Swisscom AG - ADR

Strong overall H1 / Q2 operating + cash flow outperformance (guidance confirmed) - Group revenue down CHF 225m YoY (CHF 147m net of currency) to ~CHF 3.6bn in Q2; decline mainly telco service revenue (Italy & Switzerland) and lower hardware (Italy). - EBITDAaL up 6.1% to CHF 1.269bn in Q2, driven by Italy synergies + Switzerland cost savings. - Operating free cash flow (OFCF) up 23.9% YoY to CHF 608m in Q2 (and consistently rising; full H1 also strong). - Full-year guidance reaffirmed: specifically stable OFCF from Switzerland and growing OFCF from Italy.

Switzerland: price increases largely “worked” but market remains promotional; churn normalized - Swisscom implemented price increases: Swisscom brand ~3–4% (April) and Wingo +1–2% (Sep effect). - Q1 saw higher churn from the price actions, but Q2 churn fell back toward seasonally normal levels (still slightly above historical). - RGUs mixed: mobile +10k RGUs in Q2; broadband still negative ~-8k RGUs (key ongoing challenge). - Management expects churn to further normalize in coming quarters; continued actions to improve broadband—especially Wingo refresh and a more-for-more pricing approach on sub-brands.

Switzerland: B2B/IT profitable but top-line softer; wholesale fiber story improving - B2B telco RGUs still drifting negative, but ARPU slightly improving due to selective pricing. - Major B2B focus: retention + “beem” scaling (already >100k users, broadband uptake ~1,200 locations secured), plus security+connectivity to improve stickiness. - IT services “light & shadow”: revenues down (weaker workplace/UCC volumes), but profitability improving via strict cost discipline and better project execution. - Network/wholesale positive: FTTH coverage up to 58% (FTTH +4%); wholesale broadband net adds +14k in Q2, sustaining service revenue growth (wireline ~+CHF 5m / +10% service revenue in Q2).