Ad hoc announcement pursuant to Art. 53 LR / 2022 financial statements

Strong 2022: high customer loyalty and successful product

+++ Good business development and strong market position for Swisscom +++ Growth in revenue, EBITDA and net income (adjusted for non-recurring items) +++ High capital expenditure in infrastructure +++ Business customers: growth in solutions business +++ Fastweb sees growth in revenue, EBITDA and customer base +++ Climate neutral products +++ New Head of Strategy and Business Development +++ Proposal of dividend of CHF 22 per share for financial year 2022 +++ Outlook for 2023: net revenue of CHF 11.1 – 11.2 billion, EBITDA of CHF 4.6 – 4.7 billion and capital expenditure of around CHF 2.3 billion +++

By Sepp Huber
Portrait of Christoph Aeschlimann, CEO Swisscom

Key figures at a glance

In summing up, CEO Christoph Aeschlimann stated that ‘Swisscom delivered a strong financial result and a good market performance in 2022. In the residential customer segment in Switzerland, we were able to stabilise telecoms revenue. The willingness to switch has decreased, and compared with the previous year, even more customers remain loyal to us. Our attractive products – especially the blue subscriptions launched in May – our service and our excellent infrastructure are impressive. We are also successful in the business customers segment with our cloud and security solutions. Our subsidiary Fastweb in Italy grew in terms of customers, revenue and operating income.’

Stable revenue in Swiss core business, growth at Fastweb

Group revenue decreased by 0.6% year-on-year to CHF 11,112 million, resulting in an increase of 1.0% at constant currencies. In the Swiss core business, sales increased slightly by CHF 37 million to CHF 8,270 million (+0.4%). Sales of telecoms services decreased overall by 0.9% to CHF 5,449 million, however, compared with previous years, the decline has slowed significantly. By contrast, revenue from the IT solutions business with business customers increased by CHF 70 million (+6.3%). Business in Italy continued to develop positively. Fastweb reported year-on-year revenue growth of EUR 90 million (+3.8%).

Consolidated operating income before depreciation and amortization (EBITDA) decreased by 1.6% to CHF 4,406 million. Excluding non-recurring items and at constant exchange rates, the result was an increase of 3.1%. In the core Swiss market, EBITDA grew by 3.4% on a comparable basis, while that of Fastweb increased by 3.4% (in EUR).

Net income decreased by 12.5% year-on-year to CHF 1,603 million. The main reasons for the CHF 230 million decline in profit are the non-recurring items in EBITDA (CHF 146 million), in the financial result (CHF 207 million) and in income tax expense (CHF 57 million). Adjusted for these items, net income increased by CHF 180 million.

Network infrastructure: FTTH rollout continues, ahead in all network tests

Swisscom continuously invests in the quality, coverage and performance of its network infrastructure and is consolidating its position at the cutting edge of technology. Group-wide capital expenditure remained high in 2022 at CHF 2,309 million (+1.0%). In 2022, Swisscom won all the major network tests: connect awarded both the mobile and the fixed network the grade ‘outstanding’.

Mobile network: 74% coverage with 5G+

To safeguard the high network quality and continue to offer customers a top mobile network, a rapid expansion is needed. By the end of December 2022, Swisscom already covered 74% of the Swiss population with 5G+. According to the industry association asut, 4.5 million 5G devices were in operation in Switzerland by the end of 2022. While data usage continues to rise steadily, there are around 3,200 planning applications for new antennas pending across the industry.

Broadband expansion: more fibre optics for the whole of Switzerland

By the end of 2025, Swisscom will increase fibre-to-the-home (FTTH) coverage to 50-55%. By 2030, FTTH coverage will be increased to 70-80%.

Residential customers: flexible and customisable subscriptions remain popular

At the end of 2022, 1.93 million customers in the residential customer segment were using blue subscriptions. blue accounts for 46% of all mobile subscriptions and 80% of fixed-network broadband connections in this segment. The number of fixed broadband connections decreased by 0.5% year-on-year to 2.03 million connections and TV by 1.3% to 1.57 million connections.

The number of postpaid lines increased by 166,000 year-on-year, while the number of prepaid lines decreased by 170,000. Overall, the number of Swisscom mobile access lines remained stable at 6.17 million.

Although revenue from telecommunications services in the residential segment has decreased in each of the past years, it remained stable in 2022 at CHF 3,861 million (+0.2%).

Business customers: on course for growth in a highly competitive market environment

The market for business customers remains characterised by price pressure and technological changes. Revenue from telecommunications services fell by 7.3% year on year to CHF 1,588 million, mainly due to price erosion of 3.3%. Swisscom has a strong position as a full-service provider and customer satisfaction is high. Demand for cloud, security, IoT and SAP solutions as well as business applications continued to grow. In 2022, revenue in the solutions business rose by 6.3% or CHF 1,181 million.

Fastweb increases customers, revenues and EBITDA

In 2022, Fastweb increased revenue by 3.8% in local currency terms. In the mobile communications market, the number of connections increased by 24.9% year-on-year to 3.09 million. Wireline customer base (retail and wholesale) grew by 2,8% to 3.14 million. Following Fastweb’s value strategy in the Consumer market, the retail customer base in the broadband business fell slightly by 2.4% to 2.68 million, while the number of lines provided by Fastweb to other operators now reaches 458,000 (+50%). Bundled retail offers continue to play an important role, with 41% of customers using a package combining fixed network and mobile services. Residential customers revenues were stable at EUR  1,145 (+0.3%), while revenues in the business customer segment grew by 3.7% to EUR  1,015 million. Wholesale revenues also increased, by 18,8% to EUR  322 million.

Fastweb’s overall revenue increased to EUR 2,482 million (+3.8%). Operating income before depreciation and amortisation (EBITDA) rose by 3.4% to EUR 854 million.

Energy efficiency increased

Swisscom has been improving its electricity and energy efficiency for many years. In 2022, total energy efficiency (electricity + heating fuels + vehicle fuels) in Switzerland was increased by 4.5%. In addition, Swisscom saved a total of 20 GWh of electricity last year through technology improvements, efficiency measures and phase-outs. In addition, Swisscom's subscriptions and devices have been climate-neutral since 2022.

New Head of Strategy and Business Development, change in the Board of Directors

Isa Müller-Wegner (45) will become Head of the new Group Management position Group Strategy & Business Development as of 1 June 2023. Isa Müller-Wegner has spent the last three years at Bain Capital managing private equity portfolio companies in various industries. Previously, she was responsible for eBay’s multi-billion business in much of Europe, including Italy, France, Spain and Turkey. She has also worked internationally for Bain Consulting, BBC and Arthur D Little. ‘Isa Müller-Wegner has shaped successful growth strategies in various industries as an investor and advisor and has managed operations of a highly digitised company. We are very much looking forward to shaping Swisscom’s growth at home and abroad with Isa,’ said CEO Christoph Aeschlimann. Isa Müller-Wegner holds an MBA with highest distinction from Harvard Business School and a Master of Arts (PPE) from Oxford University. She lives with her husband and two children outside Zurich.

The one-year term of office of all members of the Board of Directors expires at the Annual General Meeting on 28 March 2023. As already communicated, Barbara Frei will not stand for re-election. The Board of Directors is proposing Monique Bourquin for election as a new member of the Board. The Chairman and other members of the Board of Directors will be standing for re-election. A proposal will be made to the Annual General Meeting on 28 March 2023 for payment of an unchanged dividend of CHF 22 per share for the 2022 financial year.

Outlook for 2023: EBITDA of CHF 4.6 – 4.7 billion

For 2023, Swisscom expects net revenue of CHF 11.1 to 11.2 billion, EBITDA of CHF 4.6 to 4.7 billion and capital expenditure of around CHF 2.3 billion. Subject to achieving its targets, Swisscom will propose payment of an unchanged, attractive dividend of CHF 22 per share for the 2023 financial year at the 2024 Annual General Meeting.

Key figures at a glance

  01.01 –
31.12.2022		 01.01 –
31.12.2021		 Change
adjusted*
Net revenue (in CHF million) 11,112 11,183 -0.6%
(1.0%)
Operating income before depreciation and amortisation, EBITDA (in CHF million) 4,406 4,478 -1.6%
(3.1%)
Operating income, EBIT (in CHF million) 2,040 2,066 -1.3%
Net income (in CHF million) 1,603 1,833 -12.5%
Retail broadband connections in Switzerland (as at 31 December in thousands) 2,027 2,037 –0.5%
blue TV connections in Switzerland (as at 31 December in thousands) 1,571 1,592 -1.3%
Mobile access lines in Switzerland (as at 31 December in thousands) 6,173 6,177 –0.1%
Fastweb broadband connections (as at 31 December in thousands) 2,683 2,750 –2.4%
Fastweb mobile lines (as at 31 December in thousands) 3,087 2,472 24.9%
Capital expenditure (in CHF million) 2,309 2,286 1.0%
Of which capital expenditure in Switzerland (in CHF million) 1,688 1,634 3.3%
Group employees (FTEs as at 31 December) 19,157 18,905 1.3%
Of which employees in Switzerland (FTEs as at 31 December) 15,750 15,882 –0.8%
  Net revenue (in CHF million)
01.01 –
31.12.2022		 11,112
01.01 –
31.12.2021		 11,183
Change
adjusted*		 -0.6%
(1.0%)
  Operating income before depreciation and amortisation, EBITDA (in CHF million)
01.01 –
31.12.2022		 4,406
01.01 –
31.12.2021		 4,478
Change
adjusted*		 -1.6%
(3.1%)
  Operating income, EBIT (in CHF million)
01.01 –
31.12.2022		 2,040
01.01 –
31.12.2021		 2,066
Change
adjusted*		 -1.3%
  Net income (in CHF million)
01.01 –
31.12.2022		 1,603
01.01 –
31.12.2021		 1,833
Change
adjusted*		 -12.5%
  Retail broadband connections in Switzerland (as at 31 December in thousands)
01.01 –
31.12.2022		 2,027
01.01 –
31.12.2021		 2,037
Change
adjusted*		 –0.5%
  blue TV connections in Switzerland (as at 31 December in thousands)
01.01 –
31.12.2022		 1,571
01.01 –
31.12.2021		 1,592
Change
adjusted*		 -1.3%
  Mobile access lines in Switzerland (as at 31 December in thousands)
01.01 –
31.12.2022		 6,173
01.01 –
31.12.2021		 6,177
Change
adjusted*		 –0.1%
  Fastweb broadband connections (as at 31 December in thousands)
01.01 –
31.12.2022		 2,683
01.01 –
31.12.2021		 2,750
Change
adjusted*		 –2.4%
  Fastweb mobile lines (as at 31 December in thousands)
01.01 –
31.12.2022		 3,087
01.01 –
31.12.2021		 2,472
Change
adjusted*		 24.9%
  Capital expenditure (in CHF million)
01.01 –
31.12.2022		 2,309
01.01 –
31.12.2021		 2,286
Change
adjusted*		 1.0%
  Of which capital expenditure in Switzerland (in CHF million)
01.01 –
31.12.2022		 1,688
01.01 –
31.12.2021		 1,634
Change
adjusted*		 3.3%
  Group employees (FTEs as at 31 December)
01.01 –
31.12.2022		 19,157
01.01 –
31.12.2021		 18,905
Change
adjusted*		 1.3%
  Of which employees in Switzerland (FTEs as at 31 December)
01.01 –
31.12.2022		 15,750
01.01 –
31.12.2021		 15,882
Change
adjusted*		 –0.8%

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

Swisscom uses various alternative performance indicators. The definition and reconciliation of values in accordance with IFRS are set out in the annual report as at 31 December 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 announcement contains forward-looking statements. In this announcement, such forward-looking statements include, without limitation, statements relating to our financial condition, results of operations and business and certain of our 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 and revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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Tel. +41 58 221 98 04

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