing overview Net debt down to CHF 8.0 bn, financing costs optimised 65 Net debt (in CHF mn) Maturity profile (in CHF mn as per 31.12.2015) 2'000 1’562 1'500 8,120 8,042 1'000 915 816 608 542 500 500 546 Net debt/ 500 415 1.8 x 2.0 x 343 EBITDA ratio 250 - 31.12.2014 31.12.2015 201
Slide 66: Dividends
Dividends Payments per share since 1998 66 in CHF per share Proposal to Par value reduction Special dividend AGM 2 8 8 8 21 22 22 22 22 22 22 19 20 17 18 15 16 13 14 11 11 11 12 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 > 2015: proposal to AGM (6
Slide 67: Partial revision of the Telecoms Act
Partial revision of the Telecoms Act A revised act will not enter into force before 2020 67 Only minor material amendments The Telecoms Act revision suggested > Ex officio regulation > Roaming Debate Enactment by Debate Second Government > Bundles First Chamber > Consumer and youth protection Chambe
Slide 68: Operational excellence
Operational excellence In everything we do 68 > Organisational > Streamlined > Legacy phase- realignments processes out > Reduction of > ALL IP benefits > Simplification ~700 FTEs via social plan * > Reduction of of product > Increase cost time-to-market portfolio efficiency in > Maintain high Opera
Slide 69: Guidance 2016
Guidance 2016 Net revenue stable, EBITDA at CHF ~4.2 billion, CAPEX down 69 Change 2016 2015 2015 2016 Swisscom Change 2016 in CHF bn reported Adjustments Pro-forma Outlook w/o Fastweb (CHF 1.075/EUR) (CHF 1.075/EUR) (CHF 1.10/EUR) Fastweb Revenue 11,678 <0 >0 > 11,6 EBITDA 4,098 -0,256 * 4,354 -0,2
Slide 70: Agenda
Agenda 70 1 Welcome and introduction Louis Schmid 2 Highlights Urs Schaeppi 3 Strategic update and focus 2016 Urs Schaeppi 4 Swiss infrastructure Heinz Herren 5 Swiss retail* Marc Werner 6 Enterprise customers Christian Petit 7 Fastweb Alberto Calcagno 8 Financials and guidance Mario Rossi 9 Q&A All
Slide 71: Q&A session
71 Q&A session
Slide 72: Agenda
Agenda 72 1 Welcome and introduction Louis Schmid 2 Highlights Urs Schaeppi 3 Strategic update and focus 2016 Urs Schaeppi 4 Swiss infrastructure Heinz Herren 5 Swiss retail* Marc Werner 6 Enterprise customers Christian Petit 7 Fastweb Alberto Calcagno 8 Financials and guidance Mario Rossi 9 Q&A All
Slide 73: RGU dynamics
RGU dynamics 73 Net adds of RGUs by products (in ‘000) +73 +66 +71 +66 +39 +37 +40 +54 +54k RGUs in Q4 200 2015 with 3P and 161 4P over- 150 116 117 123 108 98 compensating 1P 100 91 75 losses 52 52 44 52 44 48 52 52 50 16 16 14 4 0 0 -4 -2 -50 -28 1P losses in 2015 -64 accelerating -100 -91 -111 -1
Slide 74: RGUs
RGUs 74 Swisscom Switzerland Access Lines/Subs/Products (000) YTD, (Change to 31.12.2014 in brackets) Number of Fixed Voice products TV & Access Broadband Mobile in Bundle Sum Δ 1P Single Play 148 (-70) 1,573 (-267) 542 (-139) 6,029 (-6) 1 8,292 (-482) (-5.5%) 2Play 287 (-17) 2 574 (-34) (-5.6%) Bun
Slide 75: ARPU
ARPU 75 YTD, (Change to 31.12.2014 in brackets) 1,2) Number Weighted of average per Fixed Voice products underlying 1) 2) 3) in Bundle TV & Access Broadband Mobile product 1P Single Play 14 (-2) 52 (+1) 35 (-0) 38 (-1) 1 40 (-1) 2Play 105 (-3) 2 53 (-2) Bundles 3Play 141 (+1) 3 47 (+0) 4Play 205 (-2
Slide 76: Revenues (RGU x ARPU)
Revenues (RGU x ARPU) 76 Net revenues (CHF mn) YTD, (Change to 31.12.2014 in brackets) Fixed Voice TV & Access Broadband Mobile Sum Δ 1P Single Play 62 (-24) 1,032 (-154) 637 (-58) 1) 2,729 (-47) 4,460 (-283) (-6.0%) 2Play 370 (-4) 370 (+313) (+16.3%) Bundles 3Play 2) 1,195 (+214) 1,195 4Play 669 (+
Slide 77: TV market Switzerland
TV market Switzerland 77 Market volumes (000) Market digital + analogue Market 4,455 4,511 share: Market IPTV * 4,324 4,161 2) 3‘917 4‘033 12 % Satellite/Terrestrial 3% Sunrise Analogue TV 27 % CATV / Net Integrators 1) 2) 2,275 14 % UPC Cablecom 1) Market share: 1,845 UPC Cablecom Premium TV 15 % o
Slide 78: Handsets & SACs
Handsets & SACs 78 sold handsets postpaid 95% 98% 90% Smartphone share 76% 73% 69% active user postpaid Handsets (in k) 407 470 491 484 366 352 332 346 369 337 283 303 SAC/SRC in CHF mn * (mobile and wireline products together) 22 Corporate 21 Segments 30 26 23 22 24 23 27 18 19 14 103 106 136 91 12
Slide 79: Reported vs. comparable revenue and EBITDA
Reported vs. comparable revenue and EBITDA 79 in CHF mn Q1 Q2 Q3 Q4 Year Revenue, reported change +72 -14 -36 -47 -25 o/w M&A impact +44 +38 +22 +26 +130 Currency effect -55 -74 -56 -53 -238 Revenue, comparable change +83 +22 -2 -20 +83 EBITDA, reported change -10 -39 -224 -42 -315 o/w Provision for
Slide 80: Segment 'Residential'
Segment ‘Residential’ 80 Q4/15 Q4oQ4 31.12.2015 YoY Net revenue up by Net revenue in MCHF 1) 1'347 -1.2% 5'224 1.2% 1.2% YOY, driven by the higher Service Direct costs in MCHF -390 -5.6% -1'284 -2.4% 2) Revenue Retail Indirect costs in MCHF -252 -4.2% -1'007 0.6% (increase in subs) Contribution marg
Slide 81: Segment 'Small & Medium Enterprises'
Segment ‘Small & Medium Enterprises’ 81 Q4/15 Q4oQ4 31.12.2015 YoY The acquisition of 1) Net revenue in MCHF 350 0.6% 1'370 2.9% ’yellow pages’ (part of the PubliGroupe Direct costs in MCHF -50 -2.0% -178 -11.0% transaction in Sept Indirect costs in MCHF 2) -81 9.5% -285 31.9% 2014) and the integrat
Slide 82: Segment 'Enterprise Customers'
Segment ‘Enterprise Customers’ 82 Q4/15 Q4oQ4 31.12.2015 YoY 1) Topline, cost and Net revenue in MCHF 704 6.3% 2'654 3.3% FTE increased Direct costs in MCHF -182 30.0% -597 9.9% primarily due to 2) Indirect costs in MCHF -294 5.4% -1'147 5.8% the acquisition of Veltigroup Contribution margin 2 in MC
Slide 83: Segment 'Wholesale'
Segment ‘Wholesale’ 83 Q4/15 Q4oQ4 31.12.2015 YoY Revenue from external customers in MCHF 146 2.8% 579 1.6% Revenue from Intersegment revenue in MCHF 96 5.5% 377 5.0% external Net revenue in MCHF 242 3.9% 956 2.9% customers Direct costs in MCHF -140 6.1% -545 3.0% up 1.6% due to 1) higher volumes In
Slide 84: Segment 'IT, Network and Innovation'
Segment ‘IT, Network and Innovation’ 84 Q4/15 Q4oQ4 31.12.2015 YoY Net revenue in MCHF 33 0.0% 130 3.2% Direct costs in MCHF - - - - Personnel expenses in MCHF -285 29.5% -923 11.3% Lower gain on sale of Rent in MCHF -51 10.9% -198 6.5% real estate leads to Maintenance in MCHF -49 -15.5% -179 -11.4%
Slide 85: Segment 'Fastweb'
Segment ‘Fastweb’ 85 Q4/15 Q4oQ4 31.12.2015 YoY Consumer revenue in MEUR 204 7.4% 789 4.8% Net revenues increased 2.8% YOY Enterprise revenue in MEUR 216 -2.7% 800 1.4% 1) Wholesale revenue in MEUR 30 -34.8% 147 0.7% 1) All segments report an Net revenue in MEUR 450 -1.7% 1'736 2.8% 2) increase in r
Slide 86: Segment 'Other'
Segment ‘Other’ 86 Q4/15 Q4oQ4 31.12.2015 YoY Net revenue down by External revenue in MCHF 83 -22.4% 340 -16.3% 9.3% YOY due to lower 1) revenue out of Net revenue in MCHF 154 -14.9% 603 -9.3% construction activities OPEX in MCHF 2) -144 -12.2% -534 -5.0% and the sale of companies EBITDA in MCHF 10
Slide 87: Reported pension plan costs and outlook
Reported pension plan costs and outlook 87 2014 2015 Change 2016 in CHF mn reported reported estimated Operating pension cost (EBITDA) 244 320 10 330 Net interest (financial restult) 24 26 1 27 Total pension cost (P&L) 268 346 357 Total company contributions (cash payments) 266 265 5 270 Pension cos
Slide 88: Pension plan situation as per 31.12.2015
Pension plan situation as per 31.12.2015 88 Valuation differences between Reconciliation IFRS deficit 2014 2015 Swiss pension law and IFRS difference of CHF 3.6 bn due to different actuarial … increase of CHF 0.5 bn due to lower discount rate profit cash equity / other 108% … assumptions … valuati
Slide 89: Regulatory proceedings
Regulatory proceedings Final decisions not expected in 2016 89 Sport > On 23 July 2015 the ComCo Secretariat issued a draft decree to impose Swisscom a sanction of CHF 143 mn regarding a reproached pro- abuse of a dominant market position regarding Sport TV-rights grams > Swisscom will be heard by t
Slide 90: USO update
USO update 90 After the consultation phase, the Swiss Federal Based on the decision of the Council will probably pass the Telecommunication Swiss Federal Council the Service Ordinance by the end of the first quarter in proceeding to assign the 2016 USO-license will be opened January USO Q1 2016 Q2 2
Slide 91: Innovative fibre technologies
Innovative fibre technologies 91 Bandwidths Exchange Fibre-to-the-Home (and business) 1Gbps > Since 2008 with 100 Mbps > Since 2013 with 1 Gbps Fibre-to-the-Street up to 500 Mbps approx. > Since 2013 with VDSL2 with G.fast 250m > After 2016 with G.fast DPU in Manhole Fibre-to-the-Building up t
Slide 92: Wholesale access portfolio
Wholesale access portfolio Contingent model based pricing is available to any wholesale partner who is willing to pre-invest 92 Access Portfolio Swisscom Wholesale 2016 Unbundled Access Line CHF 12.70/month TAL, Layer 1, Copper* Access Line Optical CHF 34.00/month ALO, Layer 1, Fibre* Broadband Conn
Slide 93: Cautionary statement
Cautionary statement regarding forward-looking statements 93 “This communication contains statements that constitute “forward-looking statements”. In this communication, such forward-looking statements include, without limitation, statements relating to our financial condition, results of operations