Financial Data and Key Metrics Changes - Q3 revenue was CHF 2.7 billion, a reported decrease of 1.2%, but a slight increase when adjusted for stable exchange rates [9] - EBITDA for Q3 was CHF 1.15 billion, down 1.3% year-over-year [9] - Operating free cash flow decreased by CHF 140 million due to lower EBITDA and higher CapEx [35] Business Line Data and Key Metrics Changes - In Switzerland, telco service revenues slightly decreased, while B2B IT revenues continued to grow [5] - Mobile net adds in Switzerland were 35,000 in Q3, while broadband connections decreased by 9,000, offset by a growth of 10,000 in wholesale [7] - In Italy, Fastweb achieved 92,000 mobile net adds, increasing market share to over 5% [8] Market Data and Key Metrics Changes - The competitive environment in Switzerland remains highly promotional, with no expected changes in Q4 [60] - In Italy, the market is stable but highly competitive, with targeted win-back campaigns [84] Company Strategy and Development Direction - The company aims to delight customers through quality service, innovation, and cost savings [10][11] - Strategic priorities include launching new B2B and B2C products, such as insurance and energy offerings, to generate new revenues [10] - The company is focused on increasing fiber coverage and improving network quality, targeting 80% fiber coverage by 2030 [67] Management's Comments on Operating Environment and Future Outlook - Management expects continued pressure on service revenues in Switzerland due to aggressive competition [60] - Confidence remains in closing the Vodafone Italia acquisition in Q1 2025 despite ongoing regulatory reviews [31][81] Other Important Information - The company confirmed its full-year guidance for revenue, EBITDA, CapEx, and dividends [56] - Cost savings initiatives are on track to exceed CHF 50 million for the year [45] Q&A Session Summary Question: Competitive environment and service revenue trends - Management noted that the competitive environment remains highly promotional, with no expected changes in Q4 [60] Question: B2B IT margin improvements - Management indicated that margins in the cloud business are stable, with ongoing efforts to improve profitability across all product categories [62] Question: Future of fiber network and potential consolidation - Management does not foresee significant consolidation in the Swiss market but remains open to opportunities if they arise [72] Question: Economics of the loyalty program - The loyalty program is designed to be cost-neutral, financed within the current cost structure, aiming to reduce churn and enhance customer loyalty [73] Question: Fiber preference trends - Management stated that there has not been a significant shift in consumer preference from cable to fiber yet, but this may change as fiber coverage expands [76] Question: Cost-saving opportunities - Management remains confident in achieving cost savings beyond CHF 50 million, driven by AI and automation initiatives [77] Question: Churn trends in broadband - Management reported that churn numbers are stable, with slight fluctuations, and are not overly concerning [80] Question: Update on Vodafone Italia acquisition - Management expressed confidence in closing the acquisition in Q1 2025, despite ongoing regulatory discussions [81] Question: Price competition in Italy - Management described the price competition in Italy as stable and highly competitive, with no worsening trends [84] Question: Huawei ban update - Management indicated that a potential Huawei ban is under consideration but does not expect immediate action from the government [88] Question: Contribution of new businesses to revenues - The energy business is already contributing positively, while the insurance business is still in its early stages [89]
Swisscom(SCMWY) - 2024 Q3 - Earnings Call Transcript