Financial Data and Key Metrics Changes - Group revenue decreased by CHF44 million, with a negative currency effect of CHF31 million, resulting in an underlying revenue decline of CHF13 million [74] - Reported EBITDA was CHF1.16 billion, slightly ahead of consensus, with a stable EBITDA compared to the previous year [92][109] - Net income increased by CHF13 million to CHF455 million, despite a slight decrease in EBITDA [27] Business Line Data and Key Metrics Changes - In Switzerland, revenue decreased by CHF52 million, primarily due to a decline in B2C revenues, which were down CHF59 million, largely from lower hardware sales [5][8] - B2B revenue was flat, with a slight increase of CHF4 million, driven by higher IT service revenues from acquisitions [7] - Fastweb in Italy reported a revenue increase of €35 million, or 5.6%, with strong growth in B2B and wholesale segments [20][21] Market Data and Key Metrics Changes - Swiss service revenue was down CHF30 million, with B2C service revenue down CHF17 million and B2B service revenue down €13 million [11] - Fastweb's mobile customer base grew by 12% year-on-year, reaching 3.6 million subscribers [63] - Wholesale revenues in Italy increased by 18%, driven by new connections [66] Company Strategy and Development Direction - The company continues to focus on value over volume, particularly in the B2C market, and is implementing measures to improve service revenue [32][112] - The acquisition of Vodafone Italia is expected to create significant value, with anticipated synergies of €600 million per year [69][80] - The company is investing in digital services and customer experience enhancements, including new offerings in energy and insurance [60][94] Management's Comments on Operating Environment and Future Outlook - Management indicated that the competitive environment in Switzerland remains aggressive, particularly from Salt, but emphasized a focus on value rather than increased promotional intensity [32][45] - The company maintains its guidance for service revenue decline in Switzerland, projecting a total decline of CHF70 million to CHF90 million for the year [15][31] - Management expressed confidence in achieving the fiber rollout targets and the necessary infrastructure upgrades by the end of 2025 [52][53] Other Important Information - Capital expenditures (CapEx) increased by CHF49 million, primarily due to the FTTH rollout in Switzerland [4][19] - Operating free cash flow decreased by CHF57 million, attributed to lower EBITDA and higher CapEx [4][26] Q&A Session Summary Question: Swiss service revenues trajectory - Management clarified that the CHF30 million decline is not the new normal and expects B2B service revenue to align with full-year guidance [29][31] Question: Swiss competitive dynamics - Management noted aggressive promotional activity from competitors and emphasized a focus on value rather than increasing promotional intensity [31][32] Question: Swiss cost savings and EBITDA phasing - Management expects higher cost savings in Q2 to Q4, with guidance for CHF50 million plus net savings for the year [33] Question: Wholesale margin in Italy - Management provided insights on the wholesale margin, indicating it is lower than 60% but still healthy [39] Question: Impact of Sunrise's customer loyalty initiatives - Management acknowledged the competitive pressure from Sunrise but emphasized a strong existing customer base and the need to attract new customers [43][45] Question: Integration of Vodafone Italy - Management expressed confidence in realizing the €600 million synergy target from the Vodafone acquisition, with plans already in place for integration [80][81] Question: Concerns regarding NetCo deal and competition - Management highlighted the importance of maintaining a healthy wholesale business and expressed concerns about potential impacts on competition from the NetCo carve-out [82][83]
Swisscom(SCMWY) - 2024 Q1 - Earnings Call Transcript