Portrait of Urs Schaeppi, CEO Swisscom
Ad hoc announcement pursuant to Art. 53 LR / 2021 financial statements

Successful 2021 – strong market performance and financial result

+++ Rise in group revenue and operating income (EBITDA) +++ Fastweb sees growth in revenue, EBITDA and customer base +++ Business customers: growth in solutions business and increased customer satisfaction +++ High investment in networks, rapid clarification needed for FTTH fibre-optic expansion +++ Net income up due to business activity and non-recurring items +++ Proposal of stable dividend of CHF 22 per share for financial year 2021 +++ Outlook for 2022: Net revenue of around CHF 11.1-11.2 billion, EBITDA of around CHF 4.4 billion and capital expenditure of around CHF 2.3 billion +++
Sepp Huber
Sepp Huber, Head of Media Relations
03 February 2022

CEO Urs Schaeppi is satisfied with the past year: ‘Swisscom achieved a strong financial result in 2021 and saw growth in revenue and operating income. We inspired customers with our products, service and infrastructure in a persistently challenging environment. This is demonstrated by our victories in all relevant mobile network and service tests and the high level of customer satisfaction among residential and business customers. According to the “Global 500 2022” report by Brand Finance, Swisscom is the strongest telco brand in Europe, and the second-largest telco brand worldwide. We are doing well in the business customers segment with our cloud and security solutions. Swisscom sets standards and was once again able to demonstrate its leading position in the areas of technology, innovation, market and sustainability. The situation regarding the expansion of our fibre-optic network remains difficult. Clarity is needed urgently in the ongoing proceedings with the Competition Commission. The Swiss economy and society are dependent on a future-oriented fibre-optic expansion to drive digitisation forward. We are currently in dialogue with the Competition Commission. Our subsidiary Fastweb in Italy is also operating successfully, seeing growth in revenue, operating income and customer base.’


High price pressure in Swiss core business, growth at Fastweb

Group revenue increased by 0.7% year-on-year to CHF 11,183 million. In the Swiss core business, revenue decreased slightly by CHF 17 million to CHF 8,233 million (-0.2%). Competition and price pressure led to a decline in revenue from telecommunications services. This decreased by 3.3% to CHF 5,478 million. Revenue from the IT solutions business with business customers increased by CHF 53 million (+5.0%). Business in Italy continued to develop positively: Fastweb reported year-on-year revenue growth of EUR 88 million (+3.8%).

 

Consolidated operating income before depreciation and amortisation (EBITDA) increased by 2.2% to CHF 4,478 million and includes non-recurring items from adjustments to post-employment benefits as well as provisions for litigation and personnel downsizing. The non-recurring items mainly impacted the result of the Swiss core business, while at Group level they were balanced out. The decline in the Swiss core business was offset thanks in part to ongoing efficiency improvements and margin contributions from growing areas. EBITDA rose by 1.4% on a like-for-like basis; at Fastweb it increased by 5.4% (in EUR). In overall terms, Swisscom generated net income of CHF 1,833 million, up a massive 20.0% on the prior-year level primarily due to non-recurring items in the financial result and the higher EBITDA.  

High investment in the network – expansion challenging

Swisscom continuously invests in the quality, coverage and performance of its network infrastructure, reinforcing its position at the cutting edge of technology. Group-wide capital expenditure remained high in 2021 at CHF 2,286 million (+2.6%).

Decisions by the authorities put the brakes on broadband expansion in the fixed network

In 2008, the rollout of the fibre-optic network to homes and offices (FTTH) began primarily in densely populated centres using the four-fibre model. Starting in 2015, rural regions were also connected with high-performance bandwidths using fibre to the street (FTTS). In 2020, the next step in this rollout followed with fibre to homes and offices (FTTH) in agglomerations and rural communities.

 

As at the end of 2021, Swisscom in Switzerland had connected 4.8 million or some 90% of homes and businesses to its ultra-fast broadband service (speeds in excess of 80 Mbps). Meanwhile, over 3.9 million or 72% of homes and businesses enjoy fast connections with speeds of more than 200 Mbps thanks to a combination of fibre-optic technologies.

 

A great deal of uncertainty is currently attached to the further expansion of the fibre-optic network to homes and offices (FTTH), which Swisscom is realising for Switzerland. In 2021, the Federal Administrative Court confirmed the precautionary measures implemented by the Competition Commission in December 2020, which partially call into question Swisscom’s network architecture. Until the situation is clarified, Swisscom will only build network elements that comply with the P2P (point-to-point) network architecture (e.g. feeder cable into the house) or are built in partnership.

 

Swisscom aims to double FTTH coverage to around 60% in Switzerland by 2025 using P2MP (point-to-multipoint) architecture. Any P2P expansion imposed by the authorities would be significantly more expensive and would reduce the planned coverage from around 60% to 50%. The original expansion target of creating around 1.5 million fibre-optic connections by 2025 would thus be reduced by a third, or around 500,000 homes and offices. Given the massive increase in the additional costs of P2P construction, especially in rural and sparsely populated areas, the risk of a digital urban-rural divide is substantially exacerbated in the longer term.  

Expansion of the mobile communications network – demand growing strongly

As at the end of 2021, Swisscom’s 4G/LTE network covered 99% of the Swiss population. Swisscom currently covers 99% of the Swiss population with a basic version of 5G. Swisscom closed 2021 with 1,975 antennas in 888 locations with full 5G+.

 

To ensure high network quality while demand continues to grow rapidly, the fifth generation of mobile communications needs to be rolled out quickly; 5G is more powerful, more efficient and more sustainable than its predecessor technologies. 4G is now almost a decade old and is increasingly reaching its limits. But the expansion of the mobile network is stalling in many places, and the creation of urgently needed capacity for both 4G and 5G is being delayed.  

Convergence: inOne bundled offering remains popular

The number of TV and broadband connections remains high, and demand for bundled offerings continues. Residential customers in particular appreciate the modular, flexible inOne subscription.

 

As at the end of 2021, Swisscom had 2.52 million inOne customers in the residential customer segment. inOne accounts for 66% of all mobile subscriptions and 81% of fixed-line broadband connections in the residential customer segment, while 46% of customers use a combined offer. The markets for broadband and TV are heavily driven by promotional offerings. The number of fixed-line broadband connections and TV connections remained virtually stable year-on-year, at 2.04 million connections for broadband and 1.59 million connections for TV. Blue TV, the most popular TV product in Switzerland, was developed further. The new media library ‘blue Play’ offers thousands of series, feature films and children’s shows. These are available at no extra charge for customers with the most common blue TV subscriptions. A technical innovation has made live sport even more attractive: in Replay, the main moments such as goal situations or red cards are visually marked so that customers can skip directly to these passages of play. ‘blue Sport’ has seen a 50% increase in customers since its launch in September 2020.

 

The number of postpaid connections in mobile communications rose by 128,000 compared with the previous year. In the residential customer segment, the share of postpaid subscriptions accounted for by second-party and third-party brands such as Wingo and M-Budget Mobile rose from 19% to 23%. The number of prepaid lines fell by 175,000. Swisscom had a total of 6.18 million mobile lines as at the end of 2021.

 

Swisscom continued to grow its home networking (smart home) offering for controlling lighting, music or alarm systems, for example. The number of households that activated one or more devices in the Swisscom Home app increased by 80%.

Business customers: fierce competition and increasing demand for ICT solutions

The market for business customers is still dominated by high price pressure and new technologies. Revenue from telecommunications services fell by 4.9% year-on-year to CHF 1,637 million due to price erosion. Swisscom has a strong position as a full service provider and customer satisfaction remains high. Demand for cloud, security and IoT solutions as well as business applications continued to grow. Revenue in the solutions business increased by CHF 53 million (+5.0%) in 2021 to CHF 1,111 million.

Fastweb sees growth in revenue, EBITDA and customer base

In 2021, Fastweb increased its revenue in every segment. In particular in the highly competitive mobile communications market, the number of mobile connections increased by 26.1% year-on-year to 2.47 million. The customer base of its broadband business remained almost stable, despite the very challenging market environment, with a significative growth of ultrabroadband lines by +11.5%. Bundled offers continue to play an important role, with 38% of customers using a package combining fixed network and mobile services. Residential customers sales increased by 0.8%, reaching EUR 1.142 million, while its business customer segment grew more strongly. Sales there rose by 7.9% to EUR 979 million. The Wholesale division is also increasing with revenue up by 2.7% reaching EUR 271 million. The number of ultrabroadband lines provided to other operators now reaches 336'000 (+113%)

 

Fastweb’s overall revenue increased to EUR 2.392 million (+3.8%). Operating income before depreciation and amortization (EBITDA) rose by 5.4% to EUR 826 million.

Setting the course for the future

There were two changes on the Group Executive Board in the year under review. The Board of Directors elected Klementina Pejic as the new Head of HR and Eugen Stermetz as the Chief Financial Officer (CFO). Both started in their roles in the first quarter of 2021.

 

With ambitious targets, Swisscom is keen to remain a pioneer in climate protection and energy efficiency. In 2021, for example, Swisscom produced around 3 million kWh of electricity for its own consumption with 87 photovoltaic systems. Thanks to the conversion of air-conditioning units to fresh-air cooling systems at mobile sites, technology improvements, and the dismantling of old platforms such as traditional fixed-network technology (TDM) or the shutdown of 2G mobile technology, 22 GWh of electricity was saved. As part of the programmes for the reuse of used mobile devices, the return rate among residential and business customers increased to 21% (prior year: 15.5%). Swisscom also trained 71,806 students, teachers, parents and senior citizens in the use of digital media. As already announced, Swisscom will be completely climate-neutral or net-zero across the entire value chain in its Swiss business by 2025. In addition, Swisscom enables a positive CO2 contribution of 1 million tonnes per year and helps customers reduce their carbon footprint with climate-friendly ICT solutions.

Outlook for 2022: EBITDA of around CHF 4.4 billion

For the 2022 financial year, Swisscom expects net revenue of CHF 11.1-11.2 billion, EBITDA of around CHF 4.4 billion and capital expenditure of around CHF 2.3 billion. Subject to achieving its targets, Swisscom will propose to pay an unchanged, attractive dividend of CHF 22 per share for the 2022 financial year at the 2023 Annual General Meeting.

 

Tough competition and high pressure on prices persist in the company’s core business in Switzerland. As already announced, Swisscom aims to continue to reduce its cost base by some CHF 100 million in 2022, as in previous years. The savings will be realised mainly by simplifying work processes, using more efficient systems and reducing the number of jobs. In contrast, new jobs will be created in growth areas such as the IT solutions business. Overall, Swisscom expects vacancies in Switzerland to stabilise in 2022, depending on market developments.

 

A proposal will be made to the Annual General Meeting on 30 March 2022 for payment of an unchanged dividend of CHF 22 per share for the 2021 financial year. The one-year term of office of all members of the Board of Directors expires at the Annual General Meeting. The Chairman and members of the Board of Directors will be standing for re-election.  

Key figures at a glance

  1.1.-31.12.2021 1.1.-31.12.2020 Change
(adjusted*)
Net revenue (in CHF million) 11,183 11,100 0.7%
(0.6%)
Operating income before depreciation and amortisation, EBITDA (in CHF million) 4,478 4,382 2.2%
(2.2%)
Operating income, EBIT (in CHF million) 2,066 1,947 6.1%
Net income (in CHF million) 1,833 1,528 20%
Retail broadband connections in Switzerland (as at 31 December in thousands) 2,037 2,043 -0.3%
blue TV connections in Switzerland (as at 31 December in thousands) 1,592 1,588 0.3%
Mobile access lines in Switzerland (as at 31 December in thousands) 6,177 6,224 -0.8%
Fastweb broadband connections (as at 31 December in thousands) 2,750 2,747 0.1%
Fastweb mobile lines (as at 31 December in thousands) 2,472 1,961 26.1%
Capital expenditure (in CHF million) 2,286 2,229 2.6%
Of which capital expenditure in Switzerland (in CHF million) 1,634 1,596 2.4%
Group employees (FTEs as at 31 December) 18,905 19,062 -0.8%
Of which employees in Switzerland (FTEs as at 31 December) 15,882 16,048 -1.0%

* On a like-for-like basis and at constant exchange rates

Swisscom uses various alternative performance indices. The definition and reconciliation of values in accordance with IFRS are set out in the annual report as at 31 December 2021.

Downloads

Links

Swisscom AG
SCMN / Valor 874251 / ISIN CH0008742519
Group Media Relations
CH-3050 Bern
Phone +41 58 221 98 04
Fax +41 58 221 81 53
E-Mail media@swisscom.com
www.swisscom.ch

Disclaimer

This press release contains forward-looking statements. In this press release, such forward-looking statements may include, but are not limited to, statements relating to our financial position, operating results and certain strategic plans and objectives.

 

Because these forward-looking statements are subject to risks and uncertainties, actual future results may differ materially from those expressed in or implied by the statements. Many of these risks and uncertainties relate to factors which are beyond Swisscom’s ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behaviour of other market participants, the actions of governmental regulators and other risk factors detailed in Swisscom’s and Fastweb’s past and future filings and reports, including those filed with the U.S. Securities and Exchange Commission and in past and future filings, press releases, reports and other information posted on Swisscom Group Companies’ websites.

 

Readers are cautioned not to put undue reliance on forward-looking statements, which speak only of the date of this communication.

 

Swisscom disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.



Subscribe to news

Subscribe to our news by e-mail


Contact us

Address

Swisscom
Media Relations
Alte Tiefenaustrasse 6
3048 Worblaufen

Postal address:
Postfach, CH-3050 Bern
Switzerland

Contact

Tel. +41 58 221 98 04
media@swisscom.com

Other contacts