Swisscom Ag · SIX:SCMN
Swisscom — Swisscom Ag Ittigen R/Shs — Q1 2023 Earnings Presentation
40 slides from Swisscom's earnings presentation, May 4, 2023
Slide 1: Q1 2023 results
Analyst & investor presentation Q1 2023 results 04 May 2023
Slide 2: Agenda
Agenda Introduction Louis Schmid, Head of Investor Relations 1. Highlights Christoph Aeschlimann, CEO 2. Business review Christoph Aeschlimann, CEO 3. Financial results Eugen Stermetz, CFO Questions & answers All Appendix 2
Slide 3: Highlights
1 Highlights 3
Slide 4: Q1 achievements
1 Q1 achievements Solid quarter - in line with expectations Solid underlying financials: Outstanding multi-brand Satisfying operational revenue and EBITDA up. strategy further cemented. performance: growing On track to achieve Swiss service champion: postpaid and stable fixed group guidance 2023 bes
Slide 5: Q1 market performance
1 Q1 market performance RGU development positive in wireless and mixed in fixed with wholesale growth compensating BB decrease Swisscom Switzerland Fastweb +177 +35 +30 Fixed -1 +144 Fixed +19 +57 +40 +9 +5 Net adds reported in k Q1 22 Q1 23 -7 -6 -19 -21 -10 -13 -25 -30 Postpaid Broadband TV Fixed
Slide 6: Q1 financial performance
1 Q1 financial performance Solid development with higher underlying EBITDA in CHF mn Q1 2023 EBITDA and OpFCF proxy development in CHF mn Revenue 2'747 Underlying +34 (+3.0%) +24 -7 (-0.3% YOY) 1’164 +13 +3 -6 (+2.4%) 1’137 EBITDA 1'164 (+2.4% YOY) EBITDA Swisscom Fastweb Other2 Pension Currency EBI
Slide 7: Business review
Business review \ GE
Slide 8: Management transition completed
2 Management transition completed Successful appointments of several new leadership members Swisscom Fastweb Klementina Eugen Christoph Gerd Isa Walter Pejic Stermetz Aeschlimann Niehage Müller-Wegner Renna CPO CFO CEO CTIO CSO CEO since Feb 2021 since March 2021 since June 2022 since March 2023 as
Slide 9: Unchanged business priorities 2023 in Switzerland and Italy
2 Unchanged business priorities 2023 in Switzerland and Italy Consequent execution while keeping a strong operational excellence focus Swisscom Switzerland Fastweb Lever leading B2C market Retain value in B2B Stable investments in Achieve position and maximise Telco business and next generation prof
Slide 10: Swisscom Switzerland - B2C
2 Swisscom Switzerland - B2C Market leadership thanks to constant push of innovation and service excellence Innovative brand strategy Service excellence at the next level • Continued focus on value and less price promotions • Service excellence improved through simplification • Own brand blue with n
Slide 11: Swisscom Switzerland - B2C
2 Swisscom Switzerland - B2C Satisfying operational performance despite seasonally higher churn rates in Q1 Wireless Wireline Q1 22 Q1 23 Q1 22 Q1 23 RGUs in k Penetration rates RGUs in k Penetration rates 1'736 1'727 3'136 3'288 1'517 1'491 80% 47% 49% 65% 29% 7% Broadband TV 2nd/3rd blue FMC HHs 4
Slide 12: Swisscom Switzerland - B2B
2 Swisscom Switzerland - B2B Telco business as expected. IT growing and with unchanged positive FY outlook Telco service IT service Revenues in CHF mn Revenues in CHF mn -12 +2 400 395 399 394 388 289 285 281 297 291 212 209 210 210 206 188 186 189 184 182 Q1 22 Q2 Q3 Q4 Q1 23 Q1 22 Q2 Q3 Q4 Q1 23 w
Slide 13: Swisscom Switzerland - Networks
2 Swisscom Switzerland - Networks Consistently extend 5G+ and fibre coverage in Switzerland Wireless Wireline Pop coverage HH coverage 1 99% 99% 91% 91% 74% >75% 79% >80% 43% >43% FY 22 FY 22 Q1 23 Q1 23 5G 5G+ >80 Mbps >200 Mpbs ≤10 Gbps • Higher legal certainty in 5G rollout • Continuously invest
Slide 14: Swisscom Switzerland - financial results
2 Swisscom Switzerland - financial results Higher EBITDA primarily thanks to strong contributions from operational excellence Revenue EBITDA OpFCF proxy in CHF mn (YOY) in CHF mn (YOY) in CHF mn 2'056 -12 2'044 +13 930 943 130 +1 131 56 Q1 23 YOY 222 56 +0 Lease expense 2 -5 217 289 +2 291 EBITDAaL
Slide 15: Fastweb - Q1 achievements
2 Fastweb - Q1 achievements Successfully executing priorities 2023 39th consecutive quarter of Consumer with +4pp UBB +6% top line growth in growth across all KPIs: penetration and +22% RGU Enterprise +163k RGUs, +5% revenue growth in mobile as 2nd best Several new contracts with and +2% EBITDA in Q
Slide 16: Fastweb - Consumer
2 Fastweb - Consumer Positive growth in Q1 mainly led by UBB and Mobile, continuing the value strategy Broadband subs in k (YOY change) Mobile subs in k (YOY change) ARPU uplift Churn benefit +22% in Q1 23 in Q1 23 -3% 2’731 • Fastweb's focus on 3’231 +28% -22% 2’662 2’649 • Strong YOY growth: value
Slide 17: Fastweb - Enterprise and Wholesale
2 Fastweb - Enterprise and Wholesale The main drivers of top line growth Enterprise revenues in EUR mn (YOY) Wholesale revenues in EUR mn 2 (YOY) +6% +16% • Growth of +6% YOY driven by large • Core services: growth 261 accounts and PA sector 73 of +17% YOY driven by 247 63 3 Other increasing number
Slide 18: Fastweb financial results
2 Fastweb financial results Q1 marks the 39th consecutive quarter of growth Revenue EBITDA OpFCF proxy in EUR mn (YOY) in EUR mn (YOY) in EUR mn +28 623 Q1 23 YOY 595 73 Wholesale +3 +10 185 188 63 14 13 Lease expense 1 EBITDAaL 2 175 (+4) 247 +14 261 Enterprise 171 +4 175 EBITDAaL 2 CAPEX -153 (+4)
Slide 19: Financial results
3 Financial results 19
Slide 20: Group revenue
3 Group revenue Underlying top line positive thanks to growing Fastweb in CHF mn Underlying +17 (+0.6%) Swisscom Switzerland -12 (-0.6%) +28 (+4.7%) +1 +5 +1 +0 -7 (-0.3%) -18 -24 2'754 2'747 1 2 3 Q1 22 B2C B2B ISF 1 Fastweb Other 2 Currency Q1 23 Wholesale restated impact reported 1 Positive thank
Slide 21: Swisscom Switzerland revenue
3 Swisscom Switzerland revenue Slightly lower top line primarily driven by Telco service revenue Q1 23 revenue changes by business drivers Telco service revenue evolution in CHF mn in CHF mn 2022 Q1 Q2 Q3 Q4 2023 Q1 Swisscom Switzerland -12 (-0.6%) 5 7 B2C -4 -2 -7 -5 -10 -17 -2 -12 B2C -5 B2B -21 -
Slide 22: Group EBITDA
3 Group EBITDA Higher underlying contributions from Swisscom Switzerland and Fastweb in CHF mn Underlying +34 (+3.0%) Swisscom Switzerland +13 (+1.4%) +24 +3 (+1.6%) +27 +2 +19 -7 (+2.4%) -6 -7 -1 1'164 1'137 1 2 3 4 5 Q1 22 B2C B2B ISF 1 Fastweb Other 2 Pension Currency Q1 23 Wholesale reported rec
Slide 23: Swisscom Switzerland EBITDA
3 Swisscom Switzerland EBITDA Operational excellence initiatives with expected savings on Telco-related costs in CHF mn Direct cost -3 (+0.7%) Indirect cost +28 (-4.0%) +27 +1 +13 +3 (+1.4%) -12 -6 -0 930 943 1 2 3 4 Q1 22 Revenue Outpayments Goods Telco IT business 2 Q1 23 SAC/SRC reported & servic
Slide 24: Capital expenditures
3 Capital expenditures Continuous investments in the infrastructure of the future Swisscom Switzerland Q1 23 in CHF mn Q1 22 ∆ Q1 23 Wireless • Wireless investments at prior's CHF 65mn year level due to ongoing 5G+ Group 522 +23 545 coverage extension (CHF -3mn YOY) CAPEX (+4.4% YOY) • Slightly lowe
Slide 25: Free cash flow
3 Free cash flow OpFCF stable and FCF higher primarily due to higher tax payments in prior year in CHF mn 1’164 -73 -545 1'091 Q1 23 546 -244 -8 -12 -65 -8 209 ∆ +27 -1 +26 -23 +3 +20 -24 -1 +124 +24 +146 1 2 1’137 -72 1'065 -522 Q1 22 543 -264 +16 -11 -189 -32 63 EBITDA Lease EBITDAaL CAPEX OpFCF C
Slide 26: Net income
3 Net income On prior year level thanks to EBITDA compensating higher financial expense in CHF mn tax rate 1 EPS 18.6% 8.53 Q1 23 1’164 -525 -66 573 -30 0 -101 442 0 442 ∆ +27 -3 0 +24 -32 +1 +2 -5 0 -5 1 tax rate 1 18.7% EPS 8.63 Q1 22 1’137 -522 -66 549 2 -1 -103 447 0 447 Depreciation, ling inter
Slide 27: Well balanced and diversified maturity profile
3 Well balanced and diversified maturity profile Successful rating reviews in Q1 underpinning A credit ratings. Moody's upgrade to A1 Debt maturity profile as per Q1 2023 1) • Attractive CHF 200mn refinancings in Q1 2023 250 199 449 • Domestic green bond of CHF 150mn (7.5y, 1.875% coupon) 2024 500 1
Slide 28: FY 2023 guidance
3 FY 2023 guidance Confirmed 2023 4 in CHF bn 2022 Splits into: outlook Splits into: 1 CHF 8.6bn for Switzerland 3 CHF ~8.6bn for Switzerland Revenue 11.051 EUR 2.5bn for Fastweb 11.1-11.2 EUR 2.5-2.6bn for Fastweb CHF 3.5bn for Switzerland EBITDA2 4.406 EUR 0.9bn for Fastweb 4.6-4.7 CHF 3.7-3.8bn f
Slide 29: Questions & answers
A 2s a “J EN 24 Q &2" 4 \ \ A / 6 ions & answers ~~
Slide 30: Appendix
Appendix 30
Slide 31: Key financials
Key financials Underlying revenue and EBITDA in CHF mn 2022 2023 Change Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Revenue 2'754 2'713 2'712 2'872 11'051 2'747 -7 Currency effect 24 +24 Underlying +17 EBITDA 1'137 1'054 1'150 1'065 4'406 1'164 +27 Provisions for regulatory litigations 82 75 157 Restruct
Slide 32: Residential Customers
Residential Customers Segment reporting as per 31.03.2023 in MCHF 31.03.2023 YOY Revenue 1) 1'136 0.4% Direct costs -230 4.5% Revenue increased thanks to 2) higher hardware sales Indirect costs -158 -4.2% (device availability EBITDA 748 0.3% improved) and blue cinema EBITDA as % of revenue 65.8% ove
Slide 33: Business Customers
Business Customers Segment reporting as per 31.03.2023 in MCHF 31.03.2023 YOY Revenue 1) 772 -2.4% Direct costs -181 -5.7% Revenue decreased (-2.4%), 2) Indirect costs -246 -0.4% driven by Telco service revenue (CHF -12mn, primarily price EBITDA 345 -2.0% pressure) and lower hard- and EBITDA as % of
Slide 34: Wholesale
Wholesale Segment reporting as per 31.03.2023 in MCHF 31.03.2023 YOY Revenue 1) 134 0.8% Revenue nearly stable Direct costs -49 2.1% (+0.8%). Slightly higher Indirect costs 2) -5 25.0% revenue from Wholesale EBITDA 80 -1.2% services compensated by EBITDA as % of revenue 59.7% lower revenue from Leas
Slide 35: Infrastructure & Support Functions
Infrastructure & Support Functions Segment reporting as per 31.03.2023 in MCHF 31.03.2023 YOY Revenue 1) 19 5.6% Direct costs -2 0.0% EBITDA improved by +7.2% Indirect costs 2) -248 -6.4% (CHF +18mn) primarily EBITDA -231 -7.2% thanks to lower workforce Lease expense -38 0.0% expenses and cost for m
Slide 36: Fastweb
Fastweb Segment reporting as per 31.03.2023 in MEUR 31.03.2023 YOY Consumer 289 1.4% Enterprise 261 5.7% 1) Wholesale 73 15.9% 1) Revenue 623 4.7% Consumer revenue up by Direct costs -240 18.2% +1.4% mainly as a result of Indirect costs 2) -195 -5.8% the increasing wireless customer base. EBITDA 188
Slide 37: Other
Other Segment reporting as per 31.03.2023 in MCHF 31.03.2023 YOY External revenue 100 0.0% Revenue 1) 243 0.8% Net revenue on level Direct costs -19 26.7% of prior year. Indirect costs 2) -190 3.3% EBITDA 34 -19.0% EBITDA down by -19%, EBITDA as % of revenue 14.0% due to lower contributions Lease ex
Slide 38: Pension cost and cash payments
Pension cost and cash payments Higher discount rate for IFRS pension liabilities impacts EBITDA 2023 but not cash payments reported estimate estimate in CHF mn Q1 22 Q1 23 YOY FY 22 FY 23 YOY Segments' pension cost 69 68 -1 273 273 0 Pension reconciliation 15 -9 -24 53 -37 -90 Operating pension cost
Slide 39: Investor contact
Investor contact Bild Louis Schmid Tamara Hackl Head Investor Relations Investor Relations Manager louis.schmid@swisscom.com tamara.hackl@swisscom.com +41 58 221 62 79 +41 58 221 12 79 39
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
Swisscom Ag Ittigen R/Shs — Q1 2023 Earnings Presentation on 6ix