Swisscom (SCMN) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue increased by 1.8% year-over-year, mainly driven by Fastweb's growth in Italy; EBITDA was in line with consensus but down 1.3% due to softer cost savings in Switzerland, and full-year guidance is confirmed.

• Business trends in Switzerland remained stable, with slight improvement in Telco service revenue and continued IT top-line growth.

• Fastweb in Italy delivered strong operational results, including the launch of Fastweb Energia and the sale of a 4.5% FiberCop stake for EUR 439 million.

• The Vodafone Italy acquisition is progressing as planned, with EUR 8.1 billion financing secured and regulatory approvals underway; closing expected Q1 2025.

• Strategic priorities remain unchanged, focusing on customer experience, innovation, cost efficiency, and skill development.

Financial highlights

• Q2 2024 revenue: CHF 2.75 billion (+1.8% YOY); H1 2024 revenue: CHF 5.45 billion (+0.1% YOY).

• Q2 2024 EBITDA: CHF 1.12 billion (-1.3% YOY); H1 2024 EBITDA: CHF 2.28 billion (-1.0% YOY).

• Net income for H1 2024 was CHF 836 million, down 1.4% year-over-year.

• Group CapEx for H1 2024 was CHF 1.16 billion, up 4.0% year-over-year, mainly for network expansion.

• Net debt at end of Q2 2024 was CHF 7.92 billion, down 2.3% year-over-year.

Outlook and guidance

• Full-year 2024 guidance confirmed: revenue ~CHF 11.0 billion, EBITDA ~CHF 4.5–4.6 billion, CapEx ~CHF 2.3 billion.

• Dividend proposal of CHF 22 per share for 2024, subject to meeting targets.

• Service revenue in Switzerland expected to decline by approximately CHF 100 million for the year.

• Fastweb revenue growth for the full year will exceed original 2%-3% guidance but remain below the 7.1% seen in H1; EBITDA growth expected at 1%-2%.

• Cost savings target of CHF 50 million+ for the year is reaffirmed, with most savings expected in H2.