2024-02-08 19:51:07 ET
Swisscom AG (SWZCF)
Q4 2023 Earnings Conference Call
February 8, 2024 08:00 AM ET
Company Participants
Louis Schmid - Head, Investor Relations
Christoph Aeschlimann - Chief Executive Officer
Dirk Wierzbitzki - Chief Executive Officer, Residential Customers, Switzerland
Urs Lehner - Chief Executive Officer, business Customers Switzerland
Walter Renna - Chief Executive Officer, Fastweb
Eugen Stermetz - Chief Financial Officer
Conference Call Participants
Polo Tang - UBS
Joshua Mills - BNP Paribas Exane
Georgios Ierodiaconou - Citi
Nawar Cristini - Morgan Stanley
Steve Malcolm - Redburn
Titus Krahn - Bank of America
Luigi Minerva - HSBC
Nuno Vaz - Societe Generale
Robert Grindle - Deutsche Bank
Presentation
Louis Schmid
Good afternoon and welcome to Swisscom's Full Year Results Presentation 2023. My name is Louis Schmid, Head of Investor Relations. Let's start the online meeting with a short introduction and move to Slide number 2 with the agenda for today.
Christoph Aeschlimann, our CEO starts with Chapter 1, A Successful 2023, where he dives into some of the achievements commercially, operationally, and financially. Then in Chapter 2, Empowering the Digital Future as Innovators of Trust, our CEO presents a Swisscom Group story and strategy before explaining the strategic priorities for Switzerland and Italy.
Thereafter, we move to Chapter 3, Trusted Leader in Digital Life and Business in Switzerland and Italy, covering achievements, market trends, strategic priorities, including ambitions for Swiss B2C presented by Dirk Wierzbitzki, our Head of Residential Customers Swisscom Switzerland. For B2B presented by Urs Lehner, Head of Business Customers Swisscom Switzerland. For Swiss Networks and IT, presented by our CEO; and our Italian business presented by Walter Renna, CEO of Fastweb.
After Walter's presentation, our CFO, Eugen Stermetz will present in Chapter 4, our rock-solid financials including the outlook 2024. In the wrap-up chapter, some final remarks from our CEO, Christoph Aeschlimann. After the presentation, we move directly into the Q&A session which starts at around 4 o'clock.
With that, I would like to open the meeting and hand over to Christoph.
Christoph Aeschlimann
Thank you, Louis. We will move directly into the achievements of 2023. I think we can say that 2023 was again a very successful year for Swisscom and Swisscom delivered again all operational and financial targets.
We are leading in Switzerland. We were awarded the strongest brand in Switzerland. We have a very large NPS leadership and were able to win many shop, service, and network tests in the past year.
Also in Italy, we had a strong growth. We continued to grow in IT. And Walter Renna took over successfully from Alberto in the CEO role.
On the Swiss side, B2B had a strong development especially on the IT side with a strong growth further positioning Swisscom as an integrated connectivity and IT leader.
Last year, we have also seen a lot of innovation. Many new products were launched both on the B2C and the B2B side to strengthen Swisscom's innovator image and to make sure that we can generate new revenues in the future years.
On the ESG side, we made a major milestone by obtaining the accreditation or the approval of our SBTi targets, which we handed in and we are now on track to execute against our 2035 Net Zero SBTi approved target.
On the next slide, we can see a brief overview of the operational performance of both Switzerland and Fastweb and you can see that overall it is a very pleasing result. In Switzerland, we were able to continue our growth in Q4 on the mobile side and were able to attract 129,000 new customers on our postpaid offering, leading to a market share of 53%.
Broadband was roughly stable, slightly declining, but overall compensated by a slight growth on the wholesale side by plus 13,000 connections.
We also had some structural changes. So you can see that TV decline continued in Q4. Also, the fixed voice decline continues in line with structural changes in the market, and many customers canceling their fixed voice lines or TV behavior shifting more and more to other media content such as OTT streaming providers.
On the Italian side, we had a very pleasing development on the mobile side with plus 422,000 subscriptions, reaching 3.5 million customers year-to-end, representing nearly 5% market share. We also continued our value strategy on the broadband side and accept a certain decline in our broadband customer base, which we overcompensate largely by the growth in our wholesale business, because as you know last year or quarters have seen many new entrants in the Italian fixed line market with Iliad, with Sky and lately Enel. And these customers are customers of our wholesale division leading to a very spectacular growth of 69,000 lines in Q4 and an overall growth year-on-year of 108,000 lines, largely overcompensating the loss we have on the B2C side.
Overall, this led to very pleasing financial results. We had a stable group revenue of CHF 11 billion, representing 0.2% change. We had a growing EBITDA at CHF 4.6 billion, up 4.9% growing net income at CHF 7.1 billion and with stable CapEx, a very strong growth in operating free cash flow proxy and overall free cash flow also growing to CHF 1.48 billion or plus 9.7%; and Eugen will later detail the financial numbers and go into more details on this....
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Swisscom AG (SWZCF) Q4 2023 Earnings Call Transcript