Financial Data and Key Metrics - Q2 revenue growth of 1.8% to CHF 2.75 billion, with H1 revenue stable at CHF 5.45 billion [7] - EBITDA slightly lower by 1.3% to CHF 1.12 billion, mainly due to softer cost savings in Switzerland [7] - Full-year guidance for 2024 confirmed, with revenue and EBITDA in line with expectations [7] - Fastweb in Italy achieved 7% revenue growth, contributing significantly to the overall top-line increase [3] Business Line Performance - Switzerland: Postpaid subscriber base increased by 22,000, while broadband saw a slight decline of 9,000, better than Q1 [5] - Italy: Mobile net adds of 113,000, achieving over 5% market share, with broadband and wholesale combined growth of 33,000 net adds [6] - IT service revenue growth in Switzerland driven by AI and cloud offerings, with a 7% increase [3] - Fastweb launched a new energy offering for B2C customers, contributing to ARPU uplift [4] Market Performance - Switzerland: Improved momentum in mobile and broadband, with measures showing positive results [5] - Italy: Strong mobile growth, with Fastweb being the second-best performer in the market behind Iliad [6] - FiberCop stake sale in Italy for €439 million, with proceeds used for deleveraging [4] Strategy and Industry Competition - Strategic priorities for 2024 remain unchanged, focusing on customer delight, innovation, cost efficiency, and skill development [8] - Fastweb's integration with Vodafone Italy is on track, with financing secured and regulatory approvals progressing [4][24] - Competitive dynamics in Switzerland remain intense, with promotional activity increasing in Q2 [45] Management Commentary on Operating Environment and Future Outlook - Management highlighted the success of Fastweb in Italy and the progress of the Vodafone Italia transaction [4][24] - Cost-saving measures remain a top priority, with a focus on achieving more with less, despite a weaker Q2 [17] - The energy business in Italy is expected to have a marginal impact on EBITDA and revenues in 2024, with potential for future growth [47] Other Important Information - Fiber rollout in Switzerland has achieved cruising speed, with FTTH coverage now at 49% [16] - Fastweb launched an AI sovereign infrastructure and an Italian LLM offering, enhancing its B2B services [22] - The company appointed a new CTIO, Mark Düsener, to continue the network modernization strategy [15] Q&A Session Summary Question: Swiss Competitive Dynamics and Fiber Rollout Impact - Competitive dynamics in Switzerland remain intense, with increased promotional activity in Q2 [45] - Fiber rollout in Switzerland offers upselling potential but also increases competition, balancing out the impact on B2C revenues [46] Question: Fastweb Energy Business and EBITDA Impact - The energy business in Italy is still in early stages, with marginal impact on 2024 EBITDA and revenues [47] - The economics of the energy offering involve reselling energy with fixed pricing, avoiding exposure to wholesale energy prices [53][55] Question: Swiss Retail Margins and Italian Competitive Dynamics - Swiss retail margins have improved year-over-year, with increased sales orientation but no significant increase in marketing spend [58][59] - Italian competitive dynamics remain intense, with mobile prices stabilizing but wireline slightly deteriorating [60] Question: Vodafone Italia Transaction and Energy Business Read-Across - The Vodafone Italia transaction is progressing, with regulatory approvals expected in Q1 2025 [63] - The energy business in Italy is seen as a growth opportunity, but a read-across to Switzerland is unlikely due to market differences [64][65] Question: Swiss Service Revenue and AI Initiatives - Measures to improve ARPU in Switzerland have shown results, particularly in the wireline segment [69][71] - AI initiatives in B2B are still in early stages, with potential for high margins but no significant revenue impact yet [72][73] Question: Insurance Opportunity in Switzerland and Italian Wireline Market - The insurance business in Switzerland is still in early stages, with potential for future growth but currently not meaningful [76] - The Italian wireline market is slightly deteriorating, but Fastweb's positioning remains stable with manageable churn [78] Question: Swiss Guidance and Free Cash Flow - The company expects significant cost savings in H2 to meet the full-year EBITDA guidance [81] - Free cash flow is expected to see a significant swing back in working capital by year-end [82] Question: FTTH Targets and Fastweb Guidance - FTTH targets remain on track, with 57% coverage expected by 2025 [85] - Fastweb's revenue growth for 2024 is expected to be above the original guidance of 2%-3%, with EBITDA growth likely in the 1%-2% range [86]
Swisscom(SCMWY) - 2024 Q2 - Earnings Call Transcript