Financial outlook

Financial outlook



2014
reported
CHF/EUR 1.212
in CHF mio.



Effect
revaluation CHF
in CHF bn.


2014
pro-forma
CHF/EUR 1.00
in CHF mio.
2015
Change
Swisscom
without
Fastweb
in CHF bn.


2015
Change
Fastweb
in CHF bn.


2015
outlook
(CHF/EUR 1.00)
in CHF bn.
Net revenue11,703(0.4)11,3310.10> 11.4
Operating income before depreciation and amortisation (EBITDA)4,413(0.1)4,315(0.1)> 0~ 4.2
Capital expenditure2,436(0.1)2,3130< 02.3

The financial outlook for 2015 is influenced to a substantial degree by the CHF/EUR exchange rate. The Swiss National Bank’s decision to abandon the euro currency peg in January 2015 has increased the volatility of the exchange rate. The forecast of the future currency development and the effects on the economy is subject to uncertainty. The following outlook is predicated on a parity CHF/EUR exchange rate of 1.00 for 2015, corresponding to an exchange rate reduction in the euro of 17% versus 2014 (average 2014 EUR exchange rate: CHF 1.21). It does not take account of the possible negative implications of the currency situation for the economy.

On the basis of the assumed parity with the euro, ­Swisscom expects for 2015 net revenue of more than CHF 11.4 billion, EBITDA of around CHF 4.2 billion and capital expenditure of CHF 2.3 billion.

Calculated at the same exchange rate as 2014, net revenue is expected to end 2015 CHF 100 million higher as compared to 2014. Excluding Fastweb, ­Swisscom expects net revenue to grow by CHF 100 million. In local currency terms (euro), Fastweb’s net revenue for 2015 is expected to be on a par with the prior year, which corresponds, however, to a decline of almost CHF 400 million in the reporting currency.

EBITDA is expected to end 2015 at around CHF 4.2 billion, or some CHF 200 million below the 2014 figure. CHF 100 million of this decline is attributable to the appreciation of the Swiss franc, and the other CHF 100 million is due to the following effects: The change in network infrastructure and services to Internet protocol (All IP) will result in higher costs in 2015. In addition, gains from the sale of real estate will be lower and, due to lower interest rates, pension costs in accordance with IFRS will be higher. These effects cannot be offset by additional contributions to results from recent acquisitions and the related synergies.

In local currency terms, Fastweb’s EBITDA is expected to be higher, primarily as a result of lower usage fees for regulated services from other network operators. Regulated prices are expected to drop further and the volume of services purchased will decline due to customers migrating to their own ultra-fast broadband network. ­

Swisscom expects capital expenditure for 2015 to be CHF 2.3 billion. In Switzerland capital expenditure will remain the same as last year at CHF 1.75 billion due to further expansion of the ultra-fast broadband network and investments in the IT platform for banking. At Fastweb the volume of capital expenditure reached its peak in 2014, and in local currency terms will decline slightly in 2015, corresponding to a currency-related reduction of CHF 100 million.

If all targets are met, ­Swisscom will again propose to the Annual General Meeting of Shareholders an unchanged ordinary dividend of CHF 22 per share for the 2015 financial year.