Swisscom Ag · SIX:SCMN
Swisscom — Swisscom Ag Ittigen R/Shs — Q3 2024 Earnings Presentation
41 slides from Swisscom's earnings presentation, Oct 31, 2024
Slide 1: Q3 2024 results
Q3 2024 results Investor & analyst presentation 31 October 2024
Slide 2: Agenda
Agenda Introduction Louis Schmid, Head of Investor Relations Swisscom 1. Achievements Christoph Aeschlimann, CEO Swisscom 2. Business update - Switzerland and Italy Christoph Aeschlimann, CEO Swisscom 3. Transaction update - Vodafone Italia Eugen Stermetz, CFO Swisscom 4. Financial results Eugen Ste
Slide 3: Achievements
1 Achievements Christoph Aeschlimann CEO Swisscom 3
Slide 4: Highlights
Highlights Satisfactory Q3 results 1 2 3 4 Q3 financials Unchanged Keep growing Acquisition of in line business trends with Fastweb Vodafone Italia and confirming FY guidance in Switzerland in Italy and merger with Fastweb • Flattish underlying Q3 - both • Q3 as expected: • Ongoing commercial succes
Slide 5: Operational performance
Operational performance Robust performance in Switzerland and ongoing growth in Italy 1 Swisscom Switzerland Fastweb 2 +113 Fixed +45 3 Fixed +1 +102 +92 +35 +72 4 +22 +58 +54 +10 +12 +8 +10 Net adds in k Q1 24 Q2 Q3 Q1 24 Q2 Q3 -9 -9 -9 -11 -12 -19 -25 -15 -15 -23 -22 -22 Postpaid Broadband TV 1 Fi
Slide 6: Financial results
Financial results Financial performance as expected, with flattish top line and underlying EBITDA in Q3 1 Overview of key figures Q3 24 EBITDA development 2 in CHF mn, YOY in CHF mn, YOY Q3 24 9M 24 3 Underlying -6 (-0.5%) 2'719 8'173 1’174 1’159 4 +2 (-1.3%) Revenue (-1.2%) (-0.4%) -2 -6 -9 -15 EBI
Slide 7: Business update - Switzerland and Italy
2 1 Business update - Switzerland and Italy Christoph Aeschlimann CEO Swisscom 7
Slide 8: Swisscom's strategic priorities for 2024 and beyond
Swisscom's strategic priorities for 2024 and beyond For Switzerland and Italy 1 2 3 Delight Innovate Achieve more Perform 4 customers for growth with less together Create unique Deliver digital products Achieve more Develop ourselves and customer experience and services of the future with less our c
Slide 9: B2C Telco - Constant strengthening of #1 position in Switzerland
B2C Telco - Constant strengthening of #1 position in Switzerland Strong focus on value optimisation across all brands Expand offer differentiation with innovation and added value … … to sustain leading position, keep ARPUs stable and churn low 1 2 Continuous investments in offerings and services • B
Slide 10: B2C Telco - Stable RGU development driven by continued growth of wingo
B2C Telco - Stable RGU development driven by continued growth of wingo Leverage strengths and partnerships to drive growth beyond core Target different customer segments and needs … … to defend RGU base and tap into new areas of growth 1 2 Swisscom with adjusted promotional approach to counteract ma
Slide 11: B2B Telco and IT - Reinforcing premium positioning as a trusted business partner
B2B Telco and IT - Reinforcing premium positioning as a trusted business partner … with excellent offerings and strong brand Investing in best offerings and customer loyalty … … to drive value and benefit from IT growth opportunities 1 2 385 384 378 375 374 CHF -11mn YOY (-2.9%) Re-enhanced brand po
Slide 12: Networks and IT - Creating tomorrow's best network of Switzerland today
Networks and IT - Creating tomorrow's best network of Switzerland today Best in quality and coverage Further drive the next generation connectivity … … to delight customers with best coverage and service quality 1 Ambition 2 Further expansion of 5G+ reach 2025: up to 90% 99% 99% 99% 99% 77% 85% 3 •
Slide 13: Telco - Achieving more with less remains a top priority
Telco - Achieving more with less remains a top priority Continuously strive for Telco cost savings to balance Telco service revenue erosion Implementing innovative tools … … to drive customers self-service and reduction of contact centre workload 1 2 Digital push for sales and service excellence • S
Slide 14: Fastweb B2C - Sustain high-quality approach in Telco while evolving beyond core
Fastweb B2C - Sustain high-quality approach in Telco while evolving beyond core Prioritise the growth of convergence economics and delivery of quality services through innovative solutions Enhance customer experience with AI and quality performance … … towards better convergence economics and higher
Slide 15: Fastweb B2B and Wholesale - Ongoing good market momentum
Fastweb B2B and Wholesale - Ongoing good market momentum Keep growing through scaling up cloud, cybersecurity and wholesale business Continuously enrich the portfolio with IT, AI and new businesses … … to grow profitably in B2B and Wholesale 1 2 B2B top line growth Revenue New contracts in EUR mn dr
Slide 16: Transaction update - Vodafone Italia
3 Transaction update - Vodafone Italia Eugen Stermetz CFO Swisscom 16
Slide 17: A unique opportunity to create a leading converged challenger in Italy
A unique opportunity to create a leading converged challenger in Italy Completion of transaction on track Transaction strengthens Swisscom's profile in Italy 1 2 Acquisition of Vodafone Italia Compelling strategic rationale Substantial value creation Highly Clear 3 EUR 8.0bn Scale Convergence Infras
Slide 18: Financial results
4 Financial results Eugen Stermetz CFO Swisscom 18
Slide 19: Group revenue and EBITDA
Group revenue and EBITDA Q3 with flattish underlying top line and EBITDA contributions Revenue 1 in CHF mn Q1 Q2 Q3 +48 +35 +53 +29 -4 +4 +6 -7 -12 2 -45 -31 -33 -52 -5 -44 1 Q3 down due to lower revenues from Underlying +21 (+0.3%) 3 Q1: -13, Q2: +55, Q3: -21 Telco service, hard- and software sales
Slide 20: Group CAPEX and OpFCF
Group CAPEX and OpFCF OpFCF primarily impacted by FTTH CAPEX phasing in Switzerland - FY guidance for CAPEX unchanged CAPEX 1 in CHF mn Q1 Q2 Q3 +49 +57 +4 +6 +1 +2 2 +51 -7 +61 -4 -2 -7 -2 -2 -5 Underlying +112 (+6.9%) 1 Primarily due to FTTH CAPEX 3 Q1: +56, Q2: -3, Q3: +59 +101 phasing: evenly sp
Slide 21: Swisscom Switzerland revenue and EBITDA changes by segments
Swisscom Switzerland revenue and EBITDA changes by segments Q3 with underlying EBITDA on prior year's level Revenue 1 in CHF mn Q1 Q2 Q3 +4 +24 +3 0 0 +1 1 Q3 impacted by lower Telco service revenue -19 -23 -4 (CHF -13mn) and hard- and software sales 2 -59 -15 -9 -8 -52 -45 (CHF -9mn) 3 +13 -101 2 D
Slide 22: Swisscom Switzerland revenue and underlying EBITDA changes by business drivers
Swisscom Switzerland revenue and underlying EBITDA changes by business drivers Indirect Telco cost savings picking up in Q3 and on track to achieve FY outlook Revenue and EBITDA 1 9M YOY, in CHF mn 1 Primarily due to brand mix (CHF -13mn), higher VAT (CHF -4mn) and lower BB subs base (CHF -5mn), 2 p
Slide 23: Swisscom Switzerland CAPEX and OpFCF
Swisscom Switzerland CAPEX and OpFCF OpFCF contribution impacted by softer EBITDA (in Q2) and FTTH CAPEX phasing (in Q1 and Q3) CAPEX 1 in CHF mn Q1 Q2 Q3 +51 +61 2 1 Higher investments in mobile core network -7 3 90 379 81 1'302 2 Primarily due to FTTH CAPEX phasing: 4 215 537 evenly spread this ye
Slide 24: Fastweb revenue and EBITDA changes by segments
Fastweb revenue and EBITDA changes by segments EBITDA increase as expected primarily thanks to growing Wholesale contributions Revenue 1 in EUR mn Q1 Q2 Q3 +29 +35 +54 +31 +3 +23 +17 +13 +26 +11 1 Robust growth in mobile (+388k subs YOY), 2 -1 -1 mitigating competitive pressure in wireline +50 +120
Slide 25: Fastweb CAPEX and OpFCF
Fastweb CAPEX and OpFCF OpFCF growing and evolution in line with expectations CAPEX 1 in EUR mn Q1 Q2 Q3 +4 +6 2 288 -4 3 75 451 46 1 Lower expenditure due to changed FWA 11 31 4 strategy, stopping rollout of a dedicated Wireless Wireline Backbone & IT FWA network network access network infrastructu
Slide 26: Group free cash flow
Group free cash flow FCF stable thanks to better NWC development, lower interest and tax payments in CHF mn 1 2 -195 +3 -5 1'490 -242 -14 3 9M 24 1'037 4 1 2 3 Δ -140 +47 +28 +51 +29 -15 0 -242 -25 -56 1'630 -271 +1 9M 23 1'037 Change in Change in Net interest Income Other OpFCF defined benefit FCF
Slide 27: Group net income
Group net income Net income slightly softer in line with EBITDA evolution in CHF mn 1 2 3'438 tax rate 1 18.6% EPS 3 24.77 (-2.1%) 9M 24 1'652 4 -1'590 -196 -75 -1 -293 1'283 0 1'283 Δ -39 -24 +1 -62 +18 -1 +18 -27 -1 -28 3’477 tax rate 1 19.2% EPS 25.31 9M 23 1'714 -1'566 -197 -93 0 -311 1'310 +1 1
Slide 28: Group guidance FY 2024
Group guidance FY 2024 Confirmed 1 2 2023 2024 3 in CHF bn reported splits into: outlook splits into: 3 CHF 8.5bn for Switzerland 2 CHF ~8.5bn for Switzerland 4 Revenue 11.072 EUR 2.6bn for Fastweb ~11.0 EUR ~2.6-2.7bn for Fastweb CHF 3.8bn for Switzerland 4 EBITDA1 4.622 EUR 0.8bn for Fastweb 5 4.5
Slide 29: Questions & Answers
Questions & Answers 29
Slide 30: Appendix
Appendix 30
Slide 31: Key financials
Key financials Underlying revenue and EBITDA in CHF mn 2023 2024 YOY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Revenue 2'747 2'703 2'752 2'870 11'072 2'703 2'751 2'719 -44 +48 -33 Currency effect 1 31 7 12 +31 +7 +12 Underlying -13 +55 -21 EBITDA 1'164 1'139 1'174 1'145 4'622 1'155 1'124 1'159 -9 -15 -
Slide 32: Swisscom Switzerland - Residential Customers
Swisscom Switzerland - Residential Customers Segment reporting as per 30.09.2024 in MCHF Q3 2024 Q3/Q3 30.09.2024 YOY Revenue 1) 1'090 -1.9% 3'247 -3.0% 9M revenue decreased due to Direct costs -188 -5.1% -562 -10.2% softer Telco service revenue Indirect costs 2) -145 -5.2% -436 -5.0% and lower hard
Slide 33: Residential Customers - Q3 2024 operational KPIs
Residential Customers Q3 2024 operational KPIs Wireless Wireline Q3 23 Q3 24 Q3 23 Q3 24 RGUs in k Penetration rates RGUs in k Penetration rates Postpaid value (YOY, pp) Broadband (YOY, pp) 3’354 3'416 80% 67% 51% 49% 1'722 1’697 (0) 1'475 1’436 33% (+1) (+1) (0) 10% (+3) (+2) (+2) 1 Postpaid 2nd/3r
Slide 34: Swisscom Switzerland - Business Customers
Swisscom Switzerland - Business Customers Segment reporting as per 30.09.2024 in MCHF Q3 2024 Q3/Q3 30.09.2024 YOY Revenue 1) 752 -1.7% 2'310 0.7% Direct costs -167 -4.6% -534 3.3% Indirect costs 2) -254 0.8% -800 4.4% 9M revenue increased (+0.7%). EBITDA 331 -2.1% 976 -3.4% Lower Telco service reve
Slide 35: Swisscom Switzerland - Wholesale
Swisscom Switzerland - Wholesale Segment reporting as per 30.09.2024 in MCHF Q3 2024 Q3/Q3 30.09.2024 YOY 9M revenue weaker (-3.9%), Revenue 1) 133 -6.3% 395 -3.9% primarily due to inbound Direct costs -71 -15.5% -171 -9.0% roaming and wholesale Indirect costs 2) -5 n.m. -9 n.m. services. EBITDA 57
Slide 36: Swisscom Switzerland - Infrastructure & Support Functions
Swisscom Switzerland - Infrastructure & Support Functions Segment reporting as per 30.09.2024 in MCHF Q3 2024 Q3/Q3 30.09.2024 YOY Revenue 1) 19 0.0% 57 0.0% 9M EBITDA roughly stable Direct costs -1 - -1 - (-0.4%). The exceptional Indirect costs 2) -257 -0.4% -772 -0.5% items (regulatory litigations
Slide 37: Fastweb
Fastweb Segment reporting as per 30.09.2024 in MEUR Q3 2024 Q3/Q3 30.09.2024 YOY 9M Residential customers revenue Residential customers 292 1.0% 870 0.1% almost on prior year level (+0.1%). Business customers 304 5.9% 883 8.5% 1) Decrease in wireline compensated Wholesale 95 13.1% 278 21.9% by highe
Slide 38: Other
Other Segment reporting as per 30.09.2024 in MCHF Q3 2024 Q3/Q3 30.09.2024 YOY External revenue 103 -3.7% 316 1.9% Revenue 1) 283 6.4% 820 7.8% Direct costs -19 -9.5% -56 -6.7% 9M revenue up by +7.8% Indirect costs 2) -223 9.9% -652 7.2% thanks to higher revenue EBITDA 41 -2.4% 112 20.4% at cablex.
Slide 39: Pension cost and cash payments
Pension cost and cash payments Net pension cost impacted by discount rate reported estimate estimate in CHF mn 9M 23 9M 24 YOY FY 23 FY 24 YOY Segments' pension cost 205 208 3 273 279 6 Pension reconciliation -28 -14 14 -37 -22 15 Operating pension cost (EBITDA) 177 194 17 236 257 21 Net interest (f
Slide 40: Cautionary statement
Cautionary statement regarding forward looking statements • "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
Slide 41: Investor contact
Investor contact Louis Schmid Anastasia Henkel Head Investor Relations Investor Relations Manager louis.schmid@swisscom.com anastasia.henkel@swisscom.com +41 58 221 62 79 +41 58 221 40 80 41
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