Swisscom AG

Swisscom reported Q2 revenue of CHF 3.6 billion, down 2% year over year, with EBITDAaL up 6.1% to CHF 1.269 billion and operating free cash flow of CHF 608 million, up 23.9%. On the group level, revenue was down CHF 225 million year over year, EBITDAaL was up CHF 83 million, CapEx was down CHF 131 million, and free cash flow was up CHF 221 million. Switzerland revenue was down CHF 27 million, Italy revenue was down CHF 111 million, and cost savings in Switzerland reached CHF 42 million in the first half. In Italy, synergies totaled EUR 166 million in the first half, with a quarterly run rate of EUR 80 million; management said it remains on track for EUR 300 million plus in the full year. Full-year guidance was confirmed, including at least CHF 50 million of cost savings in Switzerland, Swiss CapEx slightly down, reported Italy CapEx roughly stable, and stable free cash flow from Switzerland with growing free cash flow from Italy. Management also reiterated 2026 Telco service revenue decline guidance of roughly CHF 120 million for Switzerland and roughly CHF 150 million for Italy.

Christoph Aeschlimann described the quarter as solid and said Swisscom is operationally and financially on track. He emphasized that the strategy is unchanged, with the group focused on stable Swiss free cash flow and growing free cash flow from Italy through integration, synergies, and growth in IT and energy. He also highlighted the renewed Champions League rights in Switzerland, the strong AI and security traction in both markets, and faster-than-planned Vodafone Italia integration.

Eugen Stermetz focused on the numbers and guidance confirmation. He said group revenue declined CHF 225 million year over year, with EBITDAaL up CHF 83 million and operating free cash flow up CHF 214 million, helped by lower CapEx and higher EBITDAaL; free cash flow was up CHF 221 million in the first half. He noted Swiss cost savings of CHF 42 million in H1 and reiterated at least CHF 50 million for the full year, while warning not to extrapolate the Q2 pace to the full year. In Italy, he said synergies reached EUR 166 million in H1, integration costs were EUR 51 million so far, and full-year integration CapEx could reach up to EUR 200 million; he also said the CHF 75 million Vodafone compensation for the Poste MVNO loss will be booked in Q3 or Q4 as an adjustment, and there is no compensation for Lyca.

Analysts focused on Swiss price increases, brand downtrading, Telco service revenue guidance, satellite risk, and Italian tower and MSA issues. Management said customer reaction to Swiss price hikes was as expected: churn rose temporarily and then normalized, while promotional pressure remained intense and limits further broad-based price increases. On Telco revenue guidance, CFO Eugen Stermetz said the full-year view remains roughly CHF 120 million decline in Swiss Telco service revenue because Q3/Q4 still face roaming, international calling, and weak gross adds. In Italy, management said the service revenue decline should gradually ease over time but confirmed the roughly CHF 150 million decline outlook for 2026, and noted that AGCOM, INWIT, and FiberCop-related issues are still being assessed.