Swisscom maintains a steady course in 2020

Swisscom is the latest telco to publish its financial figures for 2020, and like some of its peers expressed relief that its business has emerged from a tough 12 months in a better state than was probably initially feared.

Urs Schaeppi, the CEO of the Swiss operator, said Swisscom performed successfully last year "in a challenging environment," and achieved a strong operating result with slightly lower revenue.

According to Reuters, the operator performed slightly better than consensus estimates: full-year earnings before interest, tax, depreciation and amortization (EBITDA) increased by 0.6% to 4.38 billion Swiss francs (US$4.87 billion), compared to estimates of CHF4.34 billion ($4.80 billion). Sales fell 3.1% to CHF11.10 billion ($12.3 billion), compared to an estimated CHF11.09 billion ($12.27 billion).

Figure 1: Standing strong: Swisscom has managed to come through 2020 better than expected. (Source: Unsplash)

On a like-for-like basis and at constant exchange rates, revenue declined by 2.3% while EBITDA remained stable.

"The success is even more remarkable given that, as a result of COVID-19, over 80% of our employees worked from home and kept the operation running at all times, even when the network was under strain," Schaeppi said in a statement.

"In addition, the market environment continues to be characterised by aggressive promotions, intense competition and price erosion in the Swiss core business.”

In Switzerland, Swisscom generated revenue of CHF 8.27 billion ($9.2 billion), which was down 3.5% because of ongoing price pressure and the impact of COVID-19. EBITDA increased 1.2% to CHF 3.52 billion ($3.9 billion).

In Italy, Fastweb reported year-on-year revenue growth of 3.9% to €2.3 billion ($2.75 billion). EBITDA increased 4.5% to €784 million ($939 million).

Holding firm

Swisscom remains in cautious mode for 2021, predicting net revenue of around CHF11.1 billion, EBITDA of around CHF4.3 billion and capital expenditure of about CHF2.3 billion, which is similar to 2020.

According to Reuters, this is broadly in line with consensus for EBITDA of CHF4.33 billion and sales of CHF11.04 billion.

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Subject to achieving its targets, Swisscom plans to pay an unchanged dividend of CHF22 ($24.39) per share for the 2021 financial year.

The operator also plans to maintain cost-cutting efforts, reducing its cost base by CHF100 million ($111 million) in 2021 and again in 2022, as in previous years.

In terms of network expansion, Swisscom's target is to double fiber-to-the-home coverage in Switzerland from 32% of premises in 2020 to 60% in 2025. It also said it currently covers 96% of the Swiss population with a "basic version" of 5G.

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— Anne Morris, contributing editor, special to Light Reading