17 May 2001
Swisscom is financially sound and has succeeded in further improving key figures. High free cash flow and payment of the first tranche by Vodafone for its share in Swisscom Mobile AG reduced net debt to CHF 536 million. The equity ratio now stands at 50%. The number of full-time equivalents (FTEs) fell by 1,000 year-on-year to 20,274, reducing personnel expenses by CHF 26 million to CHF 605 million.
The Fixcom-Retail and Networks segment posted a 1.5% increase in net revenue from external customers to CHF 812 million. However, a drop in inter-segment revenue resulted in a decline in EBITDA margin from 37% to 35.5%. Revenue from telephone traffic fell by 16.1% to CHF 282 million compared with the same period last year. The decline relates primarily to national long-distance traffic (35.6%) and international telephony traffic (30%) and is attributable to the massive tariff reductions introduced on 1 March 2000 and to loss of market share. Revenue from value-added services, on the other hand, went up by 40.5% to CHF 76 million. Sustained growth in ISDN generated a 4.3% increase in revenue from access business to CHF 278 million, with revenues from business customers in the Enterprise Solutions segment contributing to this trend.
In terms of traffic volume, Swisscom Ltd (Fixcom-Retail and Networks and Enterprise Solutions) reported a 1.3% increase in fixed-network telephone traffic compared to the fourth quarter of 2000, to 4,164 million minutes. For each of the segments, traffic was higher then in the fourth quarter of 2000.
Compared with the first quarter of 2000, the Fixcom-Wholesale and Carrier Services segment generated an 8.1% increase in revenue from external customers to CHF 307 million. The increase stems primarily from national interconnection services for other telecommunications providers and international subsidiaries. Tariff reductions resulted in a decline in EBITDA margin from 5.6% to 5.4%. £
In the Enterprise Solutions segment, net revenue from external customers amounted to CHF 444 million, a fall of 6.7% compared with the same period last year. In telephone traffic, access business and value-added services, Enterprise Solutions participated in the aforementioned trend in "Fixcom-Retail and Networks". At CHF 99 million, revenue from leased line business is down 14.7% on the previous year´s figure as a result of tariff reductions introduced in August 2000. Selected reductions are expected during the course of this year. Corporate Communication Solutions, on the other hand, reported strong growth, with revenue advancing 51.4% to CHF 53 million. Revenue from data communications business, however, showed an overall drop over the previous year of 6%. Tariff reductions caused a decline in the segment´s EBITDA margin from 17.3% to 14.9%.
With net revenue from external customers up 22.4% and now standing at CHF 755 million, the Mobile segment remains Swisscom´s main area of growth. The first quarter of 2001 saw a net gain of 146,287 new customers, representing a 4.5% increase in the customer base since the end of 2000 to 3.31 million. The segment achieved a 67% market share. Prepaid customers accounted for the biggest increase, with numbers in this group rising 9% to 1.34 million. The growth in revenue stems primarily from mobile voice communications, which went up by 19.1%, and from data communications, which reported more than a five-fold rise in the number of SMS messages to 582 million in the first quarter of 2001. Average monthly revenue per customer (ARPU incl. incoming traffic) dropped from CHF 88 at the end of 2000 to CHF 85, chiefly as a result of an increase in the number of prepaid customers.
Third-party expenses rose by 33.9% compared to the previous year as a result of an increase in headcount, slightly higher customer acquisition costs and preparations for GPRS and UMTS. This resulted in a decline in EBITDA margin from 51.3% to 50%. The high penetration rate in Switzerland will cause revenue growth to slow over the course of the year.
Debitel, Europe´s biggest network-independent service provider, posted a 6% increase in revenue to CHF 947 million. In local currency terms (EUR), this represents approximately 11% growth. The increase in revenue is attributable to expansion of the customer base since the end of 2000 by 7.5% to 9.25 million. Debitel is the third largest mobile provider in Germany, with 7 million customers. At CHF 51 million, EBITDA (in accordance with IAS) is up 27.5% compared with the first quarter of 2000.
The segment Other reported a 12.3% fall in revenue to CHF 250 million, chiefly as a result of a 24% decline in PBX (private branch exchange) Services to CHF 114 million. Internet Service Provider bluewin experienced the negative growth in the global portal business. The bluewin Group posted a 3.7% year-on-year increase in net revenue (including revenue from inter-segment business) to CHF 32 million. The bluewin Group reported negative EBITDA of CHF 11 million. The number of active access customers rose by 11.4% to 612,884 compared to the end of 2000. Bluewin has a market share of 41%.
For the current financial year, Swisscom expects revenue to increase slightly compared with last year and loss of market share in its home market to fall less sharply. Competitive pressure will continue to put pressure on EBITDA margins in "Fixcom-Retail and Networks" and "Enterprise Solutions". Swisscom will continue to pursue its strategy of focussing on core competencies. Given the high level of penetration in the mobile telephony market, growth in this segment looks set to slow down.
Despite good first-quarter results for 2001, Swisscom expects operating income to be down on last year. Thanks to the gain recorded on the sale of the 25% shareholding in Swisscom Mobile AG and the already announced disposal of 190 properties, Swisscom anticipates a marked increase in net income.
For a copy of the detailed Interim Report, visit:
PDF: Interim report 1st Quarter 2001
Berne, 17 May 2001