Swisscom Ag · SIX:SCMN
Swisscom — Swisscom Ag Ittigen R/Shs — Q1 2024 Earnings Presentation
42 slides from Swisscom's earnings presentation, May 2, 2024
Slide 1: Q1 2024 results
Q1 2024 results Investor & analyst presentation 02 May 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 Christoph Aeschlimann, CEO Swisscom 4. Financial results Eu
Slide 3: Achievements
1 Achievements Christoph Aeschlimann CEO Swisscom 3
Slide 4: Highlights
Highlights The Italian transaction with its FCF and dividend growth prospects as key highlight 1 2 3 4 Satisfying Following Growing Acquisition of Q1 results value over price with Fastweb Vodafone Italia and as expected in Switzerland in Italy and merging with Fastweb • Top line slightly lower • Ope
Slide 5: Operational performance
Operational performance Mobile growing. Fixed broadly stable in Switzerland and increasing in Italy 1 Swisscom Switzerland Fastweb 2 3 Fixed -3 +144 +102 Fixed +53 4 +30 +72 +12 +40 +10 +9 Net adds in k Q1 23 Q1 24 -10 -15 -13 -11 -21 -19 -23 -30 Postpaid Broadband TV1 Fixed voice Wholesale Mobile B
Slide 6: Financial results
Financial results EBITDA development as expected and OpFCF lower due to seasonally higher capital expenditures 1 Q1 24 key figures Q1 24 EBITDA development 2 in CHF mn in CHF mn, YOY Margin Margin 3 42.4% Underlying -18 (-1.5%) Revenue 2'703 1’164 +9 42.7% 4 (-1.6% YOY) +4 1’155 (-0.8%) -19 -3 -9 EB
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 - Ongoing strong value commitment across all brands
B2C Telco - Ongoing strong value commitment across all brands Continuous investments in quality and service differentiation Delight customers with value by design … … to maximise ARPU contributions and customer loyalty 1 2 Quality proposition further strengthened Q1 2024 Q1 2024 3 • Extended blue of
Slide 10: B2C Telco - Convincing new business propositions beyond the core
B2C Telco - Convincing new business propositions beyond the core Lever strong customer relationship, digital sales platforms and trustworthy brand Create a unique ecosystem with innovative services of the future … … to tap into new growth areas 1 The Home of Football MySelection 2 Win customers with
Slide 11: B2B Telco and IT - Lever leading position in connectivity to drive growth in IT
B2B Telco and IT - Lever leading position in connectivity to drive growth in IT Bring business value to customers through product innovation, new services and digital transformation Permanently develop the B2B propositions … … to maintain Telco service revenue and achieve IT revenue growth 1 2 Diffe
Slide 12: Networks and IT - Continuously enhance network leadership in Switzerland
Networks and IT - Continuously enhance network leadership in Switzerland Swisscom with high investments in 5G+ and FTTH rollout and innovation Delight customers even more with next generation connectivity… … in combination with most reliable and secure services 1 2 Best mobile network in Switzerland
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 out Telco service revenue erosion Optimisation of touch points and internal processes … … with no compromise for delighting customers 1 2 Extended shop concept Achieve more… Call Centre Shop
Slide 14: Fastweb B2C Telco - Keep strong quality focus and grow beyond core
Fastweb B2C Telco - Keep strong quality focus and grow beyond core Increase convergency economics and develop a domestic ecosystem tailored to HHs Drive value differentiation with unique customer experience … … and innovative services to increase FMC and customer loyalty 1 2 Value strategy supported
Slide 15: Fastweb B2B and Wholesale - Q1 with top line growth
Fastweb B2B and Wholesale - Q1 with top line growth… …driven by public sector and rising UBB connections in Wholesale Focus on ICT services and wholesale core services … … and continuously drive commercial momentum and top line growth 1 2 B2B with strong Q1 performance Revenue New contracts in EUR m
Slide 16: Transaction update - Vodafone Italia
3 Transaction update - Vodafone Italia Christoph Aeschlimann CEO 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 Swisscom to acquire Vodafone Italia for EUR 8.0bn EV and combine it with Fastweb Transaction strengthens Swisscom's profile in Italy Long-term value creation, attractive dividend and strong balance sheet 1 CAPEX Transaction terms
Slide 18: Financial results
4 Financial results Eugen Stermetz CFO Swisscom 18
Slide 19: Group revenue and EBITDA
Group revenue and EBITDA Underlying top line almost flat thanks to growth from Italy. EBITDA development as expected Revenue 1 in CHF mn Underlying -13 (-0.5%) 2 +4 -44 +35 (-1.6%) 1 Decrease in hardware and software sales 3 2'747 -52 and lower Telco service revenue, partly -31 2'703 compensated by
Slide 20: Group CAPEX and OpFCF
Group CAPEX and OpFCF Q1 with lower OpFCF contribution due to seasonally higher CAPEX CAPEX 1 in CHF mn Underlying +56 (+10.3%) 2 +49 +51 +4 +1 (+9.0%) 1 Acceleration of FTTH rollout. In addition, 3 -7 in Q1 investments in wireless network higher than average 4 545 594 1 2 2 Marginally higher due to
Slide 21: Swisscom Switzerland revenue and EBITDA changes by segments
Swisscom Switzerland revenue and EBITDA changes by segments As expected, Q1 slightly lower Revenue 1 in CHF mn 2 1 Decrease in hardware and software revenue +4 -52 (CHF -32mn, less smartphones sold), lower (+0.5%) +3 0 (-2.5%) 3 Telco service revenue (CHF -17mn) and -59 other revenue (CHF -10mn) 4 2
Slide 22: Swisscom Switzerland revenue and underlying EBITDA changes by business drivers
Swisscom Switzerland revenue and underlying EBITDA changes by business drivers B2C Telco service revenue and Telco cost savings relatively weak in Q1, initial FY guidance reiterated Revenue and EBITDA 1 YOY changes in CHF mn 1 Weaker YOY due to VAT (CHF -4mn), lower BB subs base (CHF -3mn) and brand
Slide 23: Swisscom Switzerland CAPEX and OpFCF
Swisscom Switzerland CAPEX and OpFCF Lower OpFCF contribution in Q1, primarily driven by seasonally higher investments into fibre and core wireless CAPEX 1 in CHF mn 2 1 Q1 higher (than average per quarter) due 129 22 to investments in mobile core network 445 3 172 32 90 4 Wireless Wireline Backbone
Slide 24: Fastweb revenue and EBITDA changes by segments
Fastweb revenue and EBITDA changes by segments EBITDA increase of +2.1% thanks to growing Wholesale contributions Revenue 1 in EUR mn 2 1 In line with PY thanks to mobile (with +380k +13 subs YOY) offsetting competitive pressure in -1 +23 +35 3 (-0.3%) (+8.8%) (+17.8%) (+5.6%) wireline 4 658 2 Top l
Slide 25: Fastweb CAPEX and OpFCF
Fastweb CAPEX and OpFCF Stable OpFCF contribution thanks to EBTIDA growth CAPEX 1 in EUR mn 93 2 157 31 3 18 6 9 4 Wireless Wireline Backbone & IT Other Q1 24 network access network infrastructure 1 1 YOY lower due to rollout stop of a dedicated FWA network YOY -8 - - +6 +6 +4 OpFCF in EUR mn -13 19
Slide 26: Group free cash flow
Group free cash flow FCF nearly flat thanks to better NWC development and lower taxes paid in CHF mn 1 2 -226 3 489 -2 -10 -30 -23 Q1 24 4 198 Δ -57 +18 +6 +2 +35 -15 -11 1 -244 546 -8 -12 -65 -8 Q1 23 209 Change in Change in Net interest Income Other OpFCF defined benefit FCF NWC paid taxes paid ca
Slide 27: Group net income
Group net income Net income up primarily thanks to better net financial result in CHF mn 1 2 1'155 tax rate 1 EPS 17.9% 8.78 3 Q1 24 (+2.9%) 568 4 -522 -65 -14 0 -99 455 0 455 Δ -9 +3 +1 -5 +16 0 +2 +13 0 +13 1 1’164 tax rate 1 EPS 18.6% 8.53 Q1 23 573 -525 -66 -30 0 -101 442 0 442 EBITDA Depreciati
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
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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 -44 Currency effect 1 31 +31 Underlying -13 EBITDA 1'164 1'139 1'174 1'145 4'622 1'155 -9 Regulatory litigations 3 -54 -51 -24 -24 Transaction cost
Slide 32: Swisscom Switzerland - Residential Customers
Swisscom Switzerland - Residential Customers Segment reporting as per 31.03.2024 in MCHF 31.03.2024 YOY Revenue 1) 1'078 -5.2% Revenue decreased due to Direct costs -188 -18.3% lower hardware sales (less 2) Indirect costs -142 -7.2% smartphones sold) and softer Telco service revenue. EBITDA 748 -0.8
Slide 33: Residential Customers
Residential Customers Q1 2024 operational KPIs Wireless Wireline Q1 23 Q1 24 Q1 23 Q1 24 RGUs in k Penetration rates RGUs in k Penetration rates Postpaid value (YOY, pp) Broadband (YOY, pp) 3'295 3'379 1'727 1'709 81% 50% 49% 67% 32% 1'491 1'462 (+3) (+3) (-1) 9% (0) (+1) (+2) 1 2 Postpaid 2nd/3rd b
Slide 34: Swisscom Switzerland - Business Customers
Swisscom Switzerland - Business Customers Segment reporting as per 31.03.2024 in MCHF 31.03.2024 YOY Revenue 1) 773 0.7% Revenue slightly increased Direct costs -178 3.5% (+0.7%). Lower Telco service Indirect costs 2) -270 6.3% revenue (CHF -13mn) EBITDA 325 -5.0% compensated by low-margin EBITDA as
Slide 35: Swisscom Switzerland - Wholesale
Swisscom Switzerland - Wholesale Segment reporting as per 31.03.2024 in MCHF 31.03.2024 YOY Revenue nearly stable Revenue 1) 136 1.5% (+1.5%). Slightly higher Direct costs -44 -10.2% revenue from Wholesale Indirect costs 2) 1 n.m. services. EBITDA 93 16.3% EBITDA as % of revenue 68.4% EBITDA up (+16
Slide 36: Swisscom Switzerland - Infrastructure & Support Functions
Swisscom Switzerland - Infrastructure & Support Functions Segment reporting as per 31.03.2024 in MCHF 31.03.2024 YOY Revenue 1) 19 0.0% Direct costs - - Reported EBITDA 2) Indirect costs -240 -4.4% improved by 4.7% primarily thanks exceptional EBITDA -221 -4.7% items (regulatory litigations Lease ex
Slide 37: Fastweb
Fastweb Segment reporting as per 31.03.2024 in MEUR 31.03.2024 YOY Residential customers 288 -0.3% Business customers 284 8.8% Residential customers 1) revenue on prior level Wholesale 86 17.8% (-0.3%). Decrease in Revenue 1) 658 5.6% wireline compensated by Direct costs -320 10.3% increasing wirele
Slide 38: Other
Other Segment reporting as per 31.03.2024 in MCHF 31.03.2024 YOY External revenue 104 5.1% 1) Revenue 252 5.0% Direct costs -18 -5.3% Revenue up by +5.0% Indirect costs 2) -201 6.3% thanks to higher revenue EBITDA 33 3.1% at cablex. EBITDA as % of revenue 13.1% Lease expense -3 50.0% EBITDA on prior
Slide 39: Pension cost and cash payments
Pension cost and cash payments Net pension cost impacted by discount rate, but company contributions (cash) stable reported estimate estimate in CHF mn Q1 23 Q1 24 YOY FY 23 FY 24 YOY Segments' pension cost 68 69 1 273 279 6 Pension reconciliation -9 -4 5 -37 -22 15 Operating pension cost (EBITDA) 5
Slide 40: New CAPEX categories
New CAPEX categories Including lists of various components Swisscom Switzerland Fastweb Q1 2024 Q1 2024 • Access network: upgrade and modernisation of existing Wireless sites, building of new antenna sites CHF 90mn EUR 6mn network • Core network • Core network incl. capacity increase Wireline • Acce
Slide 41: 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 42: 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 42
Swisscom Ag Ittigen R/Shs — Q1 2024 Earnings Presentation on 6ix