“Same history But Shaping the future”€¦ · Agenda “Same history – But- Shaping the...

“Same history But Shaping the future”

Results Q2 2012 Investor & Analyst Presentation 8 August 2012

1. Same history Carsten Schloter, CEO – Q2 results fully in-line with Q2 last year

2. But – Cannibalisation of rated voice and SMS continues

3. Shaping the future – Complete overhaul of pricing introduced to make cannibalisation irrelevant

4. Fastweb results stable

5. Segmental results Ueli Dietiker, CFO

6. Group results 7. Outlook

8. Q&A

Attachment: Details on IPTV, Access revenues, 1P and Bundle RGUs, ARPU and resulting revenues, Smartphones & SACs

Agenda “Same history – But- Shaping the future” 2

* w/o FX, hubbing (Fastweb), extra termination & pension fund cost

Q1/Q1 Q2/Q2 H1/H1 Δ%

Net revenue -8 -10 -18 -0.3%

EBITDA +10 +11 +21 +0.9%

Change in CHF mm, total Swisscom Group, comparable *

Comparable key results fully in line with last year

3

1. Same history - Summary

Core business stable. Low margin business at decline (hubbing and wholesale). Sequential improvement QoQ

Change YoY (1st HY 2011 versus 1st HY 2012) in CHF mm, total Swisscom Group

5,621 (-1.8%)

Reported Revenues Ytd 2011

-50

-30

Reported Revenues Ytd 2012

FX Apprecia- tion Fastweb (a)

Fastweb w/o Hubbing

Bundles 1P Wireless

-4

Inbound roaming, wholesale data/broad band and Other

5,722

Hubbing

- Consumer decrease

- Enterprise increase

- Wholesale increase

especially traffic

-120

1P Wireline

Other segments

Sum of Bundles+1P revenue +8

Decrease for access & traffic

(a) Average exchange rate CHF/€ ytd 2011: 1.266 vs. ytd 2012: 1.2035, i.e. a weakening of Euro against Swiss Franc of 4.9%

1. Same history - Group revenues

-53 +1 +178

-25 +2

IC Elimination

Fastweb: -82

Swisscom w/o Fastweb: -19

Q1: Q2:

-36 -17

-16 -14

+0 +1

+92 +86

-17 -33

-62 -58

-15 -10

-7 +3

+1 +1

∑

-60 -41

4

-101

1. Same history - Group EBITDA

Change YoY (1st HY 2011 versus 1st HY 2012) in CHF mm, total Swisscom Group

Reported EBITDA down 1.5%, only driven by FX and higher termination and pension cost. Sequential improvement QoQ

- 15

2,236 (-1.5%)

Reported EBITDA ytd 2011

+10 + 4

+0

Reported EBITDA ytd 2012

FX Apprecia- tion Fastweb

Fastweb Underlying (excl FX effect)

Higher contribution margin

+7

Other indirect cost

2,270 Revenue down 17mm direct cost down 27mm

overall stable indirect cost

Other segments Headquarters Intercompany elimination

Incl. CHF 12 mm higher SAC in 2012

Q1: Q2:

-9 -6

+ 1 +3

+ 0 +0

∑

- 22 - 12

-40

Termination benefits Pension cost

- 23 - 17

5

Fastweb: -11

Swisscom w/o Fastweb: -23

Termination benefits up 12mm Pension cost up 28mm

Swisscom Switzerland, comparable

- 34

+16 - 6

- 7 +14

2. But

245 234 230 228197 182 176 174 176 160

Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12

2'434 2'269 2'162 2'2971'927 1'708 1'620 1'701 1'685 1'530

316 353 383 417 473 459

1'9892'1582'1182'0032'061

2'2432'2972'1622'269

2'434

Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12

Wireline voice, volumes

1P wireline revenues traffic

in Total - 3%

Swisscom Switzerland

- 12%

*) including revenue VAS

*)

in Bundles +30%

1P: -10%

change Q2/Q2

Cannibalization of rated volumes continues

mm min.

CHF mm

6

2. But

640 673 653 745 722 702 696 678 653

949 970 977 955 888 912 880 850 839

59 60 60 101 126 141

659

923

1'6331'589 1'643 1'630 1'700 1'669 1'675 1'642 1'677 1'654

Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12

Wireless voice volumes Swisscom Switzerland

in Bundles +>100%

1P rated - 8%

1P non-rated - 7%

change Q2/Q2

mm min. in Total -3%

172 189 195 220 224 247 296 291 321

506 505 514 521 473 454 444 404 348 317

27 29 30 39 52 56

273

694691739747730724741709693678

Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12

1P rated -30%

in Bundles +93%

1P non-rated +30%

in Total -5% SMS volumes

Cannibalization of rated volumes continues

# mm

7

2. But

8

*) including revenue VAS

354 378 386 360 331 349 358 322 298 305

9799 105

10093 92 95

8271 68

373 369 404

453 441 424 460

491 477 451

Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12

SMS

Voice *)

- 15%

… as a result, revenues 1p wireless SMS & voice traffic*) declining

change Q2/Q2

Cannibalization of rated revenues continues

CHF mm

2. But

63 77 92 109 162 185 211 234 254 271

764 770 764 763 756 756 747 739 741 746

773 803 826 776 696 712 724 669 632 631

Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12

CHF mm

-5mm YoY Swisscom Switzerland

1‘600 1‘650 1‘682 1‘648 1‘614 1‘653 1‘682 1‘642 1‘627

Growth in bundles (+178 CHF mm in 1st HY versus 1st HY of last year) overcompensates decline in 1P access and 1P traffic

1P Traffic & VAS

1P Access

Bundles

Growth in revenues from Bundles can still compensate decline in traffic & access

48%

Relative share

48%

4%

38.3%

Relative share

45.3%

16.4%

1‘648

+13mm YoY

1st HY YoY +8mm

9

3. Shaping the future

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Smartphone and tablet penetration (i.e. Apps) massively change consumer behaviour

2010 2011 2012 2013

Now 1 out of 2 devices in use are smartphones, capable of circumventing the traditional core business of telco’s: classic rated text and (increasingly) voice In a year, this will be 60%, and in a few years there will be virtually no ordinary devices in use any longer

61%

69%

36%

Smartphone share handset sales

Smartphone share active handsets

21%

32%

46%

60%

OTT providers offer opportunity to circumvent SMS entirely (Whatsapp, iMessage, etc). Just a matter of time until something similar happens on larger scale to voice

(Viber, “iVoice”?)

10

3. Shaping the future

Customers increasingly desire

Value for money: Classic rated products no longer an alternative for free-to-use alternatives

Predictability of bill: Cost of (rapidly growing) data consumption increasingly unpredictable as customer has no idea how much data is being used (also in background)

Speed: Speed is intuitive & visible – and therefore valuable. Data volume is not

Operators have to adapt to reality

Best network getting more important: Network quality, spectrum, coverage & capacity increasingly important to experience reliable and consistent speed of connection. This requires capability to (continue) to invest. Swisscom invests 3x avg. European incumbent and operates 2x more antennas than nr. 2 and 3 in Switzerland

Cash out is “all” fixed cost: Only 10% varies with volumes used (cost for terminating traffic on other networks). Rest (90%) is “sunk costs”. With lower (regulated) pricing and IP alternatives, the variable component of cost will come down only further

Charging on the basis of volumes used makes no sense any longer. A complete overhaul of (esp. mobile) pricing is required to address customer desires, OTT threats, and to create a more sustainable competitive proposition which cannot easily be replicated by other providers

11

In each plan, all voice, SMS and data usage is included. Customer only has to pick the desired speed. Gives “total” control over monthly bill to customer. And “peace of mind” to Swisscom, as this pre-empts OTT threats and is not easily replicable by other operators due to required network quality/density

3. Shaping the future – speed is the only price criterion

infinity XS

0,2 Mbit/s

infinity S

1 Mbit/s

infinity M

7,2 Mbit/s

infinity XL

100 Mbit/s 21 Mbit/s

infinity L

New mobile price plans from 25 June 2012: -> Offering 5 plans with all-inclusive voice/SMS/data, designed for the following usage profiles

Price (CHF/month

Bandwidth (max)

59 75 99 129 169

Roaming in W-Europe (min. voice, # SMS, Mb Data)

- - 30/30/30 100/100/100 200/200/200

typical usage

Voice and SMS

Mail w/o attachment

+ social media

+ video small density

+ video HD

+cloud

-> Special offers to the youth segment to be launched mid August at 10-25% discount of S, M and L plans

12

3. Shaping the future – new price plans compared

Competitors already reacted with flat rates, however do not differentiate on speed. New Swisscom pricing is competitive (less premium than in past), while taking pressure away from the historical ARPU erosion

Low usage Medium usage High usage

U/U/0 Flat XS Flat 2 U/U/1 Flat M Flat 4 U/U/5 Flat XL Flat 7

flat - -

105.- 65.- 59.-

99.- * 90.- 99.- 155.-

200.- 169.-

CH

Internat. Roam.

CH

Roam.

CH

Roam.

flat flat

200 min.

flat flat

200 min.

flat flat

-

flat 30 min. 30 min.

flat flat

-

flat flat

-

flat on-net flat fix

- -

flat flat

-

flat -

flat -

flat -

flat 30 #

flat -

flat -

flat 200 #

flat -

flat -

flat -

0.5 GB -

- -

flat 30 MB

flat -

1 GB -

flat 200 MB

Flat 100 MB

5 GB -

*) on promotional basis only

13

3. Shaping the future – first customer response

Overall customer reaction very positive – many of them moving quickly to infinity

Immediate pick up Growing customer base High response rate

> 275'000 customers on the new price plans

> 110'000 of them prev. "BeFree" customers that have been transferred to NATEL infinity XL

> Every week 25-30'000 existing/new customers chose NATEL infinity

> Penetration of infinity within postpaid hence increases by 1pp./week

> Offers are well received by the end customer

> Outbound call campaigns with extraordinary high response rates (22% vs. former 10-15%)

infinity customers

275k

7%

penetration within postpaid

new infinity cust. / week

25-30k

increase in pen. per week

~1pp.

infinity campaigns

22%

former campaigns

10-15%

Status after 1 month of operation (per end of July 2012): 14

3. Shaping the future - first conclusions

Complete overhaul of (mobile) pricing was necessary to make cannibalisation irrelevant

• Price differentiation on speed only − Tariff plans (all you can eat)

delivering real, predictable and intuitive customer value

• No regret move, as costs are fixed

<10% is variable related to termination on other networks

• Fortifies competitive strength − Only strongest networks can deliver

(Swisscom Capex much higher, better coverage & capacity, more spectrum)

− Pre-empts loss to OTT

Thoughts going forward

• Fine tune plans when necessary to meet (evolving) customer needs

• Accept initial ARPU decline caused by “right graders” before “up-graders” start kicking in

• Continue to invest to deliver upon perceived quality of service and to cement number 1 market position

• Think about similar ways to address the fixed line (voice) market cannibalisation threats

15

39 39 31 32 27 28

22 21 21 23 31 24

196183

209

182186183182182187186194191

4. Fastweb – results stable

-13%

Consumer Enterprise Wholesale Hubbing

Q1

2011

Q1

2012

FASTWEB quarterly revenues (in EUR mm)

1) Incl. revenues to Swisscom companies

1)

61 58

Q1

2011

Q2 Q1

2012

Q1

2011

Q2 Q1

2012

+5% - 6%

Consumer revenue decrease driven by reduction in interconnection rates and competitive pressure

Managed reduction of low margin hubbing revenue

+14%

-28%

Q2 Q2

60 52

Q2 Q2

52 55

Total revenues without Hubbing stable YoY at € 798 mm

16


Q1 2011 Q2 2011 Q3 2011 Q4 2011 2011 Q1 2012

EBITDA 107

CAPEX

FCF proxy

./.

=

1) excluding other income of € 56mm recognised in Q3-2011 following a settlement of a dispute with another telco provider

1)

€ mm

Q2 2012

123 121 99

1)

450

109 124

Q1 2011 Q2 2011 Q3 2011 Q4 2011 2011 Q1 2012 Q2 2012

98 99 119

132 448

112 117

9 24 2 -33 2 7 -3

FCF proxy in Q2 2012 especially impacted by higher Capex strictly connected to specific projects and the increased commercial performances both on Consumer and Enterprise

In Q2 EBITDA growth vs. PY is confirmed, with margin increase from 28.0% to 28.8%

17


6

-7

1 5 336

Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012

4 15 15 30 1623

Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012

1.536 1.544 1.560 1.595 1.6731.654

Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012

Net Adds BB excl. Sky

Net Adds Sky (excl. Migrators)

Customer Base BB 1)

1) Q1 and Q2 of 2011 adjusted by customer transfer (-197k) to another operator due to the settlement of a legal dispute

• Broadband market slowdown confirmed with negative growth in 2Q

• Over the last four quarters FASTWEB has been the only operator with positive net adds in every quarter and market co-leader in customer acquisitions

(000)

(000)

(000)

18

1. Same history Carsten Schloter, CEO – Q2 results fully in-line with Q2 last year

2. But – Cannibalisation of rated voice and SMS continues

3. Shaping the future – Complete overhaul of pricing introduced to make cannibalisation irrelevant

4. Fastweb results stable

5. Segmental results Ueli Dietiker, CFO

6. Group results 7. Outlook

8. Q&A

Attachment: Details on IPTV, Access revenues, 1P and Bundle RGUs, ARPU and resulting revenues, Smartphones & SACs

Agenda “Same history – But- Shaping the future” 19

6m 2012 Financials and operational data

• Net revenue on level prior year (-0.1%). Voice line loss and ongoing price erosion is fully compensated by increasing number of bundles products, ongoing subscriber growth and a higher number of sold smart phones.

• Bundles: strong increase in bundle revenue (+49.5%) as the number of bundle customers successfully grow.

• Single play revenue: decrease -9.0% due to customer shift to bundle products and ongoing voice line loss.

• Direct cost decrease -2.1%, lower outpayments and lower subscriber acquisition/retention cost compensate for the increase of goods and services purchased.

• Indirect cost down by -1.7% (efficiency gains)

• Contribution Margin up +0.7%-points to 59.4%

• TV subscriber base up +35.2%

5. Segmental results: residential customers

30.06.2012 YOY

Net revenue in MCHF 1) 2'499 -0.1%

Direct costs in MCHF -561 -2.1%

Indirect costs in MCHF 2) -453 -1.7%

Contribution Margin 2 in MCHF 1'485 1.2%

Contribution Margin 2 in % 59.4%

CAPEX in MCHF 66 13.8%

FTE's 4'485 -5.3%

30.06.2012 YOY

Voice lines in '000 2'299 -4.7%

BB lines in '000 1'473 3.7%

Wireless customers prepaid in '000 2'231 0.0%

Wireless customers postpaid in '000 2'355 2.2%

Wireless cancellation rate (annualised) 14.0% 0.3 pp

Blended wireless ARPU MO in CHF 36 -5.3%

TV subs in '000 672 35.2%

1) incl. intersegment revenues

2) incl. capitalised costs and other income

20


• Net revenue up by +1.8%. Ongoing growth of wireless and broadband subscribers as well as strong development of bundle products overcompensate price erosion.

• Direct costs down by -5.6% due to lower outpayments and acquisition/retention costs.

• Indirect cost up +16.1% (efficiency gains are overcompensated by expenses for service level and a higher number of FTE).

• Contribution Margin down by -0.6%-points to 75.9% mainly due to higher indirect costs.

• BB lines up +12.7%

5. Segmental results: Small & Medium-sized Enterprises

30.06.2012 YOY

Net revenue in MCHF 1) 581 1.8%


Indirect costs in MCHF 2) -72 16.1%

Contribution Margin 2 in MCHF 441 0.9%



FTE's 832 8.5%

30.06.2012 YOY

Voice lines in '000 518 1.0%

BB lines in '000 187 12.7%

Wireless customers in '000 536 6.6%

Wireless cancellation rate (annualised) 7.0% 0.3 pp




21


• Revenue slightly down by -1.2%.

• Ongoing increase of wireless data is overcompensated by wireline business (price erosion).

• Direct cost down by -6.2% driven by lower outpayments and acquisition/retention costs.

• Indirect cost increase by +3.9% due to higher number of FTE (+2.5%).

• Contribution Margin stable at 51.7%.

5. Segmental results: corporate business

30.06.2012 YOY

Net revenue in MCHF 1) 906 -1.2%


Indirect costs in MCHF 2) -240 3.9%

Contribution Margin 2 in MCHF 468 -1.5%


CAPEX in MCHF 40 -23.1%

FTE's 2'410 2.5%

30.06.2012 YOY

Voice lines in '000 241 -1.2%

BB lines in '000 34 9.7%

Wireless customers in '000 992 13.2%

Wireless cancellation rate (annualised) 5.0% -0.6 pp




22


• Net revenue decreased by 28 MCHF - lower roaming rates - ongoing substitution towards full access - revenue decrease in data services

• Direct costs down by 12 MCHF as many revenue drivers push also down direct cost

• Full access lines (ULL) further increased, mostly substituting wholesale broadband lines

5. Segmental results: wholesale

30.06.2012 YOY

Revenue from external customers in MCHF 300 -4.5%

Intersegment revenue in MCHF 180 -7.2%

Net revenue in MCHF 480 -5.5%


Indirect costs in MCHF 1) -9 -10.0%

Contribution Margin 2 in MCHF 184 -7.5%


CAPEX in MCHF - nm

FTE's 107 3.9%

30.06.2012 YOY

Full access lines in '000 317 11.2%

BB (wholesale) lines in '000 176 -12.9%


23


• Indirect costs up by 19 MCHF mostly driven by higher termination benefits and higher pension cost. Higher costs for maintenance (access network & IT systems) were compensated by further cost savings due to efficiency improvements

• Segment result decreased by 23 MCHF as a result of higher indirect costs and higher depreciation partly offset by higher capitalised costs mainly due to increased investment activities.

• CAPEX above previous year (13.5%) mainly driven by higher spending for broadband-infrastructure

5. Segmental results: network and support functions

30.06.2012 YOY

Personnel expenses in MCHF -340 5.3%

Rent in MCHF -92 4.5%

Maintenance in MCHF -86 11.7%

IT expenses in MCHF -144 6.7%

Other OPEX in MCHF -113 -15.0%

Indirect costs in MCHF -775 2.5%Capitalised costs and other income in MCHF 81 11.0%

Contribution Margin 2 in MCHF -694 1.6%Depreciation, amortisation and impairment in MCHF -434 2.8%

Segment result in MCHF -1'128 2.1%


FTE's 4'046 1.5%

24


5. Segmental results: Fastweb

• Revenues decreased by 2.5% YoY – Shortfall in Consumer revenues driven by

reduction in interconnection rates and by competitive pressure due to loss-making offers (mobile to fixed cross subsidy) by competitors

– Managed reduction of low margin Wholesale revenues (Hubbing) compensated by an increase in high margin Wholesale and Enterprise business

• Reported EBITDA reached 233 MEUR, up 1.3% YOY - despite the increase of SAC (+9 MEUR) due to the strong commercial performance - thanks to significant cost reduction for bad debt and tightening of opex.

• Contribution to Swisscom EBITDA in CHF -3.8% due to the ongoing strengthening of Swiss Franc in a YOY context (Currency impact in Swisscom accounts: revenue -53 MCHF / EBITDA -15 MCHF)

• Customer base increased to 1’673k, +78k during the first half year of 2012, confirming the good trend since September 2011 in all segments. The decrease of -3.9% YoY is due to a customer transfer of 197k in Q3-2011 following a settlement of a legal dispute with another operator. Excluding this effect, customer base has increased by 8.4% in a Y0Y context.

30.06.2012 YOY

Consumer revenue in MEUR 364 -5.5%

Enterprise revenue in MEUR 379 2.7%

Wholesale revenue in MEUR 1) 110 -9.1%

Net revenue in MEUR 1) 853 -2.5%

of which net revenue excl. hubbing in MEUR 798 0.1%

OPEX in MEUR 2) -620 -3.9%

EBITDA in MEUR 233 1.3%

EBITDA margin in % 27.3%

CAPEX in MEUR 228 15.7%

OpFCF Proxy in MEUR 5 -84.8%

FTE's 3'032 -2.2%

In Swisscom accounts 30.06.2012 YOY

EBITDA in MCHF 280 -3.8%


30.06.2012 YOY

BB customers in '000 1'673 -3.9%

Mobile value customers in '000 355 26.8%

1) incl. revenues to Swisscom companies


25

Financials and operational data 6m 2012

• External revenue down by 4 MCHF (-0.9%):

– IT Services down by 6 MCHF, mainly due to lower project business revenue

• Net revenue up by 15 MCHF, higher intersegment revenues are partly offset by lower external revenue

• EBITDA on level of previous year

• Order intake IT Services amounts to 177 MCHF (YTD)

5. Segmental results: Other

30.06.2012 YOY

Swisscom IT Services in MCHF 268 -2.2%

Swisscom Participations in MCHF 161 3.2%

Hospitality Services in MCHF 32 -8.6%

Other in MCHF - n.m.

External revenue in MCHF 461 -0.9%

Net revenue in MCHF 1) 852 1.8%

OPEX in MCHF 2) -706 2.3%

EBITDA in MCHF 146 -0.7%

EBITDA margin in % 17.1%


FTE's 4'546 2.6%



26

603

666

249

275

57

76

1st HY2011

1st HY2012

Swisscom Switzerland Fastweb Others

(in CHF mm)

909

CAPEX of Swisscom Switzerland – trend to invest more into fibre continues

Fixed network: Fibre (FTTx)

Wireless network

Customer driven: Customer premises equipment and corporate customers

2010 Q2 2012

1‘017

14% 11% 14%

2011

Consolidated CAPEX increase YoY (+CHF 108mm) due to further broadband rollout at SCS

Further CAPEX increase for the broadband infrastructure at Swisscom Switzerland

6. Group results: CAPEX breakdown

Fixed network: Copper access, backbone & transport

IT systems, All-IP & other

14% 22% 24%

31% 29% 28%

12% 11% 12%

29% 27% 22%

27

Net income slightly down

6. Group results: P&L breakdown

EBIT

DA

Dep

reci

atio

n

EBIT

Net

inte

rest

Oth

er f

in.

resu

lt

Aff

. co

mp.

Tax

exp

ense

Net

inco

me

Min

orit

ies

SCM

net

inco

me

in C

HF

mm

(2‘270) (1‘326) (+9) (954) (-237) (962) (-8) (-27)

2‘236 -963

-13 +14 -222 928 -7

-124 921

tax rate 19.8%

tax rate 19.3%

(EPS CHF 18.42)

EPS CHF 17.78

(prior year)

1‘273

(-109) (-944)

28

0

00 0 0 0 1'011

+33

-909

-202

-119-65

2'270

+3

EBITDA CAPEX Receivables Payables Inventory Other NWC Others OpFCF

0 00 0 0 0 979

-1'017

-50 -88-6 -70 -26

2'236

EBITDA CAPEX Receivables Payables Inventory Other NWC Others OpFCF

∆

Increase in NWC of 214 CHF mm (more tied up capital)

YTD

June

201

1

-34 -108 +152 +31 -9 -103 +39 -32o/w pension o/w pension o/w pension

-28 +19 -9

Increase in NWC of 285 CHF mm (more tied up capital)

o/w Δ pension obligations: -23

o/w Δ pension obligations: -42

6. Group results: operating free cash flow breakdown YT

D Ju

ne 2

012

29

Net debt per 30.6.2012 has already been increased for CHF 360mm mobile spectrum expense, however has not been paid yet. Therefore not included in 1st HY Capex or FCF. Will be booked as CAPEX upon payment in August 2012

CHF bln 2011 actual 2012 target

Exchange rate CHF/€ 1.232 1.20

Revenues 11.467 11.3

EBITDA 4.584 4.4

CAPEX 2.095 2.2 (excl. cost for mobile spectrum)

Dividend per share (payable the year after)

22 (paid on 13 April 2012)

22 despite extra cost for mobile spectrum

(upon achieving the financial targets

above, payable in 2013)

FX assumption changed from 1.23 CHF/€ to 1.20 now, leading to mildly lower revenue yet same EBITDA as originally targeted

30

7. Outlook 2012

Q&A

31

Swisscom with 86k net adds in 1st HY, bringing market share in digital TV to 26%. Substantial volume of analogue TV gives potential for further growth, although some of them seem to have moved already while still paying for their “old” analogue connection

Market volumes (000) digital and analogue TV 32

Satellite/Terrestrial *

CATV / Net Integrators *

UPC Cablecom

Swisscom TV

2‘401

1‘920

1‘475 1‘180

893

28 %

48 % 17 % 28 % 7 %

20 %

25 %

26 %

* Estimates for 2012 Q2

1) Migration to digital largely driven by analogue customers who have been transferred technically, but have not subscribed to a digital product yet: these are still potential customers for Swisscom

1)

Market share:

Market share:

Total Analogue TV *

2‘662

0.5 % Sunrise *

4‘159 3‘992

3‘755 3‘537

3‘373

4‘262

Total Digital TV *

Analogue + Digital TV

Attachment, background information

63 77 92 109162 185 211 234 254 271

Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12

567 560 549 540 506 497 485 478 465 461

Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12

197 210 215 223 250 259 262 261 276 285

Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12

33 1P (single play) wireless access revenues increasing

1P wireline access revenues declining

+26 mm YoY

Bundle revenues strongly growing

+76 mmYoY Total

+

+

=

Swis

scom

Sw

itze

rlan

d -36 mm YoY

+86 mm YoY

1) Including revenue wireline business networks

1)

Attachment, background information

CHF mm

CHF mm

CHF mm

Number of Revenue Generating Units continues to grow

9,590 (-302) (-3.1%) Single Play

2Play

3Play

237 (+21) 474 (+42) (+9.7%)

374 (+78) 1,133 (+245) (+28%)

245 (+29)

4Play 363 (+363) 88 (+88)

TV Fixed Voice & Access Broadband Mobile

Number of

products in Bundle Sum Δ

2

1

3

4

1P

Bundles

2,465 (-279) 995 (-111) 5,885 (+59)

and 11 additional Mobile Subs

11,560 (+348) (+3.1%) Revenue Generating Units 694 (+182) 3,058 (-111) 1‘694 (+76) 6,114 (+201)

Access Lines/Subs/Products (000)

YTD, (Change to 31.06.2011 in brackets)

Migration to ULL

Net Change +32

-79

+32

380 (+3%)

(+36%) (+4.7%) (+3.4%) (+3.5%)

and 11 additional Mobile Subs

Attachment, background information, RGU

34

Move to bundles implies up-scaling to higher ARPU’s

35

1) ARPU excl. Business Networks 2) ARPU excl. Mobile Termination

44 (-2) Single Play

2Play

3Play

110 (-8) 55 (-4)

130 (-1) 43 (-0)

27 (+3)

4Play 57 227

TV (incl. VOD and Pay per View

Fixed Voice & Access

Broad-band Mobile

Number of

products in Bundle

Weighted average per underlying product

2

1

3

4

1P

Bundles

53 (+0) 38 (-1) 43 (-2)

48 (-1) Total weighted average 48 (-1)

YTD, (Change to 31.06.2011 in brackets)

2) 1,2) 1)

Attachment, background information, ARPU

2,750 (-170) (-5.8%) Single Play

2Play

3Play

158 (+10) 158

270 (+71) 270 (+178) (+51%)

37 (+6)

4Play 97 97 (+97)

TV Fixed Voice & Access Broadband Mobile Sum Δ

1P

Bundles

801 (-92) 424 (-34) 1,488 (-50)

3,275 (+8) (+0.2%) Net Revenue Bundle + 1P

Net revenues (CHF mm)

YTD, (Change to prior year in brackets)

Attachment, background information, Revenues (RGU x ARPU)

36

93 80 92 111 94 94 98127

8785

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

300 285368 425

322 307 359468

328 312

SAC/SRC CHF mm

Handsets in ‘000

Smartphone share

113 111 117 102

147

Residential Segment

Corporate Segments

113 95

109 132

-7mm YoY

2010 2011 2012

SAC/SRC in the residential segment decrease by CHF 7mm yoy, of which reduced subsidies per handset (-8mm) overcompensate the higher smartphone volume

69%

101

61%

Attachment, background information, Handsets & SACs

37

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