Ad hoc announcement pursuant to Art. 53 LR/annual financial statement 2023

Swisscom presents strong results for 2023

+++ Good business development and a strong market position for Swisscom +++ Revenue stable; EBITDA and net income up +++ Adapted network strategy: optical fibre will replace copper in the long term +++ Business customers: increased demand for IT services +++ Fastweb increases revenue and customers: 14% more mobile customers +++ New 2035 net zero target under SBTi +++ Proposed dividend of CHF 22 per share for the 2023 financial year +++ Outlook for 2024: revenue of around CHF 11.0 billion, EBITDA of CHF 4.5–4.6 billion and capital expenditures of around CHF 2.3 billion. +++

By Sepp Huber
Portrait of Christoph Aeschlimann, CEO Swisscom

To key figures at a glance

‘Swisscom had a strong financial result and good market performance in 2023,’ says CEO Christoph Aeschlimann. ‘We’ve impressed our customers with attractive and sustainable products, excellent service and well-developed infrastructure. Innovation remains a focus, and to this end, Swisscom will invest more than CHF 100 million in the development of AI solutions in Switzerland and Italy over the coming years. This, too, is based on high-performance infrastructure. We are developing trusted AI applications together with customers and also using them internally. In addition, our 2030+ strategy envisages the further expansion of optical fibre and the gradual removal of copper lines. Our subsidiary Fastweb in Italy is also on the move – it has been growing continuously for ten years now.’

Robust Swiss core business; Fastweb continues to perform well

Group revenue increased marginally by 0.2% year-on-year to CHF 11,072 million, with an increase of 0.9% at constant exchange rates. Revenue in the Swiss core business fell slightly, by CHF 63 million to CHF 8,146 million (–0.8%). Revenue from telecom services fell by 1.3% to CHF 5,377 million. In contrast, revenue from IT services with business customers increased by CHF 32 million (+2.8%). Business in Italy continues to develop positively. The year-on-year revenue growth at Fastweb comes in at EUR 151 million (+6.1%).

Consolidated operating income before depreciation and amortisation (EBITDA) increased by 4.9% to CHF 4,622 million. Excluding non-recurring items and at constant exchange rates, this resulted in an increase of 2.3%. On like-for-like basis, EBITDA in the Swiss core business remained almost stable (+0.2%), while in Fastweb it increased by 2.1% (in EUR).

Net income increased by 6.7% year-on-year to CHF 1,711 million. The increase in EBITDA was partially offset by higher depreciation and amortisation and a lower financial result.

Network infrastructure: ahead in all network tests – optical fibre replaces copper

Swisscom continuously invests in the quality, coverage and performance of its network infrastructure, consolidating its position at the cutting edge of technology. Group-wide investments remained high in 2023 at CHF 2,292 million (–0.7%). In 2023, Swisscom once again won all the important network tests: Swisscom achieved the highest-ever score in the connect mobile network test and was also the winner in all categories.

Mobile network: 81% coverage with 5G+

Swisscom is rapidly expanding the 5G network in order to ensure high network quality and to continue to offer customers an excellent mobile network. At the end of December 2023, Swisscom provided more than 81% of the Swiss population with 5G+. According to the industry association asut, 5.5 million 5G devices were in operation in Switzerland at the end of the year. While data usage continues to increase steadily, around 3,000 mobile network projects (new installations or modifications) are pending throughout the industry.

Adapted network strategy: optical fibre replaces copper

Swisscom continues to expand optical fibre and slightly increases its targets: by the end of 2025, optical fibre coverage is expected to increase from the current 46% to 57%1 and to 75–80% by the end of 2030. By then, the latest network technologies such as optical fibre and 5G mobile communications should be available in almost all municipalities. At the same time, Swisscom will gradually decommission the copper network wherever optical fibre is available.

Swisscom intends to complete the optical fibre network in all municipalities after 2030. This step will enable the complete decommissioning of the copper grid, resulting in electricity savings on the order of the annual consumption of a city with around 20,000 inhabitants (100 GWh).

Residential customers: almost stable revenue in telecom services – high customer satisfaction

At the end of 2023, 2.07 million customers in the residential customer segment were using blue subscriptions. In this segment, blue accounts for 72% of mobile subscriptions and 88% of fixed-line broadband connections with the Swisscom brand. The number of fixed-line broadband connections fell by 1.0% year-on-year to 2.01 million lines, with the number of TV lines dropping by 2.2% to 1.54 million. In mobile telephony, the number of lines rose by 0.5% to 6.20 million, with the customer structure changing due to an increase in postpaid lines (+129,000) and a similarly large decrease in prepaid lines (–100,000).

Telecom services revenue fell slightly (–0.5%) to CHF 3,843 million in the residential customer segment. This means stabilisation was nearly achieved for the second year in a row. Residential customer satisfaction is consistently high. This can also be seen in the connect test wins in all service areas (shop, app, hotline).

Business customers: increased demand for IT services

The market for business customers remains dominated by price pressure and technological changes. Revenue from telecommunications services fell by 3.4% year-on-year to CHF 1,534 million, primarily due to price erosion. 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 increased by 2.8% to CHF 1,184 million in 2023.

Fastweb increases customer base and revenue

Fastweb increased its revenue by 6.1% in local currency terms in 2023. In the mobile communications sector, the number of connections was up by 13.7% on the previous year to 3.51 million. The customer base in the fixed-network business (end-customer and wholesale) grew by 3.4% overall to 3.25 million. Although this fell by 3.1% to 2.60 million in the end-customer business as a result of the challenging market environment, the number of ultra-fast broadband connections that Fastweb provided to other operators rose to 0.65 million. Bundled offerings continue to play an important role, with 42.5% of customers using a bundle of fixed network and mobile. Revenue from residential customers increased by 1.6% to EUR 1,163 million as a result of the greater mobile customer base. Revenue in the business customer segment grew by 11.7% to EUR 1,134 million, driven by Fastweb’s strong position. Wholesale also reported higher revenue, with an increase of 4.8% to EUR 330 million.

Overall, Fastweb’s revenue increased to EUR 2,633 million (+6.1%). Operating income before depreciation and amortisation (EBITDA) decreased by 6.6% to EUR 798 million, with an increase of 2.1% on an adjusted basis. EBITDA in 2023 was negatively impacted by a one-time cost of EUR 74 million as a result of regulatory legal proceedings and a strategic adjustment in the Fixed Wireless Access (FWA) business.

New 2035 net zero target under SBTi

Swisscom made a Group-wide commitment in 2023 to achieve net-zero greenhouse gas emissions in accordance with SBTi by 2035 across the entire value chain, thereby making a significant contribution to a climate friendly economy. The ambitious criteria for achieving net-zero carbon emissions are defined by the Science Based Target Initiative (SBTi).

Change in the Board of Directors

The one-year office term of all members of the Board of Directors will expire at the Annual General Meeting on 27 March 2024. Alain Carrupt (1955), staff representative on the Board of Directors, will not stand for re-election at his own request. The Board of Directors nominated Daniel Münger (1961) for election as a replacement. The Chairman of the Board of Directors and the other Board of Directors members shall stand for re-election.

Daniel Münger is a Swiss and Italian citizen. He worked as a telecommunications specialist for PTT companies and has been working in employee associations since 1996. From 2016 to 2023 he led the syndicom trade union as president.

Outlook for 2024: EBITDA of CHF 4.5 to 4.6 billion

Swisscom expects revenue of around CHF 11.0 billion, EBITDA of CHF 4.5–4.6 billion and capital expenditure of around CHF 2.3 billion for 2024. Subject to achieving its targets, Swisscom plans to propose payment of an unchanged attractive dividend of CHF 22 per share for the 2024 financial year at the 2025 Annual General Meeting.

The key figures at a glance

  1.1. – 31.12.
2023		 1.1. – 31.12.
2022		 Change
restated*
Revenue (in CHF million) 11,072 11,051 0.2%
0.9%
Operating income before depreciation and amortisation, EBITDA (in CHF million) 4.622 4.406 4.9%
2.3%
Operating income EBIT (in CHF million) 2,205 2,040 8.10%
Net income (in CHF million) 1,711 1,603 6.70%
Retail broadband access lines in Switzerland (as at 31.12 in thousands) 2,006 2,027 -1.0%
blue TV connections in Switzerland (as at 31.12 in thousands) 1,537 1,571 -2.20%
Mobile access lines in Switzerland (as at 31.12 in thousands) 6,202 6,173 0.50%
Fastweb broadband access lines (as at 31.12 in thousands) 2,601 2,683 -3.10%
Fastweb mobile access lines (as at 31.12 in thousands) 3,509 3,087 13.70%
Capital expenditure (in CHF million) 2,292 2,309 -0.70%
Of which capital expenditure in Switzerland (in CHF million) 1,685 1,688 -0.2%
Group employees (FTEs as at 31.12) 19,729 19,157 3.00%
Of which employees in Switzerland (FTEs as at 31.12) 16,050 15,750 1.90%
  Revenue (in CHF million)
1.1. – 31.12.
2023		 11,072
1.1. – 31.12.
2022		 11,051
Change
restated*		 0.2%
0.9%
  Operating income before depreciation and amortisation, EBITDA (in CHF million)
1.1. – 31.12.
2023		 4.622
1.1. – 31.12.
2022		 4.406
Change
restated*		 4.9%
2.3%
  Operating income EBIT (in CHF million)
1.1. – 31.12.
2023		 2,205
1.1. – 31.12.
2022		 2,040
Change
restated*		 8.10%
  Net income (in CHF million)
1.1. – 31.12.
2023		 1,711
1.1. – 31.12.
2022		 1,603
Change
restated*		 6.70%
  Retail broadband access lines in Switzerland (as at 31.12 in thousands)
1.1. – 31.12.
2023		 2,006
1.1. – 31.12.
2022		 2,027
Change
restated*		 -1.0%
  blue TV connections in Switzerland (as at 31.12 in thousands)
1.1. – 31.12.
2023		 1,537
1.1. – 31.12.
2022		 1,571
Change
restated*		 -2.20%
  Mobile access lines in Switzerland (as at 31.12 in thousands)
1.1. – 31.12.
2023		 6,202
1.1. – 31.12.
2022		 6,173
Change
restated*		 0.50%
  Fastweb broadband access lines (as at 31.12 in thousands)
1.1. – 31.12.
2023		 2,601
1.1. – 31.12.
2022		 2,683
Change
restated*		 -3.10%
  Fastweb mobile access lines (as at 31.12 in thousands)
1.1. – 31.12.
2023		 3,509
1.1. – 31.12.
2022		 3,087
Change
restated*		 13.70%
  Capital expenditure (in CHF million)
1.1. – 31.12.
2023		 2,292
1.1. – 31.12.
2022		 2,309
Change
restated*		 -0.70%
  Of which capital expenditure in Switzerland (in CHF million)
1.1. – 31.12.
2023		 1,685
1.1. – 31.12.
2022		 1,688
Change
restated*		 -0.2%
  Group employees (FTEs as at 31.12)
1.1. – 31.12.
2023		 19,729
1.1. – 31.12.
2022		 19,157
Change
restated*		 3.00%
  Of which employees in Switzerland (FTEs as at 31.12)
1.1. – 31.12.
2023		 16,050
1.1. – 31.12.
2022		 15,750
Change
restated*		 1.90%

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

1Built optical fibre connections

Swisscom uses various alternative performance measures. The definition and reconciliation of values in accordance with IFRS are set out in the Annual Report as at 31 December 2023.

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

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.

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