Swisscom (SCMN) Q4 2023 earnings summary

Executive summary

• 2023 results met financial targets, with higher EBITDA, free cash flow and net income; revenue was nearly flat as Fastweb growth offset declines in Switzerland.

• Operational priorities included expanding fibre and 5G coverage, growing IT and digital services, and improving efficiency; the outlook targets 2024 revenue of ~CHF 11.0bn and EBITDA of CHF 4.5–4.6bn.

Financial highlights

• Revenue was CHF 11,072mn, up 0.2% YoY; underlying revenue increased CHF 104mn, or 0.9%, with Fastweb contributing CHF 151mn of growth.

• Reported EBITDA rose 4.9% to CHF 4,622mn; underlying EBITDA increased CHF 107mn, or 2.3%, while reported results included CHF 80mn of exceptionals and CHF 27mn of currency impact.

• Net income rose 6.7% to CHF 1,711mn; EPS increased 6.8% to CHF 33.03, as higher EBIT offset a lower financial result.

• Free cash flow was CHF 1,480mn, up 9.7% YoY; operating free cash flow proxy rose 12.8% to CHF 2,042mn.

• CAPEX was CHF 2,292mn, down 0.7% YoY; CAPEX/sales was 20.7%, down 0.2pp.

Outlook and guidance

• FY 2024 guidance: revenue ~CHF 11.0bn, EBITDA CHF 4.5–4.6bn and CAPEX ~CHF 2.3bn; EBITDAAL guidance is ~CHF 4.2–4.3bn.

• Guidance revenue split: ~CHF 8.5bn for Switzerland and EUR 2.6–2.7bn for Fastweb; EBITDA split: ~CHF 3.7bn and EUR 0.9bn, respectively.

• Upon meeting targets, a CHF 22/share dividend is planned for proposal, payable in 2025.

• Fibre investment envelope is CHF 500–550mn annually through 2030; FTTH coverage ambitions are 57% by 2025 and 75–80% by 2030.