Ad hoc announcement pursuant to Art. 53 LR / 2022 half-year results
+++ Good business performance and strong position for Swisscom +++ Revenue and EBITDA stable, net income up year-on-year (adjusted for non-recurring items) +++ High investment in the infrastructure of the future +++ Successful launch of Swisscom blue +++ Business customers: growth in solutions business +++ Fastweb sees growth in customers, revenue and EBITDA +++
‘It was a strong first half,’ concludes CEO Christoph Aeschlimann. ‘Swisscom’s good operating income in a challenging environment is impressive. Following the flat rates, digital TV and customisable subscription, we have set a further mark on the market with Swisscom blue and fully digitised the subscription. The ‘Brand Finance Switzerland 50 2022’ report confirms our long-standing success and our relevance as a quality brand and lists Swisscom as the strongest brand in Switzerland. In addition, we were awarded Most Sustainable Company in the Telecommunication Industry by ‘World Finance’ magazine for the second time in a row. Fastweb also closed the first half of the year successfully with higher revenue and operating profit.’
Group revenue decreased by 1.6% to CHF 5,494 million; at constant currencies, it remained almost stable (–0.1%). In the saturated Swiss core business, revenue declined slightly by 0.2% to CHF 4,094 million. Ongoing competition and price pressures led to a further decline in revenue from telecoms services. This decreased by 1.6% to CHF 2,722 million. By contrast, revenue in the IT solutions business with business customers increased by 7.7% to CHF 589 million. Business in Italy continued to develop positively, with Fastweb reporting year-on-year revenue growth of EUR 18 million (+1.5%).
Consolidated operating income before depreciation and amortisation (EBITDA) totalled CHF 2,191 million, which was 5.4% below the previous year. Excluding non-recurring items and at constant exchange rates, it increased by 1.0%. In the Swiss core business, the decline in revenue was offset thanks to ongoing efficiency improvements, and EBITDA increased by 0.6% on a like-for-like basis. At Fastweb, EBITDA rose by 4.9% (in EUR).
Swisscom achieved net income of CHF 785 million, down 25%. Non-recurring items impacted EBITDA and the financial result. These include the transfer of a participation of Fastweb, the sale of Swisscom’s participation in Belgacom International Carrier Services in the previous year and provisions for legal proceedings in the current year. Without these non-recurring items, net income would have increased by 8.2%.
Swisscom continuously invests in the quality, coverage and performance of its network infrastructure, reinforcing its position at the cutting edge of technology. At CHF 1,053 million, Group-wide capital expenditure was lower than the previous year (–2.8%).
As at the end of June 2022, Swisscom had connected roughly 4.9 million or around 90% of homes and businesses to its ultra-fast broadband service (speeds in excess of 80 Mbps). Meanwhile, over 4.1 million or around 76% of homes and businesses enjoy fast connections with speeds of more than 200 Mbps.
Swisscom aims to expand the fibre-optic network to homes and offices (FTTH) to up to 60% coverage in Switzerland by 2025 using P2MP (point-to-multipoint) architecture. The Competition Commission questioned the network architecture and imposed precautionary measures in December 2020, which the Federal Administrative Court confirmed in 2021. Swisscom is interested in a rapid solution; to this end, it is holding in-depth discussions with the Competition Commission.
In the first half of 2022, CHIP named Swisscom’s mobile network the best network in Switzerland. Swisscom is constantly developing its network and making it ready for the future. 3G technology will continue to operate until the end of 2025, after which it will make way for 4G and 5G. As at the end of June 2022, the nationwide coverage of Swisscom’s 4G/LTE network was over 99%. Swisscom currently provides 99% of the Swiss population with a basic version of 5G. As at the end of June 2022, Swisscom had 2,230 antennas in 985 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. This makes it all the more concerning that Switzerland cannot fully exploit the potential of 5G. Recent measurements by Opensignal, the independent British provider of the speed test app of the same name, show that smartphone users in Switzerland receive a poorer signal strength when connecting to 5G networks than mobile customers in neighbouring Germany, France and Italy. Opensignal cites the much stricter limits than in the European Union countries as the reason. However, the expansion of the mobile network is faltering in many places due to objections, and the creation of urgently needed capacities for both 4G and 5G is being delayed.
At the beginning of May, Swisscom digitised and individualised the subscription with the launch of Swisscom blue. Whether Internet speed, TV, telephone, roaming, security or entertainment – a simple click in the My Swisscom app combines the components into a tailored offering for every customer. Those who manage their subscription via the app and exclusively use the digital assistance Sam as the first point of contact for queries will pay CHF 10 less per month on every Internet and mobile subscription. For people who do not want to communicate digitally, nothing changes, except that they too, just like almost two million other customers, benefit from the advantages of the new subscriptions, such as the increase in Internet speed to 1 Gbps and more recording capacity on blue TV, at no extra charge.
Demand for flexible and customisable subscriptions remains high. Since the launch of blue, the subscriptions of the inOne predecessor generation have been migrated on an ongoing basis. In the residential customer segment, Swisscom recorded 1.78 million customers on blue as at the end of June 2022. blue accounts for 42% of all mobile subscriptions and 78% of fixed-line broadband connections in this segment; 43% use a combined offering. The markets for broadband and TV are still heavily driven by promotional offerings. The number of fixed-line broadband connections and TV connections remained virtually stable year-on-year, at 2.03 million connections for broadband and 1.58 million connections for TV.
The number of postpaid lines in mobile communications rose by 180,000 compared with the previous year, while the number of prepaid lines fell year-on-year by 192,000. Swisscom had a total of 6.16 million mobile lines as at the end of June 2022.
Revenue from telecommunications services in the residential customer segment decreased by 0.3% to CHF 1,927 million in the first half of the year, a marked slowdown compared with recent years.
The market for business customers is still dominated by price pressure and new technologies. Revenue from telecommunications services fell by 4.6% year-on-year to CHF 795 million due to price erosion. Swisscom has a strong position as a full service provider and customer satisfaction remains high. Demand for cloud, security, IoT and SAP solutions as well as business applications continued to grow. To further strengthen the innovative power of Swiss companies with a fast, efficient and secure transformation to the cloud, Swisscom has announced a strategic collaboration with Amazon Web Services (AWS). Revenue in the solutions business was up by 7.7% in the first half of 2022 to CHF 589 million.
Fastweb increased revenue in the first six months by 1.5% in local currency terms. In the mobile communications market, the number of mobile connections increased by 28.2% year-on-year to 2.81 million. Due to the challenging market environment, the customer base in the broadband business fell slightly by 2.2% to 2.71 million, though the share of ultra-fast broadband connections of Fastweb customer base grew by 8 percentage points compared to the previous year to 85%. Bundled offers continue to play an important role, with 40% of customers using a package combining fixed network and mobile services. Residential customer revenues were stable at EUR 572 million, while revenues in the business customer segment grew by 3.3% to EUR 497 million. Wholesale revenues also increased, by 3.2% to EUR 130 million. The number of ultrabroadband lines provided by Fastweb to other operators now reaches 386,000 (+103%).
Fastweb’s overall revenue increased to EUR 1,199 million (+1.5%). Operating income before depreciation and amortisation (EBITDA) rose by 4.9% to EUR 403 million.
Swisscom has been a pioneer in climate protection and energy efficiency for over 20 years and has been operating its entire network with 100% renewable energy from water, wind and sun for over ten years. For the second time in a row, ‘World Finance’ magazine has named Swisscom Most Sustainable Company in the Telecommunication Industry recognising its more than 20-year commitment to greater sustainability. Swisscom continues to work on reducing emissions and will be completely climate-neutral across the entire value chain by 2025. To this end, sustainability requirements were systematically integrated into the procurement process in the first half of 2022 and development programmes were launched with suppliers, for example with Ericsson. In addition, Swisscom will save over one million tons of CO2 more than it causes by 2025 thanks to Work Smart services, IoT and other future-oriented customer solutions.
Another milestone was reached in the area of circular economy: By the end of June 2022, customers had returned one million old mobile phones and smartphones as part of the Mobile Aid scheme – the proceeds go to SOS Children’s Villages. Since the scheme’s launch in 2012, it has already funded five million meals for children in need. In the area of media literacy, the reach of online training offerings increased by 30% compared to the previous year.
For the 2022 financial year, Swisscom still 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.
| Net revenue (in CHF million) | |
| 1.1.– 30.06.2022 |
5,494 |
| 1.1.– 30.06.2021 |
5,583 |
| Change adjusted* |
–1.6% (–0.1%) |
| Operating income before depreciation and amortisation, EBITDA (in CHF million) | |
| 1.1.– 30.06.2022 |
2,191 |
| 1.1.– 30.06.2021 |
2,317 |
| Change adjusted* |
–5.4% (1.0%) |
| Operating income, EBIT (in CHF million) | |
| 1.1.– 30.06.2022 |
999 |
| 1.1.– 30.06.2021 |
1,089 |
| Change adjusted* |
–8.3% |
| Net income (in CHF million) | |
| 1.1.– 30.06.2022 |
785 |
| 1.1.– 30.06.2021 |
1,046 |
| Change adjusted* |
–25.0% |
| Retail broadband connections in Switzerland (as at 30 June, in thousands) | |
| 1.1.– 30.06.2022 |
2,026 |
| 1.1.– 30.06.2021 |
2,027 |
| Change adjusted* |
–0.0% |
| blue TV connections in Switzerland (as at 30 June, in thousands) | |
| 1.1.– 30.06.2022 |
1,582 |
| 1.1.– 30.06.2021 |
1,582 |
| Change adjusted* |
0.0% |
| Mobile access lines in Switzerland (as at 30 June, in thousands) | |
| 1.1.– 30.06.2022 |
6,157 |
| 1.1.– 30.06.2021 |
6,169 |
| Change adjusted* |
–0.2% |
| Fastweb broadband connections (as at 30 June, in thousands) | |
| 1.1.– 30.06.2022 |
2,712 |
| 1.1.– 30.06.2021 |
2,774 |
| Change adjusted* |
–2.2% |
| Fastweb mobile access lines (as at 30 June, in thousands) | |
| 1.1.– 30.06.2022 |
2,805 |
| 1.1.– 30.06.2021 |
2,188 |
| Change adjusted* |
28.2% |
| Capital expenditure (in CHF million) | |
| 1.1.– 30.06.2022 |
1,053 |
| 1.1.– 30.06.2021 |
1,083 |
| Change adjusted* |
–2.8% |
| Of which capital expenditure in Switzerland (in CHF million) | |
| 1.1.– 30.06.2022 |
746 |
| 1.1.– 30.06.2021 |
752 |
| Change adjusted* |
–0.8% |
| Group employees (FTEs as at 30 June) | |
| 1.1.– 30.06.2022 |
19,067 |
| 1.1.– 30.06.2021 |
19,110 |
| Change adjusted* |
–0.2% |
| Of which employees in Switzerland (FTEs as at 30 June) | |
| 1.1.– 30.06.2022 |
15,874 |
| 1.1.– 30.06.2021 |
15,964 |
| Change adjusted* |
-0.6% |
Swisscom uses various alternative performance indicators. The definition and reconciliation of values in accordance with IFRS are set out in the interim report as at 30 June 2022.
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.