Ad hoc announcement pursuant to Art. 53 Lr/results for Q3 2023

Swisscom in an excellent market position

+++ Group revenue stable, increase in operating income (EBITDA) and net income +++ Substantial investment in mobile communications and fixed networks +++ Residential Customers: successful blue subscriptions and new TV-Box 5 +++ Business Customers: growth in IT services +++ Fastweb increases customer base and achieves revenue and EBITDA growth +++ Outlook for 2023: slight downward revision to revenue forecast, EBITDA and investments unchanged +++

By Sepp Huber

2 November 2023

To key figures at a glance

«Exactly 25 years after its IPO, Swisscom is in an excellent position and can face the future with confidence», says CEO Christoph Aeschlimann. «In the first nine months of this year, we achieved strong customer satisfaction and excellent financial results, with higher operating income. We recently launched a key product innovation with the new TV-Box 5: The box offers a whole host of new options and is a lot smaller and more energy-efficient at the same time. In Italy, our subsidiary Fastweb continues to report growth in customers, revenue and operating income.»

Slightly lower revenue in Swiss core business, growth at Fastweb

Group revenue rose slightly by 0.3% to CHF 8,202 million, which translates to an increase of 0.9% at constant exchange rates. In the Swiss core business, revenue fell slightly by 0.6% to CHF 6,067 million. Revenue from telecommunications services decreased by 1.4% to CHF 4,035 million. In contrast, revenue from IT services for business customers rose by 2.6% to CHF 877 million. The business in Italy continues to show positive development: year-on-year revenue growth at Fastweb comes in at EUR 109 million (+6.0%).

Consolidated operating income before depreciation and amortisation (EBITDA) is up by 4.1% in a year-on-year comparison to CHF 3,477 million. Excluding non-recurring items and at constant exchange rates, the increase comes to 2.2%. In the Swiss core business, the drop in revenue was offset by ongoing efficiency improvements, with EBITDA up by 0.4% on a like-for-like basis. The comparable EBITDA at Fastweb was up by 1.9% (in EUR). Net income rose by 7.9% year-on-year to CHF 1,310 million.

Network infrastructure: FTTH expansion continues

Swisscom continuously invests in the quality, coverage and performance of its network infrastructure, consolidating its position at the cutting edge of technology. At CHF 1,630 million, investment across the Group was up from the prior-year period (+1.8%).

Mobile network: over 79% 5G+ coverage

At the end of September, Swisscom provided more than 79% of the Swiss population with 5G+. Rapid expansion is required to ensure the high network quality and to continue to offer customers a first-rate mobile network. The national government sent out a crucial signal to improve the overall conditions for a rapid 5G network expansion.

Broadband expansion: more fibre optic for the whole of Switzerland – victory in connect’s fixed network test

Swisscom came in first in connect’s fixed network test for the third consecutive time. At the end of September, 2.47 million or 45% of homes and businesses were connected to the fibre-optic network (FTTH). The expansion work continues: Swisscom will have increased fibre-optic coverage to about 55% by the end of 2025 and to 70–80% by 2030. Including third-party networks, about two-thirds of homes and businesses in Switzerland will have fibre-optic access by 2025.

Residential Customers: successful blue subscriptions – new TV-Box 5 featuring a whole host of new options

Revenue from telecommunications services in the Residential Customers segment remained more or less stable at CHF 2,883 million (-0.5%). The total number of mobile lines rose by 0.5% to 6.20 million. At the end of September, 2.04 million residential customers were using blue subscriptions. In this segment, blue accounts for 49% of all mobile subscriptions and 81% of fixed-line broadband connections.

The number of Swisscom fixed-line broadband connections fell by 0.9% year-on-year to 2.01 million connections, with the number of TV connections dropping by 2.2% to 1.54 million. The new TV-Box 5 has been available since 24 October: it is 35% more energy efficient and half the size of its predecessor, and almost two-thirds of the new box is made of recycled plastic – with absolutely no plastic used in the packaging. With the integration of the Google universe, Disney+ as a new streaming partner and a new premium package comprising Disney+, Paramount+, Sky Cinema and blue Max at a discounted price, the little box opens up huge opportunities.

Business Customers: fierce competition and higher demand for IT services

The market for business customers remains dominated by price pressure and technological changes. Revenue from telecommunications services was down by 3.5% year-on-year to CHF 1,152 million. Swisscom has a strong position as a full-service provider and customer satisfaction is high. Demand for cloud, security, IoT and SAP solutions and business applications continued to grow. Revenue from IT services rose by 2.6% in the first nine months of 2023 to CHF 877 million.

Fastweb expands customer base and achieves revenue and EBITDA growth

Fastweb increased its revenue by 6.0% in local currency terms in the first nine months of the year. In the mobile telephony market, the number of connections was up by 16.7% on the previous year to 3.43 million. The customer base in the fixed-network business (end-customer and wholesale) grew by 2.5% overall to 3.19 million. Although this fell by 3.1% to 2.61 million in the end-customer business, the number of ultra-fast broadband connections provided by Fastweb to other operators rose to 579,000 (+38.5%). Bundled offers continue to play an important role, with 42% of customers using a bundled service combining fixed network and mobile. Revenue from residential customers increased by 1.5% to EUR 869 million. Revenue from business customers grew by 10.6% to EUR 814 million, with Wholesale also reporting higher revenue with an increase of 8.6% to EUR 228 million.

Overall, Fastweb’s revenue increased to EUR 1,911 million (+6.0%). The adjusted operating income before depreciation and amortisation (EBITDA) increased by EUR 12 million (+1.9%).

Avoiding CO₂ at customer level – target for 2025 already met

In the first nine months of this year, Swisscom, together with its customers in Switzerland, managed to avoid almost 1.2 million tonnes of CO₂ emissions and has thus met the target set for 2025, namely 1 million tonnes of CO₂ emissions avoided annually in Switzerland. Of the savings achieved, 80% can be attributed to services for flexible working, about 10% to the Internet of Things (IoT) and another 10% to energy-efficient data centres for cloud services, paper savings and the circular economy.

Financial outlook: slightly adjusted revenue for 2023

Due in particular to the strong Swiss franc and lower hardware sales in Switzerland, Swisscom is slightly adjusting its revenue forecast for 2023 and now expects net revenue of about CHF 11.0 billion (previously CHF 11.1 billion to CHF 11.2 billion). The expectations for EBITDA of CHF 4.6 to 4.7 billion and capital expenditure of CHF 2.3 billion remain unchanged. Subject to achievement of its targets, Swisscom plans to propose payment of an unchanged, attractive dividend of CHF 22 per share for the 2023 financial year at the 2024 Annual General Meeting.

The key figures at a glance

	1.1.- 30.09.2023	1.1.- 30.09.2022	Change (restated)*
Net revenue (in CHF million)	8,202	8,179	0.3% (0.9%)
Operating income before depreciation and amortisation, EBITDA (in CHF million)	3,477	3,341	4.1% (2.2%)
Operating income EBIT (in CHF million)	1,714	1,557	10.1%
Net income (in CHF million)	1,310	1,214	7.9%
Retail broadband access lines in Switzerland (as at 30.09 in thousands)	2,009	2,027	-0.9%
blue TV connections in Switzerland (as at 30.09 in thousands)	1,541	1,576	-2.2%
Mobile access lines in Switzerland (as at 30.09 in thousands)	6,197	6,166	0.5%
Fastweb broadband access lines (as at 30.09 in thousands)	2,613	2,696	-3.1%
Fastweb mobile access lines (as at 30.09 in thousands)	3,428	2,937	16.7%
Capital expenditure (in CHF million)	1,630	1,601	1.8%
Of which capital expenditure in Switzerland (in CHF million)	1,193	1,147	4.0%
Group employees (FTEs as at 30.09)	19,686	19,033	3.4%
Of which employees in Switzerland (FTEs as at 30.09)	16,048	15,786	1.7%

	Net revenue (in CHF million)
1.1.- 30.09.2023	8,202
1.1.- 30.09.2022	8,179
Change (restated)*	0.3% (0.9%)

	Operating income before depreciation and amortisation, EBITDA (in CHF million)
1.1.- 30.09.2023	3,477
1.1.- 30.09.2022	3,341
Change (restated)*	4.1% (2.2%)

	Operating income EBIT (in CHF million)
1.1.- 30.09.2023	1,714
1.1.- 30.09.2022	1,557
Change (restated)*	10.1%

	Net income (in CHF million)
1.1.- 30.09.2023	1,310
1.1.- 30.09.2022	1,214
Change (restated)*	7.9%

	Retail broadband access lines in Switzerland (as at 30.09 in thousands)
1.1.- 30.09.2023	2,009
1.1.- 30.09.2022	2,027
Change (restated)*	-0.9%

	blue TV connections in Switzerland (as at 30.09 in thousands)
1.1.- 30.09.2023	1,541
1.1.- 30.09.2022	1,576
Change (restated)*	-2.2%

	Mobile access lines in Switzerland (as at 30.09 in thousands)
1.1.- 30.09.2023	6,197
1.1.- 30.09.2022	6,166
Change (restated)*	0.5%

	Fastweb broadband access lines (as at 30.09 in thousands)
1.1.- 30.09.2023	2,613
1.1.- 30.09.2022	2,696
Change (restated)*	-3.1%

	Fastweb mobile access lines (as at 30.09 in thousands)
1.1.- 30.09.2023	3,428
1.1.- 30.09.2022	2,937
Change (restated)*	16.7%

	Capital expenditure (in CHF million)
1.1.- 30.09.2023	1,630
1.1.- 30.09.2022	1,601
Change (restated)*	1.8%

	Of which capital expenditure in Switzerland (in CHF million)
1.1.- 30.09.2023	1,193
1.1.- 30.09.2022	1,147
Change (restated)*	4.0%

	Group employees (FTEs as at 30.09)
1.1.- 30.09.2023	19,686
1.1.- 30.09.2022	19,033
Change (restated)*	3.4%

	Of which employees in Switzerland (FTEs as at 30.09)
1.1.- 30.09.2023	16,048
1.1.- 30.09.2022	15,786
Change (restated)*	1.7%

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

Swisscom uses various alternative performance measures. The definition and reconciliation of values in accordance with IFRS are set out in the Interim Report as at 30 September 2023.

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Christoph Aeschlimann, CEO Swisscom(opens in new tab)

Disclaimer

This notification contains forward-looking statements. In this notification, 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.