Annual report
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2024 Annual Report
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Annual reporting The Annual Report and the Sustainability Impact Report make up Swisscom’s reporting for 2024. The two publications are available online at: swisscom.ch/report2024. Like last year, the Swisscom Annual Report includes the report on non-financial matters. This is Swisscom’s way of meeting the requirements set out in the Swiss Code of Obligations, which establishes this sort of re- porting as a mandatory requirement. The Sustainability Impact Report contains the sustainability reporting for Swisscom in Switzerland. Swisscom acquired Vodafone Italia on 31 December 2024. Vodafone Italia has been operationally integrated into the Swisscom Group from the 2025 financial year onwards. For this reason, the 2024 Annual Report does not take Vodafone Italia into account – except in the case of the initial consolidation in the consolidated finan- cial statement. Sustainability Impact Report Annual Report for Swisscom in Switzerland GRI, GHG Protocol, SASB, ISO 14064 2024 2024
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1 Table of contents Management Commentary 12 – 57 Introduction 1 – 11 Report on Non-financial Matters 58 – 89 Corporate Governance and Remuneration Report 90 – 139 Consolidated Financial Statements 140 – 215 Further Information 216 – 226
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2024 in review 11.0 1.5 2.4 4.1 4.4 2.3 Revenue billion CHF Net income billion CHF Net debt to EBITDA ratio1 Total shareholder return Swisscom share % EBITDA billion CHF Capital expenditure billion CHF q– 0.3% – 5.8%q – 9.9%q 0.9p – 0.1 PPq 0.9%p 1 Pro-forma
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19,887 32.7 22 Employees (full-time equivalent) Equity ratio % Dividend per share CHF u – 14.3 PPq 0.8%p
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4 Success in Italy Fastweb is continuously growing in Italy and is entering the energy market by reselling electricity subscriptions. The acquisition of Vodafone Italia and the merger with Fastweb will create a convergent provider in Italy in a market offering growth opportunities. Course setNumber 1 Swisscom gives an impressive performance and wins all Switzerland’s relevant network and service tests in 2024 as well. Today, more than half of households and businesses benefit from Fibre to the Home. Swisscom is continuously modernising the fixed network and mobile communications infrastructure. The entire population should have internet access with bandwidths in the gigabit range by 2035. Strong Switzerland
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5 Success in Italy Fastweb is continuously growing in Italy and is entering the energy market by reselling electricity subscriptions. blue TV Swisscom combines Replay TV and streaming services in a single interface. Netflix and Disney+ are also available at a special price as part of the combined subscription. Swisscom not only uses AI itself but is also creating high-performance infrastructure with market leader NVIDIA in order to offer trustworthy services for business customers. The advantage: AI with guaranteed data storage in Switzerland. AI made in Switzerland 1,200 new electric vehicles are helping to halve the direct CO2 emissions from the fleet by 2024 and fully eliminate them by 2030. On the path to net zero
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6 Introduction | KPIsKPIs In CHF million, except where indicated 2024 2023 Change Revenue and results 1 Revenue 11,036 11,072 –0.3% Operating income before depreciation and amortisation (EBITDA) 4,355 4,622 –5.8% EBITDA as % of revenue % 39.5 41.7 EBITDA after lease expense (EBITDAaL) 4,064 4,334 –6.2% Operating income (EBIT) 1,951 2,205 –11.5% Net income 1,541 1,711 –9.9% Earnings per share CHF 29.77 33.03 –9.9% Balance sheet and cash flows 1 Equity 12,155 11,622 4.6% Equity ratio % 32.7 47.0 Capital expenditure 2,312 2,292 0.9% Operating free cash flow 1,752 2,042 –14.2% Free cash flow 1,437 1,480 –2.9% Net debt 15,597 7,071 120.6% Net debt/EBITDA 2.4 2 1.5 Operational data Fixed telephony access lines in Switzerland in thousand 1,137 1,226 –7.3% Broadband access lines retail in Switzerland in thousand 1,967 2,006 –1.9% TV access lines in Switzerland in thousand 1,493 1,537 –2.9% Mobile access lines in Switzerland in thousand 6,331 6,277 0.9% Access lines wholesale Switzerland in thousand 731 692 5.6% Broadband access lines retail in Italy in thousand 2,544 2,601 –2.2% Broadband access lines wholesale in Italy in thousand 905 648 39.7% Mobile access lines in Italy in thousand 3,930 3,509 12.0% Swisscom share Number of issued shares in thousand 51,802 51,802 – Market capitalisation 26,134 26,212 –0.3% Closing price at end of period CHF 504.50 506.00 –0.3% Dividend per share CHF 22.00 3 22.00 – Employees Full-time equivalent employees number 19,887 19,729 0.8% Average number of full-time equivalent employees number 19,918 19,461 2.3% 1 Swisscom uses various alternative performance measures. The definition and reconciliation of values in accordance with IFRS are set out in the chapter on financial review. 2 Pro forma. 3 In accordance with the proposal of the Board of Directors to the Annual General Meeting.
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Business overview Revenue EUR 2.8 billion EBITDA EUR 0.7 billion Revenue CHF 1.1 billion EBITDA CHF 0.1 billion Revenue CHF 8.0 billion EBITDA CHF 3.6 billion Swisscom Switzerland Residential Customers The Residential Customers division provides mobile and fixed line services to residential customers in Switzerland, such as fixed network telephony, broadband, TV and mobile communications. Business Customers Business Customers offers tele- communications services and overall communications solutions for large corporations and SME customers in Switzerland. The offering in the area of business ICT infrastructure covers the entire range from individual products to complete solutions. Wholesale The Wholesale segment enables other telecommunications providers to use the Swisscom fixed and mobile network. Infrastructure & Support Functions The Infrastructure & Support Functions area plans, operates and maintains the network and IT infra- structure in Switzerland. Fastweb Fastweb provides broadband and mobile phone services to residential, business and wholesale customers in Italy. The offering includes tele- phony, broadband and mobile offerings. Fastweb also offers com- prehensive ICT solutions for business customers. Vodafone Italia Swisscom acquired Vodafone Italia at the end of 2024. Vodafone Italia is to be merged with Fastweb at a later date. The merger of Vodafone Italia and Fastweb is intended to combine complementary, high-quality mobile communications and fixed tele- phone network infrastructures with expertise and practical knowledge, and establish a leading convergent provider on the Italian market with Fastweb + Vodafone. Vodafone Italia’s estimated revenue for 2024 was EUR 4.6 billion, and its EBITDA was EUR 2.0 billion. Other Operating Segments With subsidiaries in the area of net- work construction and maintenance (cablex Ltd) and broadcast services (Swisscom Broadcast Ltd), Swisscom is supplementing its core business in related areas. Other Operating Segments also includes the business with online directories (localsearch), as well as the Trust Services area, which encompasses the business with trust services such as the electronic signature and digital certificates.
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8 Shareholders’ letter Strong today – even stronger tomorrow Dear shareholders Swisscom is on track. And it has achieved this in a time that continues to be shaped by uncertainty, geo- political tensions, global economic challenges and technological and environmental change. We’re going strong thanks, not least, to Fastweb, which is performing very well. We’re now further strengthening our position in Italy. The acquisition of Vodafone Italia is an important step for us and sets the course for future success. Digitalisation and artificial intelligence (AI) offer enormous opportunities for Switzerland. However, the general public only use these if they can trust the new technologies and responsible handling of data is ensured. This is where Swisscom comes in. We want to be ‘Innovators of Trust’ for our customers and Switzerland. Innovation and trust – these are the keywords for Swisscom’s success. For example, during the year under review we launched an AI platform for business customers with Swiss AI Platform. Our customers can use it to develop their own KI solutions with guaranteed data storage in Switzerland. The topic of digital trust is another focus of innovation. This includes, for example, Swisscom Sign: the only qualified electronic signature considered equivalent to a handwritten signature. In spring 2024, we expanded our range of services to companies so that they can electronically sign contracts and docu- ments simply and with legal effect. From left: Christoph Aeschlimann, CEO Swisscom Ltd, Michael Rechsteiner, Chairman of the Board of Directors
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Innovation is a recipe for success not just for Swisscom but for Switzerland as a whole. So that our country will remain the world champion in innovation, Swisscom established the Deep Tech Nation Switzerland Foundation together with UBS. The foundation promotes highly innovative technologies and improves access to venture capital for start-ups and scale-ups so that brilliant ideas become successful companies, thus strengthening Switzerland’s competitiveness. The best network – expansion continues Our outstanding infrastructure is and remains the foundation of our success. In 2024, we reached a milestone in optical fibre expansion. Today, more than half of Swiss households and businesses benefit from Fibre to the Home. Mobile communication expansion remains challenging. Although the majority of Swiss people use a smartphone or tablet when out and about, antennas continue to meet with resist- ance. Various Swiss Federal Supreme Court decisions have resulted in significantly more modifications to mobile communications systems needing to be assessed in regular building permit procedures, even if radiation decreases. This is curbing network expansion. We will, of course, continue to do our utmost to provide our customers with the best network. We succeeded in doing this in the year under review: Swisscom has once again won all the network and service tests. Fastweb is growing – acquisition of Vodafone Italia strengthens Swisscom In Italy, Fastweb is again increasing its revenue and result. For years, we have been able to achieve our goals together and deliver good financial results in a challenging market thanks to innovation. In the year under review, Fastweb again systematically took advantage of opportunities and, for instance, entered the energy market by selling electricity subscriptions. We are now writing the next chapter of our Italian business’s success story. In March 2024, we announced the acquisition of Vodafone Italia and its merger with Fastweb. On 31 December 2024, we successfully completed the acquisition after receiving all the necessary regulatory approvals. The Italian mobile oper- ator has been part of the Swisscom Group since the start of January. Vodafone Italia is an excellent fit for Fastweb – and for Swisscom. Vodafone Italia brings a strong mobile network and Fastweb brings access to a state-of-the-art fixed network. The merger means that the new company will be able to offer customers the best convergent services. The Vodafone Italia acquisition strengthens our position and contributes to our strategy. We want to inspire customers, drive innovation, grow and exploit cost and innovation synergies. We believe that strengthening our Italian business is an important step for the successful future of Swisscom as a group and creates added value for our investors. ‘ Our focus on the Swiss market is unchanged. The acquisition of Vodafone Italia strengthens Swisscom as a whole and creates a significant increase in value. ’ From left: Christoph Aeschlimann, CEO Swisscom Ltd, Michael Rechsteiner, Chairman of the Board of Directors
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10 Solid figures Our focus is on constant and long-term value creation. Swisscom achieved good financial results in 2024. With a slightly lower revenue of CHF 11,036 million (–0.3%) and operating income (EBITDA) of CHF 4,355 million (–5.8%), it generated net income of CHF 1,541 million (–9.9%). On a like-for-like basis and at constant exchange rates, revenue rose by 0.2%. As a result of the acquisition of Vodafone Italia on 31 December 2024, integration and transactions costs of CHF 227 million were recognised in the 2024 financial year. Without these costs and other non-recurring items and at constant exchange rates, the decrease in EBITDA was 1.0%. Swisscom’s share price remained stable during the year under review at CHF 504.50 (–0.3%). The total shareholder return (TSR) based on the increase in the share price and distri- butions over the last five years was positive at 21%. Looking ahead to 2025, Swisscom expects revenue of around CHF 15.0 billion to CHF 15.2 billion, EBITDA after lease expense (EBITDAaL) of around CHF 5.0 billion and capital expenditure between CHF 3.1 bil- lion and CHF 3.2 billion (around CHF 1.7 billion of which will be in Switzerland). Subject to achieving its targets, Swisscom plans to now propose a dividend of CHF 26 per share for the 2025 financial year at the 2026 Annual General Meeting. Many thanks We can look back at a solid year. We were able to set the course in the right direction for an even stronger future. We would like to express our heartfelt thanks to you, our employees and colleagues. You work hard for our customers every day with a great deal of passion and expertise. Many thanks also to you, our shareholders, for your trust in, loyalty to and support for our company. Together, we are driving Swisscom forward. Kind regards, Michael Rechsteiner Chairman of the Board of Directors Swisscom Ltd Christoph Aeschlimann CEO Swisscom Ltd ‘ Success is no coincidence. That’s why we at Swisscom are constantly reinventing ourselves and so remain one of the most innovative companies in Switzerland. ’
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Digital transformation is key Swisscom is driving the digital transformation through its hybrid, public and private cloud portfolio, including for SMEs – so that they can concentrate on their core competences.
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Strategy and environment _______ Financial targets and achievement of targets in 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Market environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Legal environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Market for telecommunications and IT . . . . . . . . . . . . . . .17 Group goals and strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Takeover of Vodafone Italia . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Infrastructure _________________ Infrastructure in Switzerland . . . . . . . . . . . . . . . . . . . . . . . . 22 Infrastructure in Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Employees ___________________ Employees in Switzerland . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Employees in Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Brands, products and services _____ Swisscom brands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Products and services in Switzerland . . . . . . . . . . . . . . . . 32 Products and services in Italy . . . . . . . . . . . . . . . . . . . . . . . . 34 Customer satisfaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Innovation and development _____ Innovation as a key driver of business performance . . 36 Innovation focus areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Financial review _______________ Alternative performance measures . . . . . . . . . . . . . . . . . . 38 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Segment results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Depreciation and amortisation, non-operating results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Capital expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Net asset position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Statement of added value . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Financial outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Capital market ________________ Swisscom share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Dividend policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Credit ratings and financing . . . . . . . . . . . . . . . . . . . . . . . . . 53 Value-oriented business management . . . . . . . . . . . . . . . 54 Risks ________________________ Risk situation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Risk factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
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14 Management Commentary | Strategy and environment Strategy and environment Swiss business Number 1 Swisscom is number one in the Swiss market for telecommunications. Revenue CHF 11 billion in revenue was generated by Swisscom in 2024, 76% of which in Switzerland and 24% in Italy. Business in Italy Leading challenger Fastweb is the leading challenger in Italy. Financial targets and achievement of targets in 2024 Achievement of Targets 2024 targets in 2024 Financial targets Revenue around CHF 11 .0 billion CHF 11,036 million Operating income before depreciation and amortisation (EBITDA) CHF 4 .3–4 .4 billion 1 CHF 4,355 million Capital expenditure around CHF 2 .3 billion CHF 2,312 million 1 In connection with the acquisition of Vodafone Italia, integration costs of around EUR 200 million were recognised in Swisscom’s 2024 financial statements. The EBITDA outlook for 2024 has therefore been adjusted to CHF 4.3–4.4 billion (previ- ously CHF 4.5–4.6 billion). Market environment Unit 2022 2023 2024 Change in GDP Switzerland in % 2 .0 1 .3 0 .9 1 Change in GDP Italy in % 3 .9 0 .7 0 .5 2 Inflation rate Switzerland in % 2 .8 2 .1 1 .1 Inflation rate Italy in % 8 .1 5 .7 1 .4 Yield on government bonds (10 years) in % 1 .57 0 .66 0 .32 Closing rate CHF/EUR in CHF 0 .99 0 .93 0 .94 Closing rate CHF/USD in CHF 0 .92 0 .84 0 .91 1 Forecast SECO. 2 Forecast Istat. Economy Economic development in Switzerland slowed in the reporting year, and the outlook is characterised by considerable uncertainty caused in part by the geopolitical situation and monetary policy aimed at curbing inflation. The rate of inflation, as measured by the national consumer price index, has continued to drop in 2024. Interest rates The interest rate level has an impact on funding costs and, in the context of the consolidated financial state- ments, the balance sheet value of individual items such as non-current provisions and pension liabilities, as well as the impairment assessment of goodwill. Swisscom’s aver- age interest expense (excluding leasing) amounts to 1.8% at the end of 2024. Swisscom’s financing structure offers considerable protection against any interest rate increases thanks to an 86% share of fixed-interest financial debt.
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15 Exchange rates Currency effects impact the consolidated financial state- ments both through transactions made in foreign cur - rencies and the translation of the annual financial state- ments of foreign subsidiaries. Transaction risks mainly relate to the purchase of terminals, technical equipment, licences and services. In the Swiss core business, the amount of money paid out in foreign currencies is higher than the income in those currencies. The largest net trans- action risk is in the US dollar (USD). The transaction risks are partly hedged by forward currency contracts. Hedge accounting is applied in the consolidated financial state- ment. Among the foreign subsidiaries, a currency transla- tion risk primarily exists at Fastweb and Vodafone Italia, whose net assets amounted to EUR 11 billion at the end of 2024. Foreign currency translation differences of the balance sheet are recognised directly in equity. A portion of the financial liabilities in EUR is treated as a currency hedge of Fastweb’s net assets for accounting purposes in accordance with IFRS accounting standards. Legal environment Swisscom’s legal framework Swisscom is a public limited company with special sta- tus under Swiss law. In addition to company law, corpo- rate governance is primarily governed by the Telecom- munications Enterprise Act (TEA). As a listed company, Swisscom is also subject to capital market law. The legal framework for Swisscom’s business activities is formed by the decrees listed below. According to the TEA, the Swiss Confederation must hold a majority of the capital and voting rights in Swisscom . Telecommunications Enterprise Act and relationship with the Swiss Confederation The Telecommunications Enterprise Act requires the Swiss Confederation to hold a majority of the capital and voting rights in Swisscom. A decision to relinquish the federal majority would have to be made through a corresponding amendment to the law, which would be subject to a facultative referendum. Every four years, the Federal Council defines the goals which the Con- federation as principal shareholder aims to achieve. The current target period for the years 2022 to 2025 includes strategic, financial and human resources policy objectives as well as targets relating to partnerships and investments. The Federal Council also expects Swisscom to pursue a corporate strategy that is, to the extent eco- nomically possible, both sustainable and committed to ethical principles while also attaching special importance to the reduction of greenhouse gas emissions. Y See www.swisscom.ch/ziele_2022-2025 Telecommunications Act (Fernmeldegesetz) The Telecommunications Act and the associated ordi- nances primarily regulate network access, international roaming, the open internet, basic service provision, the use of radio frequencies, and the security of installations and operations. Y See www.admin.ch Network access Cost-based and non-discriminatory network access reg- ulation is limited to fixed network telephony and cop - per-based connections with the associated services. Access to fibre-optic lines is granted on the basis of com- mercial agreements. Basic service provision Basic service provision means ensuring that fixed net- work telephony and broadband internet are available throughout Switzerland. Since January 2024, the basic ser- vice provision has provided a transfer speed of 80 Mbit/s (download) and 8 Mbit/s (upload). Swisscom has been responsible for basic service provision for many years. In the reporting year, the Federal Communications Commis- sion (ComCom) once again awarded Swisscom the univer- sal service licence for basic service provision for the period from 2024 to 2031. Swisscom is committed to ensuring reliable basic service provision within Switzerland and has done so since 1999 without receiving any compensation from the public sector. Swisscom pursues an open internet policy . Open internet Swisscom pursues an open internet policy. It respects its customers’ desire to be able to freely choose con- tent and offerings on the internet. Within the scope of its network management activities, it provides all web content and services in the same high quality wherever possible. The blocking or removal of web content and services occurs solely in compliance with official orders or to ensure network security. Swisscom does not have any zero-rated offers that exclude access to selected web services from the data volume.
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16 Management Commentary | Strategy and environment Ordinance on Protection against Non-Ionising Radiation The Ordinance on Protection against Non-Ionising Radiation (ONIR) regulates immissions and thus the transmission power of mobile antennas. Swiss limit values as defined by the Environmental Protection Act (installation limit value) are much stricter than the exposure limit values recommended by the WHO. The Federal Supreme Court decided in April 2024 that a reg- ular building permit procedure is required for the first- time activation of the correction factor on adaptive antennas. This decision is forcing Swisscom to submit subsequent building permits. In this context, the num- ber of pending building permit applications for mobile communications systems has increased to over 3,000 across the industry. Federal Act on Cartels and other Restraints of Competition Competition law (Federal Cartel Act, CartA) is highly rel- evant, primarily due to Swisscom’s market position. It allows for direct sanctions to be imposed for unlawful conduct by market-dominant companies. Correspond- ing measures and processes have been established to prevent violations of the law. With regard to its compli- ance-related measures, Swisscom pursues a zero-toler- ance strategy. The Competition Commission (COMCO) has classified Swisscom as being market-dominant in a wide range of submarkets. There are currently two pro- ceedings open within the context of which COMCO has classified Swisscom as being market-dominant and the conduct of Swisscom as being unlawful, and has thus imposed or may impose direct financial sanctions. The proceedings relate to the rolling out of the fibre-optic network and the broadband connection of business cus- tomers. The status of the proceedings and the potential financial effects are set out in the notes to the consoli- dated financial statements. H See report pages 183–185 Federal Copyright Act The Swiss Federal Act on Copyright and Related Rights (Copyright Act, CopA) protects the rights of authors and, at the same time, enables the fair use of copyright-pro- tected works. Such works may generally be used only with the copyright holder’s consent and in return for compensation. An exception to this rule is made for pri- vate use and for copying for private use. The compen- sation payable to the copyright holder for certain types of use protected by copyright law (collective manage- ment of rights) is determined by reference to collectively negotiated copyright tariffs. These apply to the distribu- tion of television programmes and to the use of time-de- layed television viewing (Replay TV). Federal Act on Radio and Television The Swiss Federal Act on Radio and Television (RTVA) governs the production, presentation, transmission and reception of radio and television programmes. It is pri - marily on account of blue TV that Swisscom is affected by the rules on the transmission and broadcasting of media offerings. The various privileges (known as the ‘must carry’ provisions) applicable to certain broadcast- ers are relevant to Swisscom. Federal Act on Data Protection and the European Union’s General Data Protection Regulation The Swiss Federal Act on Data Protection (FADP) reg- ulates the handling of personal data. The European Union’s General Data Protection Regulation (GDPR) regulates the processing of personal data. The GDPR is relevant to Swisscom both as regards its service offer- ing to residential customers in the EU as well as within the European Economic Area (EEA) and its provision of IT services to business customers directly subject to the GDPR. To the extent that the GDPR affects Swisscom’s activities, Swisscom has implemented measures to com- ply with the relevant requirements. Legal and regulatory environment in Italy Fastweb’s business activities are governed by Italian and EU telecommunications legislation. The Italian reg- ulatory authority AGCOM generally sets the prices for Telecom Italia’s (TIM) wholesale access on the basis of a market analysis. The EU Foreign Subsidies Regulation (FSR) is also rel- evant for Swisscom. The FSR may have an impact on Swiss companies that generate revenue in the EU, carry out mergers and acquisitions transactions or partici- pate in public tenders. The FSR introduces new report- ing obligations and grants the European Commission investigative powers with regard to subsidies granted by non-EU countries.
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17 Market for telecommunications and IT Swiss market trends Market for telecommunications The Swiss telecommunications market is characterised by a wide range of data and voice communication products and services. In addition to the established regional and national telecoms providers, internationally active com- panies are also participating in the Swiss telecommuni- cations market. These companies provide internet-based free and paid services worldwide, including telephony, messaging, TV and streaming. As in the previous year, the estimated revenue volume for telecom services amounts to around CHF 11 billion. In the year under review, Liberty Global Ltd. completed the spin-off of Sunrise, a major national competitor. The listing on the SIX Swiss Exchange took place in November 2024. The availability of services at all times is key. Cutting-edge, high-performance network infrastructure forms the basis for this. Swisscom continuously invests in the quality, coverage and performance of its network infrastructure, thereby consolidating its position at the cutting edge of technology. In the year under review, the Swisscom mobile and fixed networks once again came out on top in all independent network tests. The Swiss telecommunications market is broken down into the mobile communications and fixed network sub- markets. Saturation in all markets is intensifying the cut- throat competition. The individual submarkets are char- acterised by a high level of promotional activity on the part of the individual market participants. At the heart of the portfolio of offerings are convergence offerings ,which can contain one or more mobile lines, in addition to a fixed broadband connection with internet, TV and fixed network telephony. Swisscom – as well as some competitors – offers products and services from the core business using secondary and third-party brands. Mobile communications market Switzerland has three separate, wide-area mobile networks on which the operators of those networks market their own products and services. Other market players also offer their own mobile services as MVNOs (mobile virtual network operators) on these networks. Swisscom makes its mobile communications network available to selected third-party providers so that they can offer proprietary products and services to their customers via the Swisscom network. The number of mobile lines (SIM cards) in Switzerland has increased by 2% year-on-year and stands at around 12 million. As in the previous year, the number of postpaid subscrip- tions taken out increased, while the number of prepaid customers fell. The proportion of mobile users with postpaid subscriptions stands at 86% (prior year: 85%). Swisscom’s postpaid market share remains unchanged year-on-year at 53%. 38% 53% 38% Market shares Swiss telecommunications market 2023 2023 2023 2024 2024 2024 Mobile Broadband retail TV 53% 49% 48%
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18 Management Commentary | Strategy and environment Fixed-line market Close to 100% of Switzerland is covered by fixed broad- band networks. In addition to the fixed networks of tel- ecoms companies, there are also networks provided by cable network operators. Moreover, market players such as utilities operating in particular cities and municipal- ities are building and operating fibre-optic networks on their own initiative at a regional level. For the most part, their network infrastructures are available to other market participants for product offerings and the provision of services. Broadband connections lay the basis for a comprehensive product offering from both national and global competitors. The broadband market grew by around 1% year over year. At the end of 2024, the number of retail broadband connections in Switzer- land was around 4 million. The Swisscom’s market share decreased by one percentage point to 48% due to the ongoing intense competition. The Swiss TV market is characterised by a diverse range of offerings provided by established national market partic- ipants. Other national and international companies are also present on the market. These include TV and stream- ing services that can be used over an existing broadband or mobile connection, regardless of the internet provider. Competitive dynamics remain high. To consolidate the attractiveness of its own TV offering, Swisscom secured the broadcasting rights to the Swiss football leagues for a further five years in the first half of 2024. IT services market in Switzerland In 2024, the IT services market (IT services and software) generated revenue of around CHF 23 billion. This repre- sented a continuation of the market’s prior-year growth trend, albeit on a less steep trajectory. For the coming years, Swisscom assumes that the market will continue to exhibit moderate growth due to increasing digitali- sation. The areas in which Swisscom expects the most growth are the cloud, security, the Internet of Things (IoT) and business applications. Business with legacy systems is expected to decline. This growth is a result of the increasing number of business-driven ICT projects as well as the demand for digital business models and new working models. Swisscom has noticed companies’ growing willingness to procure services externally in order to cope with a high level of complexity as well as the transformation into a hybrid cloud despite an envi- ronment characterised by limited availability of quali - fied specialists. Further growth drivers are the increasing threats in the area of IT security as well as system solu- tions dealing with IoT. Here, customers generally expect services customised to their individual sector and busi- ness processes with appropriate advice. Swisscom has maintained its market position in a fiercely competi- tive, changing market environment. This was mainly due to positive trends in the growth areas of security, cloud and business applications. Swisscom’s market revenues increased in these areas, although certain revenues had shifted to the major global cloud provid- ers (hyperscalers). Italian market trends Italian broadband market With an estimated revenue of around EUR 16 billion (+5% year-on-year) including wholesale, the Italian broadband market is the fourth-largest in Europe. The fixed broadband market has stagnated in recent years, whereas the number of mobile broadband connections (Fixed Wireless Access, FWA) contin- ues to increase (+8% year-on-year). The fixed market comprises 17 million connections. These are spread across four main competitors as well as other growing network operators that have recently launched their fixed-network services. Ultra-fast broadband (bandwidth greater than 50 Mbit/s) in the fixed network was provided to around 59% of Italian homes and businesses in 2024, which is below the EU average of 79%. This is due in part to a lower level of digital literacy and less developed online services and applications. In addition, customers in Italy are increasingly using mobile internet for large volumes of data due to the low prices and at times better performance compared with the fixed network. Fastweb is one of the largest providers of fixed broad- band connections thanks to a market share of 15% in the residential customers segment and 36% in the cor- porate business segment. Italian mobile communications market The Italian mobile telephony market is one of the most competitive in Europe. Over 78 million active SIM cards correspond to a market penetration of 133% of the population (AGCOM/Istat). Total revenue amounts to around EUR 11.5 billion. The tough competition is due to the existence of four mobile phone networks and the aggressive price strategy following Iliad’s entry on the market. This has led to price reductions and the introduction of secondary brands throughout the mar - ket. In 2024, Fastweb recorded a year-on-year increase of 12% in its number of customers and thus increased its market share among residential and business cus- tomers to 5%. Change in the market structure On 1 July 2024, TIM completed the sale of NetCo to Kohl- berg Kravis Roberts & Co. L.P. (KKR). NetCo is the business division of TIM that comprises both the fixed telephone network infrastructure and the wholesale business. The
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19 sales agreement includes the transfer of the business division NetCo to FiberCop (a company, 58% of which is controlled by TIM) and the subsequent acquisition of all of FiberCop’s capital by Optics Bidco, a company controlled by KKR. The subsequent relationship between NetCo and TIM will be governed by a master service agreement (MSA). The services will be provided at market prices and without minimum purchase obligations. Group goals and strategy General conditions Swisscom operates in a dynamic environment. Recent years have seen greater changes in the geopolitical and economic situation than in the past. Political risks have increased, exacerbated by the wars in Ukraine and the Middle East, tensions on the Korean peninsula and tense trade relations between the US and China. As a result, further economic development is associated with increased uncertainty, and bottlenecks could also occur in supply chains. Swisscom constantly monitors global changes in order to identify relevant develop- ments in good time, act accordingly and thus increase its resilience. The digital transformation is making inroads into more and more areas of our lives, leading to lasting changes in customer behaviour. Swisscom offers its customers the best possible support in every respect thanks to a wide range of products and services and its high-performance, reliable, nationally and inter- nationally recognised and sustainable network. This applies to both residential customers in their digital life and business customers in their digital business activities. Customers’ expectations regarding customer-oriented offerings, high-performance and stable networks, a seamless and personalised customer experience and transparent sustainability efforts will continue to rise. Business customers are increasingly driving the digital transformation through business-oriented IT initiatives. Security and compliance are also becom- ing more and more important as critical business ena- blers for business customers. Hybrid ICT environments are increasingly becoming the standard, and globally standardised technologies with delivery as a service (DaaS) models are becoming ever more dominant in the IT market. Fundamental changes such as increasing demographic ageing, new forms of work and technological progress will continue to shape the economy and society, and therefore have an impact on the activities of Swisscom. For example, as one of the leading ICT companies, Swisscom uses the latest technologies to expand its network. Swisscom is also a major player in the area of The Swisscom Group customer proposition Trust and Innovation Digital business Digital life BEST NETWORK • Effective digital transformations • Leading IT solutions • Reliable and secure services • Unique entertainment offers • Value-added digital services • Best connectivity experience
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20 Management Commentary | Strategy and environment artificial intelligence in Switzerland and uses techno- logical advances to further optimise its customer ser- vice and thus improve the customer experience. Other technologies, such as quantum computing, will only reveal their full potential in the future. The telecommunications market, and therefore a signifi- cant part of Swisscom’s core business, is characterised by intense competition and high price pressure. The overall market for connectivity services in Switzerland is contin- uing to decline slightly, while market revenues in Italy are stabilising. The market for IT services in Switzerland con- tinues to grow moderately. Group goals and strategy To ensure that Swisscom can continue to develop suc- cessfully in a challenging market environment and open up the opportunities of the digital transformation to its customers, it pursues the purpose of ‘Empowering the Digital Future’ and the vision of ‘Innovators of Trust: The most trusted Swiss tech innovator creating unique customer experiences with positive impact for soci- ety’. Because innovation and trust are core values of Swisscom and central to successful technological and social development. Swisscom is already addressing rel- evant and promising future topics. It has set the follow- ing group goals and the following group strategy. Group goals As a ‘trusted leader in digital life & business’, Swisscom wants to consolidate its position as market leader in Switzerland and position itself as a ‘leading challenger’ in Italy. As a leading digital company, Swisscom brings progressive products and services onto the market that are based on resilient, secure networks and that meet the claim of being ‘outstanding in innovation & relia- bility’. It systematically develops new growth areas in both its Digital Business and Trust Services divisions. As Swisscom is characterised by enormous stability, it lives up to its goal of having ‘rock-solid financials’. Safe- guarding profitability and cash flow is essential to its ability to continue distributing an attractive dividend. As a ‘pioneer in sustainability’, Swisscom pursues ambi- tious goals with regard to its responsibility towards the environment and society. Its main goal is to reduce or completely avoid CO2 emissions, to fulfil its responsibil- ity as a corporate citizen with outstanding governance and compliance, and to work towards a digital society in which everyone in Switzerland can participate. Through its goal of ‘high-performing teams’, Swisscom intends to intensify its focus on the further development of its cor- porate culture and the challenges posed by the shortage of skilled labour. It wants employees to consciously develop and experience a positive, motivating corporate culture. An inspiring management culture is key to this. In this way, Swisscom wants employees to perceive it as a ‘great place to work’ and an attractive employer. Group strategy The group strategy is based on four pillars. Two of these pil- lars focus on relationships with customers, and the other two pillars on the company itself and its own operations. Through ‘Delight customers’, Swisscom aims to inspire its customers with unique experiences every day. Through new, digital products and services, it also wants to help its customers take advantage of the full potential of the digital transformation via ‘Innovate for growth’. Through targeted digitalisation, the use of artificial intelligence and the simplification of processes, Swisscom aims to optimise and automate its operations in order to ‘Achieve more with less’. Swisscom is aware that its success depends to a large extent on its employees and on providing optimal working conditions. Under ‘Perform together’, it attaches particular importance to the continuous development and optimal cooperation of its employees. It focuses on topics such as performance culture, further training and diversity. The Swisscom Group strategy Delight customers Create unique customer experiences every day Innovate for growth Deliver digital products and services of the future Achieve more with less Drive transformation at pace with AI, digitalisa- tion and simplification Perform together Develop ourselves and our collaboration relentlessly
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21 Takeover of Vodafone Italia In March 2024, Swisscom signed a sales agreement with Vodafone Group Plc regarding the takeover of 100% of Vodafone Italia for a purchase price of EUR 8.0 billion (cash and debt-free). The transaction was com- pleted after all the regulatory approvals were received on 31 December 2024. Vodafone Italia will be merged with the Swisscom subsidiary Fastweb at a later date. 100% of the purchase price was covered by cash and financed using debt capital in full. The merger of Voda- fone Italia and Fastweb is intended to combine com- plementary, high-quality mobile communications and fixed telephone network infrastructures with exper- tise and practical knowledge, and establish a leading convergent provider on the Italian market with Fast- web + Vodafone. Thanks to economies of scale, a more efficient cost structure and the anticipated high syn- ergies of around EUR 600 million per year, the merged company is expected to generate considerable added value for all stakeholders through sustainable invest - ments in the Italian telecommunications market, inno- vative, convergent services at competitive prices, as well as improved services and customer experiences in all market segments. For Swisscom, the takeover of Vodafone Italia is a significant step towards realising its strategic goal of achieving profitable growth in Italy. Swisscom intends to increase the dividend and expects to maintain its excellent corporate rating. In 2024, Vodafone Italia recorded estimated revenue of EUR 4.6 billion and an EBITDA of EUR 2.0 billion. Capital expenditure came to EUR 0.8 billion and headcount was at around 4,000 employees at the end of 2024.
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22 Management Commentary | Infrastructure Infrastructure Capital expenditure CHF 2.3 billion was invested by Swisscom in 2024, CHF 1.7 billion of which in Switzerland and CHF 0.6 billion in Italy. Optical fibre expansion Around 57% of homes and businesses in Switzer- land are to be connected directly with Fibre to the Home (FTTH) by the end of 2025. Fastweb 2.3 million customers are covered by Fastweb’s ultra-fast broadband in Italy – and the company aims to cover 90% of homes and businesses by 2030. Infrastructure in Switzerland Network infrastructure Swisscom aims to provide its customers with the best network and the latest innovations for both the fixed and mobile networks. To do this, it relies on a smart combina- tion of different network technologies. Leading international position thanks to constant expansion International studies regularly confirm that Switzerland boasts one of the best IT and telecoms infrastructures worldwide. Rural regions benefit in particular from the high level of capital expenditure. According to the ‘Broadband Coverage in Europe 2023’ study by Omdia/ IHS Markit – commissioned by the EU Commission and Glasfasernetz Schweiz – the availability of broadband of at least 30 Mbit/s in rural regions of Switzerland is 98.8%, above the EU average of 78.7%. The Broadband Network Test Switzerland 2024, con- ducted by the trade magazine connect , awarded first place with the distinction ‘outstanding’ to Swisscom’s fixed network, with the company winning in the nationwide provider category. Similarly, Swisscom’s mobile network is one of the best networks in the world, as confirmed by independent network tests such as those conducted by the trade magazines con- nect and CHIP. Network expansion Thanks to bandwidths in the gigabit range, the entire Swiss population is to continue using state-of-the-art, top-quality digital services in future. With this aim, Swisscom invests CHF 1.7 billion every year in mod- ernising and maintaining its existing fixed network and mobile communications infrastructure in all Swiss municipalities. Swisscom plans to increase fibre-optic coverage (FTTH) to around 57% by the end of 2025, and to 75 to 80% by 2030. Almost the entire population should have access to the fibre-optic network by 2035. Swisscom uses modern, powerful mobile communications and satellite technol- ogies to ensure network coverage of a small number of customers outside residential areas. The ongoing optical fibre expansion will also allow it to gradually decommis- sion the copper access network in the coming years. In the long term, Swisscom will decommission the copper access network completely. On the one hand, decommissioning the copper access network in the regional access network will reduce complexity in the area of IT and networks, and, on the other hand, lead to energy savings of around 100 GWh, corresponding to the average annual electrical energy consumption of a town of 20,000 inhabitants. Broadband coverage1 Coverage > 80 Mbit/s 93% Coverage > 200 Mbit/s 85% Coverage with 10 Gbit/s 52% 1 Built access lines. Swisscom is continually increasing its number of antenna sites. For this, it coordinates site expansions with other mobile providers wherever feasible. It now shares nearly a quarter of its approximately 10,500 antenna sites with them. At the end of 2024, Swisscom had around 7,000 exte- rior units and 4,000 mobile communication antennas in buildings. With around 5,500 hotspots in Switzerland, it is also the country’s leading provider of public wireless local area networks (WLAN). The 5G and 5G+ mobile commu- nication standards not only enable new functions, but also bring a much-needed reduction in the load on the
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Future of network The best and most secure network for a digital Switzerland. Swisscom is constantly investing in its network architecture and in the latest techno- logies for its infrastructure in order to achieve this.
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24 Management Commentary | Infrastructure network, increase capacity and maintain the accus - tomed quality of the mobile network. According to a decision of the Federal Court, the acti- vation of the ‘correction factor’, which ensures the effi- cient operation of an adaptive mobile antenna, requires a building permit procedure to be carried out in each case. As a result, the number of pending building appli- cations for mobile communications systems across the industry increased to over 3,000 applications by the end of 2024. Rapid expansion is required to ensure the high network quality and to continue to offer customers an optimal mobile network. Because of this, and owing to the stringent legal framework conditions that apply, the mobile network has to be expanded by the addition of new mobile telephony sites. Progress continues to be made on expanding 5G and 5G+. Meanwhile, at the end of 2025, Swisscom will decommission its 3G technology, now more than twenty years old, in order to use the freed-up capacity for modern and efficient technologies. Y See www.swisscom.ch/networkcoverage Swisscom currently covers 99% of the Swiss population with a basic version of 5G and around 83% with 5G+. According to the industry association asut, around 7.1 million 5G-enabled devices are already in operation in Switzerland as of the end of 2024. The 5G expansion will gradually provide the additional capacity that resi- dential and business customers need. Even despite the fact that a study commissioned by the FOEN indicates that 5G radiation only has a moderate impact on the population as a whole and is not harmful to people’s health, network operators constantly find themselves faced with objections. In order to improve the level of information within the population, Swisscom provides information on its channels and supports the joint infor- mation platform Chance5G, established by the industry association asut. Y See www.chance5g.ch Internet of Things The Internet of Things (IoT) is considered to be a signifi- cant initiator of progressive approaches and the digital transformation. Thanks to strong partnerships, Swisscom is already the leading provider of IoT system solutions required for cloud and analytics implementations and their operation. Data as a Service (DaaS) rounds off Swisscom’s portfolio and, thanks to plug-and-play, makes it even easier for many customers to enter the IoT. Mobile frequencies Transmission of mobile signals requires the availability of suitable frequencies. In Switzerland, such frequencies are allocated on a technology-neutral basis. Any mobile communications technology can be transmitted on the available frequencies. In 2012, the Federal Communica- tions Commission (ComCom) allocated the frequencies 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz and 2,600 MHz. Swisscom currently uses these frequencies to pro- vide services for its customers via the 4G and 3G technol- ogies. In February 2019, further mobile radio frequencies were allocated in Switzerland, primarily used for trans- mission via 5G. These are the frequencies 700 MHz, 1,400 MHz, 2,600 MHz and 3,500 Mhz. Swisscom currently uses these frequencies to offer its customers services via the 5G, 4G and 3G mobile communication technologies. It always does this within the legal limits, which in Switzer- land are ten times stricter than those recommended by the World Health Organization (WHO) in sensitive areas such as homes, schools, hospitals and permanent work- places. IT infrastructure and platforms Swisscom operates six data centres in Switzerland. Its IT infrastructure comprises around 6,100 servers. The central telecoms functions for the operation of the fixed and mobile networks converge in four of the six data centres. Swisscom largely relies on virtualisation and containerisation of network functions to enable effi- cient and resilient operations. Likewise, Swisscom uses four data centres (two of the six data centres have a dual function) for running IT appli- cations. These include all business applications in con- nection with Swisscom services for residential and busi- ness customers. The entire infrastructure is designed for redundant operation and high availability. Swisscom attaches the very highest priority to both stability and resilience. It reviews and improves them on an ongo- ing basis. Based on an established quality and security culture, including the associated governance processes, Swisscom takes every possible precaution to reduce the likelihood that major disruptions will occur. The Swisscom Clouds form a key basis for the opera- tion of numerous customer applications as well as the company’s own applications. Swisscom follows the latest technical trends and is constantly developing its state-of-the-art solutions such as Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Con- tainer as a Service (CaaS). As part of its cloud strategy, Swisscom also draws on public cloud services, rely- ing on close partnerships with Amazon Web Services (AWS) or Microsoft Azure. In addition to its extensive multi-cloud service offering for business customers, Swisscom increasingly relies on the services of AWS to operate its internal applications. As well as IT applications, Swisscom uses its cloud platforms to provide communication services. These
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25 include an ever broader connectivity offering featur- ing advanced services such as Software Defined Wide Area Network (SD-WAN), Managed Security and Man - aged LAN. Swisscom is also focussing increasingly on state-of-the-art approaches such as Secure Access Ser - vice Edge (SASE) and Zero Trust Network Access (ZTNA). The constant state of change on the market backs up its efforts to use the latest technologies both internally and externally for the benefit of its customers. Instead of developing its own infrastructure, Swisscom is making use of the standardised systems created by its partners. The focus on the development of market-specific, val- ue-adding services based on established infrastructure has proven sound. Swisscom is ready for the future thanks to its cost-effi- cient, automated and stable IT infrastructure. It gives its customers the best possible support as they make their way into the digital world, with state-of-the- art services, extensive knowledge and long-standing experience. Infrastructure in Italy Network infrastructure Fastweb has consistently driven forward the develop- ment of the ultra-fast broadband infrastructure and con- tinues to invest in order to offer its customers top-notch performance. By the end of 2024, 90% of Fastweb cus- tomers had a connection with a speed of over 100 Mbit/s. Furthermore, Fastweb – in cooperation with FiberCop and Openfiber – covered 55% of homes and businesses with FTTH (Fibre to the Home). Finally, its 5G mobile net- work, provided in collaboration with WindTre, reached 75% of the Italian population. In the coming years, Fastweb is aiming to make further investments in fixed and mobile network infrastructure in order to achieve ultra-fast broadband coverage of 90% of homes and businesses by 2030 and exploit the advan- tages of FTTx and 5G mobile communications. IT infrastructure Fastweb is positioning itself as a digital partner for large corporations and offers a vast range of connectivity and infrastructure services (cloud, cybersecurity and cus- tomised 5G mobile communications solutions). It cur- rently operates five large data centres that are used for commercial purposes (housing and co-location, cloud- based services and other managed ICT services) as well as for internal purposes: two owned and three rented centres with end-to-end governance, four of which are located in the Milan region and one in Rome. Fastweb is constantly looking for ways to expand the capacity of its data centres. In July 2024, it opened the NeXXt AI Factory near Milan, which houses an AI super- computer from NVIDIA. The hub makes it possible to offer AI services in the cloud that are based on Fastweb MIIA, the first Italian AI language model, developed in collaboration with the most important Italian publish- ing houses and content providers. In view of the growth of the cloud ICT market and the business opportunities in the area of cloud-edge com- puting, Fastweb is planning to expand the central and local capacities of its data centres and to rely on third- party providers or self-developed solutions. Fastweb develops progressive services such as edge computing, which is expected to comprise around 40 nodes by 2025 and is based on a widely distributed network of mini data centres throughout Italy. Capital expenditure In CHF million 2020 2021 2022 2023 2024 Other countries Switzerland 2,286 1,634 652 2,309 1,688 621 2,292 1,685 607 2,229 1,596 633 2,312 1,712 600
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26 Management Commentary | Employees Employees Employees 19,887 employees (FTEs) work at Swisscom, including 80% in Switzerland and 20% abroad. Part-time 22% of employees have part-time workloads at Swisscom. Women 23% of the company’s workforce is comprised of women; the figure for management is 15%. Employees in Switzerland The digital transformation presents numerous oppor - tunities as well as great challenges for employees and companies. As a result, Swisscom helps employees develop their skills and provides them with five training and development days a year. Swisscom offers a wide range of mostly digital learning content via its train- ing and development platform, which employees use to increase their employability regardless of time and location. In the reporting year 2024, Swisscom employ- ees spent an average of 3.9 days per person on learning, training and development. Overview of employees Employees (FTEs) 15,905 Subordination to CEA 78% Permanent work contracts 99% Part-time employees 22% Fluctuation rate 6% Swisscom staff are employed under private law on the basis of the Code of Obligations. The terms and condi- tions of employment exceed the minimum standard defined by the Code of Obligations. Swisscom manage- ment employees in Switzerland are subject to the gen- eral terms and conditions of employment for managers, while the other employees are subject to Swisscom’s Collective Employment Agreement (CEA). Y See www.swisscom.ch/sir2024 Swisscom plays a pioneering role in flexible and hybrid working throughout Switzerland and is expanding the availability of this type of working model. Its employees appreciate the flexibility, which saves them time spent commuting, improves their work-life balance and ena- bles regular face-to-face meetings in the office and informal interaction. Collective Employment Agreement (CEA) Swisscom is committed to fostering constructive dia- logue with its social partners – syndicom and transfair – as well as the employee associations that are granted rights of co-determination of varying degrees. The Col- lective Employment Agreement (CEA) and the social plan are negotiated by Swisscom Ltd and its social partners and applicable to Swisscom Ltd’s employees. Group com- panies, such as Swisscom (Switzerland) Ltd, adopt the CEA by means of an affiliation agreement, possibly with busi- ness or sector-specific adjustments. The renegotiated agreement has been in force since 1 January 2024 and has further improved working conditions. The subsidiar- ies cablex Ltd and Swisscom Directories Ltd (localsearch) negotiate their own CEA with the social partners. Under the Telecommunications Enterprise Act (TEA), Swisscom is obliged to draw up a collective employment agree- ment in consultation with the employee associations. In the event of any controversial issues, an arbitration com- mission must be convened which will support the social partners by providing suggestions for solutions. Social plan The objective of the social plan is to formulate socially acceptable restructuring measures and avoid job cuts. Responsibility for implementing the social plan lies with the subsidiary firm Worklink AG. The services it offers include skill assessments, career advice and coaching as well as placement in temporary external and internal work assignments. In 2024, 88% of those affected by per- sonnel reduction measures had found a new job before the social plan programme ended (prior year: 86%). For employees with management contracts, there is also an arrangement in place to support them in their profes- sional reorientation in the event of restructuring.
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Finding the best Gaming instead of writing your CV: in its search for the right employees, Swisscom is inviting the digitally savvy to take on game-based challenges in Fortnite. The prize: an interview.
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28 Management Commentary | Employees Employee remuneration Swisscom’s salary system comprises a basic salary, a var- iable performance-related component and bonuses. The basic salary is determined based on function, individual performance and the job market. The variable perfor - mance-related salary component is measured by the achievement of overriding objectives such as financial parameters as well as business transformation topics that fall into the areas of operating performance, cus- tomers, growth and sustainability. Details on remunera- tion paid to members of the Group Executive Board are provided in the Remuneration Report. H See report pages 127–134 With effect from April 2024, Swisscom and its social partners agreed to increase salaries for employees sub- ject to the CEA by 1.9% of the total payroll. Some of the salary increases were general in nature and some were individual, taking the situation in the salary band into account. An additional 1.5% of the total payroll was available for individual salary adjustments at the man- agement level. Equal pay The salary system is structured in such a way that equal salaries are paid for equivalent tasks and services. Employees’ salaries are adjusted within the scope of the annual salary review. Swisscom also annually reviews the salary structure for differences between men’s and women’s wages using the federal government’s equal pay tool (Logib). Past reviews have only revealed minor pay discrepancies that are below the tolerance threshold set by the Federal Office for Gender Equality. Internal staff development and external job market Swisscom invests in targeted professional training for its employees and managers in order to maintain and improve their employability as well as the company’s competitiveness in the long term. It is Swisscom’s declared goal to fill as many positions as possible inter- nally. Where this is not possible, external recruitment is used. To recruit the best talent, Swisscom has to compete with national and international companies – especially in the IT professions. Swisscom operates DevOps Centres with 582 employees (FTEs) in both Riga and Rotterdam. It does this primarily to provide access to international talent outside the Swiss labour market, if needed. Apprenticeships and internships Swisscom trains 820 apprentices in a variety of profes- sions in Switzerland. It is one of the largest providers of ICT apprenticeships in the country. Following an evalua- tion of the pilot phase, the recruitment process known as ‘Putting people before paper’ was finally introduced. This process enables Swisscom to find the right appren- tices for its vocational training programme even more efficiently and effectively. In August 2024, Swisscom launched a pilot trial in which apprentices are familiarised with the founda- tions of application and software development at the start of their training. In Bern and Zurich, a total of 35 apprentices are taking part in this nine-month trial, which is intended to enable them to integrate quickly into the labour market. The training programme is closely aligned with the needs of employers and legal requirements. Employee satisfaction The Pulse survey gives Swisscom employees an oppor- tunity to submit their feedback on a wide variety of issues relating to their personal work situation. Employ- ees’ results and the comments are made available to all employees in real time. A survey of this type fosters a cul- ture of feedback and trust, which provides the basis for Swisscom and its employees to grow and develop. The response rate to the Pulse survey was 75% in 2024 (pre- vious year: 76%). Around 90% of the employees who par- ticipated in the survey said they recommend Swisscom as an employer. Diversity Swisscom takes its social responsibility seriously and is committed to strengthening equality and equal treat - ment for all employees. It is convinced that the diversity of its entire workforce is what makes Swisscom a suc- cessful and innovative company. Relationships based on trust and respect, where employees meet each other on an equal footing, form the essential basis for this. Fur- ther information on diversity can be found in the report on non-financial matters. H See report pages 77–78
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29 Employees in Italy The statutory working conditions in Italy are based on a national collective employment agreement for the tele- coms sector (CCNL). This agreement sets out the provi- sions governing working conditions for employees, such as weekly working hours, annual leave entitlement, and maternity and paternity leave. The collective employ- ment agreement also contains provisions governing the relationship between Fastweb and trade unions. Fastweb maintains dialogue with trade unions and employee representatives and involves them in major operational changes at an early stage. General terms of employment Weekly working time in hours 40 Weeks of holiday entitlement 5 Weeks of maternity leave 20 The terms and conditions of employment enable Fast- web employees to strike a healthy balance between their work demands and personal life. The Smart Work- ing concept offers all employees of the company, includ- ing customer advisors, full flexibility and autonomy when it comes to choosing a working model. Fastweb employees have the option of using the Smart Working model on all working days or deciding on a day-to-day basis, in consultation with their manager, whether they want to work in the office or from home. Fastweb offers competitive salaries to attract highly qualified specialists and managerial staff and ensure they remain with the company. Its salary system com- prises a basic salary, a collective variable profit-sharing component for non-managerial staff and a variable performance component for managerial staff that is contingent on meeting individual and company goals. The basic salary is determined based on function, indi- vidual performance and the situation on the job market. The variable profit-sharing bonus is based on the model agreed with the unions. Fastweb complies with the legal minimum salary. Fastweb is always interested in attracting new tal- ent. With this goal in mind, the company offers young people the opportunity to complete internships at the company throughout the year and takes part in a pro- gramme that introduces school pupils to the working world through internships. Fastweb also participates in career conferences and recruitment events organised by universities and educational institutions in order to meet young candidates. Fastweb strives to create a safe workplace where employees are proud to express their individuality and value diversity within the organisation. As a result, it views individual differences between employees as something that enriches the company. For Fastweb, inclusion is not only an ethical concern but should also serve as a driving force for the performance of the com- pany as a whole. Further information on diversity can be found in the report on non-financial matters. H See report pages 77–78 Headcount In full-time equivalent 2020 2021 2022 2023 2024 Other countries Switzerland 15,882 18,905 3,023 15,750 19,157 3,407 16,050 3,679 16,048 19,062 3,014 15,905 19,887 3,982 19,729
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30 Management Commentary | Brands, products and services Brands, products and services Swisscom brand CHF 6 billion is the value of the Swisscom brand. Swisscom blue 2.1 million customers use blue subscriptions. Fastweb 36% is Fastweb’s market share among business customers. Swisscom brands The Swisscom brand is managed strategically as an intangible asset and important element of the Group’s reputation management. In Switzerland, Swisscom offers products and services from its core business under the blue brand, as well as under the Wingo secondary brand and the third- party brands Coop Mobile and M-Budget. Its portfolio also includes other brands which are associated with other themes and business areas. Outside Switzerland, Swisscom’s main market is Italy, where it operates under the Fastweb brand. The strategic management and development of the entire brand portfolio is an integral part of corporate communications. The purpose, vision and values apply to all companies in the Group. Swisscom expects all its employees to align their behaviour with the three corporate values of trustworthiness, commitment and curiosity. Indi- vidual promises serve to differentiate the individual brands and make them relevant to specific custom- ers. No changes have been made to the Swisscom brand in the reporting year. The ‘ready’ brand plat - form expresses Swisscom’s positioning to the outside world, which has an advantageous effect on the brand perception. In terms of employer branding, Swisscom relies on its employees as ambassadors, primarily via social plat- forms such as LinkedIn. The My Intranet App MIA is an important tool for internal communications. It brings topics from the intranet to the mobile phones of all employees. Trustworthiness, network quality, service and increas- ingly also ESG commitment are important factors in con- firming to existing customers that they made the right decision in opting for Swisscom and in winning new cus- tomers, while also helping to emphasise the importance of Swisscom for Switzerland. The targeted sustainability campaigns have had an impact and strengthened the brand overall. This is one reason why the reputation val- ues achieved by Swisscom are exceptionally high for a company in the telecoms sector by global standards. Other brands (excerpt) Main brand Product family Secondary brand and tertiary brands Swisscom brand portfolio
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Entertainment at its best Linear TV belongs to the past. blue TV offers a choice of films, serials, news and shows at any time – and can also double as a fitness coach, DJ or game console thanks to smart apps.
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32 Management Commentary | Brands, products and services The Brand Finance ‘Schweiz 50 2024’ study ranked Swisscom as the second strongest brand in Switzer - land in the year under review. Swisscom’s brand value remained practically unchanged at CHF 6 billion, making Swisscom one of the ten most valuable Swiss brands. Products and services in Switzerland Residential customers Swisscom offers residential customers internet, TV, telephony and mobile communications under its main Swisscom blue brand. Through the brands Wingo, Coop Mobile and M-Budget, Swisscom targets customers who have lower requirements in terms of service and scope of service. M-Budget and Wingo offer simple, attractive mobile communications offerings in addition to internet and fixed network telephony services. Coop Mobile is exclusively a mobile subscription. Swisscom has the best mobile network and the largest fibre-optic network in Switzerland for providing its cus- tomers with fast and secure internet, top-quality enter- tainment and freedom while on the move. Those who combine mobile communications and internet subscrip- tions benefit from a monthly loyalty discount starting from the very lowest subscription level. Swisscom offers three different blue internet and mobile communications subscriptions. Its mobile telephony offering is rounded off by kids, basic and prepaid tar- iffs. The subscriptions differ primarily in terms of speed (internet and mobile communications) or the units included in roaming (mobile communications). Each offering includes free extras such as surf protection (Internet Guard) or call blocking (call filter). Swisscom blue offers a comprehensive entertainment experience comprising TV, streaming and cinema. blue TV is availa- ble via the Swisscom Box, a smartphone and tablet app, a web player at blue.ch and smart TVs. The app is also available with the complete blue+ offering on the TV boxes of other providers such as UPC TV or Quickline. In addition, Apple TV 4K is available as an alternative to the Swisscom TV-Box. blue TV offers a recording capacity of up to 2,000 hours. The blue Play media library offers up to 28,000 films and series episodes depending on the language region. The ‘blue Binge’ offer launched during the year under review also allows Swisscom customers to enjoy the basic subscriptions to Netflix and Disney+ at a special price. In the year under review, Swisscom launched the ‘sure’ product family in cooperation with its insurance part- ners. The switch-on insurance products on offer are simple, transparent and flexible. If required, they can be taken out quickly and easily online and convince with their flexible term. In addition, customers always have an overview of their policies in My Swisscom. The products are initially only available to Swisscom cus- tomers that have My Swisscom login details. According to the ‘Telecoms 150 2024’ report, Swisscom is the strongest telecoms brand in Europe . The My Swisscom app is and remains the focal point for customers: they can use it to customise their subscrip - tions, manage their devices, order services or contact customer support. The trade magazine connect rated the My Swisscom App as the best telecommunications app in Switzerland for the fourth time in succession in the year under review, as well as rating the Swisscom hotline as ‘outstanding’. In addition to the standard communications channels such as hotlines, chats and contact forms, customers get in touch with Swisscom via WhatsApp, Facebook, X (formerly Twitter) and Google Business Messenger. When it comes to service, Swisscom continues to rely on regional, on-site pres- ence. Employees address customers’ concerns in more than one hundred Swisscom shops. Here, too, connect awarded top marks to Swisscom in the shop test for the fourth time in a row. Business customers Telecommunications and IT services Swisscom makes use of its many years of experience as an integrated telecoms and IT company to support its business customers with their digital transforma- tion efforts and works together with them to develop forward-looking solutions. Its comprehensive ICT port- folio comprises cloud, outsourcing, workplace and IoT solutions, as well as mobile phone solutions for mobile working and communication, networking solutions, location networking, business process optimisation, SAP solutions, security and authentication solutions, data and AI consulting and offers, as well as services tailored to the banking industry. Swisscom also helps drive the digital transformation of the healthcare sector. It helps makes hospitals more efficient by providing them with support to digitise their processes. It helps health insurance companies by taking over the operation of their core IT systems and intercon- nects service providers through digitised solutions. In the world of industry, Swisscom is driving a smart man- ufacturing vision, bringing people, systems, machinery,
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33 products and companies together efficiently along the entire value chain. At the start of 2024, Swisscom announced its collabo- ration with NVIDIA to build its own AI supercomput- ers in Switzerland. Through the new Swiss AI Platform, Swisscom offers a secure range of AI-supported services that are operated in Switzerland and based on state-of- the-art infrastructure. The modular Swiss AI Platform guarantees that all data is kept in Switzerland. As a one- stop shop for AI solutions, it offers everything from con- sulting to operation from a single source. By acquiring a majority shareholding in the open- source company Camptocamp in the year under review, Swisscom is tapping into a new growth mar- ket. With a leading market position, Camptocamp has been offering innovative open-source solutions for over twenty years and has extensive expertise in geo- graphic information systems (GIS), management soft- ware systems (enterprise resource planning, ERP) and IT infrastructure. Offerings for SMEs Swisscom offers standardised and customisable ICT solutions for the various needs of its SME customers. SME IT Solution is the new, cutting-edge, comprehensive IT offering for SMEs that allows them to fully outsource their IT infrastructure. SMEs thus receive a perfectly coordinated full package of IT services, internet, net- work and telephony. SME IT Solution meets the highest security standards to provide maximum protection for sensitive company data while keeping it available at all times. Local, regionally based IT partners are on hand to advise customers, offering them a tailored service dur- ing installation and operation. IT security services, IoT solutions and cloud-based software for mobile working round off Swisscom’s SME portfolio. Enterprise Mobile bundles the new mobile subscriptions for SME customers. Numerous multi-device options ena- ble flexible surfing and telephoning on several devices. Thanks to prioritised data transmission, customers ben- efit from an optimal surfing experience even in busy locations. Domestic and international calls can be made directly via Microsoft Teams using a single mobile phone number, regardless of location and device. The Swisscom Sign solution for electronic signatures rounds off Swisscom’s SME portfolio. With it, SMEs can sign contracts and documents quickly, securely and with legal validity – even when travelling. Swisscom Sign is based on the qualified electronic signature (QES), which, under Swiss law, is the only electronic signature consid- ered equivalent to a handwritten signature. localsearch (Swisscom Directories Ltd) Through the product portfolio of its subsidiary local- search (Swisscom Directories Ltd), Swisscom helps Swiss SMEs to gain visibility online, attract new customers and retain them in the long term. localsearch advises SMEs locally throughout Switzerland. Thanks to simple and effective online marketing solutions, it contributes to the success of Swiss SMEs in the digital world. In addi- tion, it also operates the platforms local.ch and search. ch – the directory and booking platforms with the wid- est reach in Switzerland. localsearch’s brand portfolio also includes renovero.ch, the largest Swiss platform for tradespeople, localcities.ch, a platform for communities and associations, and Vergleich CH, an industry compar- ison service. Swisscom Broadcast Ltd The subsidiary Swisscom Broadcast Ltd builds radio networks for broadcasting, security and professional mobile radio networks and makes around 430 transmit- ter sites available for co-use. It also supports its custom- ers through temporary ICT, streaming media, content delivery, event management and event broadcasting services. The company’s safety and security solutions range from video security, drones as a service and drone detection to sensor-based customer insights. cablex Ltd As Switzerland’s leading network infrastructure and service company, cablex stands for an outstanding cus- tomer experience and offers comprehensive networking solutions with state-of-the-art technology. These include high-performance ICT and network infrastructure in cable and wireless networks for the highest bandwidths. The on-site service is organised throughout Switzerland and ensures a first-class customer experience. cablex also offers solutions in the areas of smart building, smart city, smart construction and smart energy. In doing so, cablex provides customers with solutions for future-proof and sustainable infrastructure. Wholesale Swisscom Wholesale provides a variety of copper- and fibre-based connectors as per customer requirements. Its Carrier Ethernet and Carrier Line services and lines leased under the TCA enable telecoms service provid- ers to enjoy transparent connections on an as-needed basis with a wide range of different bandwidths and interfaces and/or a flexible Ethernet service allowing tailored bandwidths and qualities of service. Swisscom Wholesale also provides basic offerings for the connec- tion (interconnection) of telecoms systems and ser- vices, and supplies its customers with infrastructure products such as the shared use of cable ducts and the mobile network.
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34 Management Commentary | Brands, products and services Products and services in Italy In the reporting year, Fastweb secured itself a premium position in the residential customer segment thanks to top-quality service and sustainability targets that set the bar high. In the fixed-line segment, Fastweb continued to focus on innovation and added value, differentiating itself in the market through the following measures: • The cutting-edge, high-tech internet box NeXXt, the Wi-Fi booster integrated with Alexa and the new modem with Wi-Fi 6, which was introduced at the beginning of 2024. • Additional services such as home and pet insurance offered through its partnership with Quixa (AXA Group). • The premium loyalty programme FastwebUP Plus, which offers exclusive benefits every month. • Courses offered by the Fastweb Digital Academy, which improve digital literacy among customers. In the mobile communications sector, Fastweb is pursu- ing a go-to-market strategy aimed at winning new cus- tomers by offering the best value for money on the mar- ket. It has also expanded its 5G network. Awards received in the reporting year are a testament to the high connec- tion quality offered by the Fastweb network: in the first half of 2024, the digital company Ookla confirmed that Fastweb has the fastest mobile network in Italy, as was also the case on the previous four occasions. Fastweb has successfully implemented a ‘Beyond the Core’ strategy and entered the energy market with Fastweb Energia. Fastweb Energia is a service with fixed monthly tariffs and 100% certified renewable energy. Fastweb’s primary aim through this offering is to appeal to its customer base and increase customer value. Energy is procured via external suppliers who supply Fastweb with white-label products. This eliminates trade risks, since Fastweb purchases energy from the suppliers and sells it on. Fastweb also introduced its energy offering for small companies at the end of September in the reporting year. As part of its sustainability efforts, Fastweb once again developed and managed environmental protection projects in Italy in the reporting year – with the sup- port of non-profit organisations. It also expanded its product range in line with its objectives, offering its customers the first zero-emission internet subscrip- tion in Italy since 2024. Fastweb also added the eSIM to its range in 2023, a virtual version of the traditional SIM card. Fastweb has confirmed its leading position in the cor- porate business segment. It has continually strength- ened its corporate business segment in both core and ICT services, and achieved a market share of 36% at the end of 2024. Fastweb has also further expanded its positioning in the segment of 5G mobile phone ser- vices for companies and acquired new corporate cus- tomers. In the reporting year, Fastweb continued to focus on bolstering its position in the ICT and security market, expanding its professional services and enlarg- ing its cloud and cybersecurity portfolio. In addition, Fastweb made a significant investment by acquiring 31 NVIDIA DGX H100 systems to offer cloud- based AI services and to train a national LLM (large language model) for the development of generative AI applications. In the reporting year, Fastweb made a version of its Fastweb MIIA (Italian Artificial Intelli- gence Model) language model available to start-ups, companies, universities and public administrations for the development of generative AI services and appli- cations. MIIA stores data in Italy, is connected with the Fastweb cloud platform via fibre-optic cables and is protected by four Swisscom Security Operation Cen- tres (SOC). In the wholesale customers division, Fastweb provided almost over 900,000 ultra-fast broadband connec- tions (residential and business customers) to custom - ers of Sky, WindTre, Iliad, Enel and other small carriers at the end of 2024. The results achieved strengthen Fastweb’s role as a wholesale carrier and correspond to a market share of around 15% in Italy (in terms of data revenue).
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35 Customer satisfaction Swisscom measures the satisfaction of residential and business customers twice a year, and that of wholesale customers once a year. The metrics used are the extent to which customers are willing to recommend Swisscom to others and the related Net Promoter Score (NPS). The NPS is calculated from the difference between ‘promoters’ (cus- tomers who would strongly recommend Swisscom) and ‘critics’ (customers who would only recommend Swisscom with reservations or would not recommend the company). Swisscom conducts the following surveys among resi- dential and business customers: • The Residential Customers segment questions callers to the Swisscom hotline and visitors to the Swisscom shops regularly about waiting times and staff friend- liness. Product studies also continuously survey buy- ers and users to determine product satisfaction, ser- vice and quality. • The Business Customers segment conducts surveys among customers to measure satisfaction along the customer experience chain. Feedback tools are imple- mented at relevant customer touchpoints to enable IT users to submit feedback or enter their comments in the order system after each interaction with the ser- vice desk or after placing orders. The customers can also assess the quality and success of their projects on completion. In view of the highly competitive market, the NPS in the residential customer segment has remained stable at a good level – particularly compared with the competi- tion. The NPS for business customers remains at a very high level. The results of these studies and surveys help Swisscom formulate direct measures to further improve its services and products. They also influence the vari- able performance-related component of remuneration for employees and management. Revenue and EBITDA In CHF million Switzerland Other countries 2024 Revenue EBITDA 8,363 3,679 676 2,673 Revenue EBITDA 2022 8,566 3,534 2,485 872 Revenue EBITDA 2023 8,516 3,842 2,556 780
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36 Management Commentary | Innovation and development Innovation and development Trendscouting Since 1998 Swisscom has had a branch office in Silicon Valley since 1998. Promoting innovation Deep Tech Nation Switzer- land Foundation By establishing the foundation, Swisscom is promoting start-ups together with UBS. Swisscom Ventures More than 80 investments in technology companies made by Swisscom to date. Innovation as a key driver of business performance The digital transformation represents a huge oppor- tunity for Swiss society. However, the population will only accept it if trust in secure services and the correct handling of sensitive data are assured. Trust in new technologies is therefore becoming more important, which is why Swisscom wants to serve as ‘Innovators of Trust’ for its customers and for Switzerland as a whole. Innovative strength and trust are core values of Swisscom and central to successful technological and social development. With this in mind, Swisscom is already addressing relevant and promising future topics intensively. It strives every day to delight its cus- tomers with the best products and services (‘Delight customers’). Swisscom is driving its growth by devel- oping advanced products and services (‘Innovate for growth’). It also supports forward-looking solutions to make its own processes even more efficient, for exam- ple through process digitalisation (‘Achieve more with less’). Finally, innovation is key for Swisscom to position itself as the best ICT employer, attract the best talent and retain it (‘Perform together’). In order to achieve this, it works closely with partners, universities, start- ups and established technology companies. Swisscom has been engaged in trend and technology scouting in Silicon Valley since 1998. The Outpost pro- vides Swisscom with insights into trends, technologies and developments in strategic innovation fields around the Silicon Valley ecosystem. This year, Swisscom paid particular attention to areas of innovation that have a highly dynamic market environment and are of growing importance: these include AI, cybersecurity and trust. The Swisscom Outpost also maintains local partnerships with promising start-ups, investors and leading US tech- nology companies whose products and business models are then launched in Switzerland and Italy. Swisscom Ventures has been investing in start-ups since 2007 and networking them with Swisscom as far as pos- sible in order to stimulate innovation. In the year under review, Swisscom made investments in five new companies and eight follow-up investments in existing holdings. This included xFarm, a Swiss precision agriculture company that supports more than 425,000 farms worldwide. Additionally, Swisscom uses the Swisscom StartUp platform to support companies and start-ups in Switzerland with consulting, discounts on IT and cloud services, expert know-how, coaching programmes, financing and community events. Swisscom Kickbox is an employee-driven intrapreneur- ship and innovation programme with a clear process, tools, methods and resources for realising innovation projects. It promotes a culture of innovation within the company and works at various strategic levels: for example, in the development of sophisticated custom- er-centric products and services and in employer brand- ing to help Swisscom attract the best talent. Kickbox is available to other companies via the spin-off rready AG. Y See www.swisscom.ch/innovation
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37 Innovation focus areas Artificial intelligence and automation Artificial intelligence (AI) is a cross-cutting technology, just like electricity or the internet. These technologies have revolutionised the economy and enabled innova- tion to occur across all sectors. Swisscom embraced the use of artificial intelligence early in the game in order to offer its customers even better service and to optimise its processes. For example, Swisscom co-founded the Idiap Research Institute in Martigny 30 years ago, and has been conducting research projects on AI together with the EPFL in the Swisscom Digital Lab since 2016. Swisscom uses AI in customer service, in business analytics, in new prod- ucts and services, and to continuously improve network service. Whether in AI-based speech recognition on the Swisscom hotline, in the service chatbot or in product suggestions, Swisscom uses AI primarily to offer its cus- tomers an even better experience and as a convenient way to fully resolve customer enquiries. Swisscom launched the Swiss AI Platform for business customers in June 2024, The platform enables the development of trustworthy AI applications based on high-performance infrastructure. It guarantees that data will be stored in Switzerland and has a modular structure. With the Swiss AI Platform, customers benefit from flexible access to NVIDIA supercomputers, genera- tive AI services and an AI work hub for developing their own AI solutions. Security Threats from the internet are constantly growing in number for private individuals and companies. A number of processes and business models today are completely IT-based, making them potential targets for attackers. In addition, IT landscapes are becoming increasingly com- plex and vulnerable due to multi-cloud and hybrid cloud solutions. Artificial intelligence is being used more and more frequently by attackers and as a defence against attacks alike. In the reporting year, Swisscom once again expanded its leading range of cybersecurity services in the Swiss market, including services in the area of cloud security that identify in real time any potential security risks in cloud workloads and then initiate security meas- ures. It also further increased its capacity in the Secu- rity Operation Centre (SOC) to take effective defensive measures on behalf of customers and contribute to even better protection for digital Switzerland. Digital trust Through its digital trust portfolio, Swisscom focuses on products and services that ensure the authentic- ity of information and its binding nature in the digital space. This includes Swisscom Sign, which is based on the qualified electronic signature (QES). QES is con- sidered equivalent to a handwritten signature under Swiss law. Swisscom Sign is available to all smartphone users – regardless of whether or not they are Swisscom customers. Corresponding offers for companies have rounded off the digital trust portfolio since spring 2024, enabling organisations ranging from SMEs to large cor- porations to sign watertight contracts and documents electronically – quickly and easily at any time. Together with its subsidiaries ajila AG and Innovative Web Ltd, Swisscom is working on further solutions to digitalise form-based business and government pro- cesses. Swisscom is thus addressing the entire value chain, from the creation of documentation and signa- tures to processing and handling in the specialised sys - tems. In this regard, one Swiss bank has used Swisscom Sign to completely digitalise and streamline its process for opening an account, including through an online identity check and digital signing of the contract. The subsidiary Swisscom Trust Services Ltd, one of three trust service providers (TSP) in Switzerland, rounds off Swisscom’s digital trust portfolio with infrastructure and certificate services. Swisscom thus benefits from broad-based expertise in the regulation and compli- ance of trust services in Switzerland and the EU. Other technologies of tomorrow In addition to its areas of innovation, Swisscom is fol- lowing developments in fields that could be relevant in the long term. These include LEO satellites, quantum computing, digital twins, Web 3.0, spatial computing and digital health. Among other things, it is monitor- ing advances in the quantum key distribution method, which guarantees secure data communication and could be used in quantum computers.
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38 Management Commentary | Financial review Financial review Alternative performance measures Swisscom uses key indicators defined in the Interna- tional Financial Reporting Standards (IFRS) throughout its entire financial reporting, as well as selected alternative performance measures (APMs). These alternative meas- ures provide useful information on the Group’s financial situation and serve financial management and control purposes. As these measures are not defined under IFRS, the calculation may differ from the published APMs of other companies. For this reason, comparability across companies may be limited. t The key alternative performance measures used by Swisscom in its 2024 annual financial reporting are defined as follows. Key performance indicator Swisscom definition Adjustments Significant items that, due to their exceptional nature, cannot be considered part of the Swisscom Group’s ongoing performance, such as termination benefits and significant positions in connection with legal cases or other non-recurring items . In addition, the application of changes in the IFRS accounting principles and standards can have an impact on comparability with the previous year if these principles are not applied retrospectively . The same definitions and calculation bases are applied for the adjustments in the financial year and in the previous year . In the financial reporting, the change in the adjusted operating result before depreciation and amortisation (EBITDA adjusted) is commented on a comparable basis . At constant exchange rates Key performance measures considering currency effects (figures for 2024 are translated at the 2023 exchange rate to eliminate the currency effect) . Operating income before depreciation and amortisation (EBITDA) Operating income before depreciation, amortisation and impairment losses of property, intangible assets and right-of-use assets, financial expense and financial income, result of equity-accounted investees and income tax expense . Operating income (EBIT) Operating income before financial expense and financial income, result of equity-accounted investees and income tax expense . Capital expenditure Purchase of property, plant and equipment and intangible assets and payments for indefeasible rights of use (IRU) which are classified as leases under IFRS 16 . In general, IRUs are paid in full at the beginning of use . Operating free cash flow Operating income before depreciation and amortisation (EBITDA) less investments in property, plant and equipment and intangible assets as well as payments for network access rights (IRU) and leasing expenses . Leasing expenses include interest expenses on leasing liabilities and depreciation of rights of use excluding depreciation of rights of use for network access (IRU) as well as impairments of rights of use . Free cash flow Cash flows from operating and investing activities excl . cash flows from the acquisition and sale of subsidiaries as well as income and expenses for equity-accounted investments and other financial assets . Net debt Financial liabilities and lease liabilities less cash and cash equivalents, listed debt instruments and derivative financial instruments .
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Easy to use Hello, how can I help you? Swisscom is making the digital customer experience ever more personal and intuitive. It is adding new digital services such as the electronic signature to its portfolio.
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40 Management Commentary | Financial review Reconciliation of alternative performance measures Change at Change constant In CHF million 2024 2023 reported currencies Revenue Revenue 11,036 11,072 –0.3% 0.2% Operating income before depreciation and amortisation (EBITDA) EBITDA 4,355 4,622 –5 .8% –5 .4% Termination benefits 14 7 Release of provisions for legal proceedings in Switzerland (24) (64) Additions of provisions for legal proceedings in Italy – 13 Costs of changing the fixed wireless access strategy in Italy – 60 Transaction costs acquisition of Vodafone Italia 60 – Integrations costs Vodafone Italia 167 – EBITDA adjusted 4,572 4,638 –1.4% –1.0% Capital expenditure Capital expenditure in property, plant and equipment and intangible assets 2,288 2,272 0 .7% 1 .3% Payments for indefeasible rights of use (IRU) 24 20 20 .0% Capital expenditure 2,312 2,292 0.9% 1.5% In CHF million 2024 2023 Change Operating free cash flow Cash inflow from operating activities 3,977 4,029 (52) Capital expenditure (2,312) (2,292) (20) Depreciation of right-of-use assets (261) (291) 30 Depreciation of indefeasible rights of use (IRU) 18 18 – Impairment losses on right-of-use assets – 29 (29) Proceeds from finance leases (80) (108) 28 Change in deferred gain from the sale and leaseback of real estate 4 4 – Change in operating assets and liabilities 9 5 4 Change in provisions (26) 124 (150) Change in defined benefit obligations 5 31 (26) Gain on sale of property, plant and equipment 26 6 20 Loss on disposal of property, plant and equipment – (1) 1 Expense for share-based payments (1) (1) – Revenue from finance leases 87 108 (21) Interest received (102) (7) (95) Interest paid on financial liabilities 112 84 28 Dividends received (1) (9) 8 Income taxes paid 297 313 (16) Operating free cash flow 1,752 2,042 (290) Free cash flow Cash inflow from operating activities 3,977 4,029 (52) Cash flow used in investing activities (9,279) (2,322) (6,957) Repayment of lease liabilities (267) (270) 3 Acquisition of subsidiaries, net of cash and cash equivalents acquired 7,372 62 7,310 Proceeds from sale of subsidiaries, net of cash and cash equivalents sold (2) (2) – Purchase of equity-accounted investees 2 3 (1) Purchase of other financial assets 2,020 13 2,007 Proceeds from other financial assets (2,386) (33) (2,353) Free cash flow 1,437 1,480 (43)
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41 Summary In CHF million, except where indicated 2024 2023 Change in % Revenue 11,036 11,072 (36) –0 .3% Operating income before depreciation and amortisation (EBITDA) 4,355 4,622 (267) –5 .8% EBITDA as % of revenue 39 .5 41 .7 (2 .2) Operating income (EBIT) 1,951 2,205 (254) –11 .5% Net income 1,541 1,711 (170) –9 .9% Operating free cash flow 1,752 2,042 (290) –14 .2% Free cash flow 1,437 1,480 (43) –2 .9% Capital expenditure 2,312 2,292 20 0 .9% Net debt 15,597 7,071 8,526 120 .6% Net debt/EBITDA 2 .4 1 1 .5 0 .9 Equity 12,155 11,622 533 4 .6% Equity ratio 32 .7 47 .0 (14 .3) Full-time equivalent employees 19,887 19,729 158 0 .8% 1 Pro forma. The main contributors to Group net revenue for 2024 of CHF 11.0 billion are the Swisscom Switzerland (72%) and Fastweb (24%) segments. Swisscom Switzerland accounts for 82% of the operating income before depre- ciation and amortisation (EBITDA) of CHF 4.4 billion, with Fastweb accounting for a share of 15%. Compared with the previous year, group revenue fell by 0.3% to CHF 11,036 million and operating income before depreciation and amortisation (EBITDA) by 5.8% to CHF 4,355 million. The reported revenue and EBITDA development was influenced by the performance of the euro (EUR) as a result of Fastweb’s substantial share. The average EUR exchange rate decreased by 2.2% year on year in 2024. This resulted in negative currency translation effects on Group revenue of CHF 60 million and on EBITDA of CHF 19 million. Based on a constant EUR exchange rate, revenue in 2024 rose by 0.2% or CHF 24 million. Swisscom Switzerland’s reve- nue fell by 1.7% and Fastweb achieved growth in rev- enue of 6.7% (in EUR). In Other Operating Segments, revenue increased by 4.5%. EBITDA development is influenced negatively not only by currency effects, but also primarily by non-recur- ring items of CHF 217 million net (prior year: CHF –16 million). The non-recurring items in 2024 include inte - gration costs of CHF 167 million and transaction costs of CHF 60 million in connection with the acquisition of Vodafone Italia. In addition, downsizing costs of CHF 14 million (prior year: CHF 7 million) were recorded. Fur- thermore, costs of CHF 60 million were incurred at Fast- web as a result of an adjustment of the FWA strategy. By contrast, provisions for legal proceedings amount- ing to net CHF 24 million (prior year: CHF 51 million). Without these non-recurring items and at a constant EUR exchange rate, EBITDA decreased by CHF 47 million (–1.0%). Swisscom Switzerland accounted for CHF 41 million (–1.1%) of this; Fastweb, for its part, made a pos- itive contribution of CHF 9 million (+1.1%). Net income fell by CHF 170 million or 9.9% year on year to CHF 1,541 million. The decline can mainly be attributed to the costs recorded in connection with the acquisition of Voda- fone Italia. The Annual General Meeting will propose an unchanged dividend of CHF 22 per share for the 2024 financial year. Capital expenditure rose by 0.9% year on year to 2,312 mil- lion. This primarily relates to network infrastructure in the Swiss core business and at Fastweb. The generated free cash flow of CHF 1,437 million finances the total dividend of CHF 1,140 million. The acquisition of Vodafone Italia increased net debt by CHF 9.1 billion (purchase price of CHF 7.4 billion and acquired lease liabilities of CHF 1.7 bil- lion) to CHF 15.6 billion, which corresponds to a pro forma net debt/EBITDA ratio of 2.4. The single A credit rating con- firmed by both rating agencies (Moody’s and S&P Global Ratings) underlines Swisscom’s solid financial position. Swisscom expects revenue of around CHF 15.0 billion to CHF 15.2 billion, EBITDA after lease expense (EBITDAaL) of around CHF 5.0 billion and capital expenditure of around between CHF 3.1 billion and CHF 3.2 billion for 2025. Sub- ject to achieving its targets, Swisscom plans to propose pay- ment of an increased dividend of CHF 26 per share for the 2025 financial year at the 2026 Annual General Meeting.
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42 Management Commentary | Financial review Segment results In CHF million, except where indicated 2024 2023 Change in % Revenue 1 Residential Customers 4,372 4,505 (133) –3 .0% Business Customers 3,096 3,083 13 0 .4% Wholesale 524 541 (17) –3 .1% Infrastructure & Support Functions 75 73 2 2 .7% Intersegment elimination (61) (55) (6) 10 .9% Swisscom Switzerland 8,006 8,147 (141) –1.7% Fastweb 2,672 2,561 111 4 .3% Other Operating Segments 1,111 1,063 48 4 .5% Intersegment elimination (753) (699) (54) 7 .7% Total revenue 11,036 11,072 (36) –0.3% Operating income before depreciation and amortisation (EBITDA) 1 Residential Customers 2,997 3,007 (10) –0 .3% Business Customers 1,276 1,345 (69) –5 .1% Wholesale 291 325 (34) –10 .5% Infrastructure & Support Functions (1,002) (969) (33) 3 .4% Intersegment elimination (1) 1 (2) Swisscom Switzerland 3,561 3,709 (148) –4.0% Fastweb 671 776 (105) –13 .5% Other Operating Segments 147 145 2 1 .4% Reconciliation pension cost 2 25 37 (12) –32 .4% Intersegment elimination (49) (45) (4) 8 .9% Total (EBITDA) 4,355 4,622 (267) –5.8% 1 As of 1 January 2024 Swisscom has made adjustments to the financial management. The previous year’s figures have been adjusted accordingly. For further information, see note 1.1 to the interim financial statements. 2 Operating income of segments includes ordinary employer contributions as pension fund expense. The difference to the pension cost according to IAS 19 is recognised as a reconciliation item. Swisscom’s reporting focuses on the operating divi- sions Swisscom Switzerland and Fastweb. The other business divisions are grouped together under Other Operating Segments. Swisscom Switzerland comprises the customer seg- ments Residential Customers, Business Customers and Wholesale, along with the Infrastructure & Support Functions business division. Infrastructure & Sup - port Functions is managed as a cost centre and does not charge network costs and management fees to other segments. The remaining services between the segments are charged at market prices. The segment results for Residential Customers, Business Customers and Wholesale correspond to a contribution margin before network costs. Fastweb operates in Italy and consists of the Residential Customers, Business Customers and Wholesale segments. Other Operating Segments primarily comprises Swisscom Directories Ltd (localsearch), Swisscom Broad- cast Ltd (radio transmitters) and cablex Ltd (network con- struction and maintenance).
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43 Swisscom Switzerland In CHF million, except where indicated 2024 2023 Change in % Revenue and operating income before depreciation and amortisation (EBITDA) Telecom services 5,289 5,401 (112) –2 .1% IT services 1,191 1,154 37 3 .2% Merchandise 801 835 (34) –4 .1% Wholesale 514 530 (16) –3 .0% Revenue other 148 169 (21) –12 .4% External revenue 7,943 8,089 (146) –1.8% Intersegment revenue 63 58 5 8 .6% Revenue 8,006 8,147 (141) –1.7% Direct costs (1,635) (1,705) 70 –4 .1% Indirect costs (2,810) (2,733) (77) 2 .8% Operating expense (4,445) (4,438) (7) 0.2% EBITDA 3,561 3,709 (148) –4.0% Margin as % of revenue 44 .5 45 .5 Operating free cash flow EBITDA 3,561 3,709 (148) –4 .0% Lease expense (232) (225) (7) 3 .1% EBITDA after lease expense (EBITDAaL) 3,329 3,484 (155) –4.4% Capital expenditure (1,725) (1,690) (35) 2 .1% Operating free cash flow 1,604 1,794 (190) –10.6% Operational data in thousand and full-time equivalent employees Fixed telephony access lines 1,137 1,226 (89) –7 .3% Broadband access lines retail 1,967 2,006 (39) –1 .9% TV access lines 1,493 1,537 (44) –2 .9% Mobile access lines 6,331 6,277 54 0 .9% Access lines wholesale 731 692 39 5 .6% Headcount 13,319 13,263 56 0 .4% Swisscom Switzerland’s revenue fell by 1.7% in the year under review. Telecoms services account for the largest share of revenue (66%). The other main revenue items are IT services (15%), merchandise (10%) and wholesale business (6%). Competitive pressure and price pressure have led to a CHF 112 million or 2.1% drop in revenue from telecom services. Of this decrease, CHF 61 million (–1.6%) was accounted for by the Residential Customers segment and CHF 51 million (–3.3%) by the Business Customers seg- ment. Revenue from merchandise dipped by 4.1%. Com- pared with the previous year, Swisscom sold fewer smart- phones in the Residential Customers segment. In a market environment that remains very intensive and in which Swisscom’s market shares are on the decline in the areas of mobile communications, broadband and the TV market, the number of connections for broadband (–1.9%) and TV (–2.9%) dropped, while the number of mobile connections increased slightly (+0.9%). In mobile communications, the customer structure changed in light of an increase in post- paid lines (+110,000) and a comparable decrease in prepaid lines (–56,000). In the Residential Customers segment, the share of secondary and third-party brands rose from 31% to 34%. The number of connections for fixed network teleph- ony dropped (–7.3%), which was due to the replacement of fixed line telephony connections with mobile telephony. Revenue from IT services rose by CHF 37 million (+3.2%). The largest share of the increase is attributable to the acquisi- tion of camptocamp SA (March 2024) and Axept Business Software Ltd (June 2023). Swisscom once again had a strong position as a full-service provider in the reporting year, and customer satisfaction remained high. Demand for cloud, security and IoT solutions, and business applica- tions, continued to grow. The decline in wholesale revenue by CHF 16 million (–3.0%) resulted from lower income for foreign customers’ roaming in Switzerland.
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44 Management Commentary | Financial review Operating expense remained almost stable at CHF 4,445 million (+0.2%). The direct costs fell by CHF 70 million (–4.1%), primarily due to the lower volume of smart- phones sold and lower customer acquisition costs and customer loyalty costs. The increase in indirect costs by CHF 77 million (+2.8%) was influenced by non-recurring items. In the year under review, non-recurring costs of CHF 60 million were incurred in connection with the preparations and completion of the acquisition of Voda- fone Italia. Provisions for termination benefits of CHF 13 million were also set up (prior year: CHF 6 million). By contrast, provisions for legal proceedings amounting to CHF 24 million were reversed (prior year: CHF 64 million). Excluding these non-recurring items, indirect costs fell by CHF 30 million (–1.1%). In telecommunications, cost sav- ings of CHF 72 million were realised through efficiency improvement measures. By contrast, indirect costs in the solutions business rose due to business growth. Head- count in full-time equivalents increased by 56 full-time equivalents (+0.4%). In the Business Customers segment, the headcount increased due to business growth and the acquisition of camptocamp SA, whereas in Infrastructure & Support Functions, it rose due to additional resources and insourcing efforts in IT. Operating income before depreciation and amortisation (EBITDA) fell by 4.0%. Adjusted for non-recurring items, the decrease was 1.1%. Capital expenditure came to CHF 1,725 million in the reporting year and was thus above the previous year’s level (+2.1%). Around two fifths of this amount was used for expanding the access network with opti- cal fibre and neighbourhood connections, meaning that investments in these areas were higher than in the previous year. Capital expenditure on the mobile phone network also increased. At the end of 2024, 52% of homes were connected to the fibre-optic network. A bandwidth of at least 80 Mbit/s was available to 90% of the population. Swisscom’s mobile phone network covers 99.9% of the population with 4G or 5G services thanks to the expansion, whereby 86% of the popula- tion are able to benefit from the more powerful 5G+ technology variant. Fastweb In EUR million, except where indicated 2024 2023 Change in % Revenue and operating income before depreciation and amortisation (EBITDA) Residential customers 1,170 1,163 7 0 .6% Business customers 1,249 1,134 115 10 .1% Wholesale 383 330 53 16 .1% External revenue 2,802 2,627 175 6.7% Intersegment revenue 7 6 1 16 .7% Revenue 2,809 2,633 176 6.7% Operating expense (2,103) (1,835) (268) 14 .6% EBITDA 706 798 (92) –11.5% Margin as % of revenue 25 .1 30 .3 Operating free cash flow EBITDA 706 798 (92) –11 .5% Lease expense (50) (55) 5 –9 .1% EBITDA after lease expense (EBITDAaL) 656 743 (87) –11.7% Capital expenditure (628) (623) (5) 0 .8% Operating free cash flow 28 120 (92) –76.7% Operational data in thousand and full-time equivalent employees Broadband access lines retail 2,544 2,601 (57) –2 .2% Broadband access lines wholesale 905 648 257 39 .7% Mobile access lines 3,930 3,509 421 12 .0% Headcount 3,299 3,157 142 4 .5% Fastweb’s revenue rose year on year by 6.7% or EUR 176 million to EUR 2,809 million. Competition remained fierce. The customer base in the fixed-network business (retail and wholesale) grew by 6.2% overall to 3.45 million. While the customer base in the retail segment fell by 2.2% to 2.54 million due to the challenging market envi- ronment, the number of ultra-fast broadband connec- tions provided by Fastweb to other operators (wholesale
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45 business) rose by 39.7% to 905,000. Among retail cus- tomers, the share of ultra-fast broadband connections increased by one percentage point to 91%. The number of mobile access lines increased by 421,000 (+12.0%) to 3.93 million, with bundled offerings continuing to play an important role here. 44% of broadband customers used a bundled offering combining fixed network and mobile. At EUR 1,170 million, residential customer revenue remained at almost the same level year on year (+0.6%). The lower revenue in the fixed-network business was compensated for by an increase in the mobile communications segment and as a result of its larger customer base. Revenue from business customers increased by 10.1% or EUR 115 million to EUR 1,249 million. This was due to higher revenue from IT services. Revenue from wholesale business increased by 16.1% or EUR 53 million to EUR 383 million due to broadband access growth. Operating expense increased year on year by EUR 268 million (+14.6%). Operating expense in the previous year was impacted by the recognition of provisions for legal proceedings in the amount of EUR 13 mil- lion and costs of EUR 61 million due to a change in the fixed wireless access (FWA) strategy. In the operating expense for 2024, integration costs of EUR 176 million in connection with the acquisition of Vodafone Ita- lia were recorded. After adjustments to reflect these effects, operating expense rose by EUR 166 million (+9.4%), mainly due to growth in revenue. Adjusted EBITDA increased by EUR 10 million (+1.1%). In the year under review, capital expenditure was unchanged year on year at EUR 628 million (+0.8%). Headcount increased by 4.5% or 142 FTEs to 3,299 FTEs as the company took on external staff and the growth cre- ated a need for more personnel. Other Operating Segments In CHF million, except where indicated 2024 2023 Change in % Revenue and operating income before depreciation and amortisation (EBITDA) External revenue 427 427 – 0 .0% Intersegment revenue 684 636 48 7 .5% Revenue 1,111 1,063 48 4.5% Operating expense (964) (918) (46) 5 .0% EBITDA 147 145 2 1.4% Margin as % of revenue 13 .2 13 .6 Operating free cash flow EBITDA 147 145 2 1 .4% Lease expense (11) (11) – 0 .0% EBITDA after lease expense (EBITDAaL) 136 134 2 1.5% Capital expenditure (39) (40) 1 –2 .5% Operating free cash flow 97 94 3 3.2% Full-time equivalent employees Headcount 3,269 3,309 (40) –1 .2% Revenue in Other Operating Segments was up by 4.5% or CHF 48 million year on year to CHF 1,111 million, due primarily to higher revenue at cablex. Operating income before depreciation and amortisation (EBITDA) was above that of the previous year (+1.4%) at CHF 147 million. The profit margin fell slightly to 13.2% (prior year: 13.6%). Headcount was at 3,269 full-time equiva- lents, and was therefore almost on a par with the pre- vious year (–1.2%). Reconciliation of pension cost and intersegment elimination The reconciliation item for pension cost is the difference between employer contributions and the pension cost under IFRS. Intersegment elimination relates to intragroup profits on capitalised services of other Group companies. Because the interest rate relevant for IFRS measurement has decreased, the reconciliation item for pension cost produced a positive EBITDA contribution of CHF 25 million in 2024 (prior year: CHF 37 million).
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46 Management Commentary | Financial review Depreciation and amortisation, non-operating results In CHF million, except where indicated 2024 2023 Change in % Operating income before depreciation and amortisation (EBITDA) 4,355 4,622 (267) –5.8% Depreciation, amortisation and impairment of property, plant and equipment, intangible assets and goodwill (2,143) (2,126) (17) 0 .8% Depreciation of right-of-use assets (261) (291) 30 –10 .3% Operating income (EBIT) 1,951 2,205 (254) –11.5% Net interest expense for financial assets and liabilities (34) (67) 33 –49 .3% Interest expense on lease liabilities (48) (44) (4) 9 .1% Other financial result (6) (19) 13 –68 .4% Result of equity-accounted investees (2) – (2) Income before income taxes 1,861 2,075 (214) –10.3% Income tax expense (320) (364) 44 –12 .1% Net income 1,541 1,711 (170) –9.9% Earnings per share (in CHF) 29 .77 33 .03 (3 .26) –9 .9% Net income fell by CHF 170 million or 9.9% to CHF 1,541 million. The decline can mainly be attributed to the integration and transaction costs recognised in the operating income in connection with the acquisition of Vodafone Italia. Accordingly, earnings per share of CHF 33.03 fell to CHF 29.77. Income tax expense In CHF million, except where indicated Switzerland Italy Other Total 2024 financial year Income before income taxes 1,862 (14) 13 1,861 Income tax expense 310 2 8 320 Effective income tax rate 16 .6% –14 .3% 61 .5% 17 .2% Income taxes paid 245 50 2 297 2023 financial year Income before income taxes 2,040 30 5 2,075 Income tax expense 346 19 (1) 364 Effective income tax rate 17 .0% 63 .3% –20 .0% 17 .5% Income taxes paid 226 57 30 313 The effective income tax rate is 17.2% (prior year: 17.5%). Swisscom anticipates a future effective consol- idated tax rate between of 18% and 19%. The CHF 16 million increase in income taxes paid to CHF 297 mil- lion was attributable to back-payments incurred in the previous year for previous financial years.
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47 Cash flows In CHF million 2024 2023 Change Operating income before depreciation and amortisation (EBITDA) 4,355 4,622 (267) Lease expense (291) (288) (3) EBITDA after lease expense (EBITDAaL) 4,064 4,334 (270) Capital expenditure (2,312) (2,292) (20) Operating free cash flow 1,752 2,042 (290) Change in net working capital 13 (133) 146 Change in defined benefit obligations (5) (31) 26 Net interest payments on financial assets and liabilities (10) (77) 67 Income taxes paid (297) (313) 16 Other operating cash flow (16) (8) (8) Free cash flow 1,437 1,480 (43) Dividends paid to equity holders of Swisscom Ltd (1,140) (1,140) – Net expenditures for company acquisitions and disposals (12) (63) 51 Proceeds from sale of FiberCop 423 – 423 Other changes 1 (165) 26 (191) Decrease in net debt before Vodafone Italia transaction 543 303 248 Purchase price (7,420) – (7,420) Lease liabilities (1,697) – (1,697) Other net debt 48 – 48 Vodafone Italia transaction (9,069) – (9,069) (Increase) decrease in net debt (8,526) 303 (8,821) 1 Includes foreign currency effects, fair value adjustments and non-cash changes in net debt positions. Operating free cash flow fell by CHF 290 million to CHF 1,752 (–14.2%) million due to lower EBITDA and higher capital expenditure. Net working capital fell by CHF 13 million compared with the end of 2023 (prior year: increase of CHF 133 million). This includes the additions to provisions, which were recorded in EBITDA in connection with the acquisition of Voda- fone Italia. Various payment maturities for interest income and expenses resulted in lower net interest paid. As a result, free cash flow fell by CHF 43 million to CHF 1,437 million. The free cash flow financed the dividend totalling CHF 1,140 million. In 2024, Fastweb sold its 4.5% share in FiberCop for a purchase price of EUR 439 million (CHF 423 million). At the end of 2024, the acquisition of Vodafone Italia was completed. The purchase price was EUR 7.9 billion (CHF 7.4 billion). Lease liabilities of CHF 1.7 billion were assumed with the acquisition.
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48 Management Commentary | Financial review Capital expenditure In CHF million, except where indicated 2024 2023 Change in % Backbone and infrastructure 118 133 (15) –11 .3% Fixed access network 714 657 57 8 .7% Mobile network 268 245 23 9 .4% IT 504 509 (5) –1 .0% Other 121 146 (25) –17 .1% Swisscom Switzerland 1,725 1,690 35 2.1% Fastweb 597 606 (9) –1 .5% Other Operating Segments 39 40 (1) –2 .5% Elimination (interim gains) (49) (44) (5) 11 .4% Total capital expenditure 2,312 2,292 20 0.9% Thereof Switzerland 1,712 1,685 27 1 .6% Thereof other countries 600 607 (7) –1 .2% Capital expenditure as % of revenue 20 .9 20 .7 0 .2 The capital expenditure of CHF 2,312 million or 21% of revenue once again reached a substantial amount in the reporting year. The share of capital expenditure in Switzerland came to 74% thanks to an amount of CHF 1,712 million. Swisscom Switzerland’s capital expenditure rose by 2.1% or CHF 35 million to CHF 1,725 million, with capital expenditure on fibre-optic connection (fixed network access network) as well as capital expenditure on the mobile phone network increasing year on year. Fastweb’s capital expenditure totalled EUR 628 mil- lion in local currency in the reporting year. It was therefore at almost the same level as the previous year (+0.8%).
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49 Net asset position In CHF million 31.12.2024 31 .12 .2023 Change Property, plant and equipment 13,501 11,059 2,442 Intangible assets 6,124 1,737 4,387 Goodwill 6,298 5,172 1,126 Right-of-use assets 3,994 1,972 2,022 Trade receivables 2,892 2,143 749 Receivables from finance leases 163 130 33 Trade payables (2,685) (1,611) (1,074) Provisions (1,540) (1,263) (277) Deferred gain on sale and leaseback of real estate (77) (81) 4 Other operating assets and liabilities, net (247) (141) (106) Net operating assets 28,423 19,117 9,306 Net debt (15,597) (7,071) (8,526) Defined benefit assets and obligations, net (53) (10) (43) Income tax assets and liabilities, net (843) (875) 32 Equity-accounted investees and other non-current financial assets 225 461 (236) Equity 12,155 11,622 533 Equity ratio in % 32 .7 47 .0 (14 .3) Operating assets The acquisition of Vodafone Italia has a significant impact on Swisscom’s balance sheet. The effect on net operating assets amounts to CHF 9.3 billion. Without Vodafone Italia, operating assets remained almost unchanged. For Vodafone Italia, a goodwill totalling CHF 1.1 billion is accounted for from the provisional purchase price allo- cation. The lion’s share of the goodwill, totalling CHF 6.3 billion, is attributable to Swisscom Switzerland (CHF 4.3 billion). This goodwill arose primarily in 2007 in connec- tion with the repurchase of the 25% stake in Swisscom Mobile Ltd. This had been sold to the Vodafone Group in 2001. The valuation risk of this goodwill item is very low. The carrying amount of goodwill for Fastweb is CHF 0.5 billion. In total, the carrying amount of the net assets of Fastweb and Vodafone together amounts to around EUR 11 billion (CHF 10 billion). Post-employment benefits The net defined benefit obligations in accordance with IFRS provisions amount to CHF 53 million (prior year: CHF 10 million). According to Swiss accounting standards (Swiss GAAP ARR), the Swisscom pension fund has a surplus amount of CHF 2.0 billion and a coverage ratio of 118.1% as per the provisional financial statements for 2024 (prior year: 114.5%). Due to different assumptions and methods, the valuation according to IFRS results in a surplus of only CHF 0.5 billion. Due to specific IFRS regulations, most of the surplus was not capitalised. The pension cost in accordance with IFRS in 2024 was CHF 9 million lower than regulatory employer contribu- tions. Because the interest rate relevant for IFRS measure- ment has fallen, the IFRS provision expense in 2024 rose by CHF 18 million compared with 2023. Equity Swisscom has equity of CHF 12.2 billion and an equity ratio of 32.7%. Equity increased year-on-year by CHF 0.5 billion, mainly due to retained earnings. Due to the acquisition of Vodafone Italia, the balance sheet total increased, causing the equity ratio to decrease. The determination of distributable reserves is based on the financial statements of Swisscom Ltd (sepa- rate financial statements in accordance with the Swiss Code of Obligations) and not on the consolidated finan- cial statements in accordance with IFRS. The equity of Swisscom Ltd in the 2024 annual financial statements is CHF 8.9 billion. The difference as compared to the equity reported in the consolidated balance sheet is largely due to earnings retained by subsidiaries and different accounting methods.
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50 Management Commentary | Financial review Net debt In CHF million 31.12.2024 31 .12 .2023 Change Debenture bonds 9,832 4,789 5,043 Bank loans 3,394 267 3,127 Private placements 322 322 – Other financial liabilities 351 287 64 Lease liabilities 3,636 1,915 1,721 Total financial liabilities 17,535 7,580 9,955 Cash and cash equivalents (1,523) (148) (1,375) Listed debt instruments (271) (258) (13) Other financial assets (144) (103) (41) Net debt 15,597 7,071 8,526 Ratio net debt/EBITDA 2 .4 1 1 .5 0 .9 1 Pro forma. In the year under review, Swisscom met its target of maintaining a single-A credit rating. In connection with the acquisition of Vodafone Italia, net debt rose by CHF 8.5 billion to CHF 15.6 billion. The increase from the takeover amounted to CHF 9.1 billion (purchase price of CHF 7.4 billion and acquired leasing debt of CHF 1.7 bil- lion). The pro forma net debt/EBITDA ratio amounted to 2.4 (prior year: 1.5), so that the net debt/EBITDA ratio at the end of 2024 was within the limits on net debt set by the Federal Council in the financial targets of 2.4. At the end of 2024, the proportion of fixed-interest-bear- ing financial liabilities was 86%, the average interest cost of all financial liabilities was 1.79% and the average remaining term to maturity was 5.4 years. Swisscom also has two credit lines totalling CHF 2.9 billion, which have not been used. In 2025, bonds totalling CHF 0.5 billion will become due for repayment.
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51 Statement of added value 2024 2023 Switzer- Other Switzer- Other In CHF million land countries Total land countries Total Added value Revenue 8,363 2,673 11,036 8,516 2,556 11,072 Capitalised self-constructed assets and other income 658 85 743 596 96 692 Direct costs (1,652) (1,320) (2,972) (1,730) (1,176) (2,906) Other operating expense 1 (1,145) (321) (1,466) (1,005) (528) (1,533) Lease expense (242) (49) (291) (234) (54) (288) Depreciation and amortisation 2 (1,558) (575) (2,133) (1,486) (585) (2,071) Intermediate inputs (3,939) (2,180) (6,119) (3,859) (2,247) (6,106) Operating added value 4,424 493 4,917 4,657 309 4,966 Other non-operating result 3 (301) (181) Total added value 4,616 4,785 Allocation of added value Employees 4 2,453 321 2,774 2,411 306 2,717 Public sector 5 363 25 388 287 43 330 Shareholders (dividends) 1,140 1,141 Third-party lenders (net interest expense) 34 67 Company (retained earnings) 6 280 530 Total added value 4,616 4,785 1 Other operating expense: excl. taxes on capital and other taxes not based on income. 2 Depreciation and amortisation: excl. impairment losses and amortisation of acquisition-related intangible assets such as customer relations. 3 Other non-operating result: financial result excl. net interest expense, result of equity-accounted investees, impairment losses and amortisation of acquisition-re- lated intangible assets. 4 Employees: employer contributions are reported as pension cost, rather than as expenses according to IFRS. 5 Public sector: current income tax expense, capital taxes and other taxes not based on income. Excl. payments for VAT and mobile communication frequencies. 6 Company: including changes in deferred income taxes and defined benefit obliga- tions. Thanks to a modern, high-performance network infra- structure and a comprehensive, needs-driven offering, Swisscom makes an important contribution to Switzer- land’s competitiveness and economic success. Of the consolidated operating added value of CHF 4.9 billion, Swisscom generated 90% or CHF 4.4 billion in Switzerland. Compared to the previous year, operating added value in Switzerland fell by CHF 0.2 billion or 5.0%. The added value per FTE in Switzerland was CHF 278,000 (prior year: CHF 293,000). Including capital expenditure, the purchasing volume in the Swiss business was around CHF 4.2 billion in the reporting year (prior year: CHF 4.3 billion). In addition to direct added value, purchases from suppliers created significant indirect added value for Switzerland’s economy.
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52 Management Commentary | Financial review Financial outlook 2024 2005 2024 pro forma outlook Key figures or as noted reported preliminary 1 preliminary 2 Revenue Swisscom Group CHF 11.0 bn CHF 15.3 bn CHF 15.0–15.2 bn Switzerland CHF 8 .0 bn CHF 8 .0 bn CHF 7 .9–8 .0 bn Italy EUR 2 .8 bn EUR 7 .3 bn ~ EUR 7 .3 bn EBITDA after lease expense (EBITDAaL) Swisscom Group CHF 4.1 bn CHF 5.2 bn ~ CHF 5.0 bn Switzerland CHF 3 .3 bn CHF 3 .4 bn CHF 3 .3–3 .4 bn Italy EUR 0 .7 bn EUR 1 .8 bn EUR 1 .6–1 .7 bn Capital expenditure Swisscom Group CHF 2.3 bn CHF 3.0 bn CHF 3.1–3.2 bn Switzerland CHF 1 .7 bn CHF 1 .7 bn ~ CHF 1 .7 bn Italy EUR 0 .6 bn EUR 1 .4 bn EUR 1 .5–1 .6 bn Operating free cash flow Swisscom Group CHF 1.8 bn CHF 2.2 bn CHF 1.8–1.9 bn Switzerland CHF 1 .6 bn CHF 1 .7 bn ~ CHF 1 .7 bn Italy EUR 0 .0 bn EUR 0 .5 bn EUR 0 .1–0 .2 bn 1 Pro forma adjusted figures as if Vodafone Italia were consolidated from 1 January 2024 and harmonised accounting policies were applied (on an unaudited basis). Incl. adjustment for one-off items 2024. 2 Exchange rate CHF/EUR 0.93 (2024: CHF/EUR 0.951). The Swisscom Group includes the segments Switzer- land, Italy and Other (not shown in the list above). From the 2025 financial year onwards, the EBITDA after lease expense (EBITDAaL) metric will be used to measure and report on the financial performance of the Group and the operating segments. Following the acquisition of Vodafone Italia and the adapted princi- ples for lease accounting from the 2025 financial year onwards, the importance of leases has seen a sharp increase. Compared to the previous EBITDA metric, the EBITDAaL metric is considered more reliable and more relevant for financial management (allocation of resources and measurement of financial perfor- mance) and communication with investors. It will also boost comparability with other telecommunications providers. Based on the provisional purchase price allocation and the provisional implementation of Swisscom’s accounting policies, the acquired Vodafone Italia has been taken into account in the financial outlook for 2025. In the first of 2025, the purchase price allocation will con- tinue to progress and the implementation of Swisscom’s accounting policies is expected to be finalised. Based on this, the financial outlook will be updated on 8 May 2025 when the results for the first quarter of 2025 are pub- lished. Swisscom’s 2025 EBITDAaL contains a lease expense of around CHF 1.6 billion. The 2025 EBITDAaL for Italy includes integration costs of around EUR 50 million. The 2025 capital expenditure in Italy takes into account costs for the integration of the acquired Vodafone Ita- lia, amounting to EUR 150 million, and adjustments of around EUR 50 million for capital expenditure in con- nection with the agreement made with INWIT regard- ing the location optimisation of mobile phone masts. This EUR 50 million will be reimbursed to Swisscom by the Vodafone Group as part of the purchase price adjustment. The net debt/EBITDA ratio at the end of 2025 is expected to be around 2.4. Subject to achieving its targets, Swisscom plans to pro- pose payment of an increased dividend of CHF 26 per share for the 2025 financial year at the 2026 Annual General Meeting.
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53 Capital market Market value CHF 26.1 billion Swisscom market capitalisation at the end of 2024. Total shareholder return 4.1% Total shareholder returns achieved by the Swisscom share in 2024. Credit rating Single-A rating is confirmed by S&P Global Ratings and Moody’s. Swisscom share In CHF million, except where indicated 31.12.2024 31 .12 .2023 Number of issued shares 51 .802 51 .802 Closing price at end of period CHF 504 .50 506 .00 Closing price highest CHF 571 .00 619 .40 Closing price lowest CHF 486 .80 501 .20 Market capitalisation 26,134 26,212 Dividend per share CHF 22 .00 22 .00 Dividend return % 4 .3 4 .3 Change in Swisscom share price % (0 .3) (0 .1) Change in SMI % 4 .2 3 .8 Change in STOXX Europe Telco 600 (in EUR) % 15 .6 3 .8 T otal shareholder return Swisscom share % 4 .1 4 .2 T otal shareholder return on Swisscom shares over the last five years % 20 .8 32 .9 T otal shareholder return SMI % 7 .5 6 .1 T otal shareholder return SMI over the last five years % 27 .3 54 .1 T otal shareholder return STOXX Europe Telco 600 (in EUR) % 21 .8 8 .9 T otal shareholder return STOXX Europe Telco 600 (in EUR) over the last five years % 16 .9 1 .1 At the end of 2024, the Swisscom share price was vir- tually unchanged against the closing price at the end of the previous year. The benchmark indices showed better performance in 2024. The SMI increased by 4.2% and the STOXX Europe Telco 600 (EUR) rose by 15.6%. The Swisscom share offers an attractive dividend yield of 4.3%. The total shareholder return (TSR) based on the increase in the share price and distributions over the last five years was also positive at 21%. Y See www.swisscom.ch/shareprice Dividend policy Swisscom pursues a dividend policy whereby a dividend per share at least equal to the previous year is paid out if financial targets are achieved. For the 2024 financial year, the Board of Directors will propose an unchanged dividend of CHF 22 to the Annual General Meeting, which represents a total dividend payment of CHF 1,140 million. Swisscom intends to increase the annual divi- dend for the 2025 financial year to CHF 26 per share, to be paid out in 2026. This is with the intention of a fur- ther dividend increase. Since the IPO in 1998, the total amount distributed has been CHF 38.7 billion. Credit ratings and financing Swisscom has good credit ratings from international rating agencies. In the 2023 reviews, S&P Global Rat- ings left the rating unchanged at A (positive) and Moody’s increased the rating to A2 (stable). The acqui- sition of Vodafone Italia led to S&P Global Ratings low- ering the rating to A- and Moody’s to A2. It continues to have one of the highest ratings among European tele- communications companies, supported by a clear debt reduction plan.
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54 Management Commentary | Capital market Value-oriented business management Key performance indicators for planning and manag- ing business operations are revenue, operating income before depreciation and amortisation (EBITDA) and cap- ital expenditure. The enterprise value/EBITDA ratio per- mits comparison with the value of comparable com- panies (European telecommunications companies) and with its own figure for the prior year. The members of the Board of Directors and Group Executive Board are paid a portion of their remuneration in the form of Swisscom shares. They are also subject to a mini- mum shareholding requirement. Variable remunera - tion based on financial and non-financial targets, the partial settlement of remuneration in shares and the minimum shareholding requirement ensure that the financial interests of management are aligned with the interests of shareholders. In CHF million, except where indicated 31.12.2024 31 .12 .2023 Change Enterprise value Market capitalisation 26,134 26,212 (78) Net debt 15,597 7,071 8,526 Defined benefit assets and obligations, net 53 10 43 Income tax assets and liabilities, net 843 875 (32) Equity-accounted investees and other non-current financial assets (225) (461) 236 Non-controlling interests – 3 (3) Enterprise value (EV) 42,402 33,710 8,692 Ratio enterprise value/EBITDA 6 .8 1 7 .3 (0 .5) 1 Pro forma. In connection with the acquisition of Vodafone Italia, Swisscom’s enterprise value rose by CHF 8.7 billion (+25.8%) to CHF 42.4 billion. Market capitalisation remained unchanged year on year and net debt increased by CHF 8.6 billion, mainly due to the acquisition of Vodafone Italia. The enterprise value/EBITDA ratio of 6.8x is lower than the prior-year figure of 7.3x. The reason for this decline is the acquisition of Vodafone Italia. Measured against this ratio, Swisscom’s relative valuation is well above the average for comparable companies in Europe’s telecoms sector. This high relative valuation is supported by Swisscom’s solid market position and attractive divi- dend. In addition, the lower interest rates and lower cor- porate income tax rates in Switzerland compared with other European countries have a positive effect on its enterprise value. STOXX Europe 600 Telcos (in CHF, indexed) SMI (indexed) Swisscom 12 .23 01 .24 02 .24 03 .24 04 .24 05 .24 06 .24 07 .24 08 .24 09 .24 10 .24 11 .24 12 .24 Share performance 2024 in CHF 620 CHF 505 Closing price Swisscom share 31 .12 .2024 570 520 470
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55 Risks Competitive dynamics Core business Swisscom is countering the risk of disruptive megatrends through comprehensive environment analyses, fundamental transformation and increasing its own efficiency. Politics Regulation Swisscom’s wide range of business activities, coupled with the complexity of the applicable regulations, calls for an effective compliance manage- ment system. Geopolitics Currencies, supply bottlenecks and inflation Swisscom takes steps on an ongoing basis to enable it to respond ade- quately to geopolitical developments. Risk situation Sales in the core business of Swisscom are under pres- sure from intense competition. New offerings in the areas of digitalisation and IT services, such as cloud and IT security solutions, are intended to compensate at least in part for sagging revenue from the core busi- ness. Market developments result in changes to the business model and demand both a profound trans- formation of Swisscom’s own company and greater efficiency. Some of the key risk factors are described below. Further information on risks can be found in the report on non-financial matters. H See report pages 60–89 Risk factors Competitive dynamics in the telecommunications market Infrastructure providers and service providers that don’t have their own network infrastructure are driv- ing the competitive dynamics. Swisscom is countering this pressure and the development of revenue from the traditional telecoms business by transforming the company, as well as through constant innovation. Meg- atrends such as increasing connectivity, customisation of customer needs, and demographic change are shap- ing and altering both society and the economy and have a long-term impact on the activities of Swisscom. Swisscom conducts a comprehensive external environ- ment analysis at least once a year in order to identify potential disruptions at an early stage. It uses the future trends and developments identified by the analysis in a targeted manner: for example, to categorise new, potentially disruptive developments and to model pos- sible scenarios in a timely manner. Swisscom also pro- duces regular analyses of the economic and regulatory environment. It also examines the activities of global internet corporations in greater depth to identify rele- vant changes and respond with appropriate measures. To respond to changes in the market, Swisscom consist- ently focuses on customer needs when transforming its own company and optimises or adapts its processes and its organisation.
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56 Management Commentary | Risks Policy, regulation and compliance The manner in which regulations are implemented entails risks for Swisscom, which could have an adverse impact on the company’s financial position and results of operations. Sanctions by the Competition Commis - sion could also reduce Swisscom’s operating results and cause reputational damage to the company. Finally, excessively high political demands threaten to funda- mentally undermine the current competitive system. Swisscom’s wide range of business activities, coupled with the complexity of the applicable regulations, calls for an effective compliance management system (CMS). Swisscom’s central CMS covers the entire Group. It was audited by an independent auditor in accordance with ISO 37301 (compliance management systems) during the year under review. Geopolitical development Swisscom pursues a successful hedging strategy, thereby minimising the risk of losses that can arise as a result of fluctuating foreign exchange rates. Geo- political developments also pose the risk of inflation, shortages of goods or delays in deliveries, and reces- sion in general. Changes in the geopolitical situation have put the need to protect critical infrastructure on the political agenda. A new parliamentary motion calls for a legal basis for, if necessary, banning techni- cal equipment components from countries where state or state-related institutions exert control over indus- try. To enable it to respond appropriately to geopolit- ical developments, Swisscom reviews and implements measures on an ongoing basis. Increasing bandwidth in the access network Customer demand for broadband access is growing in proportion to the growing popularity of devices and IP-based (Internet Protocol-based) services (smart- phones, IPTV, OTTs, etc.). Swisscom faces tough compe- tition from cable companies and other network oper- ators as it strives to meet current and future customer needs and defend its own market share. The network expansion this necessitates calls for major investments. To mitigate financial risks and ensure optimum network coverage, network expansion is geared towards popu- lation density and customer demand. Swisscom enters into partnerships for network expansion. Substantial risks would arise if Swisscom were forced to spend more on network expansion than planned or if projected long- term earnings were to fall. Swisscom minimises the risks by adapting the broadband expansion of the access net- work to changing conditions and technical opportunities on an ongoing basis. Competitive dynamics and regulation in Italy The competitive dynamics in Italy carry risks that have a detrimental impact on Fastweb’s strategy and could jeopardise projected revenue growth as a result. Fast- web is countering this pressure by constantly adapting its services, organisation, processes and partnerships. In the year under review, Swisscom acquired Vodafone Ita- lia, which is to be merged with Fastweb as a result. This will create a leading convergent provider in the Italian market, which will be able to remain robust in the face of external risks thanks to expected synergy effects. Changes in the legal and regulatory environment can have a negative impact on business activities and thus on the value of the company.
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57 Business interruption Usage of Swisscom Switzerland’s and Fastweb’s ser- vices is heavily dependent on technical infrastructure such as communications networks and IT platforms. Any major disruption to business operations poses a financial risk as well as a substantial reputational risk. Force majeure, natural disasters, human error, hard- ware or software failure, criminal acts by third parties (e.g. computer viruses, hacking activities), power out- ages, power shortages and the ever-growing complex- ity and interdependence of modern technologies can cause damage or interruption to operations. Built-in redundancy, contingency plans, deputising arrange - ments, alternative locations, careful selection of sup- pliers and other measures are designed to ensure that Swisscom can deliver the level of service that custom- ers expect at all times. As a systemically important company, Swisscom also wants to do its part to mini- mise the risk of a power shortage. Swisscom was certi- fied in accordance with ISO 22301 (business continuity management) in the reporting year. Information and security technologies Swisscom’s complex IT architecture entails risks during both the implementation and operating phases. These risks have the potential to delay the rollout of new ser- vices, result in additional costs and impact Swisscom’s competitiveness. The transformation is being closely monitored by the Group Executive Board. Changes and developments in technology, the economy and society interact to shape the area of internet security because continuous innovations and the opportunities they bring lead not only to opportunities, but also to new risks. Despite the fact that preventing cyberattacks is becoming increasingly difficult due to the rise in the number of potential threats, the objective is to iden- tify these risks at an early stage, systematically docu- ment them and take appropriate steps to permanently reduce them. Health and the environment In the year under review, claims were again made that electromagnetic radiation (e.g. from mobile antennas or mobile handsets) is potentially harmful to health. Under the terms of the Ordinance on Protection against Non-Ionising Radiation (ONIR), Switzerland has adopted a precautionary principle and introduced limits for base stations in sensitive areas such as homes, schools, hos- pitals and permanent workplaces that are ten times stricter than those recommended by the World Health Organization (WHO). The public’s wary attitude towards 5G, particularly if questions arise concerning loca- tions for mobile communication antennas, is impeding Swisscom’s network expansion. Even without stricter legislation, public concerns about the effects of elec- tromagnetic radiation on the environment and health could further hamper the construction of wireless net- works in the future and drive up costs.
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Environmental matters _________ Climate protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Energy efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Circular economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Climate risks and opportunities (Task Force on Climate-related Financial Disclosures TCFD) . . . . . . .69 Employee matters _____________ Labour market skills and training . . . . . . . . . . . . . . . . . . . . .76 Diversity and equal opportunities . . . . . . . . . . . . . . . . . . . 77 Social matters ________________ Data protection and data security . . . . . . . . . . . . . . . . . . . 79 Network access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Youth media protection and media skills . . . . . . . . . . . . 82 Respect for human rights ________ Fair supply chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 Anti-corruption _______________ Ethical behaviour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 General information ____________ About this report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Sustainability strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Business model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Identification of material non-financial matters . . . . . . 63
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60 Report on Non-financial Matters | General information General information About this report Reporting on non-financial matters In accordance with Article 964b of the Swiss Code of Obli- gations, the report on non-financial matters contains disclosures about environmental matters (especially the CO2 targets) as well as social, employee, human rights and anti-corruption matters. These disclosures are required to understand business performance, operating results, the company’s position and the impact that the company’s activities have on these non-financial matters. The Board of Directors of Swisscom Ltd approved this report on 12 February 2025. The report is subject to approval by the shareholders of Swisscom Ltd at its Annual General Meeting to be held on 26 March 2025. It is published electronically on the Swisscom website. Y See www.swisscom.ch/report2024 The report on non-financial matters covers all controlled domestic and foreign companies, with the exception of Vodafone Italia, which was acquired on 31 December 2024. The reporting (excluding Vodafone Italia) includes the same fully consolidated companies as the consoli- dated financial statements in accordance with the IFRS Accounting Standards. The list of Group companies is shown in Note 5.5 of the notes to the consolidated financial statements. H See report pages 199–200 In addition to the report on non-financial matters, Swisscom’s sustainability reporting also includes a Sustainability Impact Report on Swisscom’s business activities in Switzerland. The Italian subsidiary Fastweb also prepares and publishes a sustainability report. Both sustainability reports have been prepared in accordance with the international GRI (Global Report- ing Initiative) framework. The requirements set out by the Sustainability Accounting Standards Board (SASB) have also been applied to reporting in Switzerland. The two sustainability reports are verified by independent auditing companies. Y See www.swisscom.ch/sir2024 Y See www.fastweb.it/corporate Reporting on climate issues The Swiss Ordinance on Climate Disclosures (Verordnung über die Berichterstattung über Klimabelange ) entered into force on 1 January 2024. It stipulates the implemen- tation of the internationally recognised recommendations of the Task Force on Climate-related Financial Disclo- sures (TCFD) by major Swiss companies. The reporting covers the impact of climate change on the corporate sector and the impact of companies’ activities on cli- mate change. H See report pages 64–75 Reporting on compliance with due diligence requirements regarding conflict minerals and child labour In accordance with Article 964j of the Swiss Code of Obli- gations, companies have to report on compliance with due diligence requirements regarding conflict minerals and child labour. The due diligence and reporting obli- gations that companies are required to comply with are laid out in the Ordinance on Due Diligence and Transpar- ency in relation to Minerals and Metals from Conflict-Af- fected Areas and Child Labour (DDTrO). Swisscom does not import or process any conflict minerals or metals defined by law or in the Ordinance, and is therefore exempt from the reporting obligations regarding miner- als and metals. Reporting on compliance with due dili- gence requirements regarding child labour can be found in the ‘Fair supply chain’ chapter. H See report pages 84–87 Sustainability reporting according to European Sustainability Reporting Standards (ESRS) from 2025 Starting from the 2025 financial year, Swisscom intends to prepare consolidated sustainability reporting in accordance with the European Sustainability Report- ing Standards (ESRS) and integrate this into the annual report. The disclosures on non-financial matters (includ- ing those on climate-related matters) that are required by Article 964b of the Swiss Code of Obligations will be incorporated into the consolidated sustainability report- ing. Compliance with the ESRS is to be confirmed by an auditing company.
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61 Sustainability strategy Swisscom has formulated its sustainability strategy for the period up to 2025, which is entitled ‘Responsibility means moving forward – now, not someday’. It wants to play a leading role as a sustainable company and decisively address the challenges, however large and complex they may be. In addition to the expectations of stakeholders and Swiss legislation, the United Nations Agenda 2030 with its 17 Sustainable Development Goals (SDGs) defines the framework of the Swisscom Sustaina- bility Strategy. In the year under review, Swisscom started revising its sustainability strategy with the aim of achiev- ing these goals by 2030. Governance Swisscom relies on governance that is based on the speci- fications of the Telecommunications Enterprises Act (TEA) and on its own ESG (Environmental, Social and Govern- ance) strategy. Corporate responsibility governance Strategic goals of the Federal Council Based on the Telecommunications Enterprise Act (TEA), the Federal Council defines the goals that the Confed- eration, as majority shareholder of Swisscom, aims to achieve in the next four years. During the current tar- get period, which runs until 2025, the Confederation expects Swisscom to pursue a corporate strategy that is, to the extent economically possible, committed to sustainable and ethical principles. In this context, the reduction of greenhouse gas emissions is of particular importance. In addition, the strategy should take into account the concerns of the different parts of the coun- try, where operationally appropriate. Y See www.swisscom.ch/ziele_2022-2025 Incorporation in the Group strategy The Articles of Incorporation set out the principle that Swisscom Ltd aims for sustainable value creation in its activities. As a result, the Board of Directors is com- mitted to pursuing a Group strategy geared towards sustainability. Y See www.swisscom.ch/basicprinciples Organisation and responsibility Board of Directors of Swisscom Ltd The Board of Directors of Swisscom Ltd approves the ESG strategy (environmental, social and governance strategy) in accordance with the Organisational Rules and defines the material non-financial matters for the Group (which includes defining the performance indicators). It moni- tors the implementation of the measures and the risks. It is also responsible for the supply chain policy. The Board of Directors has delegated some reporting and monitor- ing duties to the Audit & ESG Reporting Committee. This committee formulates positions on business matters that lie within the decision-making power of the Board of Directors and has the final say on those business matters for which it has the decision-making power. In particular, it decides which ESG reporting regulations are applicable to the Group and approves the separate Sustainability Impact Report. Meetings of the commit- tee are convened by the Chairman or at the request of one of the members as often as business requires, but at least once a quarter and in December. Each December, the Board of Directors determines the strategic priorities for implementing the Group target and the key performance indicators (KPIs) of Swisscom Switzerland. Fastweb’s targets are determined by the Fastweb Board of Directors, and the Swisscom Board of Directors takes note of the KPIs concerning CO 2 emissions. The Board of Directors and the Audit & ESG Reporting Committee are informed about the status of the most important KPIs related to the key topics of the sustainability strategy four times a year as part of management reporting. In June and December, the Audit & ESG Reporting Committee or the Board of Directors also monitors the status of Swisscom Swit- zerland’s implementation of the key topics and KPIs for the current year. Details on the other activities and responsibilities of the Board of Directors and the Audit & ESG Reporting Committee relating to ESG matters are provided in the Organisational Rules and in Annex 1.2, the rules of pro- cedure of the Audit & ESG Reporting Committee. Y See www.swisscom.ch/basicprinciples
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62 Report on Non-financial Matters | General information CEO of Swisscom Ltd The Board of Directors of Swisscom Ltd has delegated responsibility for implementing the Group strategy to the CEO. The CEO is responsible for the half-yearly reports to the Board of Directors and can delegate tasks and competences to subordinate bodies. He also defines the targets and measures for implementing the sustainability strategy, and is supported in this task by the members of the Group Executive Board, primarily by the Head of Group Communications & Responsibility. If necessary, a working group consisting of members of the Group Executive Board is convened for specific ESG issues. In the ethics working group, the CEO – together with the Head of Group Communications & Responsibil- ity, as the individual responsible for ethics, and the Head of Group Human Resources – deals with corporate ethics issues as required. Group Executive Board Swisscom’s Group Executive Board has defined the main goals for the company and sub-goals per division as part of the sustainability strategy. It also convenes at least twice a year to discuss the further development and implementation of the defined measures. Each Novem- ber, the Group Executive Board adopts the roadmap and sub-goals (benchmarks) for the coming year. Members of the Group Executive Board are sponsors for the stra- tegic action areas for their divisions. Together with their division management, they are responsible for imple- menting the sustainability strategy in the line units and for deciding on measures. This ensures that the action areas of the sustainability strategy are binding and embedded in the company. Group Communications & Responsibility The Group Communications & Responsibility (GCR) divi- sion coordinates the ESG measures on an operational level. It provides the relevant expertise to enable deci- sions to be made and supports the CEO, Group Execu- tive Board, Board of Directors and subsidiaries in mat- ters relating to sustainable development. These include, among other things, the development and implemen - tation of the ESG strategy and coordination in the defi- nition of material non-financial matters, including the goals, measures and involvement of interest groups. The GCR division is responsible for regular reporting to the Group Executive Board and the Board of Directors. Among other things, this includes implementation pro- gress, planned activities and important developments regarding sustainability (including relevant climate risks and opportunities).
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63 Business model Swisscom is the market leader in the Swiss telecoms sector. It employs a total of around 19,900 full-time equivalent employees. In the reporting year, it gener- ated revenue of CHF 11 billion and an operating income before depreciation and amortisation (EBITDA) of CHF 4.4 billion. Swisscom achieves over 75% of revenue through its business activities in Switzerland. Since the acquisition of Fastweb in 2007, Swisscom has had operations abroad, particularly in Italy. Swisscom also acquired Vodafone Italia at the end of 2024. The Fast- web + Vodafone Italia merger will create a leading con- vergent provider of broadband and mobile phone ser- vices for residential, business and wholesale customers in Italy. In Switzerland, Swisscom provides its customers with modern, convergent mobile communications and fixed telephone network infrastructure. For residential customers, Swisscom offers all products and services for mobile communications, internet, TV and fixed network telephony nationwide. On behalf of the Confederation, it also ensures basic service provision and provides all sections of the population across Switzerland with a basic range of telecommunications services. Swisscom offers its business customers a comprehensive range of IT services. Its portfolio comprises cloud, outsourcing, workplace and IoT solutions, as well as mobile phone solutions for mobile working and communication, net- work solutions, office networking, business process optimisation, SAP solutions, security and authentication solutions, data and AI consulting, and solutions tailored to the banking, insurance and healthcare industries. Further information on Swisscom’s business activities can be found in the introduction. H See report pages 1–11 Identification of material non- financial matters The report identifies material non-financial matters based on the principle of dual materiality, which consid- ers two perspectives. According to the outside-in per- spective, matters considered to be material are those that are necessary to arrive at an understanding of the company’s business performance, operating results and position (financial materiality). In accordance with the inside-out perspective, the report presents the material impact of business activities on the environment and people (impact materiality). A large number of issues are considered material from both perspectives. The mate- riality analysis is carried out from a Group perspective. Fastweb’s sustainability reporting for its business activ- ities in Italy includes other non-financial matters iden- tified as material that are not included in Swisscom’s consolidated non-financial report. When developing its sustainability strategy and sustain- ability reporting in accordance with the GRI framework, Swisscom conducts regular trend analyses, benchmark- ing comparisons and materiality analyses. It involves the relevant stakeholder groups in the process and engages in structured dialogue with them. Further information on the identification of material matters can be found in the sustainability reports of Swisscom in Switzerland and Fastweb. Y See www.swisscom.ch/sir2024 Y See www.fastweb.it/corporate t The material topics for Swisscom and their allocation to the non-financial matters are as follows, divided into business activities in Switzerland and Italy: Matter Material topics Switzerland Italy Environmental matters Climate protection x x Energy efficiency x x Circular economy x Employee matters Labour market skills and training x Diversity and equal opportunities x x Social matters Data protection x x Data security x x Network access x Youth media protection and media skills x Respect for human rights Fair supply chain x x Combating corruption and bribery Ethical behaviour x x
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64 Report on Non-financial Matters | Environmental matters Environmental matters Climate protection Concept applied (incl. due diligence) Swisscom contributes to efforts to help limit the global temperature increase to 1.5°C and to achieve the Paris climate targets. It is aiming to achieve the net-zero tar- get across the entire Group (including the Italian subsid- iary Fastweb) by 2035 in accordance with the Science Based Targets initiative (SBTi). To this end, Swisscom has established an ambitious cli- mate strategy and a comprehensive raft of measures covering the entire value chain. Swisscom’s climate strategy is based on the reports published by the Inter- governmental Panel on Climate Change (IPCC), which call for a tightening of the Paris climate target and recommend adherence to a maximum temperature increase of 1.5°C. Swisscom’s top priority is to reduce its own emissions. It pays attention not just to the quantity of energy consumed, but also to the way it is produced and the emissions it releases. Through the net-zero target in accordance with the SBTi Corporate Net-Zero Standard, Swisscom is committed to reducing its Scope 1, Scope 2 and Scope 3 emissions by 90% across the entire value chain compared to the base year of 2018. This includes the Italian subsidiary Fastweb. In addition to reducing its own CO 2 emissions, Swisscom makes an additional climate contribution by investing in climate protection projects for CO 2 avoidance and CO 2 removal outside of its value chain. Swisscom bases its due diligence of the greenhouse gas inventory in 2024 around the current GHG standards (Greenhouse Gas Protocol standards) and verifies this annually through an independent audit in accordance with ISO 14064 (Greenhouse gas valida- tion and verification). Key performance measures Start year Target year Target 2024 SBTi targets Swisscom Group Reduction of greenhouse gas emissions Scopes 1+2 2018 2030 1 –80% –37% Reduction of greenhouse gas emissions Scope 3 2018 2030 1 –60% –20% Reduction of greenhouse gas emissions Scopes 1–3 2018 2035 1 –90% 2 –20% 1 Interim target 2030; final target 2035. 2 Residual emissions are offset through climate protection projects for CO2 avoid- ance or removal. 2024 2023 2024 Emissions scopes 1–3 in CO2 eq. tonnes Scopes 1+2 13,694 14,149 –3 .2% Scope 3 505,541 515,790 –2 .0% Total scopes 1–3 519,235 529,939 –2.0% According to the GHG Protocol (Greenhouse Gas Pro- tocol), Scope 1 comprises direct emissions resulting from the consumption of fuel during operation, trans- portation and fugitive emissions (e.g. fuel for heating or vehicles). Scope 2 includes the indirect emissions that result from the use of purchased electricity, steam, heat or cooling (e.g. electrical energy con- sumption for operations). Scope 3 includes all other indirect emissions caused by a company’s activities in its upstream and downstream value chain (e.g. emis- sions from the supply chain). Implementation of concept/ assessment of effectiveness Swisscom in Switzerland Swisscom plans to reduce its Scope 1, Scope 2 and Scope 3 emissions by 25% between 2020 and 2025 and by 50% by 2030. This requires intensive and consistent reduction measures to be carried out. Swisscom is also taking meas- ures to boost its energy efficiency (see ‘Energy efficiency’). Scope 1 Energy consumption is the most important inter- nal lever when it comes to reducing CO 2 emissions. Swisscom primarily requires electricity to operate its network infrastructure and, to a much lesser extent,
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65 requires fuel for operational mobility and to heat its buildings. The switch from fossil fuels to renewable energy sources is the main factor contributing to the reduction in Scope 1 emissions. Since 2016, Swisscom has been systematically switching from fossil fuel heating systems to heat pumps or using district heat- ing and, where possible, heat recovery from its own operations to heat its buildings. It has also set itself the goal of electrifying its fleet by 2030. In doing so, it wants to reduce the direct emissions of its vehicle fleet by half between 2020 and 2025, and to zero by 2030. To this end, Swisscom ordered more than 1,200 electric vehicles at the start of 2024. The associated fuel sav- ings led to a significant reduction in direct emissions. This allowed Swisscom to further reduce its Scope 1 emissions by 12% compared to the previous year. Scope 2 By using certified electricity and district heating, Swisscom reduces its Scope 2 emissions from electricity and transfers them to the indirect emissions and thus the provision of electricity and district heating. Efficiency measures mentioned in the ‘Energy efficiency’ chapter reduce electrical energy consumption and help to mini- mise Scope 2 emissions. Swisscom also uses an electric- ity mix of 100% renewable energy sources, the majority of which comes from wind power. It has been purchasing renewable district heating since 2019 and looks into new connections to the local district heating network wher- ever possible. and is having photovoltaic plants installed on its properties. The electricity produced is consumed primarily by the company itself, with any surplus being channelled into the grid. Swisscom installed 18 new photovoltaic plants in the reporting year. The total solar power plant output increased to 5,233 kWp as a result. Swisscom is stepping up the expansion of photovoltaic plants at its locations between now and 2026. Scope 3 More than 95% of Swisscom’s emissions are attributable to indirect emissions in the value chain (market-based). The main measures aimed at reducing indirect emis - sions can be split into three main areas: the supply chain, the company’s own products and employee mobility. Despite ongoing measures, Swisscom’s Scope 3 emis- sions increased by 4.5% in the reporting year. This is due in part to an increase in emissions from key suppliers. It is also due to expenses having changed and Swisscom hav- ing increasingly purchased goods and services from sup- pliers with high emission intensities in the reporting year. More than three quarters of Swisscom’s indirect emissions arise in the upstream value chain and relate to purchased network infrastructure and IT, or to purchased merchan- dise and services. Swisscom is pursuing various approaches to reduce these emissions. It is a member of the JAC (Joint Alliance for CSR) – an association of telecoms providers that monitors and promotes compliance with environmental and social standards among IT suppliers. Swisscom also requires its key strategic suppliers to document their car- bon footprint via the Carbon Disclosure Project (CDP). It is also seeking to significantly reduce CO2 emissions through intensive cooperation with suppliers and subcontractors as part of joint carbon reduction programmes. Swisscom sells its own products such as boxes for TV, WLAN and internet (routers). It applies targeted circu- lar economy practices to these products (see chapter on the circular economy). It reduces material consumption during production and electrical energy consumption during use. Swisscom is also reducing the need for new devices by recycling its own products and using devices that are no longer in use as replacements. Finally, it is low- ering demand for smartphones by offering second-hand options and through buyback and reselling solutions. To keep emissions resulting from employee mobility as low as possible, Swisscom endeavours to minimise its employees’ commute to work. It offers its employees the option of working from home and flexibility with regard to where they work. It also promotes the use of public transport and is reducing company parking spaces to decrease the incentive to use cars. Climate contribution Reducing its own emissions is a top priority for Swisscom. It nevertheless wants to take responsibility for its residual emissions now rather than waiting until the net-zero target year of 2035, and is currently taking concrete climate action and thus already contributing to global climate targets today. Since 2020, Swisscom has used investments in climate protection to make a climate contribution outside its value chain in addition to reducing CO 2 emissions. This contribution has corresponded to the level of residual emissions from all its customers’ products and sub- scriptions since 2022. To achieve this, it invests in care- fully selected climate protection projects that meet high quality and integrity standards in accordance with the Gold Standard, the Verified Carbon Standard (VCS) and the Plan Vivo Standard. In collaboration with the external partners myclimate, South Pole and First Cli- mate, Swisscom invested in a total of five climate pro- tection projects in the reporting year. Avoided emissions According to numerous studies, the ICT industry has the greatest leverage when it comes to climate protection thanks to its range of smart services. In the reporting
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66 Report on Non-financial Matters | Environmental matters year, digitalswitzerland published the study ‘Smart and Green – Digital Pathways to Net Zero’ in cooperation with Accenture. The study shows that intelligent solu- tions for mobility, buildings, agriculture, industry and energy systems in Switzerland can be used to achieve up to 20% of the greenhouse gas reductions required by 2030. Swisscom promotes such decarbonisation solutions in its standard portfolio with offerings for Work Smart, the Internet of Things (IoT), the cloud and the circular economy, as well as solutions for paperless working. It also develops solutions for the business cus- tomers segment that help companies to successfully and transparently reduce their carbon footprint and implement their reduction path to net zero. Swisscom’s data-driven sustainability offering has already helped around twenty companies to select and implement suitable decarbonisation solutions. Together with its customers, Swisscom is aiming to save over one million tonnes of CO2 per year by 2025 through such solutions, and once again exceeded its targets in 2024 as this fig- ure stood at 1.2 million tonnes. Y See www.swisscom.ch/sir2024 Swisscom in Italy Fastweb has also committed itself to the Group-wide net-zero target by 2035 in accordance with the Science Based Targets initiative (SBTi) and has taken efficient measures to achieve this. These include reducing direct and indirect emissions, improving the energy efficiency of network infrastructure and offsetting all remaining emissions. In addition, Fastweb is changing the compo- sition of its vehicle fleet, replacing gas-driven heating systems and reducing detrimental effects on the respec- tive locations when installing optical fibre lines. With the support of consulting company AzzeroCO2, Fastweb is offsetting residual emissions by purchasing CO2 certif- icates from environmental projects around the world. Fastweb already achieved climate neutrality in 2022 with regard to direct emissions (Scope 1) and indirect emissions (Scope 2), as well as upstream and down- stream emissions (Scope 3). In September 2022, it began offsetting emissions accrued by its customers through the use of its services. Direct emissions (Scope 1) at Fastweb amount to 1% of total emissions. Fastweb is endeavouring to achieve the targets for reducing Scope 1 emissions. To this end, it is replacing gas-powered heating systems and switching 75% of its vehicle fleet to hybrid/electric vehicles and 25% to diesel vehicles by 2025. By 2030, it aims to use 70% pure electric vehicles and 30% hybrid vehicles. The Scope 2 emis- sions recorded have amounted to zero since 2021, since 100% of energy purchased directly comes from renewable sources. Finally, using specific measures, Fastweb reduced its indirect emissions (Scope 3), which account for 99% of total emissions, by 12% from 210 to 187 thousand tonnes of CO2eq compared to the previous year. Risks The following risks related to environmental issues could arise. • Supply chains: Supply chains are not only the largest source of emissions, but also one of the most complex. Volatile CO2 reporting from key suppliers or changes in procurement can have a negative impact on the indicators. • Climate change: Ongoing climate change is accelerat- ing the intensity and frequency of extreme weather events such as rising average temperatures and pro- longed heatwaves. This can lead to natural disasters that could damage Swisscom’s network infrastructure. Energy efficiency Concept applied (incl. due diligence) As a major consumer of energy, Swisscom has been working to increase its energy efficiency for years now. The company maintains considerable network and IT infrastructure in Switzerland and Italy. Swisscom is tak- ing extensive measures throughout its operations to increase energy efficiency. To this end, Swisscom imple- ments comprehensive energy management systems in both countries as part of its due diligence process. Swisscom in Switzerland Swisscom operates one of the largest fleets of company and commercial vehicles in Switzerland. Added to this are office and operations buildings, shops and data centres. In order to boost its own energy efficiency, Swisscom has introduced an energy management system based on the ISO-50001 standard. This system serves as a key instru- ment for ensuring the transition to becoming a CO2-free company and achieving the net-zero target. Swisscom in Italy Energy accounts for a significant proportion of telecoms companies’ operating expenditure and has an impact on their carbon footprint. Procuring 100% renewable energy and increasing the energy efficiency of the net- work and IT infrastructure are top priorities for Fastweb. A special energy management team decides which meas- ures need to be taken to improve and increase this. Since 2015, the team has implemented measures both in the data centres and at key operating sites. These include continuous monitoring of energy efficiency, structural measures, the generation of renewable energy on site, operational optimisation and the decommissioning of obsolete network elements.
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67 Key performance measures Energy targets of Swisscom in Switzerland Reference Targets and target agreements Start year Target year Target 2024 Energy efficiency through savings measures over total energy consumption 1 Swisscom Not weighted 2020 2025 +20% +16% Swisscom Not weighted 2020 2030 +43% +16% EnAW 2 Weighted 2013 2024 +36% 3 +66% 1 The reference value and calculation of efficiency is based on guidelines from the Swiss Federal Office of Energy (SFOE), namely the ‘Target agreement with the federal government to boost energy efficiency’ dated 5 May 2022. 2 Energie-Agentur der Wirtschaft (EnAW); target path of 3% per year. 3 Values from previous year. Energy targets of Swisscom in Italy Target annual Effective annual In % savings in KWh savings in KWh target Measures energy savings Production of renewable energy – 193,880 – Operational and building optimisation – 26,649 – Decommissioning and optimisation of network and IT infrastructure – 2,721,098 – Total energy savings 1,500,000 2,941,627 196% Implementation of concept/ assessment of effectiveness Swisscom in Switzerland In the reporting year, Swisscom’s total energy con- sumption in its Swiss business remained almost con- stant. Nevertheless, it increased energy efficiency by taking the measures outlined below. The electrification of heating systems and vehicles is not included in this context. While this plays a part in boosting efficiency, it primarily serves to reduce CO2 emissions. As a result, it is described in the chapter on climate protection. Electricity Optimising technology and replacing outdated net- work components and platforms allowed Swisscom to make further progress in the efficiency of its tele- coms networks and IT platforms and improve network service in the reporting year. The fixed and mobile networks consume the most electricity in Swisscom’s operations. These two networks account for around two thirds of total electrical energy consumption. Despite reduction measures, Swisscom’s electrical energy consumption increased slightly in the report- ing year due to the constant expansion of its network infrastructure. The measures taken resulted in savings of around 15.5 GWh of electricity in 2024. Fuels Swisscom laid the foundation for the electrification of its vehicle fleet in the reporting year by ordering over 1,200 electric vehicles. All Swisscom passenger vehicles will be electric by the first quarter of 2025. Thanks to the ongoing switch to electric vehicles and the further opti- misation of field and customer services, fuel consump- tion was significantly reduced in the reporting year. Heating fuel In the year under review, Swisscom upgraded sev- eral heating systems in its operation buildings and installed modern heat pumps. Energy consumption was reduced significantly by replacing outdated heat - ing systems such as oil or gas systems. This enabled Swisscom to further reduce its energy consumption from heating in the reporting year. Swisscom in Italy Fastweb’s energy consumption is made up of electric- ity (96%) and, to a lesser extent, natural gas, petrol and diesel (4%). In 2024, Fastweb maintained its commit- ment to procure energy from renewable sources. The electricity purchased by Fastweb comes from 100% renewable sources. In recent years, Fastweb has concluded numerous longer- term contracts for renewable energy. In 2022, it signed a purchase agreement for the supply of electricity from renewable energy sources. The twelve-year contract has contributed to the construction of a new photovoltaic plant in the Lazio region, which will cover a portion of Fastweb’s energy requirements with renewable energies. The plant generates 19 GWh of electricity each year, which
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68 Report on Non-financial Matters | Environmental matters is used exclusively by Fastweb. In 2023, Fastweb signed two further ten-year energy purchase agreements, one of which finances a photovoltaic plant through the annual purchase of around 21 GWh in Piedmont, while the other guarantees the purchase of 30 GWh per year from a wind farm in Puglia. These three agreements cover around 50% of Fastweb’s annual energy consumption. They are part of the decarbonisation path that Fastweb has been on since 2015, whereby it purchases 100% renewable energy with certification of origin. The photovoltaic plants installed at Fastweb’s locations since 2016 have produced a total of 378,000 KWh in 2024 for Fastweb’s own consumption. This is double the amount produced in the previous year. Risks The implementation of energy efficiency measures gives rise to the following risks: • Measurability and monitoring: The measurement and monitoring of energy efficiency is complex and requires suitable systems and technology. • Legal and regulatory risks: Changes in environmental or energy regulations can have an impact on the prof- itability of energy efficiency measures. Circular economy Concept applied (incl. due diligence) The resources used by Swisscom and its suppliers are finite and in some cases scarce. The following applies: the longer a resource is used, the more ecological it is. Where possible, Swisscom intends to reduce or stabilise consumption of resources in its operations. Its aim is to move gradually towards a circular economy that spans the entire value chain. The selection and use of materials play a central role in procurement and operation, as well as in their use by customers. Swisscom is not only a network operator, but also a retailer and supplier of merchandise (e.g. mobile phones) and self-developed devices (e.g. Internet- and TV-Boxes). In this capacity, it plays a relevant role in the circular economy on the Swiss market. Recycling programmes for electronic terminal equipment sup- port the implementation of its sustainability strategy. Swisscom is continuously developing its operational environmental compatibility and sustainable use of resources in accordance with ISO 14001 (Environ- mental management systems). Swisscom performs due diligence in accordance with the ISO 14001 and ISO 14064 standards (Greenhouse gas validation and verification). Key performance measures KPI 2024 Target 2025 Number of devices collected 215,000 250,000 Implementation of concept/ assessment of effectiveness A second life for smartphones When it comes to smartphones, Swisscom, in its capacity as a retailer, can have a direct impact on the circular economy by extending the useful life of these devices and by taking back and disposing of old devices. Its efforts within this context focus on its buyback, repair and second-hand offers. By 2025, it aims to process a quarter of a million devices a year through its own programmes and to continuously increase the return rate from its customers. As part of the Swisscom Mobile Aid programme, Swisscom donates the proceeds from the resale and recycling of donated mobile phones to the SOS Children’s Villages organisation. It also offers the Buyback programme and repair options for smartphones, with the work being carried out by an external partner. Swisscom also sells ‘refreshed smartphones’, allowing it to extend the service life of existing devices. Sustainable Swisscom products Swisscom has enhanced potential to exert influence and faces corresponding challenges when it comes to designing its proprietary products, such as Internet- and TV-Boxes, to suit the circular economy. Together with its suppliers, it has set itself the goal of improving the material consumption, energy consumption and durability of the devices with each new product gen- eration and of reducing their environmental impact. In the reporting year, Swisscom increased the transpar- ency of all of its proprietary products on the market by preparing and publishing comparable information on the carbon footprint for all devices – even older prod- uct generations still on the market.
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69 Dismantling of network infrastructure Swisscom not only creates new networks, but also takes down outdated networks. When dismantling networks, it looks into the options available for selling recovera- ble, fully functional components to other network oper- ators as spare parts. What can neither be reused nor sold is recycled. In 2024, Swisscom recovered a total of 1,159 tonnes of recyclable materials. Risks Having customers return devices they are no longer using is fundamental to a functioning circular economy, and ensuring that customers do their bit here is a chal- lenge. To increase customer participation, Swisscom is focusing on direct customer communication throughout the year and on raising public awareness. Y See www.swisscom.ch/rethink Climate risks and opportunities (Task Force on Climate-related Financial Disclosures TCFD) Swisscom recognises the increasing global impact of cli- mate change on the respective national economies and on the ICT industry in particular. It is aware that climate change affects its infrastructure, products, services and business activities. Swisscom therefore strives to contin- uously improve its own resilience. To this end, it system- atically identifies, records and manages climate-related risks and opportunities. The following climate risk analysis is based on the TCFD recommendations, scientific data available from the International Panel on Climate Change (IPCC) and climate projections from the Swiss Federal Office for Meteorology and Climatology (MeteoSwiss). The analysis takes into account the critical infrastructures and business processes of Swisscom in Switzerland and Fastweb in Italy, including all relevant subsidiaries. The experts responsible for the critical elements have assessed the potential impacts on the basis of their expertise and the scientific information available. Theme Description Source Physical risks Risks due to damage caused by heat, fire, storm, water, extreme weather conditions, IPCC, CH2018 Climate Scenarios avalanches, rockfall and mud Transition risks Legal risks, technological risks, market risks, reputational risks International Energy Agency (IEA), Network for Greening the Finan- cial System (NGFS), Energy data from Swiss producers/traders Scenario 1 Far-reaching climate protection measures against global warming: RCP2 .6, IPCC SSP 1 Global warming of 1 .5–2 °C Scenario 2 Reduction path according to the current climate protection promises: RCP 4 .5-6, IPCC SSP2-3 global warming of 2 .5–3 .3 °C . Scenario 3 Reduction path taking into account the climate protection measures currently RCP 8 .5, IPCC SSP5 implemented: global warming of 5 .1 °C
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70 Report on Non-financial Matters | Environmental matters Climate-related physical risks Physical climate risks and increasing natural hazards affect Swisscom primarily in relation to its own net- work and antenna infrastructure and to its data cen- tres and operation buildings. In order to classify the risks disclosed in its climate reporting, Swisscom has used the Group-wide risk acceptance level and made a comparison with other overarching corporate risks. The qualitative risk classification of Fastweb’s infra- structure corresponds to the classification of the cor- responding Swisscom infrastructure groups. Although Swisscom considers the physical risks to be low due to the measures already taken, it anticipates rising main- tenance costs for its own network infrastructure. It wants to largely replace the copper access network – which is already exposed to climate risks – with opti- cal fibre by 2050 to reduce its annual repair costs. Due to rising global temperatures, Swisscom also expects higher costs for cooling its data centres. It conducts frequent geological surveys and cyclical inspections in order to prevent climate risks to its infrastructure and identify them at an early stage. Switzerland Scenario 1 year 3 years 2035 2050 2085 Italy (qualitative assessment) Network and Antenna infrastructure The increasing risk of (forest) fires increases the costs for fireproof cable ducts, network redundancy and reliability . The fibre optic network would hardly be affected by flooding . However, the copper network, which makes up a small part of the network, could be damaged . If operations are interrupted, there is a risk of contractual penalties, customer losses and reputational damage . 1 T T T T T 2 T T T T T 3 T T T T T Data and operations centres Power outages result in costs for diesel or mobile generators to maintain the supply . Increasing global warming and extreme climate events can increase the costs of operating and replacing affected facilities . This increases the need for more efficient cooling systems, which in turn leads to higher energy costs . 1 T T T T T 2 T T T T T 3 T T T T T Offices, operating, transmission and production buildings If a facility were to be affected by an extreme (hydrological) climate event, replacement costs would be expected to rise . In addition, any interruption to operations would lead to a loss of revenue . Fastweb has therefore already taken structural measures and concluded insurance solutions . For example, it has set up a reserve system to ensure business continuity in the event of power outages . 1 T T T T T 2 T T T T T 3 T T T T T Total 1 T T T T T 2 T T T T T 3 T T T T T T Very low < CHF 10 million T Low CHF 10–30 million T Medium CHF 30–60 million T High CHF 60–90 million T Very high > CHF 90 million
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71 Regulations and legal risks Regulations in the EU (B | Group) The rising number of ESG regulations and standards with- in the EU will continue to impact the Swisscom Group’s business activities and have an impact at a subnational level. Developments at EU level that directly impact Swisscom currently include increased reporting require- ments (CSRD, EU Taxonomy, CSDDD), the consequences of the Green Deal for business activities on the European market and strategically important suppliers’ compliance with environmental regulations. Regulations in Italy (B | FW) Fastweb, as a benefit corporation, could face sanctions from the national competition authority if it does not meet agreed key performance indicators. This could lead to reputational damage. Medium term T T T CO2 regulations and taxation (B | SC) Swisscom generally expects carbon prices to rise continu- ously. In the long term, technological breakthroughs and international cooperation could lead to carbon pricing stabilising or even falling. Such a scenario will strongly depend on determination at the political level and ad- vances in green technologies. Long term T T T Regulations in the Switzerland (B | SC) The material developments include the counter proposal to the corporate responsibility initiative, the Climate and Innovation Act, the CO₂ Act, the Federal Act on a Secure Electricity Supply from Renewable Energy Sources and other reporting requirements, such as the NFRD and TCFD. Medium term T T T Potential impacts Medium term T T T The increasing reporting re- quirements and the associated regulatory operating and capital expenditures place high demands on Swisscom. Swisscom could suffer competitive disadvantages in this context due to differences between European and Swiss law. Fastweb could be sanctioned due to misleading advertising or even violations of the Consumer Protection Act and could be forced to pay fines. Given technological innovations, energy self-sufficiency solutions and efficiency improvement measures, the annual added costs for Swisscom are likely to be in the low to mid range. Higher hardware prices could push costs up significantly, as the production and transportation of hardware is strongly dependent on fossil fuels and energy-intensive processes. Mitigation strategy In order to react quickly and effec- tively, Swisscom constantly mon- itors regulatory developments. It sets itself high sustainability targets in order to prevent reg- ulatory risks. Swisscom has also included ESG risk parameters in its supplier assessment system. Fi- nally, it encourages the exchange of experiences and knowledge building within the sector in order to develop scalable solutions at an early stage in the event of new supply chain regulations. Fastweb has set up an Impact Com- mittee, which continuously moni- tors the relevant key performance indicators and reports quarterly to the Executive Board and every six months to the Board of Directors. In order to minimise the financial risks associated with rising carbon prices, Swisscom relies on a mix of various measures: switching to renewable energies, improving energy efficiency, using sustain- able hardware and optimising logistics in the supply chain. T T T Short term: 1 year T T T Medium term: 3 years T T T Long term: by 2035 Own business (B), value chain (VC), Swisscom (SC), Fastweb (FW) Climate-related transition risks Swisscom has set itself ambitious climate objectives with its 2035 net-zero target and comprehensive action plans. These goals are already contributing to low-carbon operations. They also reduce the transi- tion risks that could arise in all areas and at different points in time. Swisscom therefore assumes that the financially quantifiable transition risks are generally low. However, rising energy prices dependent on polit- ical developments and the taxation of carbon dioxide could pose a medium risk in the long term. Despite the considerable challenges, Swisscom is striving to exploit the opportunities that are arising from the transition to a green economy.
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72 Report on Non-financial Matters | Environmental matters Market and energy risks Product carbon footprint (B | SC) Business customers are demanding increasingly detailed information on product carbon footprints, which is in- creasing the precision of the current measurements. Medium term T T T Availability and prices of scarce resources (VC | SC) Scarcity of the resources that are needed for the produc- tion of consumer devices and networks could in future lead to a situation where products for Swisscom’s core business are not always reliably available. Long term T T T Net-zero target (B | Group) More than 90% of Swisscom’s emissions fall under Scope 3, with dependence on the market and third-party providers making achieving net-zero and CO2 targets particularly challenging. In addition, corporate acquisi- tions such as the acquisition of Vodafone Italia make the targets harder to achieve. Long term T T T Energy prices (B | Group) A high market price for non-renewable energies could increase the incentive for investments in renewable energy sources such as solar power, wind power and hydroelectricity, and in turn accelerate energy reform. Conversely, a low price could inhibit the expansion of renewable energy sources such as solar and wind power unless technological breakthroughs are achieved. Long term T T T Artificial intelligence and rising energy consumption (B | SC) The increased use of digital technologies such as artificial intelligence (AI) increases energy consumption and there- fore emissions. Long term T T T Potential impacts As other suppliers face similar challenges, Swisscom currently considers the risks of reputational damage and customer losses to be rather low. However, the risks will tend to rise in the future. Supply bottlenecks in the upstream supply chain could increase procurement costs and restrict product availability. If the net-zero target is not achieved in 2035, risks such as damage to reputation and sanc- tions could arise. As current market data shows, Swisscom would incur low to medium added costs each year until 2035 if it switched entirely to renewable energies. Energy costs could increase if new technologies are used intensively. Mitigation strategy Swisscom aims to improve the quality, availability and adminis- tration of its emissions data and to expand its pioneering role in this area. Swisscom invests in diversifying its supplier portfolio, continuously improves its strategies for supplier risks and product groups and keeps track of sector and market trends in handling risk cases. Swisscom drives decarbonisa- tion in its own operations, takes account of CO₂ aspects in its M&A activities, involves strategically important suppliers in its CO2 targets and participates in sector initiatives such as JAC and CDP. www.swisscom.ch/sir2024 www.fastweb.it/corporate In order to reduce dependence on market prices and increased stability, Swisscom invests in pho- tovoltaic installations and wind farms. It also uses battery storage systems, which increase reliability and flexibility. Fastweb invests in PV installations and has ensured long-term fixed energy prices through off-site energy purchase agreements. Swisscom continuously monitors emissions and energy consump- tion and takes such considerations into account when assessing new technologies. T T T Short term: 1 year T T T Medium term: 3 years T T T Long term: by 2035 Own business (B), value chain (VC), Swisscom (SC), Fastweb (FW) Technology risks
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73 Opportunities Impact investments (B | SC) Swisscom Ventures invests in the development of new products and services that have a positive impact on society and the environment and thus make a significant contribution to Swisscom’s innovation strategy. Medium to long term T T T Circular economy (B | Group) The principles of the circular economy and the reduction of waste not only contribute to improving Swisscom’s im- age, they also increase revenue and reduce procurement costs, for example through Swisscom products being refurbished or used as replacement devices. Short to medium term T T T Network dismantling (B | SC) Swisscom is systematically driving optical fibre expansion and at the same time gradually decommissioning its cop- per access network. The sale of scarce materials such as copper enabled by dismantling old infrastructure opens up new financial earnings potential. Short to long term T T T Green bonds (B | SC) Thanks to the International Capital Market Association’s Green Bond Framework, Swisscom is able to issue green bonds or similar financial instruments for financing ESG projects. Short to long term T T T Potential impacts The impact ventures not only make a contribution to the ESG topics but also create financial ad- vantages for Swisscom (exit gains) and strengthen its reputation. Although the revenue-related advantages cannot be broken down individually, Swisscom Switzerland saves around CHF 4.5 million per year on its own products thanks to second-life programmes. If the circular econo- my continues to grow, the savings Swisscom currently generates income of CHF 4–5 million per year through reselling. The extent to which further financial returns will be generated in the future depends largely on the trend in prices for scarce materials. Green bonds are expanding Swiss- com’s investor base, which makes the funding costs more attractive. Strategic implementation Swisscom continues to invest in impact start-ups through the Ventures initiative and the Digital Transformation Fund. www.swisscom.ch/sir2024 achieved will be even higher in the future. Continuous improvement of strat- egies for the circular economy and of the second-life programme. www.swisscom.ch/sir2024 www.fastweb.it/corporate Swisscom plans to increase fibre-optic coverage to 57% by the end of 2025, and to 75–80% by the end of 2030. Copper is sold in parallel with the rolling out of the fibre-optic network. This results from the Green Bond Impact Report. www.swisscom.ch/investor T T T Short term: 1 year T T T Medium term: 3 years T T T Long term: by 2035 Own business (B), value chain (VC), Swisscom (SC), Fastweb (FW)
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74 Report on Non-financial Matters | Environmental matters USA Infrastructure Mexico Infrastructure Brazil Hardware and infrastructure Switzerland Sales and marketing, retail and services, all product groups, hardware, infrastructure China Hardware China (Dongguan) Hardware and infrastructure Low to moderate > Low immediate climate risks, increasing in the long term primarily if tempera- tures exceed 2°C . Moderate to high > Some immediate climate risks that are highly likely to increase if tempera- tures reach or exceed 2°C . High to severe > Particularly susceptible to immediate climate risks that are likely to worsen significantly as global warming advances . Italy Sales and marketing, retail and services, infrastructure Vietnam Hardware, production/ manufacturing and assembly India Hardware Taiwan Hardware, Group headquar- ters research and development South Korea Hardware and infrastructure Estonia Infrastructure Swisscom products: Swisscom-branded products (e .g . devices for home use and telecommunica- tions equipment) that are sold to end users . Products from suppliers: Finished components that are purchased from third-party suppliers and are a material part of Swisscom’s business activities . Coastal erosion Sea-level rises Flooding Forest fires Heatwaves Period of drought Deforestation Tropical storms Physical risks in the supply chain Swisscom is faced with climate-related risks associated with the production processes of suppliers in third coun- tries and with logistics in Switzerland and Italy, Swisscom’s main markets. Physical climate risks can increase transport or production costs, delay customer deliveries or major projects such as network expansions, or lead to higher capital expenditure in redundant measures (e.g. alter- native suppliers or additional inventory levels). Delays and disruptions in the supply chain can affect the cost of customer service, lead to loss of market share or damage Swisscom’s reputation as a reliable provider. In 2024, Swisscom’s total procurement expenditure amounted to around CHF 6.5 billion. A significant por- tion of this was used for the operation and expansion of its network infrastructure. In addition, mobile phones, routers and TV-Boxes accounted for around 35% of total expenditure. The following chart categorises the criti- cal supply chain into the most important geographical areas of origin and indicates the corresponding material risks according to IPCC data.
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75 Swisscom pursues a risk-based approach. In doing so, it focuses on procurement clusters that require physical sup- ply chains and high expenditure, and therefore have the greatest financial impact. Although Swisscom and Fastweb have different supply chain clusters and corresponding expenditure, critical components for the ICT industry gen- erally come from identical geographic origins. Swisscom and Fastweb are therefore exposed to similar industry risks. Supply chain cluster Expenditure Hardware (HW): Mobile devices and Swisscom-branded devices, hardware for networks, work environments and data centres 38% Infrastructure (IF): Network construction, maintenance components, energy procurement 15% Software 1 9% Services & General Goods 1 38% 1 Out of scope of reporting 2024. Swisscom invested in energy efficiency measures and renewable technologies again in the reporting year, to help reduce risks in its own operations. Its purchasing managers additionally work with key suppliers to ensure the latter have taken the necessary measures to main- tain their business operations and that they take into account the risks that could arise in upstream areas (e.g. in the procurement of raw materials or through the prac- tices of subcontractors). By monitoring and visualising critical supply chains through supply chain risk man- agement (SCRM 360°), Swisscom is working to improve risk predictions, which will enable timely and effective corrective action to be taken. As an active member of the JAC Alliance, it works with other companies from the telecommunications industry to develop solutions that increase transparency in the ICT supply chain. Risk management While the experts responsible for the critical elements at Swisscom are responsible for managing low and medium risks in their division, overarching high risks are reported to Enterprise Risk Management. Fastweb frequently reports to Swisscom and includes material climate risks in the quarterly and annual risk reports to the Internal Control Committee and the Board of Directors. At Group level, risks can be proactively included in the annual budget planning as part of the quarterly risk reports to the Board of Directors. The corporate responsibility teams are responsible for integrating climate consid- erations into the ESG strategy process. Swisscom has a business continuity management system and a resilience management system in place to prevent the occurrence of risks and minimise their corresponding impact. Challenges and future prospects At Group level, Swisscom strives to continuously improve data-driven assessment of its infrastruc- ture’s exposure to risk. It also aims to examine ways of recording the scope of risks and opportunities through sales figures. Collecting reliable information within the supply chain remains a challenging task, since a lack of transparency in the lower levels of the supply chain, different methods of data collection and less stringent reporting standards can lead to inconsistent data and blind spots. The adoption of European report- ing standards planned for 2025, namely the Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS), is intended to improve the integration of financial climate consid- erations into existing business processes.
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76 Report on Non-financial Matters | Employee matters Employee matters Labour market skills and training Concept applied (incl. due diligence) To take advantage of the opportunities presented by the digital transformation and to master its challenges, it is essential that employees continuously expand their skills. With ‘Level Up’, Swisscom is shaping the transformation process, promoting the digital skills of its employees and fostering its culture of collaboration. Swisscom is developing a skills management system that covers skills that will be relevant in the future. The system includes continuous professional development, the adaptation of training programmes to reflect the needs of the labour market and the promotion of lifelong learning. Due diligence takes place via the skills manage- ment system. Key performance measures KPI 2024 Target 2025 Number of training days per employee 3 .9 4 .5 Implementation of concept/ assessment of effectiveness Career starters Swisscom trains apprentices in seven vocational disci- plines using a progressive, skills-based training model. The apprentices arrange their apprenticeship as part of a modular system where they can apply for different prac- tical placements within the company using an online marketplace. This enables them to quickly learn to take on responsibility. In the year under review, 97 IT appren- tices commenced their apprenticeship at Swisscom, set- ting a new record. In this way, Swisscom is contributing to the training of IT specialists. It also enables young pro- fessionals to enter the world of work through its trainee programme and internships. Training and education Employees can take advantage of the five training and development days set out in the collective employ- ment agreement (CEA) by choosing from a wide range of in-house training courses, on-the-job development opportunities and external training courses. The internal digital learning platform SKILLup offers time- and location-independent study and gives employ- ees access to programmes based on their skills and interests. Swisscom aims to have an inspiring learning culture where employees have plenty of freedom and assume personal responsibility for their professional training. It continued the internal leadership training programme that was launched last year as manda- tory, and committed all managers to completing the training by the end of the reporting year. Talent development Attracting, developing and retaining talent is one of Swisscom’s key concerns in a highly competitive labour market. Participants of the Talent Development Journey are identified using clear criteria such as motivation and potential every year. They can choose from a range of further development modules tailored to suit their own situation and take advantage of coaching sessions if needed. As part of the Internals First initiative, Swisscom offers development prospects to internal talent. It wants to fill at least 75% of vacancies for management positions internally by 2026. Risks Measures to boost employability and provide further training to employees are associated with the following risks: • Lack of relevance: If the further training programmes are not tailored to suit the needs of the labour mar- ket or the company, participants who complete them may find it difficult to gain a foothold in their occu- pational field. • Overqualification: Intensive further training can result in employees being overqualified for their cur- rent position, which could affect their job satisfaction. • Technological change: Rapid technological change can lead to certain skills becoming obsolete before training is completed.
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77 Diversity and equal opportunities Concept applied (incl. due diligence) Swisscom in Switzerland Swisscom represents a culture that values differences and has no room for discrimination and marginalisa - tion. It promotes diversity with regard to gender, age, origin, language, sexual orientation and the inclusion of employees with a physical or intellectual disability, or a refugee background. Diversity drives innovation and makes Swisscom successful as a company, which is why Swisscom makes sure its recruitment, devel- opment, talent management and leadership culture processes are designed in such a way that they coun- teract stereotypes and enable equal opportunities. Swisscom performs due diligence by regularly measur - ing the Group-wide targets in the different dimensions of diversity. Swisscom in Italy Fastweb’s principles for managing and remunerat - ing employees emphasise equal conditions, non-dis- crimination, performance orientation and transpar - ency. Fastweb aims to be a safe, inclusive place where employees proudly express their uniqueness. The inclu- sion@Fastweb strategy promotes diversity, equality and inclusion. It is monitored by the Corporate Culture & Inclusion department and is available on the Fast- web website and on the Agorà intranet, which is acces- sible to all Fastweb employees. The strategy covers the areas of gender diversity, disability, sexual orientation, multiculturalism and age discrimination. The emphasis is on intersectionality, promoting equal opportunities, and mutual connections. It also strengthens internal and external initiatives ranging from gender equality to promoting women’s STEM skills, supporting employ- ees with disabilities, and promoting inclusive language at Fastweb. Key performance measures Swisscom in Switzerland KPI 2024 Target 2025 Proportion of women in the workforce 23 .1% 25 .0% Proportion of women in management 15 .1% 15 .7% Proportion of employees under 40 years of age 43 .8% 45 .0% Proportion of employees with health impairments (inclusion) 1 .2% 1 .0% Swisscom in Italy KPI 2024 Target 2025 Proportion of women in the workforce 41% 50% Proportion of women in new hires 54% 50% Proportion of employees trained in diversity and inclusion 55% 50% Implementation of concept/ assessment of effectiveness Swisscom in Switzerland To promote diversity in its Swisscom business, Swisscom focuses on the factors of gender, inclusion, generations and language regions. Gender Swisscom relies on programmes and initiatives to attract more women to IT professions and positions in management. Flexible working models give employ- ees the support they need in different life situations. Swisscom therefore advertises the majority of its posi- tions with workloads ranging from 60 to 100% and also offers job sharing, holiday purchasing, part-time work on a trial basis, contributions to extra-familial childcare and programmes such as Work & Care. Inclusion Swisscom is committed to making jobs available to people with physical or psychological impairments or a refugee background in order to (re)integrate them into the work- force. It tries to offer at least 1% of jobs for inclusion-re- lated employment solutions. To achieve this, it is working with organisations such as Compasso and Powercoders. Generations In order to counteract the loss of knowledge and short- age of skilled workers that will come hand-in-hand with
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78 Report on Non-financial Matters | Employee matters the upcoming, substantial wave of retirements, Swisscom promotes the transfer and build-up of know-how through measures such as mentoring and junior programmes. Language regions Swisscom attaches importance to ensuring that the different languages are appropriately represented throughout the company and therefore offers appren - ticeships, internships and talent programmes in all language regions. Language course offerings support employees with learning national languages and English or improving their language skills. Swisscom in Italy In September 2024, Fastweb received certification for gender equality (Prassi UNI/PdR125:2022). It achieved this thanks to its efforts to close the gender gap, by car- rying out public campaigns and initiatives in schools and universities, and as the co-founder of a new network of companies and associations taking a stand against gen- der-based violence (PARI) that was launched in 2024. With this certification, Fastweb receives additional points in public tenders and increases its competitive- ness in the corporate business segment. It has drawn up a medium- to long-term action plan for gender equality, which is reviewed annually by the certification body. As at 31 December 2024, the percentage of women in the workforce is 41% and the percentage of women in management is 26%. The gender ratio among man- agers reporting directly to the CEO increased to 31% in the reporting year. Two out of six members of Fastweb’s Board of Directors were women as of 31 December 2024. In July 2023, Fastweb launched Your Evolution, an internal programme to promote female talent. The idea behind the programme is to identify female talent and increase the proportion of women in management positions faster. In the reporting year, 20% of partici- pants moved to other positions, and 6% of them were promoted to management positions. All Your Evolution participants also took part in special training and coach- ing programmes this year. An analysis conducted in accordance with the require- ments of the gender equality certification shows no or little gender pay gap at Fastweb. The average per- centage pay gap for the same job by gender and for the same qualification level was no more than 10% in September 2024. In 2024, Fastweb also educated its employees on discrimination, harassment and gen- der-specific violence. The diversity, equality and inclusion strategy not only serves to spread ethical values at Fastweb but also as a driver for improving Fastweb’s own performance as a company. In 2024, diversity & inclusion training reached 55% of employees. Fastweb managers took part in smart leadership training, which focused on measures to pro- mote, develop or integrate employees in an attentive manner, as well as the question of how best practices seen elsewhere can be put into practice. A team of Inclusive Agents operates in all the regions where Fastweb has branches. In 2024, the team made a significant contribution to spreading an inclusive culture within the company. In addition, Fastweb promotes the use of inclusive language both in internal and external communication. It joined the scientific committee of the permanent observatory for conscious and inclusive lan- guage in the reporting year. Risks Efforts to increase diversity and equal opportunities are associated with the following risks: • Resistance to change: Some employees may resist diversity initiatives out of fear of change or uncer- tainty. • Discrimination and prejudice: Discrimination and prejudice can persist in the workplace environment in spite of diversity efforts.
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79 Social matters Data protection and data security Concept applied (incl. due diligence) Swisscom in Switzerland As ‘Innovators of Trust’, Swisscom ensures that data protection and data security are firmly established in its organisation, strengthening the trust customers place in it. As a result, data protection is a central com- ponent of Swisscom’s digital strategy and its respon- sibility towards society. The data protection and data security concept aims to protect personal and busi- ness data from unauthorised access, misuse and data breaches. Swisscom in Italy Data protection Fastweb has implemented an organisational model for the protection of privacy and data protection: this model defines the governance system and the roles and responsibilities associated with the protection of personal data, which includes the creation of a data processing register, corresponding privacy-by-design activities, the qualification of suppliers, and first- and second-line controls. Data security In terms of cybersecurity, Fastweb pursues a risk-based approach based on two pillars: Strategy: Improvement of the organisation and the gov- ernance structure in the areas of information security, incident management and security risk management in accordance with a three-lines of defence model in order to effectively combat cybercrime. Technology: Definition of technical security standards and procedures. Key performance measures KPI 2024 Target 2025 Percentage of employees trained in cybersecurity 89% 85% Implementation of concept/ assessment of effectiveness Swisscom in Switzerland Data protection The new Federal Act on Data Protection (FADP) has been in force since 1 September 2023. Swisscom has imple- mented the necessary adjustments to protect personal data. When the revised FADP came into force, it also took the opportunity to introduce a new standard of customer information and expand the options available to customers. This means that Swisscom customers can not only opt out of specific types of data processing via My Swisscom – an option already available to them in the past – but can now automatically request informa- tion regarding how their data is used. Swisscom attaches great importance to the legally com- pliant and responsible processing of personal data and protected information. As a result, Swisscom operates a compliance management system for data protection and confidentiality, to which it applies internationally recognised standards and norms. It also maintains a data ethics framework that is designed to clarify ethical issues connected to the processing of data and the use of new technologies. Among other things, Swisscom processes personal data in order to provide its customers with individual- ised, targeted advertising or offers that are even better suited to their needs. It creates customer segments or customer profiles to that end. Customers’ personal data is made available to advertising marketing companies in aggregated form for target group-based advertising. Customers may object to the receipt of advertising and the processing of their personal data for marketing and advertising purposes. Swisscom has taken technical and organisational measures in order to comply with appli- cable legal provisions. In the year under review, Swisscom did not conduct any legal or administrative proceedings in the area of customer data protection or confidentiality. Swisscom complies with its legal obligations with regard to the surveillance of postal and telecommunications traffic. Y See www.swisscom.ch/dataprotection
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80 Report on Non-financial Matters | Social matters Data security In addition to strict compliance with data protection requirements, Swisscom places a particular focus on guaranteeing data security. To ensure the best possible protection for employees, customers, partners and its own company, it relies on state-of-the-art, secure infra- structure in addition to highly qualified security experts. The three pillars of prevention, detection and response form the basis of Swisscom’s security policy. In view of the ever-increasing threats posed by cyber- crime, Swisscom uses automation technologies and arti- ficial intelligence to detect risks and attacks at an early stage and initiate appropriate countermeasures. Cyber specialists in the Swisscom Security Operation Center monitor the entire IT infrastructure around the clock. In addition to technical security measures, Swisscom strives to promote a culture of security within the com- pany. For example, targeted awareness measures are used to raise awareness among employees about the conscious and secure handling of data. The new security awareness campaign #bethestrongestlink is being used by Swisscom to motivate all employees to do their bit to ensure the company’s security. Swisscom offers effective security solutions for residen- tial and business customers. These range from call filters and virus protection to security assessments, managed security services and immediate assistance in the event of a hacker attack. Security is thus an integral part of Swisscom’s values and culture. Y See www.swisscom.ch/dataprotection Swisscom in Italy Data protection In accordance with the provisions of the General Data Protection Regulation (GDPR), Fastweb has appointed a data protection officer (DPO) to independently monitor the methods and GDPR compliance of the company’s decisions concerning the management and protection of personal data. The data protection model includes an accountability system that defines specific roles: data managers implement the GDPR requirements in the operating units; competence centres serve to support the data managers; compliance units advise and moni- tor the data managers and competence centres. In addition, Fastweb has set up an internal data protec- tion committee, which monitors the contractual data protection requirements within the sales channels and can impose penalties and other measures in the event of non-compliance. During the reporting year, Fastweb received 5,467 enquiries from customers and third parties regard- ing data protection. 22% of the enquiries were related to the exercise of rights under the GDPR and the right to object. The right to erasure accounted for 8% of the enquiries and other reasons for 70%. In July 2024, the Italian Data Protection Authority (Gar- ante per la protezione dei dati personali, GDPD) con- cluded two proceedings against Fastweb that had been running since 2022. The proceedings were primarily against illegal telemarketing activities and soft market- ing. The authority imposed a fine of EUR 0.5 million. Data security In the reporting year, Fastweb continued to follow the three-year plan it had adopted in 2023, involving a stra- tegic and technological approach. Fastweb has a competence centre that specialises in the analysis of customer requirements and corresponding solutions in the field of cybersecurity. It includes two Security Operation Centres (SOCs) that are available to business customers and public administrations for pro- active monitoring and defence against cyberattacks. Fastweb’s subsidiary 7Layers S.r.l offers comprehensive services in the field of cybersecurity. Fastweb is one of the most reliable and safest market players in the field of data management for companies and public administration. It was the first Italian pro- vider to obtain the relevant certification to qualify as a cloud service provider to the public administration in Italy as part of the national cloud strategy. Fastweb prepares a progress report each quarter on its risk mitigation activities. The report is used to monitor progress, define improvement measures and identify new products and services.
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81 Risks Cyberattacks continue to pose a major threat. The speed of digital transformation, machine learning and computing power is rising at an exponential rate, and attacks are becoming increasingly specific and efficient. This inevitably increases the number of vul- nerabilities within the company that are susceptible to cyberattacks. The corresponding risks can have the following effects: • Swisscom may have weak points when it comes to protecting its infrastructure and customer data from cyberattacks. • A lack of employee knowledge or overly complex infrastructure can make it more difficult to prevent cyberattacks, some of which are triggered by artifi- cial intelligence. • Compliance with increasingly complex statutory requirements for data storage and data protection can affect Swisscom’s strategy or business models. • Blackmail attempts, which are becoming increasingly common in connection with cyberattacks, can result in financial losses. Network access Concept applied (incl. due diligence) High-performance network infrastructure is becom - ing more and more important. Mobile communica- tions play a key role in new applications such as the Internet of Things (IoT). What is more, an increasing number of security-critical processes will be carried out via mobile communications in the future. The expansion and modernisation of networks is there- fore a must in order to enable innovation. Swisscom is constantly developing its network infrastructure to keep pace with the increasing demand for broadband in the fixed and mobile networks, investing around CHF 1.7 billion per year in its infrastructure in Swit- zerland. Through the provision of high-performance networks and an optimal technology mix, it makes a significant contribution to the attractiveness of the Swiss business community. It also aims to provide its customers with the best network at all times, regard- less of their location. Swisscom has set itself ambi- tious expansion targets. By the end of 2025, fibre-op- tic coverage (FTTH) in Switzerland is to increase to 57%, and total between 75% and 80% by 2030. Almost the entire population should have internet access with bandwidths in the gigabit range by 2035. Swisscom’s 5G+ mobile generation is to cover around 90% of the population in Switzerland in the medium term. New mobile generations are more energy effi- cient, reduce immissions and make better use of the limited radio spectrum available than previous gener- ations. This means that it is in the general interest to focus on the latest mobile generation wherever pos- sible and replace older generations. The Ordinance on Protection against Non-Ionising Radiation (ONIR) regulates immissions by mobile antennas. Swisscom takes education and providing information on mobile communications seriously. Its team of specialists answers enquiries from the public, and Swisscom also supports the Chance5G information platform established by the industry association asut. Key performance measures KPI 2024 Target 2025 Coverage of homes and businesses with fibre optics 1 52% 57% Coverage of the Swiss population with 5G+ 86% 90% 1 Built access lines. Implementation of concept/ assessment of effectiveness Network expansion made further progress in the reporting year. At the end of 2024, optical fibre coverage came to 52% and 5G+ coverage to 86%. Total 5G coverage stood at 99%. The Federal Court stated in a judgement from April 2024 that a regular building permit procedure is required for the first-time activation of the correction factor on adaptive antennas. The decision does not yet offer any legal clarification regarding the correction factor. In the reporting year, however, this resulted in Swisscom hav- ing to submit more than 1,000 retrospective building applications for the activation of the correction factor. This increased the number of building permit applica- tions for mobile communications systems pending with the relevant authorities across the sector to over 3,000. Accordingly, the 5G expansion in Switzerland is likely to be further delayed. Pressure is therefore mounting for politicians. A motion calls for the rapid expansion of the 5G network as well as measures to simplify and acceler- ate the expansion. Implementation of this motion would allow outdated regulations for calculating transmission power to be adapted to reflect developments and find- ings over the last 20 years and building permit proce- dures to be simplified.
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82 Report on Non-financial Matters | Social matters Risks The following risks related to network access could arise. • Authorisations and regulatory hurdles: Attaining authorisations and complying with regulatory require- ments can be time-consuming and complex, delaying the expansion of the network. • Technological advances: The rapid pace of techno- logical advances may lead to investments that have already been made becoming obsolete. • Supply gaps: Despite every effort to expand the net- work nationwide, some areas can still be difficult to reach, which can lead to supply gaps. Youth media protection and media skills Concept applied (incl. due diligence) Swisscom is a driving force when it comes to shaping and enabling a forward-looking information society. However, high levels of internet availability alone are not enough. Rather, use of the internet also has to add value and be autonomous. With this in mind, Swisscom takes targeted measures to promote youth media pro- tection and is committed to responsible media usage. Its services impart knowledge, classify the phenomena of digital transformation and promote reflection processes that lead to healthy media use. Swisscom performs due diligence by measuring both the effectiveness of these initiatives and the number of meaningful interactions with the population at large. Swisscom has set itself the goal of reaching around 2 million people a year with information, tips and support by 2025. Key performance measures KPI 2024 Target 2025 Promotion of media skills 813,182 350,000 Media use training 1,137,267 1,273,000 Technical measures for the protection of minors 164,052 158,000 Digital shift 96,581 230,000 Total number of contacts 2,211,082 2,011,000 Implementation of concept/ assessment of effectiveness Different user groups with specific requirements The challenges associated with meaningful, low-risk media usage change depending on age and form of use. Swisscom has summarised the challenges it faces in three areas of action. Digital inclusion Swisscom makes the opportunities associated with the digital transformation accessible to everyone, supports equal opportunities in the labour market (or in terms of employability), provides education and promotes social relationships in individuals’ leisure time. These measures are primarily aimed at older people who are at risk of losing touch with the rapid pace of technological development. Youth media protection Swisscom is supporting children, young people, parents, legal guardians and teachers in the safe and responsible use of smartphones, the internet and television. Data and internet security Swisscom provides information about the dangers of the internet, promotes responsible and reflective work, and protects personal data. The focus is primarily on adults in the private and business environment. Swisscom Campus Swisscom Campus brings together the opportunities of Swisscom for all target groups under one umbrella. The opportunities are divided into the areas of home, school, work and leisure. Y See www.swisscom.com/campus In the year under review, Swisscom focused on artificial intelligence, cybersecurity and sharenting, expanding its offerings for all of these topics. This includes webinars, columns in publications aimed at specific target groups, the enter brochure and social media posts. Following the success of the first online parents’ evening in collabora- tion with blue TV, Swisscom organised another parents’ evening on sharenting in November 2024.
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83 Youth media protection Swisscom considers the promotion of media competency to be the ideal way to enshrine the digital transformation in society. In addition, technical protective measures are designed to protect young people from inappropriate offer- ings such as pornographic and violent content. When devel- oping new products and services, Swisscom checks whether the mechanisms for youth media protection are being used effectively. The parental control function or age verifica- tion makes certain content inaccessible to young people, and blue TV has a blocking function that enables content and commercial restrictions on video-on-demand content (VoD content). Swisscom also blocks all value-added ser- vices with erotic content (0906 numbers and value-added services) for young people and gives parents the option of setting surfing times for their children on the Internet-Box. Child protection With regard to the use of its products and services, Swisscom goes beyond the law and protects children from debt, unsuitable content and the risks associated with the use of digital media (e.g. addiction, privacy, hate speech and cyberbullying). Swisscom ensures its products have parental control features and lim- its access to offerings with content that is potentially harmful to minors using suitable mechanisms. In order to actively protect the physical and mental innocence of children and young people, it is crucial that the meas- ures are not restricted solely to the media interactions of children and young people. Even before the entry into force of the Telecommunications Act (TCA Article 46a) made it a legal obligation, Swisscom was already committed to blocking on its networks child pornogra- phy sites reported by the Swiss Federal Police as part of the industry Initiative of the Swiss Association of Tele- communications (asut) for improved Youth Media Pro- tection and the Promotion of Media Skills in Society. An electric interface between the Swiss Federal Police and Swisscom automatically tracks all changes. Swisscom also supports the anonymous reporting centre www. clickandstop.ch and provides communication support. Y See www.clickandstop.ch Data and internet security Swisscom offers information about the dangers of the internet, promotes responsible and reflective work, protects personal data. Its measures focus primarily on adults in the private and business environment, for whom the Swisscom Campus offers the ‘Cyber security’ campus guide and includes online courses such as ‘Stay- ing safe on the internet’ and ‘Privacy on the internet’. Risks The following risks related to the protection of minors and media protection could arise: • Restrictions: Even though access to certain content must rightly be restricted for children and young peo- ple, overly strict measures to protect minors can have a negative impact on the freedom of expression and creative development of young people. • Technological complexity: The rapid development of digital media is making it more difficult for parents and teachers to keep up with the latest technologies and applications. • Lack of supervision: In some cases, children and young people can access unsuitable content despite measures for the protection of minors if there is insuf- ficient parental supervision. • World views conveyed exclusively by the media: Excessive media consumption can lead to a distorted perception of reality, especially among young people. • Mental health: Uncontrolled media use can lead to mental health problems, such as addictive behaviour and depression.
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84 Report on Non-financial Matters | Respect for human rights Respect for human rights Fair supply chain Concept applied (incl. due diligence) With the entry into force of legal provisions on due dil- igence and reporting obligations in relation to conflict minerals and child labour (Article 964j of the Swiss Code of Obligations) and the associated ordinance (DDTrO), Swisscom has been obligated since 2023 to conduct due diligence in relation to child labour, implement a com- prehensive management system and issue an annual report. This obligation covers the entire upstream sup- ply chain and includes the company’s own business activities and all players involved – from the extraction of raw materials to the processing of the end product. Swisscom does not introduce or process any conflict min- erals in Switzerland. The reporting obligation on compli- ance with due diligence requirements in relation to con- flict minerals is therefore waived. A large proportion of the goods and services Swisscom purchases is used to operate and expand the network infrastructure. In addition, end devices such as mobile phones, routers and TV-Boxes account for a considerable proportion of the purchasing volume. Swisscom’s pur - chasing department handles all procurement transac- tions and ensures compliance with governance require- ments. The main basis for purchasing transactions is the Code of Conduct for Procurement. It contains binding rules for Swisscom suppliers and employees. When it comes to purchasing goods and services, respecting and protecting human rights are a key element of Swisscom’s corporate responsibility. Swisscom focuses here on core human rights risks with a high probability of occurrence and a potentially significant impact on those affected and local communities. These core risks include: • Child labour • Forced labour, especially the exploitation and dis- crimination of ethnic minorities • Insufficient working conditions in the manufacture of electronics devices, e.g. when handling hazardous sub- stances • Reasonable limits on working hours • Fair remuneration The aforementioned risks are often hidden in the lower levels of the value chain, in which Swisscom only has little insight and influence on the processes involved. Swisscom therefore considers it essential for the per- formance of its corporate due diligence to collaborate in joint solutions within the ICT sector. When doing so, it takes the relevant ILO, OECD and SA8000 standards as a basis. It also relies on a holistic risk management system, which it uses to systematically check its sup- plier relationships for risks. Swisscom attaches great importance here to maintaining a fair, effective part- nership with suppliers who share its social and envi- ronmental goals and its values. Where risk hotspots are identified, Swisscom takes targeted development and corrective measures with suppliers. Key performance measures KPI 2024 Target 2025 Number of employees at suppliers in the audited factories in the year in question in the JAC network 243,396 150,000
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85 Implementation of concept/ assessment of effectiveness Swisscom in Switzerland Risk management system Swisscom’s Supply Chain Risk Management follows a holistic approach in carrying out due diligence checks. The aim is to identify, assess, prioritise and reduce risks in ethical, social and environmental terms, and with regard to finances, logistics, quality and security of supply. It also captures the overall purchasing volume of human rights risks and their corresponding impact. Swisscom’s measures have enabled it to achieve a fair procurement score of 90/100 on EcoVadis. The following overview describes the core pillars of due diligence on human rights in Swisscom’s supply chains according to the OECD guidelines. Supply chain policy As part of its due diligence, Swisscom takes a stand for children’s rights. In doing so, Swisscom is guided by the International Labour Organization’s (ILO) definition of abusive child labour. The ESG Supplier Code of Conduct attached to the purchasing contract sets out the ecolog- ical, social and ethical conditions in the supply chains. Swisscom commits to binding standards for child labour and conflict minerals and obliges its supply partners to report any suspected cases to it. Risk and impact analysis Swisscom conducted a risk analysis of its entire value chain with regard to compliance with human rights. It determined core risks according to their severity and probability of occurrence and created a plan of action for expanding the existing management system, which assigns each supply partner to a category on the risk traf- fic light (green to red). Suppliers are assigned in relation to the commodity group risk of the service or product provided (in accordance with the internationally rec- ognised score system from the EcoVadis platform) and contract volume. Swisscom pays particular attention to those supply chains over which it has the most influence and for which it bears the most responsibility. The focus is therefore on suppliers who are involved in the supply chain of Swisscom’s proprietary products. Since 2023, the risk concept has been anchored in the procurement process via the SAP Ariba digital platform. Transparency is the key to fair supply chains. Swisscom pays particular attention to monitoring purchasing transactions with elevated risks (around 30%) and procurements with its top 100 suppliers. As a result, it receives ongoing information about events in the sup- ply chains relating to over 83% of its spend. Swisscom’s risk assessment is conducted using the EcoVadis and sphera platforms, which specialise in sustainability ratings. In addition, Swisscom uses the Prewave plat- form to monitor the country risk for child labour using the UNICEF Children’s Rights and Business Atlas Index. Swisscom is working with suppliers of its proprietary products on the gradual disclosure and presentation of the relevant supply chains on Prewave. This helps it in its efforts to specifically trace the origin of the materi- als and metals used. Measures to prevent, eliminate or minimise negative impacts Since 2023, Swisscom has been a member of the Global Child Forum non-profit organisation, which campaigns worldwide for the respect of children’s rights by the private sector. Swisscom achieved a score of 7.4 in the Children’s Rights Benchmark, putting it among the lead- ers of the companies evaluated. The industry average is 5.2 points. Audit programme in the Joint Alliance for CSR Swisscom is a member of the Joint Alliance for CSR (JAC). JAC is an association of telecoms providers with global operations that join forces to monitor compliance with applicable ESG standards and working conditions in the production centres of major multinational ICT suppli - ers. By conducting on-site audits, Swisscom can identify poor corporate practices that pose a potential risk to people and the environment. It then helps its suppliers and sub-suppliers to implement prioritised and sched- uled corrective measures. On-site audits examine the following risk categories: • Health and safety: e.g. emergency exits, emergency lighting, and the handling and storage of hazardous substances • Working hours: working hours, overtime and rest days • Salaries and benefits: social security, minimum wages, deductions • Environmental protection: greenhouse gas emissions (measurement, reduction targets, involvement of sup- pliers/sub-suppliers), implementation of environmental issues along the supply chain • Child labour and young workers: overtime, night shifts and no child labour • Forced labour: lack of employment contracts In the year under review, the JAC network carried out 139 (previous year: 149) audits. The audited suppliers included mostly Asian producers from the areas of IT hardware, IT software and services, and network infra- structure. The audits uncovered a total of 622 (previous year 883) vulnerabilities.
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86 Report on Non-financial Matters | Respect for human rights In the areas of its supply chain where Swisscom con - siders there to be an increased risk to people and the environment, it takes development measures with its strategically important suppliers and their sub-suppli - ers as part of the Supplier Development Programme (SDP). Over the last few years, it has worked with sup - pliers participating in the SDP to develop solutions in relation to issues such as environmental protection, working time regulations and safety at work. The sup - pliers concerned continue developing their measures independently after the first year. After they have suc - cessfully completed the development programme over three years, they use their experience independently in their own supply chains. Swisscom has been organising training sessions in the form of workshops and webinars for its strategic pro- curement department on the topic of ESG in supplier management since 2023. It will be gradually expanding the sessions further and specifically addressing the top- ics of child labour and conflict minerals. Beyond knowl- edge transfer and the development of internal capaci- ties, the training and awareness-raising programme aims to even better enshrine the long-term ESG govern- ance principles in the procurement departments and, at the same time, facilitate cross-divisional cooperation on human rights issues. In addition to its existing whistle-blowing channel for the company’s stakeholders, in 2023 Swisscom established a complaints mechanism covering the supply chain and a remediation process. This gives those affected the oppor- tunity to report human rights abuses and related com - plaints affecting procurement processes relevant for Swisscom directly to Swisscom, which should allow it to identify and eliminate human rights abuses more directly than previously. This whistle-blowing channel is based on the UN Guiding Principles on Business and Human Rights (UNGP No. 29). It is a space that guarantees anonymous, transparent and legally compliant whistle-blowing in accordance with the principles of non-discrimination and non-retaliation. Swisscom categorises complaints according to the extent, resolvability and severity of the impact on those affected. Remediation and devel- opment measures are then taken in exchange and dia- logue with relevant suppliers and the whistle-blowers. No reports have been submitted since the system was activated in October 2023. Swisscom in Italy Fastweb is committed to pursuing its objectives with transparency and integrity and to conducting itself in an ethical and responsible manner. The protection of human rights and labour rights is a guiding principle for Fastweb, one that is, among other things, guaranteed by its SA8000 certification for social responsibility. Fastweb endeavours to ensure that its suppliers and business partners work with it according to the same principles. For this reason, Fastweb introduced a con- cept to ensure compliance with human rights in the supply chain long before the adoption of the European Commission’s proposal for a directive on corporate due diligence in the area of sustainability. The supplier qualification process is an integral part of Fastweb’s procurement model. In it, each supplier is assigned a risk level based on the supplier’s product sec- tor and on labour, safety, social and environmental cri- teria. To successfully complete the accreditation process and meet the requirements of Fastweb’s Code of Ethics, all suppliers must sign specific clauses on environmental and social responsibility issues. In it, they undertake to comply with all applicable legal regulations, in particu- lar Model 231, labour law regulations, health and safety regulations, environmental regulations and the princi - ples of social responsibility with regard to respect for human rights. Together with the Code of Ethics, Model 231 sets out rules of conduct and is updated at periodic intervals. Fastweb worked with 1,541 suppliers in 2024 (includ- ing 242 suppliers that were newly registered this year). 116 of these new suppliers were reviewed according to social and environmental criteria. In 2024, Fastweb introduced its Code of Conduct for Ethical and Sus- tainable Purchasing, which serves as a binding refer- ence point for its partners and Fastweb procurement employees. The Code of Conduct is intended to pro- mote the responsible management of environmental, social and governance aspects in the supply chain and is an integral part of Fastweb’s Code of Ethics. In 2023, Fastweb launched its Sustainable Supply Chain Programme. The programme aims to develop a struc - tured supplier assessment system that is based on ESG criteria, creates added value for the company and grad- ually anchors the culture of sustainability throughout the chain. In the year under review, it set itself the goal of reviewing the ESG performance of at least 70 sup- pliers categorised as strategic, taking into account the volume of expenditure and their ESG risk levels. 248 suppliers were assessed by EcoVadis, a global provider of ESG risk assessments. 100 of all suppliers assessed in 2024 have been categorised as strategic. The results of the assessment are gradually being integrated into the procurement processes and will increasingly be a decisive factor in partner selection.
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87 Risks Implementing a fair supply chain is essential to man- ufacture products under proper ethical conditions. It involves the following risks: • Lack of transparency: The greatest risks to people and the environment lies at lower levels of the supply chain. Swisscom often has no insight into these areas or the companies operating there or their production methods due to a lack of contractual relationships. Obtaining information and monitoring the relevant supply partners is particularly challenging due to legal obstacles, the large number of suppliers and practices such as outsourcing and subcontracting. • Reliance on suppliers: Swisscom may become reliant on key suppliers, reducing its potential to influence fair production processes in the supply chain. • Complexity of the supply chain: Electronic devices and other IT products, as well as Swisscom’s own prod- ucts, consist of a number of different components, each with their own supply and value chains. Moni- toring and controlling ethical standards in complex global supply chains and manufacturing processes can prove difficult and require effective collaboration with a large number of different suppliers and partners.
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88 Report on Non-financial Matters | Anti-corruption Anti-corruption Ethical behaviour Concept applied (incl. due diligence) Swisscom conducts its business fairly, honestly and transparently and is opposed to any form of corrup- tion. In its Code of Conduct, it has set out clear rules for legally compliant behaviour in the spirit of integ- rity. The Group-wide anti-corruption directive specifies what behaviour is permissible or prohibited in the con- text of work-related activities. The directive includes a strict ban on all forms of bribery and corruption, as well as detailed regulations on conflicts of interest, lobby- ing, donations and sponsorship. As a trustworthy part- ner, Swisscom meets stakeholders’ high expectations in terms of its integrity. It works in line with values and ethical principles and trains its employees in lawful and value-oriented conduct. Code of Conduct Swisscom’s principles and rules on corporate govern- ance are set out primarily in the company’s Articles of Incorporation, Organisational Rules and the Rules of Procedure of the Board of Directors’ committees. Of particular importance is the Code of Conduct approved by the Board of Directors. It contains an explicit dec- laration by Swisscom of its commitment to absolute integrity as well as compliance with the law and all other external and internal rules and regulations. A zero-tolerance principle applies with regard to com- pliance violations. Swisscom expects its employees to behave responsibly, show consideration for people, society and the environment, comply with applicable rules and laws, demonstrate integrity and report any violations of the Code of Conduct. The latest versions of these documents as well as their earlier, unamended and superseded versions can be viewed online on the Swisscom website under ‘Basic principles’. Y See www.swisscom.ch/basicprinciples Anti-corruption directive Swisscom rejects corruption in all its forms. Facilitation payments are also prohibited. Swisscom’s business is conducted fairly, honestly and transparently. In order to avoid corruption, Swisscom has incorporated the legal field of anti-corruption into the central Group-wide compliance management system in accordance with the ISO 37301 standard and has taken numerous precau- tions to prevent violations. The Group Anti-Corruption Directive and other specific directives define permissi- ble and prohibited behaviour. All managers are trained through e-learning units and exposed employees receive additional special instruction. The central com- pliance department (Group Compliance) monitors the implementation of and compliance with the guidelines. Anonymous reporting channel (whistle-blowing) An anonymous reporting channel is available to all employees of Swisscom and Fastweb to report question- able events or practices, such as corruption, fraud, viola- tions of laws and guidelines, or problematic accounting. A certified reporting system features technical mech- anisms to ensure that the reports remain confidential. Reports are processed by Internal Audit in accordance with a defined process. As a unit assigned to the Board of Directors, Internal Audit guarantees the greatest possible levels of objectivity and impartiality. To simplify process- ing and receive a reply, the person submitting a report can set up a mailbox while remaining anonymous. Swisscom in Italy Fastweb promotes an ethical corporate culture, which is why it has introduced anti-corruption directives, a Code of Ethics and Model 231. It has thus defined rules of conduct that are regularly updated and ensure that the company complies with the applicable regulations. Model 231 defines a structured system of rules and controls that employees and third parties acting on behalf of Fastweb must follow. Fastweb supplemented Model 231 in July 2024 with a control system defined by the company. The system is designed to prevent offences that are listed in Decreto Legislativo 8 giugno 2001 n. 231 (D.Lgs. n. 231/2001). The subsidiary 7Layers S.r.l. has its own Model 231. ‘Zero tolerance of corruption’ is one of the principles that guide the actions of Fastweb. Fastweb has imple- mented the provisions of Swisscom’s anti-corruption directive, established an anti-corruption system in accordance with the requirements of the ISO 37001 standard (Anti-bribery management systems) and received the corresponding certification. Compliance with ISO 37001 is reviewed and confirmed annually by an external auditor. Combating corruption is embedded in Fastweb’s control system, risk management system and compliance management system, which fulfils the requirements of the ISO 37301 standard. Key performance measures Swisscom’s goal was to train all Swisscom Switzerland employees in matters concerning corporate ethics in 2024. 91% of internal staff successfully completed this training in 2024.
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89 Implementation of concept/ assessment of effectiveness Swisscom in Switzerland and Fastweb in Italy periodi- cally organise specific training sessions for their employ- ees on all kinds of compliance issues (anti-corruption/ bribery [2024 e-learning: 95% of managers across the Group]), conflicts of interest, whistle-blowing, antitrust law, money laundering and terrorist financing, data pro- tection and data security, capital market compliance and human rights). This is how the idea of integrity is to be sustainably anchored in the company. It involves an internal training cycle that starts with the trainer com- mittee and reaches all employees via the management. Risks Unethical behaviour can give rise to the following risks. • Damage to reputation: Unethical behaviour can lead to significant damage to Swisscom’s reputation with a negative impact on the trust placed in the com- pany by customers, business partners and the gen- eral public. • Lack of understanding or training: A lack of training on, and awareness of, ethical principles increases the risk of violations.
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Corporate Governance _______ 1 General principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 2 Group structure and shareholders . . . . . . . . . . . . . . . . . . . 92 3 Capital structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 4 Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 5 Group Executive Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 6 Remuneration, shareholdings and loans . . . . . . . . . . . . 116 7 Shareholders’ rights of co-determination . . . . . . . . . . . 116 8 Change of control and defensive measures . . . . . . . . . 117 9 Auditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 10 Information policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 11 Financial calendar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 12 Trading blackout periods . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 Remuneration Report ________ 1 Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 2 Remuneration of the Board of Directors . . . . . . . . . . . . 124 3 Remuneration of the Group Executive Board . . . . . . . 127 4 Other remuneration (audited) . . . . . . . . . . . . . . . . . . . . . . 135 5 Activities at other companies (audited) . . . . . . . . . . . . . 135 6 Gender representation (audited) . . . . . . . . . . . . . . . . . . . . 137 Report of the statutory auditor . . . . . . . . . . . . . . . . . . . . . . . . . 138
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92 Corporate Governance and Remuneration Report | Corporate Governance Corporate Governance Majority shareholder 51% of the shares are held by the Swiss Confederation (‘Confederation’). Organisation Christoph Aeschlimann has been Swisscom CEO since June 2022. Board of Directors, Group Executive Board 33% of the members of the governing bodies were women at the end of 2024. 1 General principles In performing their activities, the Board of Directors and Group Executive Board of Swisscom are guided by the objective of sustainable business management. They incorporate the interests of Swisscom shareholders, customers, employees and other interest groups into their decisions and strive to achieve economic, social and environmental objectives as part of a holistic approach. The Board of Directors practises effective, transparent corporate governance, which is characterised by clearly assigned responsibilities and based on recognised stand- ards. In this endeavour, Swisscom takes into account the recommendations of the 2024 Swiss Code of Best Practice for Corporate Governance issued by economiesuisse, the umbrella organisation representing Swiss business. The dialogue between investors, proxy advisors and other stakeholder groups with the respective specialist divisions at Swisscom allows the Board of Directors to identify emerging trends at an early stage and to adjust its corporate governance to new requirements as and when necessary. Swisscom’s principles and rules on corporate govern- ance are set out primarily in the company’s Articles of Incorporation and Organisational Rules. Of particular importance is the Code of Conduct approved by the Board of Directors. It contains an explicit declaration by Swisscom of its commitment to absolute integrity and compliance with the law and all other external and internal rules and regulations. Swisscom expects its employees to take responsibility for their actions, show consideration for people, society and the environment, comply with applicable rules, demonstrate integrity and report any violations of the Code of Conduct. The latest versions of these documents as well as their earlier, unamended and superseded versions can be viewed online on the Swisscom website under ‘Basic principles’. Y See www.swisscom.ch/basicprinciples 2 Group structure and shareholders 2.1 Group structure Operational Group structure Swisscom Ltd is a holding company and responsible for the overall management of the Swisscom Group. On 31 December 2024, the Group comprised the following five Group Functions, which each have staff functions: Group Business Steering, Group Human Resources, Group Strategy & Business Development, Group Com- munications & Responsibility and Group Security & Cor- porate Affairs. In addition, the Group includes the busi- ness divisions Residential Customers, Business Custom- ers and IT, Network & Infrastructure and several Group companies, including Fastweb S.p.A. in Italy. The Board of Directors of Swisscom Ltd has dele- gated day-to-day business management to the CEO of Swisscom Ltd. The Group Executive Board is comprised of the CEO of Swisscom Ltd together with the heads of the Group divisions and the heads of the business divisions.
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Group Business Steering Group Strategy & Business Development Group Security & Corporate Affairs Group Communications & Responsibility Group Human Resources Group Executive Board Board of Directors CEO Swisscom AG Internal Audit FastwebIT, Network & Infrastructure Business Customers Residential Customers Our customers 93 t The operational Group structure as at 31 December 2024 is shown in the organisational chart below. The business activities are carried out by Swisscom Group companies. Strategic and financial management is assured through the rules governing the assignment of powers and responsibilities set by the Board of Direc- tors of Swisscom Ltd. The Group companies are divided into three categories: strategic, important and other. Swisscom Ltd, Swisscom (Switzerland) Ltd and Fast- web S.p.A. are classified as strategic companies. The members of the Board of Directors and the managing directors of the strategic companies are appointed by the Board of Directors of Swisscom Ltd and elected via the competent statutory bodies. The Board of Direc- tors of Swisscom (Switzerland) Ltd comprises the CEO of Swisscom Ltd as Chairman, the CFO of Swisscom Ltd and the Head of Business Customers. The CEO of Swisscom Ltd is responsible for the executive manage- ment of Swisscom (Switzerland) Ltd. Seats on the Board of Directors of Fastweb S.p.A. are held by the CEO of Swisscom Ltd, who acts as Chair, together with the CFO of Swisscom Ltd, the Head of Group Strategy & Business Development at Swisscom Ltd and the Head of Account- ing at Swisscom. The Board of Directors is supplemented by an independent external member and the delegate of the Board of Directors, who has been empowered with the executive management of the company. Fastweb controls two subsidiaries. All other Swisscom Group companies are assigned to a Group division or business division for management purposes. The members of the Board of Directors of the other Group companies and their managing directors are appointed by the CEO of Swisscom Ltd. In some cases, external parties also serve as members of the Board of Directors. A list of Group companies, including company name, registered office, percentage of shares held and share capital, is provided in Note 5.5 to the consolidated financial statements. H See report pages 199–200 For financial reporting purposes, Swisscom’s business divi- sions and Group companies are allocated to individual seg- ments. Further information on segment reporting can be found in the Management Commentary. H See report page 42–45 Changes in the operational Group structure As of 31 December 2024, Swisscom completed the acquisition of Vodafone Italia. The two strategic compa- nies Fastweb S.p.A. and Vodafone Italia S.p.A. will from now on operate under the name ‘Fastweb + Vodafone’. Both companies are managed by the same management board (Executive Committee) under the leadership of
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94 Corporate Governance and Remuneration Report | Corporate Governance the existing CEO of Fastweb, Walter Renna. The com- position of the Board of Directors of Fastweb S.p.A. will remain unchanged until its Annual General Meeting. The Vodafone S.p.A Board of Directors was newly appointed following completion. In the first quarter, both boards of directors will be identical with the exception of one person. This will ensure uniform management of the companies until their merger. Fastweb S.p.A. has a total of four direct or indirect subsidiaries. Further structural changes will be made on 1 April 2025. Leaner and more efficient Group Executive Commit- tee (formerly the Group Executive Board), consisting of Christoph Aeschlimann (Group CEO), Eugen Stermetz (Group CFO), Isa Müller-Wegner (Head of Group Strategy & Development) and Klementina Pejic (Head of Group Human Resources) will manage the company Group- wide, while the business in Switzerland and Italy will each be managed by an Executive Committee. The Exec- utive Committee for Swisscom Switzerland is made up of the nine people who will form the Swisscom Group Executive Board until the end of March 2024 and whose work already primarily focuses on the Swiss business. This will ensure stability and continuity in the Swiss business in the future. Listed company Swisscom Ltd is a company governed by Swiss law and has its registered office in Ittigen (Canton of Bern, Swit- zerland). It is listed in the Standard for Equity Securities, SubStandard International Reporting, of the SIX Swiss Exchange (Securities No.: 874251; ISIN: CH0008742519; ticker symbol SCMN). Trading in the United States is conducted over the coun- ter (OTC) as a Level 1 programme (ticker symbol: SCMWY; ISIN: CH008742519; CUSIP for ADR: 871013108). Within the framework of the programme, the Bank of New York Mellon Corporation issues the American Depos- itary Shares (ADS). ADS are American securities that represent Swisscom shares. Ten ADS correspond to one share. The ADS are evidenced by American Depositary Receipts (ADR). As at 31 December 2024, the stock market capitalisation of Swisscom Ltd was CHF 26,134 million. There are no other listed companies in the Swisscom Group. 2.2 Major shareholders Pursuant to Article 120 of the Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading (Financial Market Infrastruc - tures Act; FMIA), there is a duty to disclose a sharehold- ing to Swisscom Ltd and SIX Swiss Exchange whenever the share of a person or group subject to the disclosure obligation reaches, exceeds or falls below 3, 5, 10, 15, 20, 25, 33 1/3, 50 or 66 2/3 per cent of the voting rights of Swisscom Ltd, irrespective of whether or not the voting rights can be exercised. The detailed disclosure requirements are defined in the FINMA Financial Mar- ket Infrastructure Ordinance (FinMIO-FINMA). Under the FinMIO-FINMA, nominee companies unable to inde- pendently decide how voting rights are exercised are not subject to disclosure requirements. Since a notification requirement only exists if a shareholding reaches, falls below or exceeds one of the limits indicated above, the current percentage of shares actually held by significant shareholders may at any time differ from the percentage most recently disclosed. The shareholding notifications can be viewed on the SIX Exchange Regulation website at: https://www.ser-ag. com/en/resources/notifications- market-participants/ significant-shareholders.html#/. On 7 May 2024, UBS Fund Management (Switzerland) AG reported a holding of 3.46% in Swisscom Ltd. BlackRock Inc., New York, reported a shareholding of 3.44% of the voting rights in Swisscom Ltd in 2017. Neither of the companies has provided any notification indicating that it has reached, exceeded or fallen below the thresholds subject to notification requirements (3% and 5%, respectively) since that time. As majority shareholder, the Swiss Confederation (‘Confederation’) held 50.95% of the issued share cap- ital of Swisscom Ltd on 31 December 2024, which was unchanged from the previous year. The Telecommunica- tions Enterprise Act (TEA) provides that the Swiss Con- federation shall hold the majority of the share capital and voting rights of Swisscom Ltd. The Federal Council defines the goals which the Confederation as principal shareholder of the company aims to achieve in the next four years. As a rule, stakeholder talks with the Chairman of the Board of Directors, the CEO and the representative of the Confederation are conducted three times a year by the responsible federal government departments – the Federal Department of the Environment, Transport, Energy and Communications (DETEC) and the Federal Department of Finance (FDF) – led by the Head of DETEC. Furthermore, the Head of Group Security & Corporate Affairs also participates in their capacity as Secretary of the Board. During these talks, the participants under- take a benchmark analysis of target achievement. After the close of the business year, target achievement is assessed by the Federal Council. Y See www.swisscom.ch/ziele_2022-2025 (in German) 2.3 Cross-shareholdings No cross-shareholdings exist between Swisscom Ltd and other public limited companies.
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95 3 Capital structure 3.1 Capital The share capital of Swisscom Ltd has remained unchanged since 2009, totalling CHF 51,801,943. There is no capital band and no authorised or conditional share capital. Information concerning equity can be found in the annual financial statements of Swisscom Ltd. H See report page 218–219 3.2 Shares, participation certificates and profit-sharing certificates All of the shares issued by Swisscom Ltd are fully paid-up registered shares with a par value of CHF 1. Each share entitles the holder to one vote. Shareholders may only exercise their voting rights, however, if their shares have been entered with voting rights in the share register of Swisscom Ltd. All registered shares with the exception of treasury shares held by Swisscom are eligible for a divi- dend. There are no preferential rights. Registered shares of Swisscom Ltd are not issued in certif- icate form but are held as book-entry securities in the depositary holdings of SIX SIS AG, up to a maximum limit determined by the Swiss Confederation. Shareholders may at any time request confirmation of the registered shares they hold. However, they have no right to request the printing and delivery of certificates for their shares (registered shares with no right to printed certificates). The holder of an ADR possesses the rights listed in the Deposit Agreement (e.g. the right to issue instructions for the exercise of voting rights and the right to divi- dends). The Bank of New York Mellon Corporation, which acts as the ADR depositary, is listed as the shareholder in the share register. ADR holders are therefore unable to directly enforce or exercise shareholder rights. The Bank of New York Mellon Corporation exercises the voting rights in accordance with the instructions it receives from the ADR holders. If it does not receive instructions, it does not exercise the voting rights. Swisscom Ltd has issued neither participation nor prof- it-sharing certificates. Further information on the shares is available in Section 7 ‘Shareholders’ participation rights’ and in the Manage- ment Report. H See report pages 116–117 H See report pages 53–54 3.3 Limitations on transferability and nominee registrations Swisscom shares are freely transferable, and the voting rights of the shares registered in the share register in accordance with the Articles of Incorporation are not subject to restrictions of any kind. In accordance with Article 4.5.1 of the Articles of Incorporation, the Board of Directors may refuse to recognise an acquirer of shares as a shareholder if the total holding, when the new shares are added to any voting shares already registered in its name, exceeds the limit of 5% of all registered shares entered in the commercial register. For the shares in excess of the limit, the acquirer is entered in the share register as a shareholder or beneficial holder without voting rights. The other statutory provisions on transfer restrictions are described in Section 7.1 of this Corporate Governance Report, ‘Voting right restrictions and proxies’. Y See www.swisscom.ch/basicprinciples H See report page 116 Swisscom has issued special regulations governing the registration of trustees and nominees in the share reg - ister. To facilitate the trading of the shares on the stock exchange, the Articles of Incorporation (Article 4.6) allow the Board of Directors, by means of regulations or agreements, to permit the fiduciary entry of registered shares with voting rights for trustees and nominees in excess of the 5% threshold, provided they disclose their trustee capacity. In addition, they must be subject to supervision by a banking or financial market super- visory authority or otherwise provide the necessary assurance that they are acting for the account of one or more unrelated parties. They must also be able to pro- vide evidence of the names, addresses and holdings of the beneficial owners of the shares. This provision of the Articles of Incorporation may be changed by resolution of the Annual General Meeting, for which a majority of the voting shares represented is required. In accordance with this provision, the Board of Directors has issued regulations governing the entry of trustees and nomi- nees in the Swisscom Ltd share register. Y See www.swisscom.ch/basicprinciples The entry of trustees and nominees as shareholders with voting rights is subject to application and the conclu- sion of an agreement by which the trustee or nominee acknowledges the applicable entry restrictions and dis- closure obligations as binding. Trustees and nominees related in terms of capital or voting rights either contrac- tually or through common management or other means are treated as a single shareholder (trustee or nominee). 3.4 Convertible bonds, debenture bonds and options Swisscom has no convertible bonds outstanding. Details of the debenture bonds are given in Note 2.2 to the con- solidated financial statements. H See report pages 159–162 Swisscom does not issue options on registered shares of Swisscom Ltd to its employees.
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96 4 Board of Directors 4.1 Members of the Board of Directors Alain Carrupt left the Board of Directors on 27 March 2024. On the very same day, the Annual General Meeting appointed Daniel Münger as a new member and re- elected all other members to be elected by the Annual General Meeting. The Federal Council also appointed the representative of the Confederation to the Board of Directors for another year. As of 31 December 2024, the Board of Directors comprised the following non- executive members. Taking office at the Name Nationality Year of birth Function Annual General Meeting Michael Rechsteiner 1 Switzerland 1963 Chairman 2019 Roland Abt Switzerland 1957 Member 2016 Monique Bourquin Switzerland 1966 Member 2023 Guus Dekkers Netherlands 1965 Member 2021 Frank Esser Germany 1958 Deputy Chairman 2014 Sandra Lathion-Zweifel Switzerland 1976 Member, representative of the employees 2019 Daniel Münger Switzerland, Italy 1961 Member, representative of the employees 2024 Anna Mossberg Sweden 1972 Member 2018 Fritz Zurbrügg 2 Switzerland 1960 Member, representative of the Confederation 2023 1 Chairman since 31 March 2021. 2 Designated by the Swiss Confederation.
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97 4.2 Education, professional activities and affiliations Key details of the career and qualifications of each member of the Board of Directors are provided in the summary below. The external mandates of the mem- bers of the Board of Directors are disclosed in the Remu- neration Report. The Board members are obligated to consult the Chairman of the Board of Directors prior to accepting new mandates and to immediately advise him of any changes in their professional lives. If the Chairman is concerned, he shall consult or inform the Deputy Chairman. The Chairman or Deputy Chairman, as the case may be, then informs the Board of Directors about these changes and about potential conflicts of interest. Awareness of dealing with affiliations is raised in the Board of Directors as part of the annual internal training session that focuses on stock exchange regula- tions, as well as in the annual further training sessions. Details on the regulation of external mandates, in par- ticular the number of permissible external mandates and the definition of the term ‘mandate’, are set out in Article 9.3 of the Articles of Incorporation. No member exceeds the limits set for external mandates set out in the Articles of Incorporation. Y See www.swisscom.ch/basicprinciples H See report pages 135–137 The members of the Board of Directors are required to order their personal and business affairs to ensure that conflicts of interest are avoided as far as possible. They must take any action necessary for this. Should a conflict of interest nevertheless arise, the member concerned must inform the Chairman of the Board of Directors and/or the Deputy Chairman immediately, so that it can brought to the attention of the Board of Directors. If the member of the Board of Directors is subject to conflicting interests or has to safeguard such interests, the Board of Directors makes a decision that is commensurate with the intensity of the conflict of interest in order to ensure that the interests of the company are safeguarded independently. It looks, first and foremost, at whether the member of the Board of Directors concerned has to abstain or whether a double resolution with and without the member affected by the conflict is sufficient. In the event of an abstention, the Board of Directors decides whether this abstention – depending on the intensity of the conflict – applies only to the resolution or also to the consultation ses- sion before the resolution is passed. Michael Rechsteiner Master of Science in Mechanical Engineering, ETH Zurich; Executive MBA, University of St. Gallen (HSG) Career history 1990–2000 various roles at ABB Kraftwerke AG, most recently General Manager of ABB Power Generation Asia, Kuala Lumpur, Malaysia; 2000–2002 Head of Power Plants, Vice President Project Execution, Alstom Power; 2003–2007 COO, Sultex; 2007–2015 various roles at Alstom Power, most recently CEO and Senior Vice President Power Services; 2015–2017 General Electric (GE) Officer and Vice President of Global Product Lines at GE Power Services; April 2017–March 2021 manage- rial responsibility for GE Power Services Europe and CEO of GE Gas Power Europe; April 2021–April 2022 exter- nal advisor to General Electric (Switzerland) GmbH; since March 2021 Chairman of the Board of Directors of Swisscom Ltd Key competencies Michael Rechsteiner heads up the Board of Directors and has broad international experience in business and man- agement. In particular, he contributes his expertise and experience in the areas of innovation and technology, business customers, mergers & acquisitions, strategy, transformation, human resources, and environment, social & governance (ESG) to the Board of Directors.
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98 Corporate Governance and Remuneration Report | Corporate Governance Roland Abt PhD in Business Administration University of St.Gallen (HSG) Career history 1985–1987 CFO of a group of companies with oper- ations in the areas of IT and real estate; 1987–1996 Eternit Group (later Nueva Group): 1987–1991 Head of Controlling, 1991–1993 CEO, Industrias Plycem, Ven - ezuela, 1993–1996 Division Manager, Fibre Cement Activities; 1996–2016 Georg Fischer Group: 1996– 1997 CFO, GF Piping Systems, 1997–2004 CFO, Agie Charmilles Group (currently GF Machining Solutions), 2004–2016 CFO, Georg Fischer AG, and member of the Group Executive Board Key competencies Roland Abt is a financial expert with broad international experience in business and management. In particular, he contributes his expertise and experience in the areas of business customers, finance, mergers & acquisitions, strategy, transformation, law and human resources to the Board of Directors. Monique Bourquin Degree in Business Administration (lic. oec.) University of St.Gallen (HSG) Career history 1990–1994 Strategy and Corporate Finance Consultant, PricewaterhouseCoopers Switzerland; 1994–1997 Mar- keting and Sales, Unilever AG (formerly Knorr Nährmit- tel AG); 1997–1999 Head of Key Account Management (Sales), Rivella AG; 1999–2002 Country Manager (Mar- keting & Sales), Mövenpick Schweiz AG; 2002–2007 Head of Sales, Executive Board Member, Unilever Schweiz GmbH; 2008–2012 CEO, Executive Board Member, Uni- lever Schweiz GmbH incl. Oswald GmbH; 2012–2016 CFO DACH Region, Executive Board Member, Unilever Deutschland GmbH Key competencies Monique Bourquin has long-standing international expe- rience in business and management in the private cus- tomer segment. In particular, she contributes expertise in matters relating to strategy, brand management, market- ing, sales, finance and human resources to the Board of Directors.
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99 Guus Dekkers Master’s degree in Computer Science, Radboud University Nijmegen; MBA, Rotterdam School of Management (RSM) Career history 1990–2001 Volkswagen AG, Wolfsburg, various func- tions, mainly in the area of business process optimi- sations; 2002–2005 Head of Information Technology Europe & International and Vice President, Johnson Con- trols Automotive; 2005–2007 CIO and Vice President, Siemens VDO Automotive AG, Germany; 2008–2016 CIO, Airbus Group, France; since April 2018 CTO and member of the Executive Committee, Tesco PLC, London Key competencies Guus Dekkers has gained broad international experience in business and management in various sectors. He espe- cially contributes knowledge of the telecommunications and IT sectors to the Board of Directors. Furthermore, he complements the Board of Directors with his expertise and experience in the areas of innovation, technology and digitalisation as well as mergers & acquisitions, strategy, transformation and human resources, in both business and private customer segments. Frank Esser Graduate in Business Administration, Doctorate in Economics (Dr. rer. pol.) Career history 1988–2000 Mannesmann Deutschland, most recently from 1996 member of the Executive Board of Mannes- mann Eurokom; 2000–2012 Société française du radi- otéléphone (SFR): 2000–2002 COO, 2002–2012 CEO, in this function from 2005–2012 also a member of the Group Executive Board of the Vivendi Group Key competencies Frank Esser has international business, leadership and transformation experience in the telecommunications industry. In particular, he brings to the Board of Direc- tors his expertise in the business and private customer segments and his experience in the areas of technology, mergers & acquisitions, strategy and human resources.
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100 Corporate Governance and Remuneration Report | Corporate Governance Sandra Lathion-Zweifel Degree in Law (lic. iur.), attorney-at-law; Master of Law from the University of Zurich and Columbia University, New York; trader’s licence from SIX Swiss Exchange Career history 2005–2010 Mergers & acquisitions lawyer, Lenz & Staehelin law firm, Zurich; 2010–2014 Head of Legal & Compliance Financial Products, Credit Suisse AG, Zurich; 2014–2018 Head of department in the Asset Manage- ment division of the Swiss Financial Market Supervisory Authority (FINMA); 2018–2019 Counsel for Banking & Finance, Lenz & Staehelin law firm, Geneva Key competencies Sandra Lathion-Zweifel brings her legal expertise to the Board of Directors as well as experience in the areas of mergers & acquisitions, banking and finance, asset man- agement, strategy, human resources and ESG. Anna Mossberg Executive MBA for Growing Companies, Stanford Business School, Palo Alto; Executive MBA, IE University, Madrid; Master of Science in Industrial Engineering and Management, Luleå University of Technology Career history 1996–2010 Telia: in various roles, including Vice Presi- dent and Head of Business & Product Management, Head of Internet, Consumer Segment, Director Data Services, Product & Services; 2010 CEO, Bahnhof AB, Stockholm; 2012– 2014 Senior Vice President Strategy and Portfolio Management, Deutsche Telekom; 2015–2018 member of the Management Team, Google Ltd, Sweden; 2021– 2022 Managing Director, Silo AI, Sweden Key competencies Anna Mossberg has international business and leader - ship experience in the telecommunications, media and entertainment sectors. In particular, she brings to the Board of Directors her expertise and experience in the areas of telecommunications, innovation, digitalisation, artificial intelligence (AI), finance, mergers & acquisitions, human resources and strategy in the private and business customer segments.
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101 Daniel Münger Certified NPO Manager Career history 1983–1995 Various roles at PTT companies in cable instal- lation and as a telecommunications specialist; 1996–2001 Various roles at the Swiss Metalworkers’ and Watchmak- ers’ Union (SMUV) and the Union of Construction and Industry (GBI); 2002–2023 syndicom: 2002–2009 Regional Director of the Communications Union (now syndicom); 2010–2014 Central Secretary of the ICT Sector; 2015–2016 Head of the Logistics Sector and member of the Manage- ment Board; 2016–2023 Chairman Key competencies Thanks to his professional experience and the many years he spent in the leadership of a personnel association, Dan- iel Münger brings his expertise particularly in the areas of telecommunications, transformation, finance and human resources to the Board of Directors. Fritz Zurbrügg Doctorate in Economics (Dr. rer. pol.) Career history 1992–1994 Economist, International Monetary Fund (IMF); 1994–1998 Head of IMF and International Financ- ing Section, Swiss Federal Finance Administration (FFA); 1998–2006 Senior Advisor and Executive Director of the Swiss Constituency, IMF Washington, D.C.; 2006–2012 FFA: 2006–2010 Head of the Fiscal Policy, Fiscal Equalisa- tion and Financial Statistics Division, 2010–2012 Direc- tor of the FFA; 2012–2022 Swiss National Bank (SNB): 2012–2015 member of the Governing Board, 2015-2022 Vice-Chair of the Governing Board Key competencies Fritz Zurbrügg contributes his broad international experi- ence and expertise in the fields of finance and risk man- agement, as well as his management experience, to the Board of Directors.
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Board of Directors by career, experience, skills and knowledge In % and (number of members) as of 31 December 2024 Telecommunications, IT, media and/or entertainment 44% (4) Innovation, technology and/or digitalisation 44% (4) Residential customers (B2C) 44% (4) Business customers (B2B) 56% (5) Finance, risk management and/or M&A 100% (9) Strategy and/or transfor- mation 89% (8) Human resources 89% (8) Environmental, social & governance 22% (2) Leadership position in top management 89% (8) Member of the Board of Directors in stock ex- change listed companies 67% (6) Legal 22% (2) International business experience 67% (6) Sector Specialization Role 44% (4) 44% (4) 11% (1) Up to 4 years 5 to 8 years 9 to 12 years Board of Directors by length of term of office In % and (number of members) as of 31 December 2024 67% (6) Male Board of Directors by gender In % and (number of members) as of 31 December 2024 33% (3) Female 102 Corporate Governance and Remuneration Report | Corporate Governance 4.3 Composition of the Board of Directors The Board of Directors regularly examines its composi- tion and plans the appointments to the committee posi- tions on an annual basis. The members of the Board of Directors possess comprehensive expertise in relevant areas and broad experience. The following diagrams show the Board of Directors in terms of the members’ competencies, terms of office and gender. Swisscom Ltd’s Board of Directors thus already complies with gender representation requirements for the boards of directors of listed companies as set out in Swiss com- pany law. 4.4 Independence To establish the independence of its members, the Board of Directors applies the criteria set out in the Swiss Code of Best Practice for Corporate Governance published by economiesuisse. Independent members are thus under- stood to mean non-executive members of the Board of Directors who were never a member of the executive management or who have not been a member of the executive management for at least three years, who were never a member of the external audit team as auditor-in-charge or who have not been a member of the external audit team as auditor-in-charge for at least two years, or who have no or only comparatively minor business relations with the company. The term of office of a member of the Board of Directors is not a criterion that can be used to assess independence. All, i.e. 100%, of the members of the Board of Directors are considered to be independent based on these criteria. The Swiss Confederation, represented on the Board of Directors by Fritz Zurbrügg, holds the majority of the capital and voting rights in Swisscom in accordance with the Telecom- munications Enterprise Act (TEA). Customer and supplier relationships exist between the Swiss Confederation and Swisscom. Details of these are provided in Note 6.2 to the consolidated financial statements. H See report page 204
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103 4.5 Election and term of office Under the terms of the Articles of Incorporation, the Board of Directors comprises between seven and nine members and, if necessary, the number can be increased temporarily. Under the Articles of Incorpora- tion of Swisscom Ltd, the Swiss Confederation is entitled to appoint two representatives to the Board of Direc- tors of Swisscom Ltd. At present, one representative is appointed. Under the terms of the TEA, employees must be granted appropriate representation on the Board of Directors of Swisscom Ltd. The Articles of Incorporation also stipulate that the Board of Directors is to include two employee representatives and that employees are entitled to make proposals for their employee repre- sentatives. Daniel Münger was nominated as employee representative by the syndicom trade union and Sandra Lathion-Zweifel was nominated as employee represent- ative by the transfair staff association. The employee representatives are elected by the shareholders at the Annual General Meeting upon a motion proposed by the Board of Directors, as are the other members of the Board of Directors with the exception of the representa- tive of the Swiss Confederation, who is appointed by the Federal Council. The Annual General Meeting elects the members and the Chairman of the Board of Directors as well as the members of the Compensation Committee individ- ually for a term of one year. The term of office runs until the conclusion of the following Annual General Meeting. Re-election is permitted. If the office of the Chairman is vacant or the number of members of the Compensation Committee falls below the minimum number of three members, the Board of Directors nominates a chairman from among its members or appoints the missing member(s) of the Compensation Committee to serve until the conclusion of the next Annual General Meeting. Otherwise, the Board of Directors constitutes itself. The maximum term of office for members elected by the Annual General Meeting, as a rule, is a total of twelve years . The flexible arrangement makes it possible for share- holders to extend the maximum term of office in excep- tional cases if special circumstances exist. Members retire from the Board of Directors when they reach the age of 70. The maximum term of office and age limit for the representative of the Swiss Confederation are deter- mined by the Federal Council. 4.6 Succession planning The Board of Directors regularly examines whether its members’ qualifications, abilities and experience are still aligned with the Board’s needs and requirements. The Board commences the search for potential new members early on so as to ensure that it has access to the expertise it requires, is well-diversified and can nom- inate new members as needed in the future. As a guide for the ad-hoc Nomination Committee, the Board of Directors formulates a requirements profile specifying the qualifications, skills and experience that are desired. On the basis of this, the Nomination Committee evalu- ates potential candidates and makes recommendations to the Board of Directors for the election of new Board members by the Annual General Meeting. The Board of Directors submits a motion to the Annual General Meet- ing regarding the approval of new Board members. 4.7 Ongoing development and continuing education The Board of Directors attaches great importance to the ongoing development and continuing education of the Board and its individual members. The members of the Board of Directors assess the Board’s performance and efficiency once a year in November based on a question- naire available online. This self-evaluation asks them to assess both the work of the Board and the performance of the Chairman. The evaluation additionally covers the composition, organisation and work processes of the Board, responsibilities under the Organisational Rules and the priorities and goals for the reporting year. The Board of Directors meets to discuss the results of the survey in January and sets goals and measures for the current year. In 2022, the Board of Directors had a comprehen- sive, externally led assessment carried out for the first time in order to obtain an outside view of the Board and compare it with its peers. The committees also conduct an annual self-assessment as part of a discussion based on a questionnaire received in advance and define meas- ures. The Chairman also conducts a one-on-one annual discussion with each member in which possibilities for further individual development are addressed. Once a year, a one-day mandatory training course is held, most recently in January 2024. Occasional study trips are conducted, during which members of the Board of Directors familiarise themselves with com- panies, up-and-coming technologies, innovations and emerging business trends first hand. In October 2023, the Board of Directors organised a one-week study trip to South Korea and Japan. The members of the Board of Directors also have the opportunity to explore in depth the upcoming challenges facing the Group, business divisions and subsidiaries as part of ‘com- pany experience days’, which usually take place three
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104 Corporate Governance and Remuneration Report | Corporate Governance times a year. The majority of the Board members reg- ularly take advantage of these opportunities. In addi- tion, the members of the Board of Directors attend the Swisscom Group’s annual management meeting whenever possible. New Board members are given a task-specific introduction to their duties. At a two-day introduction, they are provided with an overview of Group management, Group strategy, the business and the current operational challenges. In addition, they attend function-related induction and training courses. 4.8 Chairman of the Board of Directors Michael Rechsteiner has held the office of Chairman since 31 March 2021. The tasks and responsibilities of this function are defined in the Organisational Rules. In the event that the Chairman of the Board of Directors is unavailable or there is a potential conflict of interest, the Vice-Chairman, Frank Esser, takes over the Chair- man’s tasks. Y See www.swisscom.ch/basicprinciples 4.9 Internal organisation and modus operandi The Board of Directors is responsible for the strategic and financial management of Swisscom and for monitoring the company’s executive management. As the supreme governing body of the company, it has decision-making authority unless such authority is granted to the Annual General Meeting by virtue of law. The Board of Directors is usually convened once per month by the Chairman (except in April, August, September and November) for a one- to two-day meeting. Further meetings are convened as business requires (ad-hoc meet- ings). In the event that the Chairman is hindered, the meeting is convened by the Vice-Chairman. The Chairman or the committee chairperson sets the agenda for the meetings of the Board of Directors. Any Board member may request the inclusion of further items on the agenda. The Board members receive the agenda and documenta- tion approximately ten business days prior to the meet- ings, so that they can prepare. The CEO, the CFO and the Head of Group Security & Corporate Affairs always attend the Board meetings as well. At every ordinary meeting, the Chairman of the Board and the CEO report to the Board of Directors on particular events, on the general course of business and major business transactions and on any measures that have been implemented. In addition, the Board of Directors can invite members of the Group Executive Board and senior employees of Swisscom as well as auditors and other internal and external experts, as necessary, to all its meetings as dictated by the specific issues being addressed. This ensures appropriate report- ing to the members of the Board of Directors. In the year under review, the Board of Directors brought in external advisors in a project to assess individual issues. The duties, responsibilities and working method of the Board of Directors and its conduct with respect to con- flicts of interest are defined in the Organisational Rules and in the rules governing the standing committees. Y See www.swisscom.ch/basicprinciples t The following table gives an overview of the Board of Directors’ meetings and circular resolutions in 2024. Individual meetings were held by video conference. Meeting days Ad-hoc meetings Circular resolutions T otal 10 3 3 Average duration (in hours) 06:10 01:40 – Participation: Michael Rechsteiner, Chairman 10 3 3 Roland Abt 10 3 3 Monique Bourquin 10 3 3 Alain Carrupt 1 2 2 3 Guus Dekkers 10 3 3 Frank Esser, Deputy Chairman 10 3 3 Sandra Lathion-Zweifel 10 3 3 Anna Mossberg 10 3 3 Daniel Münger 2 8 1 3 Fritz Zurbrügg 10 3 3 1 Left the Board of Directors on 27 March 2024. 2 Elected to the Board of Directors on 27 March 2024.
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Board of Directors 1 Chairman/chairwoman of the Board of Directors committee . 2 No voting rights . Strategy & Investments Committee Frank Esser 1 Guus Dekkers Anna Mossberg Daniel Münger Michael Rechsteiner Audit & ESG Reporting Committee Roland Abt 1 Sandra Lathion-Zweifel Fritz Zurbrügg Michael Rechsteiner Compensation Committee Monique Bourquin 1 Roland Abt Frank Esser Fritz Zurbrügg Michael Rechsteiner 2 Ad-hoc Nomination Committee Ad-hoc staffing 105 4.10 Committees of the Board of Directors The Board of Directors has delegated individual tasks to committees. The standing committees of the Board of Directors of Swisscom Ltd were constituted as follows as at 31 December 2024. The Board of Directors has three standing committees (Strategy & Innovation, Audit & ESG Reporting and Compensation) and one ad-hoc committee (Nomina- tion) tasked with carrying out detailed examinations of material issues. It may appoint further ad hoc commit- tees as required. In accordance with the rules govern- ing the standing committees, they usually each consist of three to six members. As a rule, each member of the Board of Directors sits on at least one of the standing committees. Subject to being appointed to the Compen- sation Committee (without voting rights), the Chairman of the Board of Directors is a member of all the stand- ing committees. The standing committees are chaired by other members, however. The chairs of the committees report verbally on the latest committee meetings at the next meeting of the Board of Directors. All members of the Board of Directors also receive copies of all meeting minutes from the Strategy & Investments Committee as well as the Audit & ESG Reporting Committee. The min- utes of the Compensation Committee and the Nomina- tion Committees are sent to the other members of the Board of Directors upon request. In 2023 and 2024, an ad-hoc committee headed by the Chairman Michael Rechsteiner looked at questions regarding the acquisition of Vodafone Italia in a total of nine meetings. Frank Esser, Roland Abt and Fritz Zur- brügg also took part. The meetings lasted 1 hour and 15 minutes on average. All committee members attended all meetings. Strategy & Investments Committee The Strategy & Investments Committee prepares infor- mation relating to corporate policy, strategy, transac- tions and investments for the Board of Directors. These matters include, by way of example, the Group strategy and the strategies pursued by key strategic Group com- panies, setting up or dissolving significant Group compa- nies, acquiring or disposing of significant shareholdings, and entering into or terminating strategic alliances. The Committee also acts in an advisory capacity on mat- ters relating to major investments and divestments and examines specific current issues in depth. The Strategy & Investments Committee has the ultimate decision-mak- ing authority when it comes to issuing rules of procedure and directives in the areas of Mergers & Acquisitions and Corporate Venturing. Details of the Committee’s activ- ities and responsibilities are set out in the Strategy & Investments Committee rules of procedure. Y See www.swisscom.ch/basicprinciples The Strategy & Investments Committee is convened by the Chairman or at the request of a Committee mem- ber as often as business requires, but as a rule once per quarter within the framework of a half-day meeting. The CEO, the CFO, the Head of Group Strategy & Business Development and the Head of Group Security & Corpo- rate Affairs always participate in the Strategy & Invest- ments Committee meetings. In 2024, all the meetings were also attended by other members of the Group Executive Board, members of the Management Boards of strategic Group companies or project managers, depending on the agenda items. The Strategy & Invest- ments Committee did not call on any external advisors during the reporting year.
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106 Corporate Governance and Remuneration Report | Corporate Governance t The following table gives an overview of the Strategy & Investments Committee’s meetings and circular resolutions in 2024. Meetings Ad-hoc meetings Circular resolutions T otal 5 – – Average duration (in hours) 03:15 – – Participation: Frank Esser, Chairman 5 – – Alain Carrupt 1 1 – – Guus Dekkers 5 – – Anna Mossberg 5 – – Daniel Münger 2 4 – – Michael Rechsteiner 5 – – 1 Left the Board of Directors on 27 March 2024. 2 Elected to the Board of Directors on 27 March 2024. Audit & ESG Reporting Committee The Audit & ESG Reporting Committee handles all busi- ness relating to financial management (for example, accounting, financial controlling, financial planning, tax strategy and financing), assurance (risk manage- ment, the internal control system, compliance, internal audits, data protection and security), external audit and both financial and non-financial reporting. It also handles matters dealt with by the Board of Directors that call for specific financial expertise (dividend policy, for example) and performs ESG (Environmental, Social and Governance) monitoring tasks. The Committee is the Board of Directors’ most important controlling instrument and is responsible for monitoring Group- wide assurance. It formulates positions on business matters which lie within the decision-making authority of the Board of Directors and has the final say on those business matters for which it has the decision-making authority. Details of the Committee’s activities and responsibilities are set out in the rules of procedure of the Audit & ESG Reporting Committee. Y See www.swisscom.ch/basicprinciples The Audit & ESG Reporting Committee is composed of four independent members. The Chairman of the Com- mittee is an expert in the financial field, and the majority of the members are experienced in finance and account- ing. The Audit & ESG Reporting Committee is convened by the Chairman or at the request of a Committee mem- ber as often as business requires, but at least once per quarter and one additional time in December. The meet- ings usually last between three and six hours. The CEO, CFO, Head of Group Security & Corporate Affairs, Head of Accounting, Head of Internal Audit and the external auditors always attend the meetings. In 2024, the Board of Directors called upon other members of the Group Executive Board and Swisscom management to attend, depending on the agenda. The Audit & ESG Reporting Committee can also involve independent third parties such as lawyers, public accountants and tax experts as required. The Committee did not invite any external consultants to meetings during the reporting year. The Chairman of the Audit & ESG Reporting Committee also liaises closely with the Heads of Internal Audit and Accounting and the representatives of Swisscom’s external auditors outside of the meetings. He and individual mem- bers of the Committee also meet with the persons respon- sible for Fastweb’s internal and external audits once a year to discuss the current challenges facing Fastweb.
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107 t The following table gives an overview of the Audit & ESG Reporting Committee’s meetings and circular res- olutions in 2024. Meetings Ad-hoc meetings Circular resolutions T otal 5 – 2 Average duration (in hours) 03:30 – – Participation: Roland Abt, Chairman 1 5 – 2 Sandra Lathion-Zweifel 5 – 2 Michael Rechsteiner 5 – 2 Fritz Zurbrügg 5 – 2 1 Financial expert. Compensation Committee For information on the Compensation Committee, refer to the section ‘Remuneration Report’. H See report page 122–137 Nomination Committee The Nomination Committee is formed on an ad-hoc basis for the purpose of preparing the groundwork for electing new members to the Board of Directors and the Group Executive Board when needed. The Committee is presided over by the Chairman of the Board of Direc- tors, and its composition is determined on a case-by- case basis. The Committee carries out its work based on a specific requirements profile defined by the Board of Directors outlining the qualifications and experience sought. It then presents suitable candidates to the Board of Directors, but has no further decision-making author- ity. The Board of Directors appoints the members of the Group Executive Board and decides upon the motion to be proposed to the Annual General Meeting for the elec- tion and approval of members of the Board of Directors. The Nomination Committee is convened by the Chair- man or at the request of a Committee member as often as business requires. In the 2024 financial year, the topic of succession in the Board of Directors was addressed by an ad-hoc Nomination Committee. The following members of the ad-hoc Nomination Com- mittee met once for 3 hours and 30 minutes: • Michael Rechsteiner (Chair) • Monique Bourquin • Guus Dekkers • Fritz Zurbrügg All committee members attended the meeting. 4.11 Assignment of powers of authority The Telecommunications Enterprise Act (TEA) refers to the Swiss Code of Obligations regarding the non-trans- ferable and irrevocable duties of the Board of Directors of Swisscom Ltd. Pursuant to Article 716a of the Code of Obligations, the Board of Directors is responsible for the overall management and supervision of persons entrusted with managing the company’s operations. It decides on the appointment and removal of members of the Group Executive Board. The Board of Directors also determines the strategic, organisational, financial plan- ning and accounting-related guidelines, including the tax and ESG strategy. It takes into account the goals that the Swiss Confederation, as majority shareholder, aims to achieve. The Federal Council formulates these goals for a four-year period in accordance with the provisions of the TEA. The Federal Council defined the goals for the period from 2022 to 2025 in 2021. Y See www.swisscom.ch/ziele_2022-2025 (in German) The Board of Directors has delegated day-to-day business management to the CEO in accordance with the TEA and the Articles of Incorporation. In addition to the duties reserved for it under the law, the Board of Directors decides on business transactions of major importance to the Group, including, for example, the acquisition or dis- posal of companies with a financial exposure in excess of CHF 20 million and investments or divestments with a financial exposure in excess of CHF 50 million. The Board of Directors also has overall responsibility for ESG (environmental, social, governance) issues, approves the sustainability strategy as part of the corporate strategy and monitors its implementation. The division of pow- ers between the Board of Directors and the CEO is set out in detail in the Organisational Rules and in Annex 2 to the Organisational Rules, ‘Organisational Regulations’ (function diagram). ESG governance is described in the Section Report on non-financial matters. Y See www.swisscom.ch/basicprinciples H See report page 61–62
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108 Corporate Governance and Remuneration Report | Corporate Governance 4.12 Information and controlling instruments of the Board of Directors vis-à-vis the Group Executive Board The Board of Directors is briefed comprehensively so it can fulfil its tasks and responsibilities. The Chairman of the Board of Directors and the CEO discuss fundamen- tal issues concerning Swisscom Ltd and its Group com- panies at least once a month. The Chairman also meets in person with each member of the Group Executive Board at least once a year for an in-depth discussion of topical issues. The CEO also provides the Board of Directors at every ordi- nary meeting with detailed information on the course of business, major projects and events, and any measures adopted. Every month, the Board of Directors receives a written report containing all key performance indicators relating to the Group and the segments. In addition, the Board of Directors receives a quarterly report on the course of business, financial position, results of operations and risk position of the Group and the segments. It also receives projections for operational and financial developments for the current financial year. The management reporting is carried out in accordance with the same accounting princi- ples and standards as for external financial reporting. It also includes key non-financial information that is important for controlling and steering purposes. The Board of Direc- tors is informed in writing about other current or material issues on an ongoing and timely basis. Every member of the Board of Directors is entitled to request information on all matters relating to the Group at any time, provided this does not conflict with the provisions regarding the recusal of a member from Board deliberations or confidentiality obligations. The Board of Directors is also informed imme- diately of any events of an exceptional nature. The Board of Directors is responsible for establishing and monitoring the Group-wide assurance functions. These include risk management, the internal control sys- tem, compliance and internal audits. Risk management The Board of Directors has set the objective of pro- tecting the company’s enterprise value through the implementation of Group-wide risk management. A corporate culture that promotes the conscious handling of risks facilitates the achievement of this objective. Accordingly, Swisscom has implemented a Group-wide, central risk management system that is based on ISO Standard 31000 and takes account of both external and internal events. Swisscom maintains level-appropriate, comprehensive reporting and appropriate documen - tation. Its objective is to identify, assess and address significant risks and opportunities in good time. To this end, the central Risk Management unit, which reports to the Head of Group Security & Corporate Affairs, works closely with the Controlling and Strategy departments, other assurance functions and line functions. The risk management system is examined periodically by an external auditor. Swisscom assesses its risks in terms of the probability that they will occur and their quanti- tative and qualitative effects in the event that they do occur. It manages risks on the basis of a risk strategy. The risks are evaluated in terms of their impact on key performance indicators. Swisscom reviews and updates its risk profile on a quarterly basis. In April and Decem- ber, the Head of Risk Management provides the Board of Directors and the Audit & ESG Reporting Commit- tee with information on significant risks, the potential effects and the status of the corresponding measures. In urgent cases, the Chairman of the Audit & ESG Report- ing Committee is informed without delay about any significant new risks. Once a year, the Head of Risk Man- agement consults with the Audit & ESG Reporting Com- mittee (without management involvement). The risk factors are described in the Risks section of the Management Commentary. H See report pages 55–57 Internal control system for financial reporting The internal control system (ICS) ensures the reliabil- ity of financial reporting with an appropriate degree of assurance. It acts to prevent, uncover and correct sub- stantial errors in the consolidated financial statements, the financial statements of the Group companies and the Remuneration Report. The ICS encompasses the following components: control environment, assess- ment of accounting risks, control activities, moni- toring controls, information and communication. The Accounting unit, which reports to the CFO, man- ages and monitors the ICS. Internal Audit periodically reviews the functioning and effectiveness of the ICS. Significant shortcomings in the ICS identified during these monitoring and review activities, including the corrective actions defined, are reported in the status report to the Audit & ESG Reporting Committee twice a year and to the Board of Directors on an annual basis. Should the ICS risk assessment change significantly, the Chairman of the Audit & ESG Reporting Committee is informed without delay. Appropriate corrective meas - ures to remedy the shortcomings are monitored by the Accounting unit. The Audit & ESG Reporting Commit- tee assesses the performance and effectiveness of the ICS on the basis of the periodic reporting. The internal control system for non-financial reporting is currently being set up. The 2024 Sustainability Impact Report was audited by SGS and compliance with the Global Reporting Initiative (GRI) was confirmed.
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109 Compliance management The Group-wide central Compliance Management Sys- tem (CMS) is designed to prevent compliance violations in order to protect the Swisscom Group, its executive bodies and employees from legal sanctions, financial losses and reputational damage. The CMS covers the following legal areas: • Anti-corruption • Money laundering and terrorism financing • Data protection and confidentiality • Antitrust law • Telecommunications law • Stock exchange law Swisscom enhanced its CMS in line with the ISO 37301 standard in 2024. The Group’s dedicated compliance functions as well as the compliance officers and com- pliance managers of the business divisions and fully consolidated subsidiaries provide support to the line for the ongoing implementation of the CMS in specific legal areas. External auditors review the CMS for adequacy and effec- tiveness every four years. Furthermore, external auditors will continue to conduct a specific audit in the area of money laundering law on an annual or biennial basis. Once a year, Group Compliance reports directly to the Audit & ESG Reporting Board of Director’s committee and to the Board of Directors on its activities, compliance risk assessment and target achievement. In the event of significant changes in the assessment of compliance risks and in the event of potentially serious compliance violations, a timely report is sent to the Chairman of the Audit & ESG Reporting Committee and to the Chairman of the Board of Directors. Further information on governance regarding the han- dling of data can be found in the 2024 Sustainability Impact Report. Y See www.swisscom.ch/basicprinciples Y See www.swisscom.ch/sir2024 Internal auditing Internal auditing is carried out by the Internal Audit unit. Internal Audit supports the Swisscom Ltd Board of Direc- tors and its Audit & ESG Reporting Committee in fulfill- ing their statutory and regulatory supervisory and con- trolling obligations. Internal Audit also supports man- agement by highlighting opportunities for improving business processes and controls as well as the assurance functions. It documents the audit findings and monitors the implementation of measures. Internal Audit is responsible for planning and performing audits throughout the Group in compliance with profes- sional auditing standards and possesses maximum inde- pendence. It is under the direct control of the Chairman of the Board of Directors and provides reports to the Audit & ESG Reporting Committee. At an administrative level, Internal Audit provides reports to the Head of Group Security & Corporate Affairs. Once a year, the Head of Internal Audit consults with the Audit & ESG Reporting Committee (without management involvement). Internal Audit liaises closely and exchanges information with the external auditors. The external auditors have unrestricted access to the audit reports and audit files of Internal Audit. Based on a risk analysis and in close coor- dination with the external auditors, Internal Audit pre - pares an audit plan annually and presents it to the Audit & ESG Reporting Committee for approval. Notwith - standing the above, the Audit & ESG Reporting Commit- tee can commission special audits – and do so based on information received on the whistle-blowing platform operated by Internal Audit. This reporting procedure, which has been approved by the Audit & ESG Report- ing Committee, allows complaints relating to external reporting and financial reporting, among other things, to be submitted anonymously to Internal Audit, which ensures that these will be followed up. At the meet - ings, which are held at least quarterly, the Audit & ESG Reporting Committee is briefed on audit findings, the reports submitted to the whistle-blowing platform and the implementation status of the audit plan. The Head of Internal Audit took part in all five meetings of the Audit & ESG Reporting Committee in 2024.
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[to be updated] 110 5 Group Executive Board 5.1 Members of the Group Executive Board In accordance with the Articles of Incorporation, the Exec- utive Board comprises one or more members, who must not be members of the Board of Directors of Swisscom Ltd at the same time. Temporary exceptions are only per- mitted in exceptional cases. The Board of Directors has delegated responsibility for the overall executive man- agement of Swisscom Ltd to the CEO. The CEO is enti- tled to delegate his powers to subordinates, mainly to other members of the Group Executive Board. The mem- bers of the Group Executive Board are appointed by the Board of Directors. On 1 June 2024, Myriam Käser took over the management of the Group Communications & Responsibility business division from Stefan Nünlist, who stepped down from the Group Executive Board on this date. As of 1 September 2024, Mark Düsener was appointed the Head of IT, Network & Infrastructure, tak- ing over from Gerd Niehage, who left the Group Executive Board at the end of August 2024. Changes to the Group Executive Board as at 1 April 2025 are set out in Sec- tion 2.1, ‘Group structure’. H See report page 92–94 t An overview of the composition of the Group Executive Board as at 31 December 2024 is given in the table below. Appointed to the Group Name Nationality Year of birth Function Executive Board as of Christoph Aeschlimann 1 Switzerland 1977 CEO Swisscom Ltd February 2019 Mark Düsener Germany, USA 1974 Head of IT, Network & Infrastructure, CTIO September 2024 Myriam Käser Switzerland 1979 Head of Group Communications & Responsiblity June 2024 Urs Lehner Switzerland 1968 Head of Business Customers June 2017 Isa Müller-Wegner Switzerland, Germany 1977 Head of Group Strategy & Business Development June 2023 Klementina Pejic Germany 1974 Head of Group Human Resources, CPO February 2021 Eugen Stermetz Austria 1972 Head of Group Business Steering, CFO March 2021 Martin Vögeli Switzerland 1969 Head of Group Security & Corporate Affairs April 2023 Dirk Wierzbitzki Switzerland, Germany 1965 Head of Residential Customers January 2016 1 Since June 2022 CEO.
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111 5.2 Education, professional activities and affiliations Key details of the careers and qualifications of the members of the Group Executive Board are provided below. The external mandates of the members of the Group Executive Board are disclosed in the Remunera- tion Report. Prior to accepting new mandates and other duties outside the Swisscom Group, the members of the Group Executive Board are obligated to obtain the approval of the Chairman of the Board of Directors. Details on the regulation of external mandates, in par- ticular the number of permissible external mandates and the definition of the term ‘mandate’, are set out in Article 9.3 of the Articles of Incorporation. None of the members of the Group Executive Board exceeds the set limits for mandates. The members of the Group Execu- tive Board perform their other significant activities by order of Swisscom. Y See www.swisscom.ch/basicprinciples H See report pages 135–137 The members of the Group Executive Board are required to order their personal and business affairs to ensure that conflicts of interest are avoided as far as possible. They must take any action necessary for this. Should a conflict of interest nevertheless arise, the member con- cerned must inform the CEO and/or Chairman of the Board of Directors immediately. If the member of the Group Executive Board is subject to conflicting interests or has to safeguard such interests (conflict of interest), the CEO/Chairman of the Board makes a decision that is commensurate with the intensity of the conflict of inter- est in order to ensure that the interests of the company are safeguarded independently. 5.3 Management agreements Neither Swisscom Ltd nor any of the Group companies included in the scope of consolidation have entered into management agreements with third parties. Christoph Aeschlimann Degree in Computer Science (Dipl. Ing.), École polytechnique fédérale de Lausanne (EPFL); MBA, McGill University (Canada) Career history 2001–2004 Software Development Manager, Odyssey Asset Management Systems; 2006–2007 Business Unit Manager, Zühlke Group; 2007–2011 Odyssey Financial Technologies: 2007–2008 Area Services Manager, 2008– 2011 Senior Account Manager EMEA; 2011–2012 Head of Switzerland and General Manager D-A-CH & CIS, BSB; 2012–2018 ERNI Group: 2012–2014 Business Area Man- ager, 2014–2017 Managing Director Switzerland, 2017– 2018 CEO; since February 2019 Swisscom Ltd: 2019–June 2023 Head of IT, Network & Infrastructure and member of the Swisscom Group Executive Board, since June 2022 CEO and Chairman of the Group Executive Board
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112 Corporate Governance and Remuneration Report | Corporate Governance Mark Düsener Degree in Communications Engineering, Technical University of Munich (TU), degree in Technology Management, Center for Digital Technology & Management (CDTM), TU Munich and Ludwig Maximilian University Munich Career history 2000–2005 Technology Manager, Vodafone Group Strategy, Germany; 2005–2017 Vodafone, Germany: 2005–2007 Manager New Business Development, 2008–2010 Head of Technology at Otello, 2009–2011 Senior Manager Technology Strategy; 2011–2012 Head of Demand Management Consumer Applications, 2012– 2015 Head of Service Delivery and Project Management Southern Germany, 2015–2017 Head of Strategic Plan- ning, Partner & Carrier Management; 2017–2020 T-Sys- tems International: 2017–2018 Senior Vice President Strategy, Portfolio & Transformation, 2018–2020 Senior Vice President Healthcare Solutions, 2019–2020 Manag- ing Director Deutsche Telekom Healthcare and Security Solutions GmbH; since 2020 Swisscom: 2020–2024 Head of Mobile Network, Mobile Services & B2B Telco, since September 2024 CTIO, Head of the IT, Network & Infra- structure business division, Swisscom Ltd and member of the Group Executive Board Myriam Käser Master of Arts lic. phil. I Career history 2003–2009 editor, International Relations and Secu- rity Network (ISN), ETH Zurich; 2009–2010 Chief Edi- tor, International Relations and Security Network (ISN), ETH Zurich; 2010–2011 PR Project Manager, Bonhage PR, Bern; 2011–2014 Prime Communications, Zurich: 2011–2013 Communications Consultant, 2013–2014 Senior Consultant and member of the Management Board, 2015–2018 Chief Communications Officer (CCO), member of the Extended Management Board, NZZ Media Group, Zurich; 2018–2024 Chief Communications and Public Affairs Officer, member of the Management Board, Skyguide, Geneva; since June 2024, Swisscom Ltd, Head of Group Communications & Responsibility and member of the Group Executive Board
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113 Urs Lehner Degree in IT Engineering (UAS, University of Applied Sciences), Executive MBA in Business Engineering, University of St. Gallen (HSG) Career history 1997–2013 Trivadis Group: most recently 2004–2008 Solution Portfolio Manager, member of the Trivadis Group Executive Board, 2008–2011 COO of Trivadis Group, 2011–2013 member of the Board of Directors of Trivadis Holding AG; 2011–2017 Swisscom (Switzerland) Ltd: 2011–2013 Head of Marketing & Sales Corporate Business, 2014–2015 Head of Marketing & Sales Enter- prise Customers, 2016–2017 Head of Sales & Services Enterprise Customers; since June 2017 Swisscom Ltd: Head of Swisscom Enterprise Customers (called Enter- prise Customers until 2019) and member of the Group Executive Board Isa Müller-Wegner MBA, Harvard Business School MA PPE, Oxford University Career history 1999–2002 Consultant, Arthur D. Little, London; 2002– 2003 Business Strategist for Television, British Broad - casting Corporation, London; 2005–2007 Consultant, Bain & Company, London; 2007–2014 Principal, Bain & Company, Zurich; 2014–2019 ebay International Inc., Zurich: 2014–2015 Head of EMEA Strategy, 2015–2017 COO Emerging European Countries, 2017–2019 General Manager Emerging European Markets; 2019–2023 Exec- utive Vice President, Bain Capital Private Equity, London; since June 2023 Swisscom Ltd: Head of Group Strategy & Business Development and member of the Group Executive Board
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114 Corporate Governance and Remuneration Report | Corporate Governance Klementina Pejic MBA, Dortmund University of Applied Sciences; École Supérieure des Sciences Économiques et Commerciales ESSEC, Cergy-Pontoise, International Business M.A. Career history 2001–2002 Consultant, Watson Wyatt AG, Zurich; 2003– 2020 Clariant International AG: 2003–2004 Divisional HR Manager, 2005–2007 Global HR Business Partner, 2008– 2009 Head Management Development Europe, 2010– 2011 Head Global Talent Management, 2012–2013 Head Senior Management Development, 2014–2017 Head SMD & People Excellence, 2018–January 2021 Head Human Resources; since February 2021 Swisscom Ltd: CPO and member of the Group Executive Board Eugen Stermetz Degree in Business Administration (lic. oec.), University of St. Gallen; PhD in Social and Economic Sciences (Dr. rer. soc. oec.), Vienna University of Economics and Business Career history 1996–2000 Boston Consulting Group, Munich and Vienna; 2001–2005 CFO, Igeneon AG, Vienna; 2006– 2008 CFO and Managing Director, F-star GmbH, Vienna; 2009–2011 CFO and member of the Executive Board, SVOX AG, Zurich; since 2012 Swisscom Ltd: until 2017 CFO Participations, 2017–2018 CFO Participations and Head of Mergers & Acquisitions, 2018–February 2021 Group Treasurer (Treasury, Insurance and Mergers & Acquisitions), since March 2021 CFO and member of the Group Executive Board
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115 Martin Vögeli Licentiate in Economics from the University of Bern/Master of Advanced Studies in Business Psychology from the University of Applied Sciences and Arts Northwestern Switzerland Career history Swisscom Ltd: 1998–2000 Head of Wholesale Regu- latory, 2001–2005 Head of Risk Management, 2006 Head of the Related Business growth initiative project/ designated Secretary of the Board of Directors, since 2007, Secretary of the Board of Directors, November 2013–2022 Head of Group Strategy & Board Services, since January 2023 Head of Group Security & Corpo- rate Affairs, since April 2023 member of the Group Executive Board Dirk Wierzbitzki Degree in Electrical Engineering (Dipl. Ing.) Career history 1994–2001 various management roles in the area of product management, Mannesmann (now Vodafone Germany); 2001–2010 Vodafone Group: 2001–2003 Director for Innovation Management, Vodafone Global Products and Services, 2003–2006 Director of Commer- cial Terminals, 2006–2008 Director of Consumer Internet Services and Platforms, 2008–2010 Director of Commu- nications Services, 2010–2015 Swisscom (Switzerland) Ltd: member of the Management Board, Residential Customers, 2010–2012 Head of Customer Experience Design for Residential Customers, 2013–2015 Head of Fixed-network Business & TV; since January 2016 Swisscom Ltd: until 2019 Head of Products & Marketing division, and since 2020 Head of Residential Customers; since 2016 member of the Group Executive Board
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116 Corporate Governance and Remuneration Report | Corporate Governance 6 Remuneration, shareholdings and loans All information on the remuneration of the Board of Directors and the Group Executive Board of Swisscom Ltd is provided in the separate Remuneration Report. H See report page 122–137 7 Shareholders’ rights of co-determination 7.1 Voting right restrictions and proxies Each registered share entitles the holder to one vote. Voting rights can only be exercised if the shareholder is entered in the share register of Swisscom Ltd with voting rights. The Board of Directors may refuse to recognise an acquirer of shares as a shareholder or beneficial holder with voting rights if the latter’s total holding, when the new shares are added to any voting shares already registered in its name, exceeds the limit of 5% of all registered shares entered in the commercial register. For the shares in excess of the limit, the acquirer is entered in the share register as a shareholder or beneficial holder without voting rights. This restriction on voting rights also applies to registered shares acquired through the exercise of subscription, option or conversion rights. The calculation of the percentage restriction is sub- ject to the Group clause in accordance with Article 4.5.1 of the Articles of Incorporation. Y See www.swisscom.ch/basicprinciples The 5% voting right restriction does not apply to the Swiss Confederation, which, under the terms of the Tele- communications Enterprise Act (TEA), holds the majority of the capital and voting rights in Swisscom Ltd. Further information on voting right restrictions are set out in Article 4.5 of the Articles of Incorporation. Y See www.swisscom.ch/basicprinciples The restrictions on voting rights provided for in the Arti- cles of Incorporation may be lifted by resolution of the Annual General Meeting, for which a majority of the votes represented is required. During the year under review, the Board of Directors did not recognise any acquirers of shares with more than 5% of all registered shares as a shareholder or beneficial holder with voting rights, did not reject any requests for recognition or registration and did not remove any shareholders with voting rights from the share register due to the provision of false data. 7.2 Statutory quorum requirements The Annual General Meeting of Shareholders of Swisscom Ltd adopts its resolutions and decides its elections by the absolute majority of votes represented. In addition to the special quorum requirements under the Swiss Code of Obligations, a two-thirds majority of the voting shares represented is required in the following cases: • introduction of restrictions on voting rights • change in the Articles of Incorporation concerning spe- cial decision quorums 7.3 Convocation of the Annual General Meeting and agenda items The Board of Directors can order that the Annual Gen- eral Meeting be held either at a meeting venue or elec- tronically without any physical venue (virtual event). The Board of Directors can also allow shareholders who are not present at the venue to exercise their rights elec- tronically (hybrid event). The Board of Directors convenes the Annual General Meeting at least 20 calendar days prior to the date of the meeting by means of an announcement in the Swiss Commercial Gazette. The meeting can also be convened by letter or by way of an electronic notice to the share- holders registered in the share register. One or more share- holders who together represent at least 5% of the share capital can demand in writing that an extraordinary gen- eral meeting be convened, stating the agenda item and the proposal or, in the case of elections, by stating the names of the proposed candidates. The Board of Directors is responsible for defining the agenda. Shareholders representing shares with a par value of at least CHF 40,000 may request that an item be placed on the agenda. This request must be sub- mitted in writing to the Board of Directors at least 45 days prior to the Annual General Meeting, stating the agenda item and the proposal (Article 6.4.3 of the Arti- cles of Incorporation). Y See www.swisscom.ch/basicprinciples 7.4 Representation at the Annual General Meeting Shareholders may be represented at the Annual General Meeting by their legal representative, a representative of their choosing or by the independent proxy elected by the Annual General Meeting. The law firm Reber Rechtsanwälte, Zurich, was appointed as independ- ent proxy for the period up until the conclusion of the Annual General Meeting in March 2025.
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117 A power of attorney may be granted in writing or elec- tronically via the shareholder portal operated by Com- putershare Switzerland Ltd. Shareholders who are rep- resented by the independent proxy may issue instruc- tions for each agenda item and also for all unannounced agenda items and motions using the forms prepared by the Board of Directors and indicate whether they wish to vote for or against a motion in line with the Board of Directors, or to abstain. The independent proxy must cast the votes entrusted to it by shareholders according to the shareholders’ instructions. If it does not receive instructions, it will abstain (Article 6.7.4 of the Articles of Incorporation). Y See www.swisscom.ch/basicprinciples 7.5 Entries in the share register Shareholders entered in the share register with voting rights are entitled to vote at the Annual General Meet- ing. To ensure due procedure, the Board of Directors defines a cut-off date at its own discretion for deter- mining voting entitlements, which is normally three business days before the respective Annual General Meeting. Entries in and deletions from the share reg- ister can be made at any time, regardless of the cut-off date. The cut-off date is announced with the invitation to the Annual General Meeting and also published in the financial calendar on the Swisscom website. Share- holders entered in the share register with voting rights as of 5 p.m. on 21 March 2024 were entitled to vote at the Annual General Meeting of 27 March 2024. Share- holders entered in the share register with voting rights as of 5 p.m. on 20 March 2025 will be entitled to vote at the Annual General Meeting of 26 March 2025. 8 Change of control and defensive measures Under the terms of the Telecommunications Enterprise Act (TEA), the Swiss Confederation must hold the majority of the capital and voting rights in Swisscom Ltd. This requirement is also set out in the Articles of Incorpora- tion. There is thus no duty to submit a takeover bid as defined in the Financial Market Infrastructures Act, since this would contradict the TEA. Details on change of control clauses are given in the section ‘Remuneration Report’. H See report page 122–137 9 Auditor 9.1 Selection process, duration of mandate and term of office of the auditor-in-charge The statutory auditor is appointed annually by the Annual General Meeting following a proposal submitted by the Board of Directors. Re-election is permitted. The policies for appointing the statutory auditor have been set forth in a policy by the Audit & ESG Reporting Committee. A new invitation to tender is issued for the statutory audi- tor’s mandate at least every ten to 14 years. The statutory auditor’s tenure is limited to 20 years. As stipulated by the Swiss Code of Obligations, the auditor-in-charge may only perform the mandate for a maximum of seven years. PricewaterhouseCoopers (PwC), Zurich, has performed the mandate since the 2019 financial year. The auditor-in- charge has been Petra Schwick since 2023. 9.2 Audit fees and additional fees In CHF thousand 2024 2023 Audit fees 3,860 3,281 Additional fees 919 1,895 Fees to auditors 4,779 5,176 Additional fees in % of audit fees 24% 58% The additional fees for 2024 include services related to transaction consultancy, consultancy related to the remuneration system, reviews related to IT outsourcing orders from business customers, reviews related to issuing bonds, a review concerning the reporting on financial information, a review of individual financial information compilations and a review of reporting requirements for the outstanding green bonds. The audit fees for 2024 include services for planned sus- tainability reporting under the European CSRD/ESRS regulations in the amount of EUR 99,000. 9.3 Supervision and controlling instruments vis-à-vis the auditors The Audit & ESG Reporting Committee verifies the qualifications and independence of the statutory audi - tors as a state-supervised auditing firm on behalf of the Board of Directors. It also assesses the performance and remuneration of the auditors. Assessment criteria are the competence and availability of the audit team, the audit process, and reporting and communication. The Audit & ESG Reporting Committee is also respon- sible for observing the statutory rotation principle for the auditor-in-charge and for reviewing and issuing
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118 Corporate Governance and Remuneration Report | Corporate Governance the new invitations to tender for the audit mandate. It approves the integrated strategic audit plan, which includes the annual audit plan of both the internal and external auditors. It also approves the fee for the auditing services provided to the Group and Group companies each year. To help ensure independence, the Audit & ESG Reporting Committee has laid down principles for awarding additional services to the audi- tors, including a list of prohibited services. In order to ensure the independence of the auditors, additional service mandates must be approved by the Audit & ESG Reporting Committee where the fee exceeds CHF 300,000. It requires that the CFO reports to it quarterly and the auditors annually on current mandates being performed by the auditors, broken down according to audit services, audit-related services and non-audit services, and on their independence. The statutory auditors, represented by the auditor-in- charge and his deputy, usually attend all Audit & ESG Reporting Committee meetings. They inform the Com - mittee in detail about the performance and results of their work, in particular regarding the annual financial statement audit. They further submit a written report annually to the Board of Directors and the Audit & ESG Reporting Committee on the conduct and results of the audit of the annual financial statements, as well as on their findings with regard to accounting and the inter- nal control system. Once a year, the auditor-in-charge consults with the Audit & ESG Reporting Committee (without management involvement). Finally, the Chair- man of the Audit & ESG Reporting Committee liaises closely with the auditor-in-charge beyond the meet- ings of the Committee and regularly reports to the Board of Directors. Representatives of PwC, the statu- tory auditors, attended all meetings of the Audit & ESG Reporting Committee in 2024. The Head of Internal Audit was also present at all meetings. Neither the rep- resentatives of the statutory auditor nor the Head of Internal Audit attended the meetings of the full Board of Directors in 2024. 10 Information policy Swisscom pursues an open, active information policy vis-à-vis shareholders, the general public and the capital markets. It uses the following media for this purpose: Information Frequency Source Notifications to shareholders If required Swiss Official Gazette of Commerce www .shab .ch or by letter or electronically (at the discretion of the Board of Directors) Swisscom website continuously www .swisscom .ch Interim reports and Annual Report (incl . Management Report, quarterly www .swisscom .ch/adhoc Corporate Governance Report, Remuneration Report, Report on non-financial Matters, Consolidated Financial Statements, condensed Financial Statements of Swisscom Ltd) Complete financial statements of Swisscom Ltd yearly www .swisscom .ch/adhoc Sustainability Impact Report in accordance with the Global Reporting yearly www .swisscom .ch/sir2024 Initiative (GRI) and Sustainability Accounting Standards Board (SASB) Analyst presentations on financial statements quarterly www .swisscom .ch/adhoc Press releases If required www .swisscom .ch/adhoc Ad-hoc press releases (push link) If required www .swisscom .ch/adhoc Ad-hoc news subscription (pull link) www .swisscom .com/adhoc-subscribe Minutes of the General Meetings yearly www .swisscom .ch/generalmeeting Those employees at Swisscom responsible for investor relations can be contacted via the website or by e-mail, telephone or post. Swisscom’s website, contact details and the address of its headquarters are listed in the pub- lishing details. H See report page 227
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119 11 Financial calendar Event Date Annual General Meeting for the 2024 financial year in Zurich Oerlikon 26 March 2025 Publication of results and interim report 1st quarter 2025 08 May 2025 Publication of results and interim report 2nd quarter 2025 07 August 2025 Publication of results and interim report 3rd quarter 2025 06 November 2025 Publication of annual results and annual report 2025 12 February 2026 Annual results press conference 2025 12 February 2026 The detailed financial calendar is published on the Swisscom website under ‘Investors’ and is updated on a regular basis. Y See www.swisscom.ch/financialcalendar 12 Trading blackout periods Swisscom defines ordinary and, if need be, extraordi- nary trading blackout periods for trading in Swisscom securities by the Board of Directors, Group Executive Board and employees (hereinafter collectively referred to as ‘employees’). This is the responsibility of the inter- nal clearing unit, which is made up of the CFO, the Head of Investor Relations and a specialist from Group Legal Services. The four ordinary trading blackout periods prior to the announcement of the company’s figures are aimed at all employees who become aware of the unpublished company figures. The clearing unit main - tains a corresponding insider list. Unless the clearing unit issues instructions to the contrary, the ordinary blackout periods last around four weeks and end 24 hours after the company figures are made public. The clearing unit informs the individuals affected of upcoming trading blackout periods in an e-mail sent out every year before the start of each trading blackout period. The details are also available on the intranet. Extraordinary trading blackout periods are imposed by the clearing unit on an ad-hoc basis if other unpublished price-sensitive information arises. These apply to indi - viduals with the relevant insider knowledge. The clearing unit maintains corresponding insider lists. The trading blackout periods last for the period specified by the clear- ing unit. They end 24 hours after the price-sensitive infor- mation is made public or when specified by the clearing unit. The clearing unit informs employees of any trading blackout periods imposed by e-mail. The clearing unit makes decisions on any exceptions to the ordinary and extraordinary trading blackout periods on a case-by-case basis in the event of special circumstances. No exceptions were granted in the year under review.
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120 Corporate Governance and Remuneration Report | Letter from the Chair of the Compensation Committee Letter from the Chair of the Compensation Committee Dear Shareholders Swisscom is on track and achieved solid financial results in the 2024 reporting year. And it has achieved this in a time that continues to be shaped by uncertainty, geo - political tensions, global economic challenges and techno- logical and environmental change. With a relatively slight increase in revenue and slightly lower operating income, net income decreased. Fastweb, which is performing very well, represents an important contribution to our success. We are now further strengthening our position in Italy. The acquisition of Vodafone Italia is an important step for us and sets the course for future success. Innovation and trust are the keywords for Swisscom’s success. For example, during the year under review we launched an AI platform for business customers with Swiss AI Platform. Our customers can use it to develop their own KI solutions with guaranteed data storage in Switzerland. Another focus of innovation is the topic of digital trust. This includes Swisscom Sign, the only qualified electronic signature considered equivalent to a handwritten signature. In spring 2024, Swisscom expanded this range of services to companies so that they can electronically sign contracts and documents simply and with legal effect. Its outstanding infrastruc- ture is and remains the foundation of Swisscom’s suc- cess. We do everything we can to continue to offer our customers the best network. We succeeded in doing this in the year under review: Swisscom has once again won all the network and service tests. In the year under review, the Compensation Commit- tee took note of the results of the advisory vote on the 2023 Remuneration Report and thoroughly addressed the concerns raised by shareholders on disclosure of the achievement of targets and the lack of long-term incentive components in the remuneration system. We have increased transparency on the assessment of the achievement of targets in this Remuneration Report. This will provide you as shareholders with more detailed information to assess the appropriate - ness of the remuneration in relation to performance. The Compensation Committee reviewed the Group Executive Board’s remuneration system and eval- uated ways in which it can configured in line with market standards and geared more strongly towards long-term performance and value generation for shareholders through a long-term incentive. Although the market relevance of a long-term incentive compo- nent has been clearly confirmed, the current remuner- ation system framework does not offer the flexibility to introduce such a component. However, the long- term component in the remuneration is supported by the stipulated minimum shareholding requirement. As such, the Compensation Committee proposed to the Board of Directors that the existing remuneration model be retained for 2025. In addition to financial per- formance, which is a key determinant of overall target achievement, this model also takes performance on issues related to business transformation into account. The variable performance-related salary component for members of the Group Executive Board will con- tinue to be paid out in cash and blocked shares. This approach gears remuneration of the Group Executive Board towards strategy implementation and makes it possible to reward performance both appropriately and sustainably while taking into account Swisscom’s responsibility to help promote society’s positive devel- opment and to protect the environment. Swisscom performed successfully in the year under review. Not only did it achieve a good financial result, it also achieved outstanding performance in business transformation, which the Board of Directors evaluated in its overall assessment. This results in overall target achievement of 117% for the members of the Execu- tive Committee. Overall, the total remuneration for the members of the Board of Directors and the Group Execu- tive Board for the 2024 reporting year is within the range approved by the 2023 Annual General Meeting. Like every year, you, dear shareholders, will have an opportunity at the 2025 Annual General Meeting to cast your vote on Swisscom’s remuneration principles and the remuneration system as part of the consultative vote on the Remuneration Report. In addition, you will vote on the maximum total remuneration paid to the Board of Directors and the Group Executive Board for the 2026 financial year. In the course of the successful acquisition of Vodafone Italia, the Swisscom Board of Directors will temporarily expand to 10 members from the 2025 Annual General Meeting onward. Laura Cioli,
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121 an established expert in the Italian telecommunications and services market, is nominated for election. A motion will therefore be proposed to the Annual General Meet- ing that the maximum remuneration already approved for the Board of Directors be increased by CHF 0.2 mil- lion to CHF 2.7 million for 2025. The maximum amount of CHF 2.8 million is proposed for 2026. For the remuneration of the Group Executive Board, a reduction in the maximum amount already approved for the year 2025 of CHF 3.7 million to CHF 7.2 million, due to the reduction to four members as of 1 April 2025, will be submitted for approval. A maximum amount of CHF 5.9 million is proposed for the year 2026. To meet our responsibilities, the Compensation Committee will con- duct reviews of the remuneration strategy and system again in the coming year to ensure that Swisscom’s prin- ciples are aligned with the interests of shareholders and other stakeholders and that performance is rewarded both appropriately and sustainably. We look forward to your support and thank you for your trust. Kind regards, Monique Bourquin, Chair of the Compensation Committee
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122 Corporate Governance and Remuneration Report | Remuneration Report Remuneration Report Remuneration Incentive for sustainable corporate success. Group Executive Board CHF 10.5 million in remuneration for 2024. Board of Directors CHF 2.4 million in remuneration for 2024. 1 Governance 1.1 General principles The Remuneration Report is based on sections 3.5 and 5 of the Annex to the Corporate Governance Directive issued by the SIX Swiss Exchange and Articles 734–734f of the Federal Act on the Amendment of the Swiss Civil Code (Swiss Code of Obligations). Swisscom is also guided by the recommendations of the Swiss Code of Best Practice for Corporate Governance issued by economiesuisse, the umbrella organisation representing Swiss business. Swisscom’s internal principles for determining the level of remuneration are primarily set out in the Arti- cles of Incorporation, the Organisational Rules and the Regulations of the Compensation Committee. The latest versions of these documents as well as their earlier, unamended and superseded versions can be viewed online on the Swisscom website under ‘Basic principles’. Y See www.swisscom.ch/basicprinciples Y See www.swisscom.com/amendment_cc As in previous years, the Remuneration Report will be put to a consultative vote at the Annual General Meet- ing on 26 March 2025. 1.2 Division of responsibilities between the Annual General Meeting, the Board of Directors and the Compensation Committee The Annual General Meeting approves the maximum total remuneration amounts payable to the Board of Directors and the Group Executive Board for the follow- ing financial year upon the motion proposed by the Board of Directors. Details of the relevant regulation and the consequences of a negative decision by the Annual Gen- eral Meeting are set out in Articles 6.7.13 and 6.7.14 of the Articles of Incorporation. Article 8.2.2 of the Articles of Incorporation also defines the requirements for and the maximum level of the additional amount that can be paid to a member of the Group Executive Board who is newly appointed during a period for which the Annual General Meeting has already approved the remuneration. In addi- tion, the Articles of Incorporation contain the following provisions relating to the remuneration policy: • Remuneration of the Board of Directors (Articles 7.4 and 9.1) • Compensation Committee (Article 7.5) • Remuneration of the Group Executive Board (Articles 8.2 and 9.1) • Contracts of the Board of Directors and the Group Executive Board (Article 9.2) • Number of external mandates for the Board of Directors and Group Executive Board (Article 9.3) The Board of Directors approves, inter alia, the personnel and remuneration policy for the entire Group, as well as the general terms and conditions of employment for members of the Group Executive Board. It sets the remuneration of the Board of Directors and decides on the remuneration of the CEO and the total remuneration of the Group Executive Board. In doing so, it takes into account the maximum total amounts approved by the Annual General Meeting for the remuneration to be paid to the Board of Directors and the Group Executive Board for the financial year in question. The Compensation Committee handles all business mat- ters of the Board of Directors concerning remuneration, submits proposals to the Board of Directors in this con- text, and, within the framework of the approved total remuneration, is empowered to decide upon the remu- neration of the individual Group Executive Board mem- bers (with the exception of the CEO). In addition, it has addressed succession planning at the level of the Board of Directors, Group Executive Board and upper manage- ment, as well as talent management. Neither the CEO nor the other members of the Group Executive Board participate in meetings at which any change to their remuneration is discussed or decided. The decision-making powers are governed by the Arti- cles of Incorporation, the Organisational Rules of the Board of Directors and the Regulations of the Compen- sation Committee. Y See www.swisscom.ch/basicprinciples
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123 t The table below shows the division of responsibilities between the Annual General Meeting, the Board of Directors and the Compensation Committee. Remuneration Board Annual Subject Committee of Directors General Meeting Maximum total amounts for remuneration of the Board of Directors and Group Executive Board V 1 A 2 G 3 Additional amount for the remuneration of newly appointed members of the Group Executive Board (Articles of Incorporation) V A G Personnel and remuneration policy V G 4 – Principles of the performance and shareholding plans for the Board of Directors and Group Executive Board (Articles of Incorporation) V A G Principles underlying retirement-benefit plans and social security payments V G – Equity-share and performance-based participation plans of the Group V G 4 – General terms of employment of the Group Executive Board V G 4 – Definition of performance targets for the variable performance-related salary component V G 4 – Concept of remuneration to members of the Board of Directors V G 4 – Remuneration of the Board of Directors V G 5 – Remuneration of the CEO Swisscom Ltd V G 5 – T otal remuneration of the Group Executive Board V G 5 – Remuneration of the members of the Group Executive Board (excl . CEO) G 5, 6 – – Remuneration report V A G 7 1 V stands for preparation and proposal to the Board of Directors. 2 A stands for proposal to the Annual General Meeting. 3 G stands for approval. 4 In the framework of the Articles of Incorporation. 5 In the framework of the maximum total remuneration defined by the Annual General Meeting. 6 In the framework of the total remuneration defined by the Board of Directors. 7 Consultative vote. 1.3 Election, composition and modus operandi of the Compensation Committee The Compensation Committee consists of three to six members. They are elected individually each year by the Annual General Meeting. If the number of mem- bers falls below three, the Board of Directors appoints the missing member(s) from its midst until the conclu- sion of the next Annual General Meeting. The Board of Directors appoints the Chairman of the Compensation Committee, which constitutes itself. If the Annual Gen- eral Meeting elects the Chairman of the Board of Direc- tors to the Compensation Committee, he has no voting rights. The Chairman of the Board of Directors recuses himself when discussions take place or decisions are made with regard to changes in his own remunera- tion. The CEO, CPO, Head of Rewards & Engagement and Head of Group Security & Corporate Affairs in his capacity as Secretary of the Board attend the meetings in an advisory capacity. Agenda items that exclusively concern the Board of Directors are discussed without the CEO and CPO present. Agenda items that concern changes in the remuneration of the CEO, the CPO or the Head of Group Security & Corporate Affairs are dis- cussed without the persons concerned present. Other members of the Board of Directors, auditors or internal and external experts may be called upon to attend the meetings in an advisory capacity. Minutes are kept of the meetings, which are provided to the members of the Committee and to other members of the Board of Directors on request. The Chairman of the Compensa- tion Committee reports verbally on the activities of the Committee at the next meeting of the Board of Direc- tors. The meetings of the Compensation Committee are generally held in February, June and December. Fur- ther meetings can be convened as and when required. In the reporting year, the Compensation Committee called on PwC as external consultants to review the remuneration system and highlight potential adjust- ments for the purposes of configuring the remunera- tion system in line with market standards with a long- term incentive component. The details are governed by Article 7.5 of the Articles of Incorporation, the Organisational Rules of the Board of Directors and the Regulations of the Compensation Committee. Y See www.swisscom.ch/basicprinciples The members of the Compensation Committee neither work nor have worked for Swisscom in an executive capacity, nor do they maintain any significant commercial links with Swisscom Ltd or the Swisscom Group. Customer and supplier relationships exist between the Swiss Con- federation and Swisscom. Details of these are provided in Note 6.2 to the consolidated financial statements. H See report page 204
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124 Corporate Governance and Remuneration Report | Remuneration Report t The following table gives an overview of the composi- tion of the Committee, the Committee meetings and circular resolutions in 2024. Meetings Ad-hoc meetings Circular resolutions T otal 3 1 – Average duration (in hours) 02:25 01:15 – Participation: Monique Bourquin, Chairwoman 3 1 – Roland Abt 3 1 – Frank Esser 3 1 – Michael Rechsteiner 1 3 1 Fritz Zurbrügg 3 1 – 1 Participation without voting rights. 2 Remuneration of the Board of Directors 2.1 General principles The remuneration system for the members of the Board of Directors is designed to attract and retain experienced and motivated individuals for the Board of Directors’ function. It also seeks to align the interests of the mem- bers of the Board of Directors with those of the share- holders. The remuneration is commensurate with the activities and level of responsibility of each member. The basic principles regarding the remuneration of the Board of Directors and the allocation of equity shares are set out in Articles 7.4 and 9.1 of the Articles of Incorporation. Y See www.swisscom.ch/basicprinciples The remuneration is made up of a fixed Director’s fee that varies in relation to the member’s function (basic emolument plus functional allowances), statutory and regulatory employer contributions to social secu- rity and to the occupational pension, as well as any additional benefits. Additional remuneration is not given for attendance at meetings. No variable perfor- mance-related emoluments are paid. The members of the Board of Directors are obligated to draw a portion of their fee in the form of equity shares and to com- ply with the requirements on minimum shareholdings, thus ensuring they directly participate financially in the performance of Swisscom’s shares. The remuneration is normally reviewed every Decem- ber for the following year for ongoing appropriate- ness. The Board of Directors bases its comparison on companies listed in the Swiss Market Index (SMI), but excluding companies with revenue in excess of CHF 20 billion and companies in the pharmaceuticals and financial sector. The comparison for the 2024 reporting year was made in December 2023, and the remuneration of Compagnie Financière Richemont, Geberit, Givaudan, Logitech, Sonova and Sika were used as the benchmark. The internal comparative study revealed that the remuneration paid to the Chairman and members of the Board of Directors at Swisscom was in the lowest peer group quartile. In spring 2024, the Board of Directors engaged PwC to perform an external benchmark study. The peer group in the benchmark study comprised companies in the SMI and SMIM (excluding the pharmaceuticals and financial sectors) that were comparable in size to Swisscom in terms of market capitalisation, revenue and headcount. It comprised the following compa- nies: ABB, Adecco, BKW, Geberit, Givaudan, Holcim, Kuehne+Nagel, Lonza, Richemont, Schindler, SGS, Sika and Sonova. The comparable companies had a median market capitalisation of CHF 26 billion, median rev- enue of CHF 11 billion and a median headcount of 34,000 employees. The benchmark study confirmed that the remuneration package for the Board of Direc- tors was in the lowest quartile.
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125 2.2 Remuneration components Director’s fee The Director’s fee is made up of a basic emolument and allowances as compensation for the individual func- tions. The following amounts are paid per year. 2024 2023 in CHF gross gross Base salary per member 146,000 146,000 Functional allowances 1 Presidium 308,000 308,000 Vice presidium 25,000 25,000 Representative of the Confederation 2 – – Audit Committee & ESG Reporting, Chair 61,000 61,000 Audit Committee & ESG Reporting, Member 17,000 17,000 Audit Committee Strategy & Investments, Chair 25,000 25,000 Audit Committee Strategy & Investments, Member 17,000 17,000 Remuneration Committee, Chair 25,000 25,000 Remuneration Committee, Member 15,000 15,000 1 No functional allowance is paid for participation in ad-hoc committees appointed on a case-by-case basis. 2 The function allowance of CHF 48 thousand was cancelled per 28 March 2023. Under the Management Incentive Plan, the members of the Board of Directors are obligated to draw one third of their Director’s fee in the form of shares. For members who resign from the Board of Directors at the Annual General Meeting, the fee is paid fully in cash on a pro rata basis. The shares are allocated on the basis of their tax value, rounded up to whole num- bers of shares. Shares are blocked from sale for three years. This restriction on disposal also applies if mem- bers leave the company during the blocking period. The shares, which are allocated on a pro rata basis in March or April and in December of the reporting year, are recognised at market value on the date of alloca- tion. The share-based remuneration is augmented by a factor of 1.19 in order to take account of the difference between the tax value and the market value. In March and December 2024, a total of 1,513 shares were allo- cated to the members of the Board of Directors (prior year: 1,446 shares) with a tax value of CHF 446 (March) and CHF 427 (December) (prior year: March CHF 495/ December CHF 428), respectively, per share. Their mar- ket value was CHF 531 (March) and CHF 509 (Decem- ber) (prior year: March CHF 590/December CHF 510), respectively, per share. Contributions to social security and occupational pension as well as additional benefits Swisscom pays the statutory and regulatory employer contributions to social security (SI) and occupational pen- sion plan (PP) on the fee. The contributions are disclosed separately and are included in the total remuneration. If required by law, the individual members of the Board of Directors are insured against the economic conse- quences of old age, death and disability; their basic emolument is covered through the comPlan pension plan (see www.pk-complan.ch for the regulations) and their functional allowances are covered as part of a 1e plan with VZ Sammelstiftung. The reported pension benefits cover all savings, guarantee and risk contribu- tions paid by the employer to the pension plan. The disclosure of service-related and non-cash bene- fits and expenses relies on a tax-based point of view. Swisscom does not offer any significant service-related or non-cash benefits. Out-of-pocket expenses are reim- bursed on a lump-sum basis in accordance with expense reimbursement rules approved by the tax authorities, and other expenses are reimbursed on an actual cost basis. They are not included in the reported remuneration.
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126 Corporate Governance and Remuneration Report | Remuneration Report 2.3 Total remuneration (audited) The total remuneration paid to the individual mem- bers of the Board of Directors for the 2023 and 2024 financial years is presented in the tables below, broken down into individual components. Total remuneration paid is within the maximum total amount approved by the 2023 Annual General Meeting for 2024 of CHF 2.5 million. Base salary and functional allowances Employer Employer Cash Share-based contributions to contributions 2024, in CHF thousand remuneration payment pension plan to social security Total 2024 Michael Rechsteiner, Chairman 335 200 64 28 627 Monique Bourquin 124 74 29 11 238 Roland Abt 159 95 – 12 266 Alain Carrupt 1 39 – – 2 41 Guus Dekkers 2 109 65 – 21 195 Frank Esser 3 152 91 – – 243 Sandra Lathion-Zweifel 109 65 22 10 206 Anna Mossberg 4 109 65 – 34 208 Daniel Münger 5 83 50 20 8 161 Fritz Zurbrügg 119 71 28 11 229 Total remuneration to members of the Board of Directors 1,338 776 163 137 2,414 1 Left the Board of Directors on 27 March 2024. In the year of departure, the remuneration is paid out in full in cash. 2 Subject to social security contributions in Great Britain. 3 Subject to social security contributions in Germany. No employer contribu- tions are paid. 4 Subject to social security contributions in Sweden. 5 Elected to the Board of Directors on 27 March 2024. Base salary and functional allowances Employer Employer Cash Share-based contributions to contributions 2023, in CHF thousand remuneration payment pension plan to social security Total 2023 Michael Rechsteiner, Chairman 335 200 64 28 627 Monique Bourquin 1 93 57 21 9 180 Roland Abt 159 96 – 12 267 Alain Carrupt 109 65 – 8 182 Guus Dekkers 2 109 65 – 21 195 Frank Esser 3 152 91 – – 243 Barbara Frei 4 47 – – 3 50 Sandra Lathion-Zweifel 109 65 22 10 206 Anna Mossberg 5 109 65 – 44 218 Renzo Simoni 4 57 – 8 3 68 Fritz Zurbrügg 1 89 54 21 8 172 Total remuneration to members of the Board of Directors 1,368 758 136 146 2,408 1 Elected to the Board of Directors on 28 March 2023. 2 Subject to social security contributions in Great Britain. 3 Subject to social security contributions in Germany. No employer contribu- tions are paid. 4 Left the Board of Directors on 28 March 2023. In the year of departure, the remuneration is paid out in full in cash. 5 Subject to social security contributions in Sweden. The employer contributions to social security include an additional payment for the years 2018 to 2022. 2.4 Minimum shareholding requirement The members of the Board of Directors are required to maintain a minimum shareholding equivalent to one annual emolument (basic emolument plus functional allowances). As a rule, they have four years from the start of their term of office or assumption of a new function to acquire the prescribed shareholding in the form of the blocked shares paid as part of remuneration and, if necessary, through share purchases on the open market, observing internal and legal trading restrictions. Com- pliance with the shareholding requirement is reviewed annually by the Compensation Committee. If a member’s shareholding falls below the minimum requirement due to a drop in the share price, the difference must be made up by no later than the time of the next review. In justi- fied cases, such as personal hardship or legal obligations, the Chairman of the Board of Directors can approve indi- vidual exceptions at his discretion.
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127 2.5 Shareholdings of the members of the Board of Directors (audited) Blocked and non-blocked shares held by members of the Board of Directors and/or related parties as at 31 December 2023 and 2024 are shown in the table below. None of the persons subject to the disclosure obligation hold voting shares exceeding 0.1% of the share capital. Number 31.12.2024 31 .12 .2023 Michael Rechsteiner 1,713 1,324 Roland Abt 1,462 1,277 Monique Bourquin 335 191 Alain Carrupt 1 n/a 940 Guus Dekkers 523 396 Frank Esser 1,675 1,498 Sandra Lathion-Zweifel 742 615 Anna Mossberg 850 723 Daniel Münger 2 98 n/a Fritz Zurbrügg 245 106 Total shares held by the members of the Board of Directors 7,643 7,070 1 Left the Board of Directors on 27 March 2024. 2 Elected to the Board of Directors on 27 March 2024. 3 Remuneration of the Group Executive Board 3.1 General principles The remuneration policy of Swisscom applicable to the Group Executive Board is designed to attract and retain highly skilled and motivated specialists and executive staff over the long term and provide an incentive to achieve a lasting increase in the enterprise value. It is systematic, transparent and long-term-oriented, and is predicated on the following principles: • Total remuneration is competitive and is in an appro- priate relation to the market as well as the internal salary structure. • Remuneration is based on performance in line with the results achieved by Swisscom. • Through direct financial participation in the perfor- mance of the Swisscom share, the interests of manage- ment are aligned with the interests of shareholders. The remuneration of the Group Executive Board is a bal- anced combination of fixed and variable salary compo- nents. The fixed component is made up of a base salary, fringe benefits (mainly a car allowance) and retirement benefits. The variable remuneration includes a perfor- mance-related component settled partly in cash and partly in shares. The members of the Group Executive Board are required to hold a minimum shareholding, which strengthens their direct financial participation in the medium-term performance of the Swisscom share and thus aligns their interests with those of shareholders. To facilitate compliance with the minimum shareholding requirement, Group Executive Board members have the possibility of drawing up to 50% of the variable performance-related component of their salary in shares. The basic principles regarding the performance-related remuneration and the profit and equity participation plans of the Group Executive Board are set out in Article 9.1 of the Articles of Incorporation. Y See www.swisscom.ch/basicprinciples
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Employee recruitment, employee retention and protection Focus on annual targets and sustain able corporate results Alignment with shareholders’ interests Fixed remuneration Base salary Pension benefits Fringe benefits Function, experience and qualifications, market Variable remuneration Performance-related component in cash and shares Achievement of annual performance targets Minimum shareholding requirement Requirement to hold a minimum amount of Swisscom shares Long-term growth of enterprise value Influencing factors Purpose Assets Instruments Remuneration Remuneration system Remuneration components and determining factors 128 Corporate Governance and Remuneration Report | Remuneration Report The Compensation Committee decides at its discretion on the level of remuneration, taking into consideration the external market value of the function in question, the internal salary structure and individual performance. For the purpose of assessing the market value of indi- vidual functions, Swisscom relies on cross-sector com- parisons with Swiss companies as well as international sector comparisons. These two comparative perspectives allow Swisscom to form an optimal overview of the rele- vant employment market for managerial positions. In the reporting year, Swisscom consulted a comparative study conducted by the consultancy firm Willis Towers Watson WTW in 2022. It covered 13 major companies domiciled in Switzerland from various sectors, with the exception of the financial and pharmaceutical sectors. These com- panies had median revenue of CHF 6 billion and a median headcount of 25,000 employees. The evaluation of the comparative study took into account the comparability of the extent of responsibility in terms of revenue, number of employees and international scope. In spring 2024, the Board of Directors engaged PwC to provide external support for the review of the remu- neration system for the Group Executive Board. To this end, the remuneration system and the remuneration of individual Group Executive Board functions were sub- jected to a comparison. The peer group in the bench- mark study comprised companies in the SMI and SMIM (excluding the pharmaceuticals and financial sectors) that were comparable in size to Swisscom in terms of market capitalisation, revenue and headcount. It con- sisted of the following companies: ABB, Adecco, BKW, Geberit, Givaudan, Holcim, Kuehne+Nagel, Lonza, Richemont, Schindler, SGS, Sika and Sonova. The com- parable companies had a median market capitalisation of CHF 26 billion, median revenue of CHF 11 billion and a median headcount of 34,000 employees. Both studies showed that the remuneration package for the Group Executive Board functions was in the lowest quartile of the relevant peer groups. As a rule, the Compensation Committee reviews the individual remuneration paid to members of the Group Executive Board every three years of employment. Tak- ing the comparative studies into account, the Board of Directors adjusted the salary paid to two members of the Group Executive Board in the year under review to reflect the experience and performance of these mem- bers and bring remuneration closer to the market level.
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Determination of target achievement As the decisive basis for the payment of the performance-related component 1. Financial targets Revenue Operating performance EBITDA margin Customers Operating free cash flow Growth Operating free cash flow Fastweb Sustainability 2. Business transformation 3. Overall target achievement +/- = (Depending on the achievement of the ‘EBITDA threshold’) between 0% and 130% 129 3.2 Remuneration components Base salary The base salary is the remuneration paid according to the function, qualifications and performance of the individual member of the Group Executive Board. It is determined based on a discretionary decision taking into account the external market value of the function and the salary structure for the Group’s executive man- agement. The base salary is paid in cash. Variable performance-related salary component The members of the Group Executive Board are entitled to a variable performance-related salary component which represents 70% of the base salary if objectives are achieved in full (performance-related bonus). The amount of the performance-related component paid out depends on the extent to which the targets are achieved, as determined by the Compensation Committee, taking into account the performance evaluation by the CEO. If targets are exceeded, the performance-related bonus may amount to no more than 130% of the target bonus. The maximum performance-related salary component is thus limited to 91% of the base salary. This ensures that the performance-related salary component does not exceed the annual base salary, even taking account of the market value of the component paid in shares. Targets and achievement of targets for the variable performance-related salary component The targets for the members of the Group Executive Board consist of financial targets as well as topics relat- ing to the business transformation. The target structure therefore anchors long-term, strategic considerations such as strengthening the core business by offering the best customer experiences and the best infrastructure, realising new growth opportunities, and continuously developing operational excellence. Overall target achievement also depends on the achievement of the minimum EBITDA requirement, referred to as the ‘EBITDA threshold’. The EBITDA threshold is set annually by the Board of Directors in relation to the Group EBITDA target. Once the EBITDA threshold is reached, overall target achievement is measured based on financial target achievement and the evaluation of performance in topics related to business transformation (0% to 130%). If the EBITDA threshold is not reached, overall target achievement for the members of the Group Executive Board is 0% and no variable performance-related salary compo - nent is paid out. Financial targets The financial targets underlying the variable perfor- mance-related salary component are adopted annually in December for the following year by the Board of Direc- tors following a proposal submitted by the Compensa- tion Committee. The targets relevant to the reporting year remain unchanged from the previous year, in line with the Group’s continuing corporate strategy. The tar- gets are based on the budget figures for the respective year under review. The financial targets include reve- nue, operating income before interest, taxes, depre- ciation and amortisation as a percentage of revenue (EBITDA margin), and an operating free cash flow proxy. The Group Executive Board members delegated by Swisscom to the Board of Directors of the Italian subsid- iary Fastweb S.p.A. are also measured on the basis of the Fastweb financial targets. The Compensation Committee’s decision is based on an assessment of the extent to which financial targets have been met using a scale for the overachievement and/or underachievement of each target. Deviations resulting from non-recurring items such as exchange rate fluctua- tions or transactions or mergers & acquisitions are neutral- ised here. The achievement of an individual target can vary from 0% to 200%. The achievement of the financial targets is determined according to the weighting of the individual targets and cannot exceed 200% overall.
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Weighting of financial targets Financial targets Weighting of CEO and CFO Weighting of other members of Group Executive Board Revenue 24% 30% EBITDA margin 24% 30% Operating free cash flow 32% 40% Operating free cash flow Fastweb 20% 0% Business transformation topics Securing long-term success Business transformation Topics Assessment based among others on Operating performance +/– 0 to 20 per- centage points on financial target achievement • Quantitative key figures per topic • Multi-year average • Previous year • Current year Customers Growth Sustainability • Stability • Reputation • Customer satisfaction or net promoter score • Innovation or strategic projects • Employees • Environment 130 Corporate Governance and Remuneration Report | Remuneration Report Business transformation The topics relevant to Swisscom’s long-term success are summarised under the term ‘business transformation’. These topics strengthen the degree to which compen- sation is focused on shareholder interests, as they form the basis for comprehensively assessing Swisscom’s performance, which is geared towards the long term. Operating performance is assessed based on indicators related to network and service stability and reputation. The topic of customers includes customer satisfaction as measured by the Net Promoter Score for residential and business customers; this is a recognised indicator of customer loyalty. The topic of growth is measured on the basis of innovation indicators and the imple- mentation of strategic projects, while the new topic of sustainability includes indicators on employee satis- faction, diversity and Swisscom’s contribution toward protecting the environment (CO 2 reduction; ESG crite - rion). This therefore incorporates Swisscom’s responsi- bility to help promote society’s positive development and to protect the environment into the remuneration system. Further information on customer satisfaction can be found in the Management Report. Further infor- mation on Swisscom’s contribution to the environment and society can be found in the Sustainability Impact Report 2024. H See report page 35 Y See www.swisscom.ch/sir2024 The Compensation Committee uses key figures and deviations from the multi-year average or previous year to deliberate on performance with respect to the busi- ness transformation. It assesses the outcome at its own discretion on a scale of +/– 0 to 20 percentage points. Overall target achievement Overall target achievement is calculated based on achievement of financial targets including or less the business transformation assessment. In order to ensure that this definition of overall target achievement appro- priately describes the Group’s performance and reflects shareholders’ interests in terms of long-term value creation, the Compensation Committee may, in excep - tional situations, exercise its discretion in determining the overall target achievement in order to appropriately depict actual management performance. In doing so, it may take into account certain special factors, e.g. cur - rency fluctuations, extraordinary financial effects or unforeseen industry and market developments. The
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Thresholds for overall target achievement Target achievement 200% 130% 0% Lower threshold (EBITDA minimum requirement) Upper threshold (cap at 130 % target achievement) 131 overall achievement of targets is limited to a maximum of 130%. Based on the overall achievement of targets, the Compensation Committee submits a proposal for the approval of the Board of Directors for the amount of the performance-related salary component to be paid to the Group Executive Board and the CEO. Payment of the variable performance-related salary component The variable performance-related salary component for a given financial year is paid in March or April of the following year, with 25% being paid in the form of Swisscom shares, in accordance with the Management Incentive Plan. Group Executive Board members may opt to increase the share component up to a maximum of 50% of the total variable performance-related compen- sation. The remaining portion of the performance-re - lated component is settled in cash. In the event of a departure from the Group Executive Board during the course of the year, the payment of the performance-re- lated component for the current year is generally made in cash only. The decision as to what percentage of the variable performance-related salary component is to be drawn in the form of shares must be communicated prior to the end of the reporting year, but no later than in November following the publication of the third-quarter results. The shares are allocated on the basis of their tax value, rounded up to whole numbers of shares. Shares are blocked from sale for three years. This restriction on disposal likewise applies if the employment relationship is terminated during the blocking period. The share- based remuneration disclosed in the year under review is augmented by a factor of 1.19 in order to take account of the difference between the market value and the tax value. The market value is determined as of the date of allocation. The allocation of shares for the year under review will be made in March 2025. In March 2024, a total of 1,694 shares (prior year: 1,476 shares) with a tax value of CHF 446 (prior year: CHF 495) per share and a market value of CHF 531 (prior year: CHF 590) per share were allocated for the 2023 financial year to the members of the Group Executive Board. As an extraordinary trading blackout period was in effect at the time, the members of the Group Execu- tive Board were not able to choose a higher share com- ponent for their variable performance-related salary component for the 2023 financial year. Only 25% of the variable performance-related salary component was paid in the form of Swisscom shares. Pension fund and fringe benefits The members of the Group Executive Board, like all eli- gible employees in Switzerland, are insured against the financial consequences of old age, death and disability through the comPlan pension plan (for pension fund regulations, see www.pk-complan.ch). The reported pension benefits cover all savings, guarantee and risk contributions paid by the employer to the pension plan. They also include the pro-rata costs of the AHV bridging pension paid by comPlan in the event of early retirement and the premium for the term life insurance concluded for Swisscom management staff in Switzerland. Further information about this is provided in Note 4.3 to the con- solidated financial statements. H See report pages 188–194 Service-related benefits, non-cash benefits, and expenses are reported from a tax perspective. The members of the Group Executive Board are entitled to a car allowance. Out-of-pocket expenses are reimbursed on a lump-sum basis in accordance with expense reimbursement rules approved by the tax authorities, and other expenses are reimbursed on an actual cost basis. They are not included in the reported remuneration.
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Financial target achievement Revenue Operating free cash flow1 Operating free cash flow Fastweb1 0 % 0 % 0 % 0 % 200 % 200 % 200 % 200 % 100 % 100 % 100 % 100 % 97% 105% 104% 100% EBITDA margin1 1 Adjusted for the effects of M&A transactions that were not included in the setting of the budget figures on which targets were based, particularly transaction and integration costs connected with the acquisition of Vodafone Italia . 132 Corporate Governance and Remuneration Report | Remuneration Report 3.3 Total remuneration (audited) The following table shows the total remuneration paid to the members of the Group Executive Board for the 2023 and 2024 financial years, broken down into the different components and including the highest amount paid to one member. In the reporting year, the total remuneration for the Group Executive Board was CHF 10.5 million (previous year CHF 8.7 million), which is within the maximum total amount approved by the Annual General Meeting of CHF 10.9 million for 2024. The increase in the total remuneration paid to the Group Executive Board is mainly attributable to the expansion of the Group Executive Board from six to nine members in the previous year, which impacted the full reporting year for the first time. The highest remuneration amount is attributable to the CEO, Christoph Aeschlimann. This is 6% higher than the previous year, which is primarily due to the increased achievement of targets for the variable performance-related salary component. The variable performance-related salary component for members of the Group Executive Board (CHF 3.8 million in total) was around 88% of the base salary (CHF 4.3 million in total). Remuneration of the Group Executive Board Thereof Thereof Total Group Total Group Christoph Christoph Executive Board Executive Board Aeschlimann Aeschlimann In CHF thousand 2024 5 2023 4 2024 2023 Fixed base salary paid in cash 4,330 3,865 882 882 Variable performance-related remuneration paid in cash 2,226 2,196 361 486 Variable performance-related remuneration paid in shares 1 1,570 871 430 193 Service-related and non-cash benefits 220 190 24 24 Employer contributions to social security 2 708 636 145 139 Retirement benefits 1,079 951 130 130 Total remuneration to members of the Group Executive Board 10,133 8,709 1,972 1,854 Benefits paid following retirement from Group Executive Board 3 331 – – – Total remuneration paid to Group Executive Board, incl. benefits paid following retirement from Board 10,464 8,709 1,972 1,854 1 The shares are reported at market value and are blocked from sale for three years. 2 Employer contributions to social security (OASI, DI, EO and FZ, incl. administra- tion costs, and daily sickness benefits and accident insurance) are included in the total remuneration. 3 Remuneration paid to fulfil contractual obligations during the notice period to members of Group Management who left during the reporting year. 4 6 Group Executive Board members until 31 March 2023; 9 Group Executive Board members from 1 April 2023. 5 9 members of the Group Executive Board. The expansion of the Group Exec- utive Board in the previous year had an impact on the entire year for the first time. Achievement of targets for the variable performance-related salary component in 2024 (not audited) All in all, the Swisscom Group achieved its financial targets in the reporting year. The achievement of the individual financial targets is shown in the table below. In accordance with the weighting of the individual targets, this results in financial target achievement of 102% for the CEO and the other members of the Group Executive Board.
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Dimension Topic KPIs Board of Directors Compensation Committee assessment Operating performance Stability • Customer perception of network stability Stability further increased with • Number of incidents with customer significant improvement in all impact after change incident KPIs . Major incidents • Number of major incidents with were avoided . B2C and B2B customer impact customers rated network and service stability at an unchanged high level . Reputation • Public perception according to Reputation slightly improved RepTrak survey compared with the previous year’s already high level and was rated at the highest level since measurements began . Customers Customer satisfaction • Net Promoter Score for B2C and B2B Swisscom significantly outperformed (SMEs and large customers) the NPS targets in both of the B2B customer segments . In the B2C division, the NPS was down in the second half of the year due to price increases . Swisscom also won all the relevant sales & service tests . Growth Growth and innovation • Growth areas for revenue growth While the milestones in the strategic • Achievement of milestones growth initiatives were achieved, Innovate for growth topics revenue growth is below Swisscom’s • Perception of innovation according to ambitious objectives . Swisscom RepTrak (external & internal) continues to lead the field in terms of reputation for innovation compared to its competitors . In the overall assessment of the growth dimension, the Compensation Committee took account of the performance and the additional effort in the successful completion of the Vodafone Italia acquisition, which will create the basis for transformative growth . Sustainability Employees • eNPS employee survey Swisscom was recommended • Workplace perception RepTrak (internal) as an employer (eNPS) by the • Diversity KPIs (generation, gender, same high proportion of origin, inclusion) employees as in the previous year, and internal workplace perception further improved . Swisscom saw an increase in all diversity KPIs, although it did not fully achieve its ambitious targets . All employee KPIs are at their highest level of the last five years . Environment • Scopes 1–3 CO2 reduction CO 2 emissions in Scopes 1–2 were • Scope 4 CO2 reduction further reduced and the targets • Increase in energy efficiency exceeded; the Scope 3 targets were not achieved, but this was mainly due to exogenous factors . The indirect avoided emissions were maintained despite the downward trend in remote work and energy efficiency was further increased . With the order of 1,200 e-vehicles, the electrification of the vehicle fleet by 2030 has been initiated . 133 The Compensation Committee used defined key figures and deviations from the multi-year average or previous year to assess performance in the individual business transformation topics. As before, the focus was largely on the Swiss business. The assessment of the individual topics is summarised in the following overview. Business transformation performance
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Overall target achievement +15% Business transformation performance +/- = Financial target achievement CEO: 102% Members of the Group EB: 102% Overall target achievement CEO: 117% Members of the Group EB: 117% 134 Corporate Governance and Remuneration Report | Remuneration Report Based on the assessment of the individual topics, and using a scale of +/– 0 to 20 percentage points, the Com- pensation Committee assessed the business transfor- mation performance at +15 percentage points, taking account of the Group Executive Board’s performance and additional effort in conjunction with the acquisition of Vodafone Italia. The EBITDA threshold was reached. The overall target achievement, which consists of finan- cial target achievement and the evaluation of business transformation performance as described, was 117% of the target bonus for the CEO and the other members of the Group Executive Board. 3.4 Minimum shareholding requirement The members of the Group Executive Board are required to hold a minimum number of Swisscom shares. The min- imum shareholding to be held by the CEO is equivalent to two years’ base salary and the other Group Executive Board members are required to maintain a shareholding equivalent to one year’s base salary. The members of the Group Executive Board build up the prescribed share- holding over four allocation periods The members of the Group Executive Board build up the prescribed share- holding in the form of the blocked shares paid as part of remuneration and, if necessary, through share purchases on the open market, observing internal trading restric- tions. Compliance with the shareholding requirement is reviewed annually by the Compensation Committee. If a member’s shareholding falls below the minimum requirement due to a drop in the share price or a salary adjustment, the difference must be made up by no later than the time of the next review. In justified cases, such as personal hardship or legal obligations, the Chairman of the Board of Directors can approve individual exceptions at his discretion. 3.5 Shareholdings of the members of the Group Executive Board (audited) Blocked and non-blocked shares held by members of the Group Executive Board and/or related parties as at 31 December 2023 and 2024 are shown in the table below. None of the persons subject to the disclosure requirement held voting shares exceeding 0.1% of the share capital. Number 31.12.2024 31 .12 .2023 Christoph Aeschlimann (CEO) 1,682 1,318 Mark Düsener 1 195 n/a Myriam Käser 2 – n/a Urs Lehner 1,642 1,431 Isa Müller-Wegner 120 – Gerd Niehage 3 n/a – Stefan Nünlist 4 n/a 346 Klementina Pejic 655 487 Eugen Stermetz 569 375 Martin Vögeli 799 660 Dirk Wierzbitzki 1,986 1,775 Total shares held by the members of the Group Executive Board 7,648 6,392 1 Elected to the Group Executive Board on 1 September 2024. 2 Elected to the Group Executive Board on 1 June 2024. 3 Left the Group Executive Board on 31 August 2024. 4 Left the Group Executive Board on 31 May 2024. 3.6 Employment contracts The employment contracts of the members of the Group Executive Board are subject to a twelve-month notice period. No termination benefits apply beyond the salary payable for a maximum of twelve months. The employment contracts include a claw-back clause that stipulates that Swisscom may allow any wrongfully awarded remuneration to lapse or may reclaim any remuneration that is wrongfully paid. The contracts do not contain either a non-competition clause or a clause on change of control.
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135 4 Other remuneration (audited) 4.1 Additional remuneration Swisscom may pay remuneration to members of the Board of Directors for assignments in Group companies and assignments performed by order of Swisscom (Arti- cle 8.2 of the Articles of Incorporation). No such remu- neration was paid in the year under review. Y See www.swisscom.ch/basicprinciples The members of the Group Executive Board are not enti- tled to separate remuneration for any directorships they hold either within or outside the Swisscom Group. 4.2 Remuneration for former members of the Board of Directors or Group Executive Board and their related parties In the year under review, no remuneration that was not at arm’s length was paid to former members of the Board of Directors in connection with earlier activities as a member of a governing body of the company. Similarly, no such remuneration was paid to former members of the Group Executive Board. Further, there were no pay- ments to individuals who are closely related to any for- mer or current member of the Board of Directors or the Group Executive Board which are not at arm’s length. 4.3 Loans and credits granted Swisscom Ltd has no statutory basis for the granting of loans, credit facilities or pension benefits apart from the retirement benefits paid to the members of the Board of Directors and Group Executive Board. In the 2024 financial year, Swisscom did not grant any collateral, loans, advances or credit facilities of any kind either to former or current members of the Board of Directors or related parties, or to former or current members of the Group Executive Board or related par- ties. There are therefore no corresponding receivables outstanding. 5 Activities at other companies (audited) 5.1 Board of Directors As at 31 December 2024, the members of the Board of Directors and the Group Executive Board performed the following mandates and other significant activities at other companies: Michael Rechsteiner Mandates in listed companies Since April 2024, member of the Board of Directors, the Audit, Risk & Compliance Committee and the Human Capital & ESG Committee of Sandoz Group AG, Risch Mandates in interest groups, associations, institutions and foundations, and employee retirement-benefit foundations Member of the Board of Trustees of the ETH Foundation, Zurich Mandates by order of Swisscom Member of the Board of Directors and the Board Com- mittee of economiesuisse Other significant activities – Roland Abt Mandates in listed companies Member of the Board of Directors and chairman of the Audit Committee of Bystronic AG (formerly Conzzeta AG), Zurich Mandates in non-listed companies Mandates in Aargau Verkehr (AVA): Chairman of the Board of Directors of Aargau Verkehr AG, Aarau and Chairman of the Board of Directors of Limmat Bus AG, Dietikon; Chairman of the Board of Directors of Eisen- bergwerk Gonzen AG, Sargans; until March 2024 member of the Board of Directors of Raiffeisenbank Zufikon Mandates in interest groups, associations, institutions and foundations, and employee retirement-benefit foundations President of the Board of Trustees of Fürsorgestiftung Conzzeta, Zurich; President of the Board of Trustees of Pensionskasse Conzzeta, Zurich Other significant activities –
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136 Corporate Governance and Remuneration Report | Remuneration Report Monique Bourquin Mandates in listed companies Member of the Board of Directors, the Market Commit- tee, the Compensation Committee and the Agricultural Council at Emmi AG, Lucerne; member of the Board of Directors and Chair of the Compensation Committee of Chocoladefabriken Lindt & Sprüngli AG, Kilchberg Mandates in non-listed companies Member of the Board of Directors of Kambly Holding AG, Trubschachen; member of the Board of Directors of W. Kündig & Cie AG, Zurich; President of the Board of the Swiss branded goods association Promarca, Bern; Rivella mandates: member of the Board of Directors of Rivella AG, Rothrist, member of the Board of Directors of Miroma AG, Rothrist; Chair of the Management Board of Euqinom GmbH, Rüdlingen; Managing Director of Estarog GmbH, Rüdlingen Other significant activities Member of the Advisory Board of Fondation Swiss Board Institute, Geneva; member of the Foundation Board of Schweizerische Stiftung für technische Entwick- lungszusammenarbeit (Swiss Foundation for Technical Cooperation) Swisscontact, Zurich Guus Dekkers Mandates in listed companies CTO and member of the Executive Committee, Tesco PLC, London Other significant activities Member of the Advisory Board of the Fraunhofer Insti- tute for Secure Information Technology SIT, Darmstadt; member of the Advisory Board of the National Research Center for Applied Cybersecurity ATHENE, Darmstadt Frank Esser Mandates in listed companies Chairman of the Board of Directors of SES S.A., Luxem- bourg Other significant activities – Sandra Lathion-Zweifel Mandates in non-listed companies Member of the Board of Directors and the Audit Com- mittee and Chair of the Nomination and Remuneration Committee of the Raiffeisen Switzerland Cooperative, St. Gallen Other significant activities Member of the Advisory Board of the CMTA – The Capital Markets and Technology Association, Geneva; member of the Executive Board of swissVR, Rotkreuz; member of the Advisory Board of the association Lucerne Dialogue, Lucerne Anna Mossberg Mandates in listed companies Member of the Board of Directors, Remuneration & Sus- tainability Committee and Audit Committee of Swedbank AB, Stockholm; until April 2024 member of the Board of Directors and Chair of the Audit Committee of Orkla ASA, Oslo; member of the Board of Directors of Volvo Cars AB, Gothenburg Mandates in non-listed companies Member of the Board of Directors, the Nomination and Compensation Committee and the AI Advisory Board of Ringier AG, Zofingen; since June 2024 member of the Board of Directors of the Marshall Group, Stockholm Other significant activities Member of the Advisory Board of Axcel Management A/S, Copenhagen; member of the Strategic Advisory Board of the Boards Impact Forum Daniel Münger Mandates in non-listed companies Member of the Northwestern Switzerland Regional Committee of COOP Genossenschaft Other significant activities Member of the federal Tripartite Commission, accompa- nying measures to the bilateral agreements with the EU (TPK FlaM) Fritz Zurbrügg Mandates in companies – Other significant activities –
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137 5.2 Group Executive Board As at 31 December 2024, the members of the Group Executive Board performed the following mandates and other significant activities at other companies: Christoph Aeschlimann Mandates by order of Swisscom Member of the Executive Board, Association Suisse des Télécommunications (asut), Bern; member of the Board of Trustees of the Swiss Entrepreneurs Foundation, Bern; until December 2024 member of the international Advi- sory Committee of the ZHAW School of Management and Law, Winterthur; member of the Board of IMD Foun- dation, Lausanne; since May 2024 President of the Board of Trustees of the Deeptech Nation Switzerland Founda- tion, Zurich Other significant activities Until December 2024 member of the Executive Board, Glasfasernetz Schweiz, Bern; member of the Steering Committee of digitalswitzerland Zurich; member of the Advisory Board of the Geneva School of Economics and Management at the University of Geneva; member of the Board of the Economic Society of the Canton of Bern (VWG Bern); member of the Board of Swiss-American Chamber of Commerce, Zurich Mark Düsener Mandates in companies – Other significant activities – Myriam Käser Mandates in companies – Other significant activities Since January 2025 member of the Executive Board of Glasfasernetz Schweiz, Bern; member of the Executive Board at HarbourClub Chief Communications Officers, Zurich Urs Lehner Mandate in non-listed companies Since August 2024 member of the Board of Directors of Roth Gerüste AG, Gerlafingen Other significant activities Since March 2024 member of the Board of Directors of the Swedish Swiss Chamber of Commerce, Zurich Isa Müller-Wegner Mandates in companies – Other significant activities Member of the Advisory Board of the Swiss Diversity Association, Zurich Klementina Pejic Mandate by order of Swisscom Member of the Board of Trustees of the comPlan pension fund, Bern Other significant activities Member of the Institute Council of the international insti- tute of management in technology (iimt) at the University of Fribourg, member of the Executive Board of the Swiss Employers’ Association, Zurich Eugen Stermetz Mandate by order of Swisscom Until December 2024 President of the Foundation Council of the comPlan pension fund, Bern Other significant activities – Martin Vögeli Mandate by order of Swisscom Member of the Board of Directors of Creaholic SA, Biel Other significant activities – Dirk Wiertzbitzki Mandate by order of Swisscom Member of the Board of Directors of SoftAtHome, Paris Other significant activities – 6 Gender representation (audited) Three women sit on the Board of Directors and three on the Group Executive Board. The proportion of women is 33% in both boards. As at 31 December 2024, Swisscom thus complied with the legal requirements regarding the representation of both genders on the Board of Directors and the Group Executive Board.
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PricewaterhouseCoopers AG, Birchstrasse 160, 8050 Zürich Telefon: +41 58 792 44 00, www.pwc.ch PricewaterhouseCoopers AG is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity. Report of the statutory auditor to the General Meeting of Swisscom Ltd, Ittigen Report on the audit of the remuneration report Opinion We have audited the remuneration report of Swisscom Ltd (the Company) for the year ended 31 December 2024. The audit was limited to the information pursuant to article 734a-734f of the Swiss Code of Obligations (CO) in the sections marked 'audited' on pages 122 to 137 of the remuneration report. In our opinion, the information pursuant to article 734a-734f CO in the remuneration report (pages 122 to 137) complies with Swiss law and the Company’s articles of incorporation. Basis for opinion We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the 'Auditor’s responsibilities for the audit of the remuneration report' section of our report. We are independent of the Company in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other information The Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the tables marked 'audited' in the remuneration report, the consolidated financial statements, the financial statements and our auditor’s reports thereon. Our opinion on the remuneration report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the remuneration report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the audited financial information in the remuneration report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Board of Directors’ responsibilities for the remuneration report The Board of Directors is responsible for the preparation of a remuneration report in accordance with the provisions of Swiss law and the Company’s articles of incorporation, and for such internal control as the Board of Directors determines is necessary to enable the preparation of a remuneration report that is free from material misstatement, whether due to fraud or error. It is also charged with structuring the remuneration principles and specifying the individual remuneration components. Auditor’s responsibilities for the audit of the remuneration report Our objectives are to obtain reasonable assurance about whether the information pursuant to article 734a-734f CO is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law and SA-CH will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this remuneration report. 138 Corporate Governance and Remuneration Report | Remuneration Report
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Swisscom Ltd | Report of the statutory auditor to the General Meeting As part of an audit in accordance with Swiss law and SA-CH, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement in the remuneration report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made. We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. PricewaterhouseCoopers AG Petra Schwick Arsim Arslani Licensed audit expert Licensed audit expert Auditor in charge Zürich, 12 February 2025 139
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Consolidated Financial Statements ________ Consolidated statement of comprehensive income . . . . 142 Consolidated balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 Consolidated statement of cash flows . . . . . . . . . . . . . . . . . 144 Consolidated statement of changes in equity . . . . . . . . . . . 145 Notes to the consolidated financial statements _________ 1 Operating performance 1 .1 Segment information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148 1 .2 Operating expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155 2 Capital and financial risk management 2 .1 Capital management and equity . . . . . . . . . . . . . . . . . . . 157 2 .2 Financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 2 .3 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162 2 .4 Financial result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166 2 .5 Financial risk management . . . . . . . . . . . . . . . . . . . . . . . . 166 3 Operating assets and liabilities 3 .1 Net current operating assets . . . . . . . . . . . . . . . . . . . . . . . 175 3 .2 Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . 178 3 .3 Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180 3 .4 Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181 3 .5 Provisions and contingent liabilities . . . . . . . . . . . . . . . . . 183 4 Employees 4 .1 Employee headcount and personnel expense . . . . . . 186 4 .2 Key management compensation . . . . . . . . . . . . . . . . . . . 187 4 .3 Defined benefit plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 5 Scope of consolidation 5 .1 Group structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195 5 .2 Changes in the scope of consolidation . . . . . . . . . . . . . . 195 5 .3 Acquisition of Vodafone Italia . . . . . . . . . . . . . . . . . . . . . . 195 5 .4 Equity-accounted investees . . . . . . . . . . . . . . . . . . . . . . . . 198 5 .5 Group companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199 6 Other disclosures 6 .1 Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201 6 .2 Related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204 6 .3 Sale of shares in FiberCop . . . . . . . . . . . . . . . . . . . . . . . . . 204 6 .4 Other accounting policies . . . . . . . . . . . . . . . . . . . . . . . . . 205 Report of the statutory auditor . . . . . . . . . . . . . . . . . . . . . . . . 206
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142 Consolidated Financial Statements | Consolidated statement of comprehensive income Consolidated Financial Statements Consolidated statement of comprehensive income In CHF million, except for per share amounts Note 2024 2023 Income statement Revenue 1 .1 11,036 11,072 Direct costs 1 .2 (2,972) (2,906) Personnel expense 1 .2, 4 .1 (2,749) (2,680) Other operating expense 1 .2 (1,727) (1,630) Capitalised self-constructed assets and other income 1 .2 767 766 Operating income before depreciation and amortisation 4,355 4,622 Depreciation, amortisation and impairment of property, plant and equipment, intangible assets and goodwill 3 .2, 3 .3, 3 .4 (2,143) (2,126) Depreciation of right-of-use assets 2 .3 (261) (291) Operating income 1,951 2,205 Financial income 2 .4 167 30 Financial expense 2 .4 (255) (160) Result of equity-accounted investees 5 .4 (2) – Income before income taxes 1,861 2,075 Income tax expense 6 .1 (320) (364) Net income 1,541 1,711 Other comprehensive income Actuarial gains and losses from defined benefit pension plans 2 .1 (17) (28) Change in fair value of equity instruments 2 .1, 6 .3 163 43 Items that will not be reclassified to income statement 146 15 Foreign currency translation adjustments of foreign subsidiaries 2 .1 5 (126) Change in cash flow hedges 2 .1 (11) (10) Items that may be reclassified to income statement (6) (136) Other comprehensive income 140 (121) Comprehensive income Net income 1,541 1,711 Other comprehensive income 140 (121) Comprehensive income 1,681 1,590 Share of net income and comprehensive income Equity holders of Swisscom Ltd 1,542 1,711 Non-controlling interests (1) – Net income 1,541 1,711 Equity holders of Swisscom Ltd 1,682 1,590 Non-controlling interests (1) – Comprehensive income 1,681 1,590 Earnings per share Basic and diluted earnings per share (in CHF) 2 .1 29.77 33.03
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143 Consolidated balance sheet In CHF million Note 31.12.2024 31 .12 .2023 Assets Cash and cash equivalents 1,523 148 Trade receivables 3 .1 2,892 2,143 Receivables from finance leases 2 .3 47 46 Other operating assets 3 .1 1,749 1,323 Other financial assets 68 50 Current income tax assets 6 .1 82 1 Non-current assets held for sale – 7 Total current assets 6,361 3,718 Property, plant and equipment 3 .2 13,501 11,059 Intangible assets 3 .3 6,124 1,737 Goodwill 3 .4 6,298 5,172 Right-of-use assets 2 .3 3,994 1,972 Equity-accounted investees 5 .4 27 27 Receivables from finance leases 2 .3 116 84 Other financial assets 2 .5, 6 .3 545 745 Defined benefit assets 4 .3 – 11 Deferred tax assets 6 .1 245 225 Total non-current assets 30,850 21,032 Total assets 37,211 24,750 Liabilities and equity Financial liabilities 2 .2 1,639 718 Lease liabilities 2 .3 622 227 Trade payables 3 .1 2,685 1,611 Other operating liabilities 3 .1 1,996 1,471 Provisions 3 .5 221 115 Current income tax liabilities 6 .1 286 203 Total current liabilities 7,449 4,345 Financial liabilities 2 .2 12,260 4,947 Lease liabilities 2 .3 3,014 1,688 Defined benefit obligations 4 .3 53 21 Provisions 3 .5 1,319 1,148 Deferred gain on sale and leaseback of real estate 2 .3 77 81 Deferred tax liabilities 6 .1 884 898 Total non-current liabilities 17,607 8,783 Total liabilities 25,056 13,128 Share capital 52 52 Capital reserves 136 136 Retained earnings 2 .1 14,071 13,529 Foreign currency translation adjustments 2 .1 (2,081) (2,086) Hedging reserves 2 .1 (23) (12) Equity attributable to equity-holders of Swisscom Ltd 12,155 11,619 Non-controlling interests – 3 Total equity 12,155 11,622 Total liabilities and equity 37,211 24,750
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144 Consolidated Financial Statements | Consolidated statement of cash flows Consolidated statement of cash flows In CHF million Note 2024 2023 Net income 1,541 1,711 Income tax expense 6 .1 320 364 Result of equity-accounted investees 5 .4 2 – Financial income 2 .4 (167) (30) Financial expense 2 .4 255 160 Depreciation, amortisation and impairment of property, plant and equipment, intangible assets and goodwill 3 .2, 3 .3 2,143 2,126 Depreciation of right-of-use assets 2 .3 261 291 Gain on sale of property, plant and equipment 1 .2 (26) (6) Loss on disposal of property, plant and equipment – 1 Expense for share-based payments 1 1 Revenue from finance leases (87) (108) Proceeds from finance leases 80 108 Change in deferred gain from the sale and leaseback of real estate 2 .3 (4) (4) Change in operating assets and liabilities 3 .1 (9) (5) Change in provisions 3 .5 26 (124) Change in defined benefit obligations 4 .3 (5) (31) Interest received 102 7 Dividends received 5 .4 1 9 Interest payments on financial liabilities 2 .2 (112) (84) Interest payments on lease liabilities 2 .3 (48) (44) Income taxes paid 6 .1 (297) (313) Cash flow from operating activities 3,977 4,029 Purchase of property, plant and equipment and intangible assets 3 .2, 3 .3 (2,288) (2,272) Proceeds from sale of property, plant and equipment and intangible assets 44 10 Acquisition of subsidiaries, net of cash and cash equivalents acquired 5 .2 (7,372) (62) Proceeds from sale of subsidiaries, net of cash and cash equivalents sold 5 .2 2 2 Acquisition of equity-accounted investees 5 .2 (2) (3) Purchase of other financial assets 2 .2 (2,020) (13) Proceeds from other financial assets 2 .2, 6 .3 2,386 33 Other cash flows from investing activities (29) (17) Cash flow used in investing activities (9,279) (2,322) Issuance of financial liabilities 2 .2 8,881 223 Repayment of financial liabilities 2 .2 (641) (471) Repayment of lease liabilities 2 .3 (267) (270) Dividends paid to equity holders of Swisscom Ltd 2 .1 (1,140) (1,140) Dividends paid to non-controlling interests – (1) Acquisition of non-controlling interests 5 .2 (15) – Other cash flows from financing activities 1 (12) Cash inflow (used in) from financing activities 6,819 (1,671) Net increase in cash and cash equivalents 1,517 36 Cash and cash equivalents at 1 January 148 121 Foreign currency translation adjustments in respect of cash and cash equivalents (142) (9) Cash and cash equivalents at 31 December 1,523 148
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145 Consolidated statement of changes in equity Equity Foreign attributable currency to equity Non- Share Capital Retained translation Hedging holders of controlling Total In CHF million capital reserves earnings adjustments reserves Swisscom interests equity Balance at 1 January 2023 52 136 12,942 (1,960) (2) 11,168 3 11,171 Net income – – 1,711 – – 1,711 – 1,711 Other comprehensive income – – 15 (126) (10) (121) – (121) Comprehensive income – – 1,726 (126) (10) 1,590 – 1,590 Dividends paid – – (1,140) – – (1,140) (1) (1,141) Other changes – – 1 – – 1 1 2 Balance at 31 December 2023 52 136 13,529 (2,086) (12) 11,619 3 11,622 Net income – – 1,542 – – 1,542 (1) 1,541 Other comprehensive income – – 146 5 (11) 140 – 140 Comprehensive income – – 1,688 5 (11) 1,682 (1) 1,681 Dividends paid – – (1,140) – – (1,140) – (1,140) Other changes – – (6) – – (6) (2) (8) Balance at 31 December 2024 52 136 14,071 (2,081) (23) 12,155 – 12,155
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146 Consolidated Financial Statements | Notes to the consolidated financial statements Notes to the consolidated financial statements The financial report is a translation from the original German version. In case of any inconsistency the German version shall prevail. General information and changes in accounting policies General disclosures The Swisscom Group (hereinafter referred to as Swisscom) provides telecom services. It operates mainly in Swit- zerland and Italy. The consolidated financial statements for the year ended 31 December 2024 comprise Swisscom Ltd, as the holding company, and its subsidiaries. Swisscom Ltd is a public limited company with special status under Swiss law and has its registered office in Ittigen (Bern). Its address is: Swisscom Ltd, Alte Tiefenaustrasse 6, 3048 Worb laufen. Swisscom is listed on the SIX Swiss Exchange. The number of issued shares is unchanged from the prior year and totals 51,801,943. The shares have a nominal value of CHF 1 and are fully paid-up. Each share entitles the holder to one vote. The majority shareholder of Swisscom Ltd remains, as in the prior year, the Swiss Confederation (‘Confederation’). The Confederation is obligated by current law to hold the majority of the cap- ital and voting rights. The Board of Directors of Swisscom approved the issuance of these consolidated financial statements on 12 February 2025. No material events after the reporting date have occurred to date. The consol- idated financial statements are subject to approval by the shareholders of Swisscom Ltd at its Annual General Meeting to be held on 26 March 2025. Takeover of Vodafone Italia In March 2024, Swisscom signed a sales agreement with Vodafone Group Plc regarding the takeover of 100% of Vodafone Italia for a purchase price of EUR 8.0 billion (cash and debt-free). The transaction was completed after all the regulatory approvals were received on 31 December 2024. Further information on the transaction can be found in Note 5.3. Until completion of the transaction, Swisscom only had restricted access to information on Vodafone Italia. For this reason and due to the short period of time between transaction completion and preparation of the consolidated financial statements for 2024, it was not possible for Swisscom to determine or, therefore, disclose all the information for disclosure under IFRS Accounting Standards. Where disclosure was not practical, this was noted accordingly. Basis of preparation The consolidated financial statements of Swisscom have been prepared in accordance with the IFRS Accounting Standards (IFRS), and in compliance with the provisions of Swiss law. The reporting period covers twelve months. The consolidated financial statement is presented in Swiss francs (CHF), which corresponds to the functional currency of Swisscom Ltd. Unless otherwise noted, all amounts are stated in millions of Swiss francs. The con - solidated financial statements are drawn up on the historical cost basis, unless a standard or interpretation prescribes another measurement basis for a particular line item, in which case this is explicitly stated in the accounting policies. Material accounting policies of relevance for an understanding of the consolidated financial statements are set out in the specific notes to the financial statements.
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147 Significant judgements, estimates and assumptions in applying the accounting policies The preparation of consolidated financial statements is dependent upon assumptions and estimates being made in applying the accounting policies, for which management can exercise a certain degree of judgement. In par- ticular, this concerns the following positions. Description Further information Leases Note 2 .3 Property, plant and equipment Note 3 .2 Intangible assets Note 3 .3 Goodwill Note 3 .4 Provisions for dismantlement and restoration costs Note 3 .5 Provision for regulatory and competition law procedures Note 3 .5 Defined benefit plans Note 4 .3 Amendments to IFRS Accounting Standards and Interpretations which are to be applied for the first time in the financial year Standard Name Amendments to IFRS 16 Lease liability in a sale and leaseback transaction Amendments to IAS 1 Classifying liabilities as current or non-current Amendments to IAS 7 Supplier finance arrangements As of 1 January 2024, Swisscom adopted amendments to existing IFRS Accounting Standards that have no mate- rial impact on the results or financial position of the Group. Further information regarding the changes to the IFRS Accounting Standards which must be applied in 2025 or later are set out in Note 6.4. Voluntary changes in accounting policies Swisscom reviewed the classification and presentation of direct and indirect costs. The review resulted in the introduction of changes, primarily to the way purchased network services are classified and presented, from 2024 onwards. This improves the presentation of the operating expenses for the financial management of Swisscom’s operating units and increases comparability with the peer group from the telecommunications sector. The previ- ous year was adjusted accordingly. The change increases direct costs, and reduces indirect costs, by CHF 181 million each for the financial year 2023.
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148 Consolidated Financial Statements | Notes to the consolidated financial statements 1 Operating performance This chapter sets out information on the operating performance of Swisscom in the current financial year . The classification according to operating segments corresponds to the reporting system used internally to evaluate performance and allocate resources as well as to Swisscom’s management structure . 1.1 Segment information Changes in segment reporting With effect from 1 January 2024, Swisscom reallocated various divisions and central costs to the segments within Swisscom Switzerland. In addition, the TV-related Swisscom Broadcast operating division (Other Operating Segments) was shifted to the Residential Customers segment within Swisscom Switzerland. The prior year’s figures have been restated as follows: In CHF million Reported Adjustment Restated Revenue 2023 financial year Residential Customers 4,502 3 4,505 Business Customers 3,098 (15) 3,083 Wholesale 542 (1) 541 Infrastructure & Support Functions 73 – 73 Elimination (69) 14 (55) Swisscom Switzerland 8,146 1 8,147 Fastweb 2,561 – 2,561 Other Operating Segments 1,075 (12) 1,063 Elimination (710) 11 (699) Total revenue 11,072 – 11,072 Operating income before depreciation and amortisation (EBITDA) 2023 financial year Residential Customers 2,979 28 3,007 Business Customers 1,358 (13) 1,345 Wholesale 326 (1) 325 Infrastructure & Support Functions (963) (6) (969) Intersegment elimination 1 – 1 Swisscom Switzerland 3,701 8 3,709 Fastweb 776 – 776 Other Operating Segments 153 (8) 145 Elimination (8) – (8) Total EBITDA 4,622 – 4,622
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149 General disclosures Segment Activity Residential Customers The Residential Customers segment provides mobile and fixed-network services to residential customers in Switzer- land, such as telephony, broadband, TV and mobile offerings . The segment also includes the sale of terminal equip- ment . Business Customers The Business Customers segment focuses on telecom services and overall communications solutions for business customers in Switzerland . Its offering in the area of business ICT infrastructure covers the entire range from individual products to complete solutions . Wholesale This segment incorporates the use of the Swisscom fixed-line and mobile network by other telecommunications ser- vice providers and the use of external networks by Swisscom . In addition, Wholesale includes roaming by foreign operators whose customers use the Swisscom mobile network, as well as broadband services and regulated access services to the access network Infrastructure & Support Functions The segment Infrastructure & Support Functions is responsible for the planning, operation and maintenance of Swisscom’s network infrastructure and all IT systems . It is responsible for the development and production of IT and network services in Switzerland . In addition, Infrastructure & Support Functions also includes Group-wide support functions such as finance, human resources or strategy as well as the management of real estate and the vehicle fleet in Switzerland . Fastweb Fastweb provides broadband and mobile services to residential, business and wholesale customers in Italy . The offer- ing includes telephony, broadband and mobile offerings . For business customers, Fastweb offers comprehensive ICT solutions . Other Operating Segments Other Operating Segments mainly comprises Swisscom Directories Ltd (localsearch), which operates in the field of online directories, cablex Ltd, which provides services in the building, maintenance and operation of of high-perform- ing ICT and network infrastructure solutions, and Swisscom Broadcast Ltd, which is the leading provider in Switzer- land of broadcast services, of cross-platform retail media services, and of security communications . Reporting is divided into the following segments: Residential Customers, Business Customers, Wholesale, and Infra- structure & Support Functions, which are grouped under Swisscom Switzerland, as well as Fastweb and Other Operating Segments. Vodafone Italia was not assigned to an operating segment as of 31 December 2024. For its services, the Infrastructure & Support Functions segment does not charge any network costs or manage- ment fees whatsoever to other segments. The remaining services between the segments are charged at market prices. The results of the Residential Customers, Business Customers and Wholesale segments thus correspond to a contribution margin before network costs. Segment expense encompasses the direct costs, personnel expense and other indirect costs, which include other operating costs less capitalised costs of self-constructed assets and other income. Pension cost includes ordinary employer contributions. The difference between the ordinary employer contributions and the pension cost as provided for under IAS 19 is reported in the elimination column. The Eliminations column in the segment result, which totals CHF –24 million (prior year: CHF –8 million), includes income of CHF 25 million (prior year: CHF 37 million) as a pension cost reconciliation item in accordance with IAS 19. Leases between the segments are not recognised in the balance sheet in accordance with IFRS 16. The reported lease expense of the segments comprises depreciation and interest on right-of-use assets excluding depreciation of prepaid indefeasible rights of use (IRU) of CHF 18 million (prior year: CHF 18 million), no impairment losses on right-of-use assets (prior year: CHF 29 million) and the accounting for the rental of buildings between segments. The lease expense of low value assets is presented as direct costs. Capital expenditure consists of the purchase of property, plant and equipment and intangible assets and pay- ments for indefeasible rights of use (IRU). In general, IRU are paid in full at the beginning of the usage period. If the criteria of IFRS 16 are met, they are classified as a lease. From an economic point of view, pre-paid IRU will be Swisscom Switzerland Fastweb Other Operating Segments Swisscom Group Residential Customers Business Customers Wholesale Infrastructure & Support Functions
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150 Consolidated Financial Statements | Notes to the consolidated financial statements considered as capital expenditure in the segment information. IRU payments in 2024 amounted to CHF 24 million (prior year: CHF 20 million). Swisscom Switzerland sometimes sells mobile handsets at a subsidised rate as part of a bundled offering with a mobile contract. As a result of the reallocation of revenue over the pre-delivered components (mobile handset), revenue is recognised earlier than the date of invoicing. This results in contract assets deriving from this business being recognised. In the segment reporting of Swisscom Switzerland, the recognition and derecognition of these contract assets is reported as other revenue. The amounts invoiced are reported under revenue from telecoms services or merchandise. On 31 December 2024, Swisscom completed the acquisition of Vodafone Italia. With the completion of the transaction, costs of EUR 176 million (CHF 167 million) were recorded in Swisscom’s 2024 consolidated financial statements in operating income before depreciation and amortisation (EBITDA) as other operating expenses, of which EUR 104 million (CHF 99 million) was recorded as recognition of other provisions and EUR 72 million (CHF 68 million) as impairment losses relating to operating assets. These costs relate to the planned exit from existing MVNO and mobile network sharing agreements in connection with the migration of Fastweb mobile customers to the Vodafone Italia network. See Notes 3.1 and 3.5. In the previous year, Fastweb reviewed its strategy for the establishment of a fixed wireless access (FWA) net- work and decided to adjust this strategy at the end 2023. FWA expansion going forward will use the company’s own 5G network infrastructure based on an agreement with WindTre. By contrast, the previous strategy of establishing a dedicated FWA network outside of those areas with optical fibre access (FTTH) was abandoned. The strategic adjustment resulted in expenses of EUR 61 million (CHF 60 million) being recognised in Fastweb’s operating income before depreciation and amortisation (EBITDA) in 2023. Impairment losses were also recog- nised on property, plant and equipment and on right-of-use assets. See Notes 2.3 and 3.2.
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151 Segment information 2024 Other Swisscom Operating Elimi- 2024, in CHF million Switzerland Fastweb Segments nation Total Residential customers 4,357 1,113 – – 5,470 Business customers 3,072 1,188 427 – 4,687 Wholesale customers 514 365 – – 879 External revenue 7,943 2,666 427 – 11,036 Intersegment revenue 63 6 684 (753) – Revenue 8,006 2,672 1,111 (753) 11,036 Direct costs (1,635) (1,325) (79) 67 (2,972) Personnel expense (2,128) (226) (425) 30 (2,749) Other indirect costs (682) (450) (460) 632 (960) Operating income before depreciation and amortisation (EBITDA) 3,561 671 147 (24) 4,355 Depreciation, amortisation and impairment of property, plant and equipment, intangible assets and goodwill (2,143) Depreciation of right-of-use assets (261) Operating income (EBIT) 1,951 Financial income 167 Financial expense (255) Result of equity-accounted investees (2) Income before income taxes 1,861 Income tax expense (320) Net income 1,541 EBITDA 3,561 671 147 (24) 4,355 Lease expense (232) (48) (11) – (291) EBITDA after lease expense (EBITDAaL) 3,329 623 136 (24) 4,064 Capital expenditure (1,725) (597) (39) 49 (2,312) Operating free cash flow 1,604 26 97 25 1,752 Segment information Swisscom Switzerland 2024 Infrastructure Total Residential Business Whole- & Support Elimi- Swisscom 2024, in CHF million Customers Customers sale Functions nation Switzerland Fixed-line 1,968 791 – – – 2,759 Mobile 1,827 703 – – – 2,530 Telecom services 3,795 1,494 – – – 5,289 IT services – 1,191 – – – 1,191 Merchandise 448 353 – – – 801 Wholesale – – 514 – – 514 Revenue other 114 18 – 16 – 148 External revenue 4,357 3,056 514 16 – 7,943 Intersegment revenue 15 40 10 59 (61) 63 Revenue 4,372 3,096 524 75 (61) 8,006 Direct costs (791) (745) (222) (1) 124 (1,635) Personnel expense (304) (896) (14) (914) – (2,128) Other indirect costs (280) (179) 3 (162) (64) (682) Operating income before depreciation and amortisation (EBITDA) 2,997 1,276 291 (1,002) (1) 3,561 Capital expenditure (37) (39) – (1,648) (1) (1,725)
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152 Consolidated Financial Statements | Notes to the consolidated financial statements Segment information 2023 Other Swisscom Operating Elimi- 2023, in CHF million, restated Switzerland Fastweb Segments nation Total Residential customers 4,490 1,132 – – 5,622 Business customers 3,069 1,103 427 – 4,599 Wholesale customers 530 321 – – 851 External revenue 8,089 2,556 427 – 11,072 Intersegment revenue 58 5 636 (699) – Revenue 8,147 2,561 1,063 (699) 11,072 Direct costs (1,705) (1,183) (82) 64 (2,906) Personnel expense (2,081) (220) (421) 42 (2,680) Other indirect costs (652) (382) (415) 585 (864) Operating income before depreciation and amortisation (EBITDA) 3,709 776 145 (8) 4,622 Depreciation and amortisation of property, plant and equipment and intangible assets (2,126) Depreciation of right-of-use assets (291) Operating income (EBIT) 2,205 Financial income 30 Financial expense (160) Result of equity-accounted investees – Income before income taxes 2,075 Income tax expense (364) Net income 1,711 EBITDA 3,709 776 145 (8) 4,622 Lease expense (225) (54) (11) 2 (288) EBITDA after lease expense (EBITDAaL) 3,484 722 134 (6) 4,334 Capital expenditure (1,690) (606) (40) 44 (2,292) Operating free cash flow 1,794 116 94 38 2,042 Segment information Swisscom Switzerland 2023 Infrastructure Total Residential Business Whole- & Support Elimi- Swisscom 2023, in CHF million, restated Customers Customers sale Functions nation Switzerland Fixed-line 2,004 819 – – – 2,823 Mobile 1,852 726 – – – 2,578 Telecom services 3,856 1,545 – – – 5,401 IT services – 1,154 – – – 1,154 Merchandise 503 332 – – – 835 Wholesale – – 530 – – 530 Revenue other 131 23 – 15 – 169 External revenue 4,490 3,054 530 15 – 8,089 Intersegment revenue 15 29 11 58 (55) 58 Revenue 4,505 3,083 541 73 (55) 8,147 Direct costs (874) (708) (239) – 116 (1,705) Personnel expense (305) (868) (14) (894) – (2,081) Other indirect costs (319) (162) 37 (148) (60) (652) Operating income before depreciation and amortisation (EBITDA) 3,007 1,345 325 (969) 1 3,709 Capital expenditure (49) (59) – (1,582) – (1,690)
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153 Disclosure by geographical regions 2024 2023 Non-current Non-current In CHF million Revenue assets Revenue assets Switzerland 8,363 16,843 8,516 16,576 Italy 2,666 13,091 1 2,556 3,382 Other countries 7 10 – 9 Not allocated – 906 – 1,065 Total 11,036 30,850 11,072 21,032 1 Incl. Vodafone Italia. See Note 5.3. Disclosure by products and services In CHF million 2024 2023 Telecom services 7,445 7,500 IT services 1,191 1,184 Merchandise 801 930 Wholesale 879 851 Revenue other 720 607 Total revenue 11,036 11,072
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154 Consolidated Financial Statements | Notes to the consolidated financial statements Accounting policies Telecoms services Telecoms services encompass mobile and fixed-network services both in Switzerland and abroad. Mobile phone services comprise the basic charges; in addition, they include domestic and international cellular traffic by Swisscom customers within Switzerland and abroad. Swisscom offers subscriptions with a monthly flat-rate sub- scription, the revenue for which is recognised on a straight-line basis over the minimum term of the contract. Depending on the type of subscription, revenue is also recognised on the basis of the minutes used. The mini- mum contract term is generally 12 or 24 months. If a mobile handset is sold as part of a bundled offering with a subscription, it is considered a multi-element contract. Similar multi-element contracts are grouped into portfo- lios for revenue accounting. The total transaction price for multi-element contracts is allocated to each identi- fied performance obligation on the basis of relative stand-alone selling prices. The stand-alone selling prices of mobile handsets and subscriptions correspond to Swisscom’s list price and the minimum contract term. Non-re- fundable connection fees which do not constitute a separate performance obligation are considered as part of the total transaction price and allocated to the separate performance obligations arising under the customer contract on a pro rata basis. In the event that there is no minimum contract term, the revenue is recognised at the time of connection. Fixed-network services principally comprise the basic charges for fixed telephony, broadband and TV connections, as well as the domestic and international telephony traffic of individuals and corporate customers. In addition, Swisscom makes bundled offerings comprising broadband and TV connections with an optional fixed-line telephony connection. These subscription fees are flat rate. The minimum contract term is twelve months. Revenues are recognised on a straight-line basis over the term of the contract. Revenue for telephone calls is recognised at the time when the calls are made. IT services The service area of communications and IT solutions (IT service) principally comprises advisory services and the implementation, maintenance and operation of communication infrastructures. Furthermore, the area includes applications and services, as well as the integration, operation and maintenance of data networks and outsourc- ing services. Revenue from customer-specific orders is recognised using a measure of progress method, which is measured on the basis of the relationship of the costs incurred to total anticipated costs. Revenue arising on long-term outsourcing contracts is recognised as a function of performance to date provided to the customer. The duration of these contracts is generally between three and seven years. Transition projects in connection with an outsourcing contract are not recorded as separate performance obligations. Maintenance revenues are recog- nised on a straight-line basis over the term of the maintenance contracts. Variable consideration is only included in the transaction price if it is highly probable that no significant revenue reversals will occur in the future. Sales of merchandise Mobile handsets, fixed-line devices and miscellaneous supplies are recognised as revenue at the time of delivery or provision of the service. Swisscom sells routers and TV-Boxes to be used for services provided by Swisscom. As these devices are only compatible with the Swisscom network and cannot be used for networks of other telecommunications service providers, they are not recorded as separate performance obligations. Revenue is deferred and recognised over the minimum contract term of the related broadband or TV subscription. Wholesale The services principally comprise leased lines and the use of the Swisscom fixed network by other telecom- munications service providers (roaming). Leased-line charges are recognised as revenue on a straight-line basis over the terms of the contract. Roaming services are recognised as revenue on the basis of the call minutes or as contractually agreed charges as of the time of providing the service, taking market conditions and other entity-specific factors into account. When determining the fair value for the recognition of revenue and costs for individual roaming contracts that contain minimum guarantees, in addition to the contractually agreed prices, Swisscom also takes into account company-specific factors and market conditions. Roaming services charged to other telecommunications service providers are reported on a gross basis.
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155 1.2 Operating expense Direct costs In CHF million 2024 2023 Customer premises equipment and merchandise 988 1,007 Services purchased 696 623 Costs to obtain a contract 219 225 Costs to fulfil a contract 73 86 Network access costs of Swiss subsidiaries 217 240 Network access costs of foreign subsidiaries 779 725 Total direct costs 2,972 2,906 Indirect costs In CHF million 2024 2023 Salary and social security expenses 2,686 2,613 Other personnel expense 63 67 Total personnel expense 1 2,749 2,680 Information technology cost 291 289 Maintenance expense 268 286 Energy costs 175 158 Advertising and selling expenses 160 168 Consultancy expenses and freelance workforce 112 97 Rent network capacities 136 109 Call centre services purchased 109 117 Administration expense 34 33 Allowances for receivables and contract assets 53 70 Miscellaneous operating expenses 389 303 Total other operating expense 1,727 1,630 Capitalised self-constructed tangible and intangible assets (600) (541) Own work for capitalised contract costs (37) (49) Gain on sale of property, plant and equipment (27) (6) Miscellaneous income (103) (170) Total capitalised self-constructed assets and other income (767) (766) Total indirect costs 3,709 3,544 1 See Note 4.1. Capitalised self-constructed tangible and intangible assets include personnel costs accrued in the manufacturing of technical installations, the construction of network infrastructure and the development of software for internal use.
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156 Consolidated Financial Statements | Notes to the consolidated financial statements Accounting policies Costs to obtain a contract Swisscom pays commissions to dealers for the acquisition and retention of mobile phone customers. The commission payable is dependent on the type of subscription. Subscriber acquisition and retention costs are deferred and amortised over the related revenue-recognition period. In addition, Swisscom will reimburse the dealer for any handset subsidies they grant to customers when they take out a Swisscom mobile subscription at the same time. The associated costs are deferred and recognised on a straight-line basis over the contract term as the costs of obtaining a contract. The amortisation period corresponds to the related revenue-recognition period. See Note 1.1. Costs to fulfil a contract In connection with a broadband or TV subscription, the customer must purchase a router or TV-Box in order to use the services of Swisscom. Routers and TV -Boxes can only be used for services provided by Swisscom. The cost of routers and TV-Boxes are reported as costs to fulfil a contract and amortised over the minimum term of the contract. The set-up costs incurred to transfer and integrate outsourcing transactions with corporate customers are deferred and amortised against income on a straight-line basis over the duration of the operating contract. The amortisation period corresponds to the related revenue-recognition period. See Note 1.1.
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157 2 Capital and financial risk management The following chapter sets out the procedures and guidelines governing the active management of the capital structure and the financial risks to which Swisscom is exposed . Swisscom strives to achieve a robust equity basis, which enables it to guarantee its ability to continue as a going concern and to offer investors an appropriate return based on the risks assumed . 2.1 Capital management and equity Debt Swisscom’s debt situation is aligned with the limit on net debt in relation to the operating result before depre- ciation and amortisation (EBITDA) as set by the Federal Council in its financial targets. The Federal Council has set the limit for net debt at 2.4x EBITDA. It is possible that this ratio may be exceeded at times. Swisscom has an A credit rating with rating agency S&P Global and an A1 credit rating with Moody’s. It aims to keep its ratings in the single A range. Net debt consists of financial liabilities and lease liabilities less cash and cash equivalents, listed debt instruments and derivative financial instruments. The net debt to EBITDA ratio is as follows: In CHF million 31.12.2024 31 .12 .2023 Net debt 15,597 1 7,071 Operating income before depreciation and amortisation (EBITDA) 4,355 4,622 1 Incl. Vodafone Italia (purchase price and acquired lease liabilities). See Note 5.3. Equity ratio Swisscom strives to achieve an equity ratio of a minimum of 30%. The equity ratio is computed as follows: In CHF million 31.12.2024 31 .12 .2023 Equity 12,155 11,622 T otal assets 37,211 24,750 Equity ratio in % 32.7 47.0 Dividend policy Swisscom pursues a policy of stable dividends whereby a dividend per share at least equal to the previous year is paid out if financial targets are achieved. Distributable reserves are not determined on the basis of the equity as reported in the consolidated financial statements but rather on the basis of equity as reported in the statutory financial statements of the parent company, Swisscom Ltd. As at 31 December 2024, Swisscom Ltd’s distrib- utable reserves amounted to CHF 8,841 million. The dividend is proposed by the Board of Directors and must be approved by the Annual General Meeting of Shareholders. Treasury shares are not entitled to a dividend. Swisscom Ltd paid the following dividends in 2023 and 2024. In CHF million, except where indicated 2024 2023 Number of registered shares eligible for dividend (in millions of shares) 51 .802 51 .802 Ordinary dividend per share (in CHF) 22 .00 22 .00 Dividends paid 1,140 1,140 The Board of Directors will propose the payment of an unchanged dividend of CHF 22 per share for the 2024 financial year to the Annual General Meeting of Shareholders of Swisscom Ltd on 26 March 2025. This results in a total dividend payment of CHF 1,140 million. The dividend payment is scheduled for 1 April 2025.
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158 Consolidated Financial Statements | Notes to the consolidated financial statements Earnings per share In CHF million, except where indicated 2024 2023 Share of net income attributable to equity holders of Swisscom Ltd 1,542 1,711 Weighted average number of shares outstanding (number) 51,801,712 51,801,652 Basic and diluted earnings per share (in CHF) 29.77 33.03 Supplementary information on equity Development of retained earnings and other reserves as well as comprehensive income in 2024 Foreign currency Equity Non- Retained translation Hedging holders of controlling In CHF million earnings adjustments reserves Swisscom interests Total Balance at 1 January 2024 13,529 (2,086) (12) 11,431 3 11,434 Net income 1,542 – – 1,542 (1) 1,541 Actuarial gains and losses from defined benefit pension plans (21) – – (21) – (21) Change in fair value of equity instruments 163 – – 163 – 163 Income tax expense 4 – – 4 – 4 Items that will not be reclassified to income statement 146 – – 146 – 146 Foreign currency translation adjustments of foreign subsidiaries – 2 – 2 – 2 Fair value losses of cash flow hedges transferred to income statement – – (19) (19) – (19) Income tax expense – 3 8 11 – 11 Items that may be reclassified to income statement – 5 (11) (6) – (6) Other comprehensive income 146 5 (11) 140 – 140 Comprehensive income 1,688 5 (11) 1,682 (1) 1,681 Dividends paid (1,140) – – (1,140) – (1,140) Other changes (6) – – (6) (2) (8) Balance at 31 December 2024 14,071 (2,081) (23) 11,967 – 11,967 Development of retained earnings and other reserves as well as comprehensive income in 2023 Foreign currency Equity Non- Retained translation Hedging holders of controlling In CHF million earnings adjustments reserves Swisscom interests Total Balance at 1 January 2023 12,942 (1,960) (2) 10,980 3 10,983 Net income 1,711 – – 1,711 – 1,711 Actuarial gains and losses from defined benefit pension plans (35) – – (35) – (35) Change in fair value of equity instruments 42 – – 42 – 42 Income tax expense 8 – – 8 – 8 Items that will not be reclassified to income statement 15 – – 15 – 15 Foreign currency translation adjustments of foreign subsidiaries – (135) – (135) – (135) Fair value losses of cash flow hedges transferred to income statement – – (10) (10) – (10) Income tax expense – 9 – 9 – 9 Items that may be reclassified to income statement – (126) (10) (136) – (136) Other comprehensive income 15 (126) (10) (121) – (121) Comprehensive income 1,726 (126) (10) 1,590 – 1,590 Dividends paid (1,140) – – (1,140) (1) (1,141) Other changes 1 – – 1 1 2 Balance at 31 December 2023 13,529 (2,086) (12) 11,431 3 11,434
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159 2.2 Financial liabilities In CHF million 2024 2023 Balance at 1 January 5,665 6,002 Issuance of bank loans 3,245 12 Issuance of debenture bonds 5,634 200 Issuance of other financial liabilities 2 11 Issuance of financial liabilities 8,881 223 Repayment of bank loans (141) (221) Repayment of debenture bonds (500) (250) Repayment of other financial liabilities – – Repayment of financial liabilities (641) (471) Interest expense 150 75 Interest payments (112) (84) Foreign currency translation adjustments (140) (129) Change in fair value 71 43 Accrual of deferred purchase price margins from business combinations 3 9 Payments for deferred consideration from business combinations 1 (2) (13) Business combinations 12 – Other changes 12 10 Balance at 31 December 13,899 5,665 Bank loans 3,394 267 Debenture bonds 9,832 4,789 Private placements 322 322 Derivative financial instruments 2 177 136 Other financial liabilities 174 151 Total financial liabilities 13,899 5,665 Thereof current financial liabilities 1,639 718 Thereof non-current financial liabilities 12,260 4,947 1 Reported in the cash flow statement as cash flow used in investing activities. See Note 5.2. 2 See Note 2.5. Financing the acquisition of Vodafone Italia In March 2024, Swisscom signed a contract to acquire Vodafone Italia for EUR 8.0 billion. The transaction was completed on 31 December 2024. The transaction was financed by the issuance of domestic Swiss bonds total- ling CHF 1.2 billion, Eurobonds of EUR 4.5 billion (CHF 4.2 billion) and syndicated bank loans in the amount of CHF 2.3 billion. The funds raised from the bond issuance were invested in current financial assets until the com- pletion of the transaction. Depending on the maturity, current financial assets are recognised as cash and cash equivalents or as other current financial assets in Swisscom’s consolidated financial statements. Further informa- tion on the acquisition of Vodafone Italia is provided in Note 5.3. Credit lines Swisscom has two confirmed lines of credit amounting to CHF 1,700 million and CHF 1,200 million, both maturing in 2028. The line of credit amounting to CHF 1,700 million is a sustainability-linked loan. The amount of the credit margin is linked to the achievement of defined sustainability targets by Swisscom. As of 31 December 2024, neither of these lines of credit had been drawn down, as in the prior year.
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160 Consolidated Financial Statements | Notes to the consolidated financial statements Bank loans Carrying amount Par value Nominal Effective In CHF million Maturity years in currency interest rate interest rate 31.12.2024 31 .12 .2023 Bank loans in EUR 2, 3 2017–2024 150 0 .67% 0 .67% – 139 Bank loans in EUR 1 2023–2024 12 4 .27% 2 .23% 6 – 12 Bank loans in EUR 1 2024–2025 150 3 .29% 0 .22% 6 141 – Bank loans in EUR 1 2024–2025 50 3 .33% 0 .36% 6 47 – Bank loans in EUR 1 2024–2025 100 3 .27% 0 .30% 6 94 – Bank loans in EUR 1 2024–2025 150 3 .40% 0 .31% 6 141 – Bank loans in EUR 1 2024–2025 250 3 .46% 0 .47% 6 236 – Bank loans in EUR 1 2024–2025 350 3 .25% –0 .36% 6 330 – Compounded Bank loans in CHF 4 2024–2027 1,140 SARON +0 .55% 1 .70% 5 1,140 – Bank loans in USD 2 2009–2028 58 8 .30% 4 .62% 67 62 Bank loans in USD 2 2009–2028 51 7 .65% 4 .63% 58 54 Compounded Bank loans in CHF 4 2024–2029 1,140 SARON +0 .65% 1 .80% 5 1,140 – Total bank loans 3,394 267 1 Variable interest-bearing. 2 Fixed interest-bearing. 3 Designated for hedge accounting of net investments in foreign operations. 4 Fixed interest-bearing through interest rate swaps. 5 After hedging with interest rate swap. 6 After hedging with currency swap. As of 31 December 2024, Swisscom had taken out short-term bank loans on a weekly and monthly basis amount- ing to EUR 1,050 million or CHF 989 million (prior year: EUR 13 million or CHF 12 million). In connection with the financing of the acquisition of Vodafone Italia, Swisscom took out two bank loans totalling CHF 2,280 million at the end of 2024. In the third quarter of 2024, Swisscom repaid a bank loan of EUR 150 million (CHF 139 million) upon maturity.
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161 Debenture bonds Carrying amount Par value Nominal Effective In CHF million Maturity years in currency interest rate interest rate 31.12.2024 31 .12 .2023 Debenture bond in CHF (ISIN: CH0188335365) 2012–2024 500 1 .75% 1 .77% – 504 Debenture bond in EUR (ISIN: XS1288894691) 2015–2025 500 1 .75% 1 .55% 4 468 450 Debenture bond in CHF (ISIN: CH0247776138) 2014–2026 200 1 .50% 1 .47% 201 202 Debenture bond in EUR (ISIN: XS1803247557) 2 2018–2026 500 1 .13% –0 .71% 3 471 463 Debenture bond in EUR (ISIN: XSXS2827693446) 1 2024–2026 500 3 .50% 3 .70% 479 – Debenture bond in CHF (ISIN: CH0344583783) 2 2016–2027 200 0 .38% 0 .79% 3 201 193 Debenture bond in CHF (ISIN: CH0362748359) 2017–2027 350 0 .38% 0 .39% 351 350 Debenture bond in CHF (ISIN: CH0317921663) 2016–2028 200 0 .38% 0 .30% 201 201 Debenture bond in CHF (ISIN: CH0437180935) 2018–2028 150 0 .75% 0 .72% 150 150 Debenture bond in EUR (ISIN: XS2169243479) 2020–2028 500 0 .38% –1 .22% 3 468 460 Debenture bond in EUR (ISIN: XS2827694170) 1 2024–2028 500 3 .50% 3 .57% 475 – Debenture bond in CHF (ISIN: CH0254147504) 2014–2029 160 1 .50% 1 .47% 160 161 Debenture bond in CHF (ISIN: CH0419040982) 2019–2029 200 0 .50% 0 .45% 201 201 Debenture bond in CHF (ISIN: CH1248666930 ) 2023–2030 150 1 .88% 1 .91% 151 151 Debenture bond in CHF (ISIN: CH1350727785) 2024–2030 315 1 .65% 1 .65% 317 – Debenture bond in CHF (ISIN: CH0515152467) 2020–2031 100 0 .13% 0 .15% 100 100 Debenture bond in EUR (ISIN: XS2827696035) 1 2024–2031 1,250 3 .50% 3 .60% 1,173 – Debenture bond in CHF (ISIN: CH0336352775) 2016–2032 300 0 .13% 0 .14% 300 300 Debenture bond in CHF 2017/ (ISIN: CH0373476164) 2019–2033 230 0 .75% 0 .66% 232 232 Debenture bond in CHF (ISIN: CH1112455766) 2021–2033 100 0 .25% 0 .27% 100 100 Debenture bond in CHF (ISIN: CH0580291968) 2020–2034 100 0 .25% 0 .27% 100 100 Debenture bond in CHF (ISIN: CH1350727793) 2024–2034 455 1 .80% 1 .83% 457 – Debenture bond in EUR (ISIN: XS2894869416) 1 2024–2034 500 3 .25% 3 .37% 471 – Debenture bond in CHF 2015/ (ISIN: CH0268988182) 2 2018–2035 300 1 .00% 1 .03% 3 309 296 Debenture bond in CHF (ISIN: CH1361401875) 2024–2035 100 1 .20% 1 .19% 100 – Debenture bond in EUR (ISIN: XS2827697272) 1 2024–2036 1,000 3 .63% 3 .76% 932 – Debenture bond in CHF (ISIN: CH1350727801) 2024-2039 375 2 .00% 1 .99% 376 – Debenture bond in CHF (ISIN: CH0494734335) 2019–2044 125 0 .00% 0 .00% 125 125 Debenture bond in EUR (ISIN: XS2827708145) 1 2024–2044 750 3 .88% 3 .98% 712 – Debenture bond in CHF (ISIN: CH1254751907) 2023–2053 50 2 .19% 2 .21% 51 50 Total debenture bonds 9,832 4,789 1 Designated for hedge accounting of net investments in foreign operations. 2 Thereof CHF 350 million and EUR 500 million designated for fair value hedge accounting. 3 After hedging with interest rate swap. 4 After hedging with currency swap and taking hedge accounting into consider- ation.
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162 Consolidated Financial Statements | Notes to the consolidated financial statements In connection with the financing of the acquisition of Vodafone Italia, Swisscom took out loans of EUR 4,000 million (CHF 3,764 million) and CHF 1,145 million in the second quarter of 2024. In the third quarter of 2024, Swisscom also issued a eurobond of EUR 500 million (CHF 471 million) and a green bond of CHF 100 million. In the first quarter of 2023, Swisscom raised a green bond of CHF 150 million with a coupon of 1.875% and a maturity of 7.5 years. The funds raised were used within the Green Bond Framework. In addition, Swisscom raised a privately placed bond of CHF 50 million with a coupon of 2.19% and a maturity of 30 years in the first quarter of 2023. This was used to repay existing debt. Swisscom repaid a CHF 250 million bond upon maturity in the second quarter of 2023. Private placements Carrying amount Par value Nominal Effective In CHF million Maturity years in currency interest rate interest rate 31.12.2024 31 .12 .2023 Private placements in CHF 2022–2027 170 1 .71% 1 .71% 171 171 Private placements in CHF 2016–2031 150 0 .56% 0 .56% 151 151 Total private placements 322 322 The private placements may become due for immediate repayment if the shareholding of the Confederation in the capital of Swisscom falls below one third, or if another shareholder can exercise control over Swisscom. Other financial liabilities As at 31 December 2024, the carrying amount of other financial liabilities was CHF 174 million (prior year: CHF 151 million), consisting primarily of loans. 2.3 Leases Lessee Swisscom’s leases comprise in particular the rental of operation and office buildings, antenna sites, and network infrastructure. In addition, indefeasible rights of use (IRU) are classified as leases under IFRS 16. In general, IRU are paid in full at the beginning of use. The Italian subsidiary Fastweb procures various access services from other fixed-network operators and uses their connection cables to the end customer. Swisscom applies the low value asset exemption for these leases. Accordingly, no right-of-use assets and lease liabilities are recognised for these access services. The costs are reported as direct costs. There are no material lease commitments arising from leases that began after the balance sheet date. Swisscom concluded two agreements in 2001 for the sale of real estate. At the same time, it entered into long- term agreements to lease back part of the real estate sold which, in part, qualify as finance leases. The gain real- ised on real estate classified as finance leases was deferred. As at 31 December 2024, the carrying amount of the deferred gains was CHF 77 million (prior year: CHF 81 million). The deferred gains are released to other income over the term of the individual leases.
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163 Right-of-use assets Land Technical Other In CHF million and buildings installations right-of-use assets Total At cost Balance at 1 January 2023 2,410 1,021 25 3,456 Additions 234 62 13 309 Disposals (127) (19) (1) (147) Business combinations 4 – – 4 Foreign currency translation adjustments (12) (58) – (70) Balance at 31 December 2023 2,509 1,006 37 3,552 Additions 215 48 22 285 Disposals (26) (12) (10) (48) Business combinations 1 172 1,777 41 1,990 Foreign currency translation adjustments 3 15 – 18 Balance at 31 December 2024 2,873 2,834 90 5,797 Accumulated depreciation and impairment losses Balance at 1 January 2023 (930) (523) (11) (1,464) Depreciation (204) (50) (8) (262) Impairment losses (29) – – (29) Disposals 121 19 1 141 Foreign currency translation adjustments 4 30 – 34 Balance at 31 December 2023 (1,038) (524) (18) (1,580) Depreciation (196) (54) (11) (261) Disposals 25 12 9 46 Foreign currency translation adjustments (1) (7) – (8) Balance at 31 December 2024 (1,210) (573) (20) (1,803) Net carrying amount Net carrying amount at 1 January 2023 1,480 498 14 1,992 Net carrying amount at 31 December 2023 1,471 482 19 1,972 Net carrying amount at 31 December 2024 1,663 2,261 70 3,994 1 Incl. Vodafone Italia. See Note 5.3. Lease liabilities In CHF million 2024 2023 Balance at 1 January 1,915 1,911 Additions 285 309 Interest expense 48 44 Payments (315) (314) Disposals (1) (8) Business combinations 1 1,697 4 Foreign currency translation adjustments 7 (31) Balance at 31 December 3,636 1,915 Land and buildings 1,700 1,567 Technical installations 1,829 326 Other leases 107 22 Total lease liabilities 2 3,636 1,915 Thereof current lease liabilities 622 227 Thereof non-current lease liabilities 3,014 1,688 1 Incl. Vodafone Italia. See Note 5.3. 2 Note 2.5 shows the maturity analysis for lease liabilities.
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164 Consolidated Financial Statements | Notes to the consolidated financial statements Income and expenses arising from leases In CHF million 2024 2023 Revenue Income from leases excluding subleases 164 182 Income from subleases 3 3 Other income Deferred gain on sale and leaseback of real estate 4 4 Financial income Interest income on finance lease – 1 Direct costs Expense from leases of low value assets (82) (88) Depreciation and impairment losses Depreciation of right-of-use assets (261) (262) Impairment losses on right-of-use assets – (29) Financial expense Interest expense on lease liabilities (48) (44) Lessor Swisscom supplies other providers of telecommunications services with access lines for use, which are classified either as finance or operating leases. At the same time, Swisscom leases space in operations and offices buildings and at antenna sites, which is classified as an operating lease. Future lease payments in respect of receivables from finance leases as at 31 December 2023 and 2024 break down as follows: In CHF million 31.12.2024 31 .12 .2023 Within 1 year 47 46 Between 1 and 2 years 23 28 Between 2 and 3 years 11 10 Between 3 and 4 years 9 7 Between 4 and 5 years 8 7 After 5 years 32 32 Total future payments from finance leases 130 130 Future interest income – – Vodafone Italia 33 – Total receivables from finance leases 163 130 Thereof current receivables from finance leases 47 46 Thereof non-current receivables from finance leases 116 84 Future lease payments in respect of operating leases are as follows as at 31 December 2023 and 2024: In CHF million 31.12.2024 31 .12 .2023 Within 1 year 47 48 Between 1 and 2 years 44 45 Between 2 and 3 years 44 45 Between 3 and 4 years 43 44 Between 4 and 5 years 43 43 After 5 years 43 44 Total future payments from operating leases 264 269
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165 Significant judgements or estimates When determining the terms of leases, management considers all facts and circumstances that encompass an economic incentive to exercise renewal options or not exercise termination options. Renewal and termination options are only included in the contract term where there is sufficient certainty that they will be exercised. This assessment is reviewed in the event of a material occurrence or change in circumstances that might affect the previous assessment, where this is within the lessee’s control. Accounting policies Financial liabilities Financial liabilities are initially recognised at fair value less direct transaction costs. In subsequent accounting periods, they are re-measured at amortised cost using the effective interest method. Leases In particular, Swisscom leases comprise the rental of operation and office buildings, antenna sites, and network infrastructure and indefeasible rights of use (IRU). As a lessee, for each lease Swisscom recognises a lease liabil- ity for future lease payments and a right of use for the underlying asset as at the time when the leased asset becomes available to Swisscom. The lease payments are divided into a repayment component and an interest component. The interest component is recognised as an interest expense over the lease term computed on the basis of the effective interest method. The right-of-use asset is depreciated on a straight-line basis over the shorter of the useful life and the lease term. As a lessor, Swisscom has to distinguish between finance and oper- ating leases. A lease is recorded as a finance lease whenever essentially all of the risks and rewards incidental to ownership of the asset are transferred. Unless implicitly specified in the lease, the interest rate used to measure the rights of use and lease liabilities is the incremental borrowing rate. In the area of network access services, for selected leases Swisscom applies the exemptions regarding the separation of lease and non-lease components. The non-lease components are accounted for in accordance with other standards. Swisscom procures various access services from other network operators and uses their connection cables to the end customer. Under IFRS 16, part of these access services is classified as a lease. The value of the individual connection cable fulfils the criteria as an asset of low value. Swisscom applies the low value asset exemption for these leases. Accordingly, no right-of-use assets and lease liabilities are recognised for these access services. The costs of access services continue to be reported as an operating expense. The exemption for short-term leases is not applied. A number of leases for the rental of operation and office buildings include renewal and termination options which are taken into account in the initial measurement by category of building. Rental contracts of antenna sites have an initial lease term of 10 to 15 years. In general, these rental contracts include renewal and mutual termination options. For these leases, it is not reasonably certain that the renewal options will be exercised. Accordingly, no renewal options are taken into account in the initial measurement of rental contracts of antenna sites. Given Swisscom’s planning horizon of a maximum of five years and technological developments, it is not possible to estimate the amount of additional undiscounted payments from renewal options which are currently not included in the lease liabilities.
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166 Consolidated Financial Statements | Notes to the consolidated financial statements 2.4 Financial result In CHF million 2024 2023 Interest income on financial assets 116 8 Interest income on defined benefit obligations 1 3 5 Foreign exchange gains 33 – Other financial income 15 17 Total financial income 167 30 Interest expense on financial liabilities (150) (75) Interest expense on lease liabilities (48) (44) Foreign exchange losses – (8) Change in fair value of interest rate swaps (10) (5) Interest and present-value adjustments on provisions 2 10 (12) Other financial expense (57) (16) Total financial expense (255) (160) Financial income and financial expense, net (88) (130) Interest expense on lease liabilities (48) (44) Net interest expense on financial assets and liabilities (34) (67) 1 See Note 4.3. 2 See Note 3.5. 2.5 Financial risk management Swisscom is exposed to various financial risks arising from its operating and financing activities. Financial risk management is conducted in accordance with established guidelines, with the objective of limiting the poten- tially adverse effects thereof on the financial situation of Swisscom. The identified risks and measures to mini- mise them are presented below. Risk Source Risk mitigation Currency risks Swisscom is exposed to foreign exchange changes ● Reduction in cash flow volatility by use of forward which can impact the Group’s cash flows, currency contracts/swaps and currency swaps and financial result and equity . designation for hedge accounting (transaction risk) ● Reduction in translation risk by foreign currency financing and designation for hedge accounting ● Hedging of currency risk of foreign currency financing by use of currency swaps Interest rate risk Interest rate risks result from changes in interest rates ● Use of interest rate swaps to manage which can negatively impact cash flows and the financial fixed/variable share and duration situation of Swisscom . of financial debt Credit risks Through its operating business activities and derivative ● Guideline establishing minimum requirements from operating financial instruments and financial investments, for counterparties business activities Swisscom is exposed to the risk of default ● Designated counterparty limits and financial of a counterparty . ● Employment of netting agreements foreseen under transactions ISDA (International Swaps and Derivatives Association) ● Use of collateral agreements Liquidity risk Prudent liquidity management involves the holding ● Procedures and principles of adequate reserves of cash and cash equivalents, to ensure adequate liquidity negotiable securities as well as the possibility ● Two guaranteed bank credit lines of obtaining confirmed lines of credit . totalling CHF 2,900 million
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167 Currency risks As regards financial instruments, the following currency risks and hedging contracts existed for foreign curren- cies as of 31 December 2023 and 2024. 31.12.2024 31 .12 .2023 In CHF million EUR USD EUR USD Cash and cash equivalents 37 1 24 9 Trade receivables 12 7 10 6 Other financial assets 28 389 10 397 Financial liabilities (6,755) (224) (1,621) (216) Trade payables (61) (35) (27) (38) Net exposure at carrying amounts (6,739) 138 (1,604) 158 Net exposure to forecasted cash flows in the next 12 months (144) (269) (143) (259) Net exposure before hedges (6,883) (131) (1,747) (101) Forward currency contracts 221 274 240 248 Foreign currency swaps 1,046 (30) 78 (35) Currency swaps 1,412 – 463 – Hedges 2,679 244 781 213 Net exposure (4,204) 113 (966) 112 As at 31 December 2024, Swisscom had outstanding financial liabilities with a nominal value totalling EUR 4,500 million (CHF 4,235 million, prior year: EUR 1,150 million, CHF 1,061 million), which are designated for hedge accounting of net investments in foreign operations. In 2024, a loss of CHF 46 million (prior year: gain of CHF 70 million) arising from the measurement of financial liabilities was recognised in other comprehensive income in the foreign currency translation adjustments of foreign subsidiaries item. As at 31 December 2024, the cumulative positive amount of foreign currency translation differences in equity resulting from financial liabilities which are designated for hedge accounting of net investments in foreign operations totalled CHF 392 million. Foreign currency sensitivity analysis The following sensitivity analysis shows the impact on the income statement should the EUR/CHF and USD/CHF exchange rates change in line with their implicit volatility over the next twelve months. The analysis assumes that all other variables, in particular the interest rate level, remain constant. Income impact Hedges for Hedges for on balance sheet balance sheet Planned planned items items 1 cash flows cash flows In CHF million 31.12.2024 EUR volatility 5 .86% 395 (144) 8 (13) USD volatility 7 .70% (11) 2 21 (21) 31.12.2023 EUR volatility 5 .90% 95 (46) 8 – USD volatility 7 .39% (12) 3 19 (18) 1 Without hedge accounting of net investments in foreign operations. The volatility of balance sheet positions and scheduled cash flows is partially offset by the volatility of the related hedging contracts.
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168 Consolidated Financial Statements | Notes to the consolidated financial statements Interest rate risks The structure of interest-bearing financial instruments at nominal values is as follows: In CHF million 31.12.2024 31 .12 .2023 Fixed interest-bearing financial liabilities 10,360 5,482 Variable interest-bearing financial liabilities 3,268 12 Total interest-bearing financial liabilities 13,628 5,494 Fixed interest-bearing financial assets (256) (243) Variable interest-bearing financial assets (1,835) (422) Total interest-bearing financial assets (2,091) (665) Total interest-bearing financial assets and liabilities, net 11,537 4,829 Variable interest-bearing 1,433 (410) Fixed through interest rate swaps . (2,280) – Variable through interest rate swaps 821 813 Variable interest-bearing, net (26) 403 Fixed interest-bearing 10,104 5,239 Fixed through interest rate swaps . 2,280 – Variable through interest rate swaps (821) (813) Fixed interest-bearing, net 11,563 4,426 Total interest-bearing financial assets and liabilities, net 11,537 4,829 Interest rate sensitivity analysis A shift in interest rates by 100 basis points has no impact on the income statement (prior year: CHF 4 million). It has an impact of CHF 58 million (+100 basis points) or CHF –61 million (–100 basis points) on equity as at 31 December 2024 (previous year: nil). Credit risks Credit risks from financial transactions The carrying amounts of cash and cash equivalents and other financial assets exposed to credit risk (excluding trade receivables, receivables from finance leases and contract assets) may be analysed as follows: In CHF million 31.12.2024 31 .12 .2023 Cash and cash equivalents 1,523 148 Financial assets at amortised cost 408 375 Derivative financial instruments 29 2 Other assets valued at fair value 2 2 Total carrying amount of financial assets 1,962 527 The carrying amounts analysed by the S&P Global Ratings (formerly: Standard & Poor’s) rating of the counterparties may be summarised as follows: In CHF million 31.12.2024 31 .12 .2023 AAA 8 15 AA– to AA+ 285 324 A– to A+ 1,588 156 BBB– to BBB+ 44 13 BB– to BB+ 1 – Without rating 36 19 Total 1,962 527
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169 Financial risks from operating activities Credit risks on trade receivables, contract assets and other receivables arise from the Group’s operating activ- ities. Credit risks from other receivables are insignificant. As an initial step, Swisscom divides the credit risks from operating activities between Swisscom Switzerland and Fastweb. Default risks are principally impacted by the individual attributes of the customers. They are also influenced by the default risk of customer groups and industry sectors. Swisscom has a receivables management system in place to minimise default losses. It reviews new customers for their creditworthiness and sets maximum payment terms for customer groups. Swisscom divides customers into groups according to their creditworthiness, for the purposes of monitoring default risk. In the process it differentiates between individual and business customers, among other things. In addition, it takes into account the ageing structure of the receivables as well as the industry segment in which a business customer is active. The split of trade receivables and contract assets by operating segment is as follows: In CHF million 31.12.2024 31 .12 .2023 Notional amount Residential Customers 883 936 Business Customers 565 571 Wholesale 136 147 Infrastructure & Support Functions 7 5 Swisscom Switzerland 1,591 1,659 Fastweb 594 612 Vodafone Italia 1,049 – Other Operating Segments 147 169 Total notional amount 3,381 2,440 Allowances Residential Customers (41) (55) Business Customers (8) (10) Wholesale (2) (3) Infrastructure & Support Functions – – Swisscom Switzerland (51) (68) Fastweb (33) (31) Vodafone Italia (210) – Other Operating Segments (13) (25) Total allowances for doubtful debts (307) (124) Total notional amount less allowances for doubtful debts 3,074 2,316 As at 31 December 2024, the maturities of trade receivables and contract assets as well as any related valuation allowances may be analysed as follows: 31.12.2024 1 In CHF million Rate Par value Allowances Not overdue 1 .01% 1,788 (18) Past due up to 3 months 2 .87% 314 (9) Past due 4 to 6 months 39 .13% 46 (18) Past due 7 to 12 months 23 .73% 59 (14) Past due over 1 year 30 .40% 125 (38) Total 4.16% 2,332 (97) 1 Excl. Vodafone Italia.
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170 Consolidated Financial Statements | Notes to the consolidated financial statements As at 31 December 2023, the maturities of trade receivables and contract assets as well as any related valuation allowances may be analysed as follows: 31 .12 .2023 In CHF million Rate Par value Allowances Not overdue 0 .47% 1,691 (8) Past due up to 3 months 4 .63% 561 (26) Past due 4 to 6 months 22 .39% 67 (15) Past due 7 to 12 months 44 .90% 49 (22) Past due over 1 year 73 .61% 72 (53) Total 5.08% 2,440 (124) Movements in valuation allowances for trade receivables and contract assets may be analysed as follows: In CHF million 2024 2023 Balance at 1 January 124 122 Additions to allowances 64 80 Write-off of irrecoverable receivables subject to allowance (78) (66) Release of unused allowances (11) (10) Business combinations 210 – Foreign currency translation adjustments (2) (2) Balance at 31 December 307 124 Liquidity risk Contractual maturities including estimated interest payable Carrying Contractual Due within Due within Due within Due after In CHF million amount payments 1 year 1 to 2 years 3 to 5 years 5 years 31.12.2024 1 Bank loans 3,394 3,517 1,025 42 2,450 – Debenture bonds 9,832 11,713 679 1,341 2,704 6,989 Private placements 322 335 4 4 175 152 Derivative financial instruments 177 102 69 15 18 – Other financial liabilities 174 163 20 32 18 93 Lease liabilities 1,991 2,487 171 369 588 1,359 Trade payables 1,547 1,547 1,444 7 96 – Total 17,437 19,864 3,412 1,810 6,049 8,593 1 Excl. Vodafone Italia. Carrying Contractual Due within Due within Due within Due after In CHF million amount payments 1 year 1 to 2 years 3 to 5 years 5 years 31.12.2023 Bank loans 267 288 157 5 126 – Debenture bonds 4,789 5,018 544 498 2,089 1,887 Private placements 322 338 4 4 178 152 Derivative financial instruments 136 126 27 83 10 6 Other financial liabilities 151 151 22 33 14 82 Lease liabilities 1,915 2,504 273 241 581 1,409 Trade payables 1,611 1,611 1,517 14 80 – Total 9,191 10,036 2,544 878 3,078 3,536
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171 Derivative financial instruments Contract value Positive fair value Negative fair value In CHF million 31.12.2024 31 .12 .2023 31.12.2024 31 .12 .2023 31.12.2024 31 .12 .2023 Interest rate swaps in CHF 350 350 7 – – (14) Currency swaps in EUR 471 463 – – (80) (98) Total fair value hedges 821 813 7 – (80) (112) Forward currency contracts in USD 207 180 9 – – (8) Forward currency contracts in EUR 183 178 1 – (2) (7) Currency swaps in USD 2 – – – – – Interest rate swaps in CHF 2,280 – – – (61) – DC Eurobond hedges (unwound but not settled) – – 3 – – – Total cash flow hedges 2,672 358 13 – (63) (15) Interest rate swaps in CHF 20 20 – – (4) (2) Currency swaps in EUR 941 – – 2 (29) – Currency swaps in USD 57 51 – – (1) – Currency swaps in EUR 1,057 153 7 – – (2) Forward currency contracts in USD 67 68 2 – – (3) Forward currency contracts in EUR 38 62 – – – (2) Total other derivative financial instruments 2,180 354 9 2 (34) (9) Total derivative financial instruments 5,673 1,525 29 2 (177) (136) Thereof current derivative financial instruments 2 2 (25) (25) Thereof non-current derivative financial instruments 27 – (152) (111) Swisscom has entered into interest rate and foreign currency swaps, designated as fair value hedges and cash flow hedges, in order to hedge interest rate and foreign currency risks of fixed interest-bearing finance denom- inated in CHF and EUR. Derivative financial instruments contain forward contracts, designated as cash flow hedges, for hedging future purchases of goods and services in USD and EUR. Furthermore, derivative financial instruments include interest rate swaps which are not designated for hedge accounting purposes. In addition, derivative financial instruments exclusively comprise forward foreign currency transactions and foreign currency swaps in EUR and USD which serve to hedge future transactions in connection with financing or the operating business activities of Swisscom, and which are not designated for hedge accounting purposes. Swisscom does not enter into derivative financial instruments for speculative purposes. Supplier finance arrangements Swisscom participates in a supplier finance arrangement. Under these arrangements, a bank declares itself willing to make payments to the participating suppliers for invoices owed by Swisscom, and receives the payment from Swisscom at a later point in time. The main purpose of this arrangement is to enable efficient payment processing and to put suppliers in a position to receive payments from the bank before the due date of the invoice. In CHF million 31.12.2024 1 Carrying amount of liabilities under a supply finance arrangement Disclosed under trade payables 171 Therof suppliers have received payment from finance providers 166 Range of payment due dates Liabilities that are part of the arrangement 30–180 days Comparable trade payables that are not part of the arrangement 2 30–180 days 1 Comparative information is not required for the first applicable annual finan- cial report. 2 Comparable trade payables are, for example, trade payables of the entity within the same line of business or jurisdiction as the liabilities disclosed under.
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172 Consolidated Financial Statements | Notes to the consolidated financial statements Accounting policies Swisscom has not de-recognised the original liabilities to which the supplier finance arrangements relate, as the conclusion of the arrangement doesn’t result in legal exemption nor in significant changes to the original liability. From Swisscom’s perspective, the arrangements do not significantly extend the payment periods beyond the conditions agreed with other, non-participating suppliers. Swisscom is not obligated to pay the bank additional interest on the amounts owed to the suppliers. Swisscom therefore reports amounts financed by suppliers under trade payables, as the type and function of the financial liability are the same as for trade payables. However, Swisscom does report the amounts broken down in the notes. All liabilities from financial arrangements with suppliers are classified as current items as at 31 December 2024. The payments to the bank are included in oper- ating cash flow, as they are still within the normal course of Swisscom’s business and their main purpose remains operative – i.e. payments for the purchase of goods and services.
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173 Valuation category and fair value of financial instruments The fair values of financial assets and the financial liabilities are summarised in the following table. Not included therein are cash and cash equivalents, trade receivables and trade payables, as well as miscellaneous receivables and liabilities whose carrying amount corresponds to a reasonable estimation of their fair value. 31.12.2024 In CHF million Carrying amount Fair value Level Other financial assets Listed debt instruments 271 238 1 Other financial assets 137 137 2 At amortised cost 408 375 Equity instruments 7 7 1 Equity instruments 167 167 3 Fair value through other comprehensive income 174 174 Loans 2 2 2 Derivative financial instruments 29 29 2 Fair value through profit or loss 31 31 Total other financial assets 613 580 Financial liabilities Bank loans 3,394 3,424 2 Debenture bonds 9,832 9,986 1 Private placements 322 326 2 Derivative financial instruments 177 177 2 Other financial liabilities 174 163 2 Total financial liabilities 13,899 14,076 31 .12 .2023 In CHF million Carrying amount Fair value Level Other financial assets Quoted debt instruments 258 227 1 Other financial assets 117 117 2 At amortised cost 375 344 Equity instruments 8 8 1 Equity instruments 408 408 3 At fair value through other comprehensive income 416 416 Loans 2 2 2 Derivative financial instruments 2 2 2 Fair value through profit or loss 4 4 Total other financial assets 795 764 Financial liabilities Bank loans 267 265 2 Debenture bonds 4,789 4,609 1 Private placements 322 317 2 Derivative financial instruments 136 136 2 Other financial liabilities 151 144 2 Total financial liabilities 5,665 5,471 Financial assets amounting to CHF 277 million (prior year: CHF 263 million) are not freely available to Swisscom, as they serve as security for liabilities.
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174 Consolidated Financial Statements | Notes to the consolidated financial statements Accounting policies Derivative financial instruments Derivative financial instruments are initially recognised at fair value and are subsequently measured at fair value. The method of recording the fluctuations in fair value depends on the underlying transaction and the objective pursued by purchasing or entering into this underlying transaction. On the date a derivative contract is concluded, management designates the purpose of the hedging relationship: hedge of the fair value of an asset or liability (‘fair value hedge’) or a hedge of future cash flows in the case of future transactions (‘cash flow hedge’). Changes in the fair value of derivative financial instruments that are designated as hedging instruments for ‘fair value hedges’ are recognised in the income statement. Changes in the fair value of derivative financial instruments that are designated as hedging instruments for cash flow hedges are dealt with in other comprehen- sive income and are recognised in the hedging reserve as part of equity. If a hedge of an anticipated transaction subsequently results in the recording of a financial asset or financial liability, the amount included in equity is recognised in the income statement in the same period in which the financial asset or financial liability impacts the results. Otherwise, the amounts recorded in equity are recognised in the income statement as income or expense in the same period as the cash flows of the intended or agreed future transaction occur. Changes in the fair value of derivative financial instruments that are not designated as hedging instruments are immediately recorded as income. Estimation of fair values Fair values are allocated to one of the following three hierarchical levels. • Level 1: exchange-quoted prices in active markets for identical assets or liabilities; • Level 2: other factors which are observable on markets for assets and liabilities, either directly or indirectly; • Level 3: factors that are not based on observable market data. The fair value of publicly traded equity and debt instruments of Level 1 is based upon their stock exchange quo- tations as of the balance sheet date. The fair value of Level 2 financial assets and liabilities which are not quoted on exchanges are computed on the basis of future maturing payments discounted at market interest rates. Level 3 assets consist of investments in various investment funds and individual companies. The fair value is deter- mined on the basis of a computational model. Interest rate and currency swaps are discounted at market rates. Foreign currency forward transactions and foreign currency swaps are valued by reference to forward foreign exchange rates as of the balance sheet date.
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175 3 Operating assets and liabilities The following chapter discloses information on the movement in net operating assets and liabilities as well as in significant non-current tangible and intangible assets . In addition, it outlines the allocation of goodwill to the individual cash-generating units and the results of any applicable impairment tests . Changes in provisions and contingent liabilities are also presented in this chapter . 3.1 Net current operating assets Change in operating assets and liabilities Operational Other In CHF million 01 .01 .2024 changes changes 1 31.12.2024 2024 financial year Trade receivables 2,143 (84) 833 2,892 Other operating assets 1,323 (5) 431 1,749 Trade payables (1,611) 77 (1,151) (2,685) Other operating liabilities (1,471) 21 (546) (1,996) Total operating assets and liabilities, net 384 9 (433) (40) 1 Foreign currency translation and change in scope of consolidation incl. Voda- fone Italia. See Note 5.3. Operational Other In CHF million 01 .01 .2023 changes changes 1 31 .12 .2023 2023 financial year Trade receivables 2,255 (79) (33) 2,143 Other operating assets 1,353 (7) (23) 1,323 Trade payables (1,674) 16 47 (1,611) Other operating liabilities (1,571) 75 25 (1,471) Total operating assets and liabilities, net 363 5 16 384 1 Foreign currency translation and change in scope of consolidation. Trade receivables In CHF million 31.12.2024 31 .12 .2023 Billed revenue 2,756 2,173 Accrued revenue 443 93 Allowances (307) (123) Total trade receivables 1 2,892 2,143 1 Credit risks. See Note 2.5.
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176 Consolidated Financial Statements | Notes to the consolidated financial statements Other operating assets and liabilities In CHF million 31.12.2024 31 .12 .2023 Other operating assets Contract assets 182 174 Contract costs 508 268 Other receivables 120 77 Inventories 270 161 Prepaid expenses 514 528 Advance payments made 46 13 Value-added taxes receivable 77 62 Other non-financial assets 32 40 Total other operating assets 1,749 1,323 Other operating liabilities Contract liabilities 1,244 961 Accruals for variable performance-related bonus 192 146 Value-added taxes payable 109 81 Accruals for annual holiday, overtime 60 45 Liabilities from collection activities 15 16 Miscellaneous liabilities 376 222 Total other operating liabilities 1,996 1,471 Contract assets and liabilities In CHF million 31.12.2024 31 .12 .2023 Contract assets Swisscom Switzerland 143 132 Other 39 42 Total contract assets 182 174 Contract liabilities Swisscom Switzerland 571 570 Fastweb 320 323 Vodafone Italia 294 – Other 59 68 Total contract liabilities 1,244 961 Contract assets of Swisscom Switzerland primarily include deferrals arising in connection with the sale of bundled offerings in the mobile-phone area. Some mobile handsets are sold on a subsidised basis together with a mobile contract in a bundled offering. As a result of the allocation of revenue over the pre-delivered components (mobile handset), revenues are recognised earlier than the invoicing thereof. This results in contract assets deriving from this business being recognised. The contractual liabilities mainly cover deferrals from payments for prepaid cards and prepaid Swisscom Switzerland subscription fees. In 2024, an amount of CHF 313 million was recorded as revenue which had been recognised as a contract liability as at 31 December 2023. With the disclosure of the performance obligations that are unsatisfied and the allocated transaction price, Swisscom avails itself of the rules of IFRS 15.121. The exemption is not applied in the case of mobile-phone contracts with the sale of a sub- sidised mobile handset and a minimum contract term. These contracts incorporate revenue of CHF 616 million (2025: CHF 460 million; 2026: CHF 147 million; 2027: CHF 9 million).
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177 Contract costs Contract costs include deferred costs to obtain a contract as well as costs to fulfil a contract, which may be ana- lysed as follows: In CHF million 31.12.2024 31 .12 .2023 Costs to obtain a contract Swisscom Switzerland 32 33 Fastweb 106 81 Vodafone Italia 200 – Other 45 52 Total costs to obtain a contract 383 166 Costs to fulfil a contract Router and TV boxes 22 22 Initial costs from outsourcing contracts 67 80 Vodafone Italia 36 – Total costs to fulfil a contract 125 102 Total contract costs 508 268 Accounting policies Operating assets and liabilities Total operating assets and liabilities used in the normal course of business are disclosed as current items in the balance sheet. Trade receivables Trade receivables are measured at amortised cost less impairment losses. Impairment losses on trade receivables are recognised, depending on the nature of the underlying transaction, in the form of individual valuation allow- ances or portfolio-based general valuation allowances which cover the anticipated default risk. As regards port- folio-based general valuation allowances, financial assets are grouped together based on homogeneous credit risk attributes, reviewed collectively for impairment and, whenever required, impairment losses are recognised. In addition to the contractually foreseen payment conditions, historical default rates and current information and expectations are taken into consideration in determining the expected future cash flows from the portfolio. Impairment losses for trade receivables are recognised as other operating expenses.
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178 Consolidated Financial Statements | Notes to the consolidated financial statements 3.2 Property, plant and equipment Land, buildings Advances made Technical and leasehold Other and assets In CHF million installations improvements installations under construction Total Cost of acquisition Balance at 1 January 2023 27,851 1,673 4,657 903 35,084 Additions 1,067 8 196 338 1,609 Disposals (285) (2) (281) – (568) Adjustment to dismantlement and restoration costs 185 – 34 – 219 Reclassifications to non-current assets held for sale – (19) – – (19) Reclassifications 150 11 107 (267) 1 Business combinations – – 1 – 1 Foreign currency translation adjustments (350) (5) (2) (4) (361) Balance at 31 December 2023 28,618 1,666 4,712 970 35,966 Additions 950 18 188 476 1,632 Disposals (103) (14) (105) – (222) Adjustment to dismantlement and restoration costs 77 – 7 – 84 Reclassifications to non-current assets held for sale – 5 – – 5 Reclassifications 154 2 87 (243) – Business combinations 1 1,947 43 42 33 2,065 Foreign currency translation adjustments 85 1 – 1 87 Balance at 31 December 2024 31,728 1,721 4,931 1,237 39,617 Accumulated depreciation and impairment losses Balance at 1 January 2023 (19,452) (1,409) (3,412) – (24,273) Depreciation (1,084) (16) (296) – (1,396) Impairment losses (49) – (1) – (50) Disposals 285 2 275 – 562 Reclassifications to non-current assets held for sale – 12 – – 12 Reclassifications 4 (4) – – – Foreign currency translation adjustments 234 3 1 – 238 Balance at 31 December 2023 (20,062) (1,412) (3,433) – (24,907) Depreciation (1,051) (16) (299) – (1,366) Impairment losses (3) – (1) – (4) Disposals 103 12 104 – 219 Reclassifications to non-current assets held for sale – (3) – – (3) Reclassifications 1 – (1) – – Foreign currency translation adjustments (55) – – – (55) Balance at 31 December 2024 (21,067) (1,419) (3,630) – (26,116) Net carrying amount Net carrying amount at 1 January 2023 8,399 264 1,245 903 10,811 Net carrying amount at 31 December 2023 8,556 254 1,279 970 11,059 Net carrying amount at 31 December 2024 10,661 302 1,301 1,237 13,501 1 Incl. Vodafone Italia. See Note 5.3.
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179 Commitments for future capital expenditures Firm contractual commitments for future capital investments in property, plant and equipment as at 31 December 2024 aggregated CHF 1,405 million (prior year: CHF 1,162 million). These figures do not include Vodafone Italia. Non-cash investing and financing transactions As a result of changes in the assumptions made in estimating dismantlement and restoration costs, an increase in the corresponding provisions of CHF 84 million (prior year: increase of CHF 219 million) was recognised in property, plant and equipment with no impact on the income statement. See Note 3.5. Significant judgements or estimates Management estimates the useful economic lives and residual values of technical facilities, real estate and other installations and equipment on the basis of the anticipated period over which economic benefits will accrue to the company from the use of the assets. Useful economic lives are reviewed annually on the basis of historical and forecast expectations concerning future technological developments, economic and legal changes as well as further external factors. Accounting policies Property, plant and equipment is recognised at historical cost less depreciation and impairment losses. In addition to historical cost and the costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management, the purchase or manufacturing cost also includes the estimated costs for dismantling and restoring the site. Borrowing costs are capitalised insofar as they are directly attributable to the acquisition or production of a qualifying asset. Costs for the replacement, renewal or renovation of property, plant and equipment are capitalised as replacement investments if a future inflow of economic benefits is probable and the purchase or manufacturing cost can be measured reliably. The carrying amount of the parts replaced is de-recognised. Depreciation is calculated using the straight-line method except for land, which is not depreciated. The estimated useful lives for the main categories of property, plant and equipment are as follows: Category Years Ducts 1 40 Cables 1 11 to 30 Transmission and switching equipment 1 4 to 15 Other technical installations 1 3 to 15 Buildings and leasehold improvements 10 to 40 Other installations 3 to 15 1 Technical installations. Whenever significant parts of an item of property, plant and equipment comprise individual components with differing useful lives, each component is depreciated separately. The process for estimating useful lives takes into account the expected use by the company, the expected wear and tear, technological developments, as well as empirical values with comparable assets. Leasehold improvements and installations in leased premises are depreciated on a straight-line basis over the shorter of their estimated useful lives and the expected lease term. The impact from adjusting useful economic lives and residual values is recognised on a prospective basis. Whenever indications exist that the value of an asset may be impaired, the recoverable amount of the asset is determined. If the recoverable amount of the asset, which is the greater of the fair value less costs to sell and the value in use, is less than its carrying amount, the carrying amount is written down to the recoverable amount. The carrying amount of an item of property, plant and equipment is de-recognised upon disposal or whenever no future economic benefits are expected from its use. Gains and losses arising on the disposal of property, plant and equipment are recognised as other income or other operating expenses.
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180 Consolidated Financial Statements | Notes to the consolidated financial statements 3.3 Intangible assets Internally Brands and Other Purchased generated customer intangible In CHF million software software Licences relations assets Total Cost of acquisition Balance at 1 January 2023 2,604 1,994 1,105 420 213 6,336 Additions 251 251 136 – 31 669 Disposals (62) (66) (22) (4) – (154) Reclassifications 46 81 – – (128) (1) Business combinations – – – 33 – 33 Sale of subsidiaries – (2) – – – (2) Foreign currency translation adjustments (113) (11) (15) (14) (1) (154) Balance at 31 December 2023 2,726 2,247 1,204 435 115 6,727 Additions 247 276 125 – 22 670 Disposals (53) (34) (120) (64) (17) (288) Reclassifications 7 29 – – (36) – Business combinations 1 385 – 2,077 1,727 277 4,466 Foreign currency translation adjustments 28 3 4 4 – 39 Balance at 31 December 2024 3,340 2,521 3,290 2,102 361 11,614 Accumulated amortisation and impairment losses Balance at 1 January 2023 (2,171) (1,522) (488) (349) (65) (4,595) Amortisation (241) (252) (154) (22) (10) (679) Impairment losses (1) – – – – (1) Disposals 61 65 22 4 – 152 Foreign currency translation adjustments 101 12 4 15 1 133 Balance at 31 December 2023 (2,251) (1,697) (616) (352) (74) (4,990) Amortisation (261) (285) (170) (20) (6) (742) Impairment losses (1) – – – – (1) Disposals 53 34 110 64 17 278 Foreign currency translation adjustments (24) (3) (4) (4) – (35) Balance at 31 December 2024 (2,484) (1,951) (680) (312) (63) (5,490) Net carrying amount Net carrying amount at 1 January 2023 433 472 617 71 148 1,741 Net carrying amount at 31 December 2023 475 550 588 83 41 1,737 Net carrying amount at 31 December 2024 856 570 2,610 1,790 298 6,124 1 Incl. Vodafone Italia. See Note 5.3. As at 31 December 2024, other intangible assets included advance payments made and uncompleted develop- ment projects of CHF 58 million (prior year: CHF 32 million). Commitments for future capital expenditures As at 31 December 2024, firm contractual commitments for future capital investments in intangible assets aggre- gated CHF 57 million (prior year: CHF 55 million). These figures do not include Vodafone Italia. Significant judgements or estimates Management estimates the useful economic lives and residual values of intangible assets on the basis of the anticipated period over which economic benefits will accrue to the company from the use of the assets. Useful economic lives are reviewed annually on the basis of historical and forecast expectations concerning future tech- nological developments, economic and legal changes as well as further external factors.
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181 Accounting policies Mobile-phone licences, self-developed software as well as other intangible assets are recorded at historical cost less accumulated amortisation. Intangible assets resulting from business combinations, such as brands and customer relationships, are recognised at cost less accumulated amortisation, which equates to fair market value as at the date of acquisition. Mobile-phone licences are amortised based on the term of the licence. It begins as soon as the related network is ready for operation, unless other information is at hand which would suggest the need to modify the useful lives. The impact from adjusting useful economic lives and residual values is recognised on a prospec- tive basis. Amortisation is computed on a straight-line basis over the following estimated useful economic lives. Category Years 1 Software internally generated and purchased 3 to 7 Brands and customer relationships 5 to 10 Licences 2 to 16 Other intangible assets 3 to 10 1 Excl. Vodafone Italia. Whenever indications exist that the value of an asset may be impaired, the recoverable amount of the asset is determined. If the recoverable amount of the asset, which is the greater of the fair value less costs to sell and the value in use, is less than its carrying amount, the carrying amount is written down to the recoverable amount. 3.4 Goodwill Swisscom allocates goodwill to the cash-generating units based upon their business activities. Goodwill arising in a business combination is allocated to each cash-generating unit which can derive synergies from the business combination. The goodwill allocated to the cash-generating units may be analysed as follows: Residential Business Customers Customers Other cash- Swisscom Swisscom generating In CHF million Switzerland Switzerland Fastweb units 1 Total At cost Balance at 1 January 2023 2,767 1,501 1,749 412 6,429 Business combinations – 29 1 1 31 Foreign currency translation adjustments (2) – (106) – (108) Balance at 31 December 2023 2,765 1,530 1,644 413 6,352 Business combinations 2 – 4 – 1,145 1,149 Foreign currency translation adjustments – – 26 – 26 Balance at 31 December 2024 2,765 1,534 1,670 1,558 7,527 Accumulated impairment losses Balance at 1 January 2023 – – (1,257) – (1,257) Foreign currency translation adjustments – – 77 – 77 Balance at 31 December 2023 – – (1,180) – (1,180) Impairment losses – – – (30) (30) Foreign currency translation adjustments – – (19) – (19) Balance at 31 December 2024 – – (1,199) (30) (1,229) Net carrying amount Net carrying amount at 1 January 2023 2,767 1,501 492 412 5,172 Net carrying amount at 31 December 2023 2,765 1,530 464 413 5,172 Net carrying amount at 31 December 2024 2,765 1,534 471 1,528 6,298 1 Comprises the cash-generating units Wholesale Swisscom Switzerland, Swiss- com Directories and Vodafone Italia. 2 Incl. Vodafone Italia. See Note 5.3.
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182 Consolidated Financial Statements | Notes to the consolidated financial statements Impairment testing In the fourth quarter of 2024 and after the conclusion of business planning, individual goodwill amounts were subjected to impairment tests. The recoverable amount of a cash-generating unit is determined based on its value in use, applying the discounted cash flow (DCF) method. The projected free cash flows were estimated on the basis of the business plans approved by management, which as a rule cover a three-year period. A plan- ning horizon of five years was used for the Fastweb impairment test. For free cash flows extending beyond the detailed planning period, a terminal value was computed by capitalising the normalised cash flows. A steady long- term growth rate that corresponds to the growth rates customary in the country or market was assumed. The projected cash flows and management assumptions are corroborated by external sources of information. The discount rate is derived from the Capital Asset Pricing Model (CAPM). This latter comprises the weighted value of own equity and external borrowing costs. For the risk-free interest rate which forms the basis of the discount rate, the yield from Swiss government bonds is taken (abroad: Germany) with a maturity of ten years and a zero interest rate, subject to minimum interest rates of 1.5% (Switzerland) and 2.0% (abroad). For cash-generating units abroad, a risk premium for the country risk is then added. Discount rates and long-term growth rates 2024 2023 WACC WACC Long-term WACC WACC Long-term Cash-generating unit pre-tax post-tax growth rate pre-tax post-tax growth rate Residential Customers Swisscom Switzerland 4 .65% 3 .81% 0% 4 .95% 4 .06% 0% Business Customers Swisscom Switzerland 4 .63% 3 .81% 0% 4 .94% 4 .06% 0% Fastweb 7 .58% 6 .00% 2 .0% 7 .90% 6 .24% 2 .0% Other cash-generating units 4 .65–9 .86% 3 .81–8 .63% 0–2 .4% 4 .95–9 .69% 4 .06–8 .53% 0–1 .0% Results and sensitivity of impairment tests Residential Customers and Business Customers Swisscom Switzerland As at the measurement date, the recoverable amount at all cash-generating units, based on their value in use, was higher than the carrying amount relevant for the impairment test. Swisscom believes none of the antici- pated changes in key assumptions which can rationally be expected would cause the carrying amount of the cash-generating units to exceed the recoverable amount. Fastweb As at the date of the impairment test, no impairment of goodwill resulted. The recoverable amount exceeded the net carrying amount by EUR 773 million (CHF 727 million). In the prior year, the difference amounted to EUR 627 million (CHF 603 million). The following changes in material assumptions would lead to a situation where the value in use would equate to the net carrying amount. 2024 2023 Assumptions Sensitivity Assumptions Sensitivity Average annual revenue growth until 2029 (2028) with EBITDA margin unchanged compared to business plan 5 .4% 4 .3% 5 .4% 4 .5% Normalised EBITDA margin 27% 25% 28% 27% Normalised capital expenditure rate 18% 19% 19% 20% WACC post-tax 6 .00% 6 .91% 6 .24% 7 .07% Long-term growth rate 2 .0% 0 .9% 2 .0% 1 .0% Vodafone Italia For a number of reasons, the goodwill resulting from the acquisition of Vodafone Italia is not allocated to an existing cash-generating unit. Swisscom assumed control of the company on 31 December 2024 and prior to that point, access to the data was extremely limited. In addition, the reporting structure of Swisscom, and with it management’s administration and monitoring of Vodafone Italia’s operations, will change during the course of 2025. On a provisional basis, the non-allocated goodwill amounts to EUR 1,217 million. (CHF 1,145 million).
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183 For the impairment test, the recoverable amount for Vodafone Italia (including the non-allocated goodwill) has therefore been determined on an individual basis, using a discounted cash flow (DCF) method. The projected free cash flows were estimated over a five-year period. For free cash flows extending beyond the five-year period, a terminal value was computed by capitalising the normalised cash flows. A long-term growth rate of 2.4% was assumed in line with long-term inflation in Italy. The discount rate was determined as 6.9% post-tax (WACC pre- tax: 8.72%), based on the Capital Asset Pricing Model (CAPM). The updated assessment shows that the purchase price and therefore the assets on which it is based, including goodwill, are recoverable. Swisscom takes the view that none of the expected changes to the key assumptions that could be reasonably expected will result in the carrying amount of Vodafone Italia exceeding the recoverable amount. Significant judgements or estimates The allocation of goodwill to the cash-generating units and the computation of the recoverable amount are subject to the judgement of management. This encompasses the estimation of future cash flows as well as the determina- tion of the discounting rate and the growth rate on the basis of historical data and current forecasts. Accounting policies For the purposes of the impairment test, goodwill is allocated to the cash-generating units. The impairment test is performed annually on a mandatory basis. Whenever there is any indication during the year that goodwill may be impaired, the cash-generating unit is tested for impairment at that time. An impairment loss is recognised if the recoverable amount of a cash-generating unit is lower than its carrying amount. The recoverable amount is the greater of the fair value less costs to sell and the value in use. 3.5 Provisions and contingent liabilities Provisions Dismantlement Regulatory and and restoration competition law In CHF million costs proceedings Other Total Balance at 1 January 2024 866 200 197 1,263 Additions to provisions – 8 130 138 Adjustments recorded under property, plant and equipment 84 – – 84 Interest and present-value adjustments 9 (21) 2 (10) Release of unused provisions – (19) (12) (31) Use of provisions (23) (16) (45) (84) Business combinations 1 – – 181 181 Foreign currency translation adjustments – – (1) (1) Balance at 31 December 2024 936 152 452 1,540 Thereof current provisions 54 18 149 221 Thereof non-current provisions 882 134 303 1,319 1 Incl. Vodafone Italia. See Note 5.3. Provisions for dismantlement and restoration costs The provisions are computed by reference to estimates of future anticipated dismantling costs and are discounted using an average interest rate of 0.86% (prior year: 1.08%). Adjustments as a result of reassessments in the amount of CHF 62 million were recognised under property, plant and equipment with no impact on the income state- ment in 2024. Of this amount, CHF 32 million resulted from the use of different interest rates and CHF 30 mil- lion from the adjustment of the cost index and the other assumptions used to calculate dismantling costs. An increase of estimated costs by 10% would result in an increase of CHF 88 million in the amount of the provision. A delay of another ten years in the timing of the dismantling would lead to an increase of CHF 67 million in the provisions.
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184 Consolidated Financial Statements | Notes to the consolidated financial statements Provisions for regulatory and competition law proceedings In accordance with the Telecommunications Act, Swisscom provides access services (incl. interconnection) to other telecommunications service providers in Switzerland. In previous years, several telecommunications service pro- viders demanded ComCom reduce the prices charged to them by Swisscom for regulated network access services. The Competition Commission (COMCO) has also launched various investigations against Swisscom in the past. In its investigation of the invitation to tender for the corporate network of the Swiss Post in 2008, the Competi- tion Commission (COMCO) reached the conclusion in November 2015 that Swisscom had a dominant position on the market for broadband access for business clients. COMCO imposed a penalty of CHF 8 million on grounds of conduct that was judged to be unlawful under competition law. In June 2021, the Federal Administrative Court largely confirmed COMCO’s ruling and ordered Swisscom to pay a fine of CHF 7 million. Swisscom filed an appeal against this decision with the Federal Court. In its ruling published on 18 April 2024, the Federal Court concluded, in the final instance, that Swisscom had behaved correctly and repealed COMCO’s penalty decision. On 17 December 2020, COMCO opened an investigation into Swisscom’s optical fibre network and ordered pre- cautionary measures. Swisscom filed an appeal against these precautionary measures. In its ruling of 2 November 2022, the Federal Court found that the precautionary measures ordered by the Competition Commission (which had previously been confirmed by the Federal Administrative Court) were not arbitrary and confirmed them as well. On 25 April 2024, COMCO published a penalty notice in the amount of CHF 18 million on grounds of conduct which was judged to be unlawful under competition law. Swisscom has appealed against the decision before the Federal Administrative Court. In April 2013, COMCO launched an investigation against Swisscom under the Federal Cartel Act concerning the broadcasting of sporting events on pay TV. In May 2016, COMCO imposed a penalty of CHF 72 million on Swisscom in these proceedings. Swisscom filed an appeal against this ruling with the Federal Administrative Court. In June 2022, the Federal Administrative Court largely confirmed COMCO’s ruling and ordered Swisscom to pay a fine of CHF 72 million. Swisscom paid the fine in the third quarter of 2022. Swisscom filed an appeal against this decision with the Federal Court. The Federal Court confirmed the fine of CHF 72 million in the final instance on 10 May 2024. In the past, Swisscom recognised provisions for regulatory and antitrust proceedings on the basis of legal assess- ments. As a result of the reassessment of these proceedings, provisions of CHF 8 million were recognised in 2024 and provisions of CHF 40 million (incl. interest) were reversed. Any payments to be made will depend upon the date on which legally binding decrees and decisions are issued, and could probably occur within five years. Other provisions Other provisions primarily includes provisions for contractual risks and termination benefits as well as provisions of Vodafone Italia. Any necessary payments of the non-current portion of the provisions could likely occur within three years. Contingent liabilities for regulatory and competition law proceedings The Competition Commission (COMCO) is conducting several proceedings against Swisscom. In the event that a legally enforceable finding of market abuse is reached, COMCO might impose a penalty on Swisscom. In addi- tion, claims under civil law might be asserted against Swisscom. In view of the previous proceedings conducted by COMCO, further proceedings against Swisscom might be initiated.
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185 Significant judgements or estimates The provisions for dismantling and restoration costs relate to the dismantling of telecommunications installations and transmitter stations as well as the restoration to its original state of land held by third-party owners. The level of the provisions is determined to a significant degree by the estimation of future dismantling and resto- ration costs, as well as the timing of dismantlement. The provisions and contingent liabilities for regulatory and antitrust proceedings relate to proceedings in connection with regulated access services provided by Swisscom and proceedings initiated by COMCO. The legal and accounting assessment of these proceedings is associated with significant uncertainties in estimation and scope for discretion with regard to the probability of occurrence and the amount of a possible cash outflow. The provisions recognised in this way constitute the best estimate of the liability. Possible liabilities whose occurrence as at the balance-sheet date cannot be assessed, or liabilities for which the level cannot be reliably estimated, are disclosed as contingent liabilities. Accounting policies Provisions are recognised whenever a legal or constructive obligation arises from past events, the outflow of resources to settle this liability is probable, and the amount of the liability can be estimated reliably. Provisions are discounted if the effect is material. Provisions for dismantlement and restoration costs Swisscom is legally obligated to dismantle transmitter stations and telecommunications installations located on land belonging to third parties following decommissioning, and to restore to its original state the property owned by third parties in the locations where these installations are erected. The costs of dismantling are capi- talised as part of the acquisition costs of the installations, and are amortised over their useful lives. The provisions are measured at the present value of the aggregate future costs, and are reported under non-current provisions. Whenever the provision is re-measured, the present value of the changes in the liability is either added to or deducted from the cost of the related capitalised item of property, plant and equipment. The amount deducted from the cost of the related asset must not exceed its net carrying amount. Any excess is taken directly to income.
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186 Consolidated Financial Statements | Notes to the consolidated financial statements 4 Employees This chapter contains information on employee headcount and personnel expense, the compensation paid to key management personnel and retirement benefit obligations . 4.1 Employee headcount and personnel expense Employee headcount In full-time equivalent 31.12.2024 31 .12 .2023 Change Residential Customers 2,423 2,550 –5 .0% Business Customers 5,544 5,446 1 .8% Wholesale 80 83 –3 .6% Infrastructure & Support Functions 5,272 5,184 1 .7% Swisscom Switzerland 13,319 13,263 0.4% Fastweb 3,299 3,157 4 .5% Other Operating Segments 3,269 3,309 –1 .2% Total headcount 19,887 19,729 0.8% Thereof Switzerland 15,905 16,050 –0 .9% Thereof other countries 3,982 3,679 8 .2% Average number of employees 19,918 19,461 2 .3% The headcount as at 31 December 2024 reported above excludes Vodafone Italia (with around 4,000 full-time equivalents). Personnel expense In CHF million 2024 2023 Salary and wage costs 2,150 2,105 Social security expenses 272 260 Expense of defined benefit plans 1 252 236 Expense of defined contribution plans 11 11 Expense for share-based payments 1 1 Termination benefits 14 7 Other personnel expense 49 60 Total personnel expense 2,749 2,680 Thereof Switzerland 2,471 2,420 Thereof other countries 278 260 1 See Note 4.3.
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187 4.2 Key management compensation In CHF thousand 2024 2023 Current compensation 1,338 1,368 Share-based payments 776 758 Pension contributions 163 136 Social security contributions 137 146 Total compensation to members of the Board of Directors 2,414 2,408 Current compensation 6,776 6,251 Share-based payments 1,570 871 Benefits paid following retirement from Group Executive Board 331 – Pension contributions 1,079 951 Social security contributions 708 636 Total compensation to members of the Group Executive Board 10,464 8,709 Total compensation to members of the Board of Directors and of the Group Executive Board 12,878 11,117 Swisscom’s key management personnel are the members of the Board of Directors and Group Executive Board of Swisscom Ltd. Compensation paid to members of the Board of Directors consists of a base salary plus functional allowances. One third of the entire compensation of the Board of Directors is settled in the form of equity shares. Compensation paid to the members of the Group Executive Board consists of a fixed basic salary paid in cash, a variable performance-related component settled in cash and shares, payments in kind and non-cash benefits, as well as pension and social insurance contributions. 25% of the variable performance-related share of the mem- bers of the Group Executive Board is settled in shares. The Group Executive Board members may elect to increase this share to 50%. The disclosure pursuant to Articles 734–734f of the Swiss Code of Obligations is set out in the Remuneration Report chapter. Shares in Swisscom Ltd held by the members of the Board of Directors and Group Executive Board are set out in the notes to the separate financial statements of Swisscom Ltd.
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188 Consolidated Financial Statements | Notes to the consolidated financial statements 4.3 Defined benefit plans Pension plans comPlan The majority of employees in Switzerland are insured under the Swisscom pension plan against the risks of old age, death and disability. The pension plan is implemented by the comPlan foundation. The supreme governing body of the pension fund is the Foundation Council, which is made up of an equal number of representatives from the employees and the employer. The pension fund rules, together with the legal provisions concerning occupational pension plans, constitute the formal regulatory framework of the pension plan. Individual retire- ment savings accounts are maintained for all insured persons. Amounts are credited to these individual savings accounts on an annual basis and interest is accrued. The rate of interest to be applied to the retirement savings accounts is set each year by the Foundation Council, having regard to the financial situation of the pension fund as well as the statutory minimum interest rate. The amounts credited to the individual savings accounts are funded by savings contributions from both the employer and employees that vary based on salary and age. In addition, the employer pays risk contributions to fund death and disability benefits. The standard retirement age is 65. Employees are entitled to early retirement with a reduced old-age pension. The amount of the old-age pension is the result of multiplying the individual retirement savings account at the time of retirement by a conversion rate set out in the pension fund rules. The retirement benefits can also be paid out in the form of a capital payment either in full or in part. In case of early retirement, the employer also finances an OASI bridging pension until the standard retirement age. The amount of disability pensions is determined as a percentage of the insured salary and is independent of the number of years of service. The formal regulatory framework contains various provisions concerning risk sharing between the employees and the employer. In the event of a funding shortfall, computed in accordance with Swiss accounting standards for pension funds (Swiss GAAP APR 26), the Foundation Council lays down measures which shall lead to the elimina- tion of this funding deficit and the restoration of financial equilibrium within a timeframe of five to seven years. Such measures may include a reduced or zero interest rate on retirement savings accounts, a reduction in future benefits, the levying of restructuring contributions or a combination of these measures. Should a structural funding shortfall exist as a result of interest-induced insufficient current funding, the top priority is to remedy this situation by adapting future benefits. Employer’s restructuring contributions must, at a minimum, be equal to the sum of employee restructuring contributions. Under the formal regulatory framework, the employer has no legal obligation to pay additional contributions to eliminate more than 50% of a funding shortfall. From past common business practice, Swisscom has a de facto obligation over and above the legal minimum to pay addi- tional or restructuring contributions in the case of funding shortfalls and structural funding deficits. The upper limit of the employer’s share of future benefit costs in accordance with IAS 19.87(c) is assumed to be at the level of the de facto obligation. As a result of the OASI 21 reform, the comPlan Foundation Council amended the pension fund rules in the fourth quarter of 2023. The OASI reform standardised the retirement age at 65 for OASI and occupational pensions. comPlan was already applying a standard retirement age of 65 for all genders. There was one exception for the OASI bridging pension with regard to women. This was adjusted with the amendment to the pension fund rules. The plan amend- ment resulted in recognition of CHF 7 million as past service cost in the income statement in 2023. This is based on a remeasurement of the net defined benefit obligation using the current fair values of plan assets at the inception of the plan amendment and current actuarial assumptions, taking into account the risk-sharing characteristics. The past service cost is the difference between the valuation under the previous regulatory benefits and contributions and the valuation under the amended regulatory benefits and contributions. In accordance with the relevant Swiss accounting principles and standards (Swiss GAAP APR 26), comPlan’s esti- mated funding ratio amounted to 118.1% as at 31 December 2024 (prior year: 114.5%). The main reasons for the difference compared with IFRS are the use of a different discount rate as well as a different actuarial measure- ment method with the deferred recognition of the costs of future retirement benefits.
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189 Other plans Other pension plans exist for individual Swiss subsidiary companies which are not affiliated to comPlan and for Fastweb and Vodafone Italia. Employees of the Italian subsidiary Fastweb have acquired entitlements to future pen- sion benefits up to the end of 2006, which are recorded in the balance sheet as defined benefit obligations. The discount rate used was 3.38% (prior year: 3.17%). Pension cost In CHF million comPlan Other plans 2024 comPlan Other plans 2023 Current service cost 241 7 248 219 6 225 Plan amendments – – – 7 – 7 Administration expense 3 1 4 3 1 4 Total recognised in personnel expense 244 8 252 229 7 236 Interest expense on net defined benefit obligations (3) – (3) (5) – (5) Total recognised in financial income (3) – (3) (5) – (5) Total expense of defined benefit plans recognised in income statement 241 8 249 224 7 231 In CHF million comPlan Other plans 2024 comPlan Other plans 2023 Actuarial gains and losses from Change of the demographical assumptions (15) – (15) 3 – 3 Change of the financial assumptions 690 – 690 853 – 853 Experience adjustments to defined benefit obligations 249 1 250 21 (1) 20 Change in share of employee contribution (risk sharing) (123) – (123) (307) – (307) Return on plan assets excluding the part recognised in financial result (658) – (658) (228) – (228) Asset ceiling (123) – (123) (306) – (306) Total (income) expense of defined benefit plans recognised in other comprehensive income 20 1 21 36 (1) 35
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190 Consolidated Financial Statements | Notes to the consolidated financial statements Status of pension plans In CHF million comPlan Other plans 2024 comPlan Other plans 2023 Defined benefit obligations Balance at 1 January 11,788 52 11,840 11,136 48 11,184 Current service cost 241 7 248 219 6 225 Interest cost on defined benefit obligations 173 – 173 234 – 234 Employee contributions 184 – 184 181 – 181 Benefits paid (590) – (590) (559) (1) (560) Actuarial losses (gains) 801 1 802 570 (1) 569 Change in scope of consolidation – 31 31 – – – Plan amendments – – – 7 – 7 Foreign currency translation adjustments – – – – – – Balance at 31 December 12,597 91 12,688 11,788 52 11,840 Plan assets Balance at 1 January 12,165 31 12,196 11,805 26 11,831 Interest income on plan assets 182 – 182 253 – 253 Employer contributions 250 8 258 260 6 266 Employee contributions 184 – 184 181 – 181 Benefits paid (590) – (590) (559) – (559) Return on plan assets excluding the part recognised in financial result 658 – 658 228 – 228 Administration expense (3) (1) (4) (3) (1) (4) Balance at 31 December 12,846 38 12,884 12,165 31 12,196 Net defined benefit obligations (assets) Net defined benefit obligations (assets) before asset ceiling (249) 53 (196) (377) 21 (356) Asset ceiling 249 – 249 366 – 366 Net defined benefit obligations (assets) recognised at 31 December – 53 53 (11) 21 10 Thereof defined benefit asset – – – (11) – (11) Thereof defined benefit obligations – 53 53 – 21 21 Movements in recognised defined benefit obligations (assets) are to be analysed as follows: In CHF million comPlan Other plans 2024 comPlan Other plans 2023 Balance at 1 January (11) 21 10 (11) 22 11 Pension cost, net 241 8 249 224 7 231 Employer contributions and benefits paid (250) (8) (258) (260) (7) (267) Change in scope of consolidation – 31 31 – – – (Income) expense of defined benefit plans, recognised in other comprehensive income 20 1 21 36 (1) 35 Foreign currency translation adjustments – – – – – – Balance at 31 December – 53 53 (11) 21 10 The weighted average duration of the present value of the defined benefit obligations for comPlan is 14 years (prior year: 13 years).
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191 Breakdown of comPlan pension plan assets 31.12.2024 31 .12 .2023 Investment Not Not Category strategy Quoted quoted Total Quoted quoted Total Government bonds Switzerland 5 .0% 1 .8% 3 .4% 5 .2% 1 .9% 3 .3% 5 .2% Corporate bonds Switzerland 8 .0% 7 .6% 0 .0% 7 .6% 7 .1% 0 .0% 7 .1% Government bonds developed markets, World 2 .5% 3 .2% 0 .0% 3 .2% 3 .8% 0 .0% 3 .8% Corporate bonds developed markets, World 9 .0% 9 .0% 0 .0% 9 .0% 9 .0% 0 .0% 9 .0% Government bonds emerging markets, World 4 .0% 6 .2% 0 .0% 6 .2% 7 .5% 0 .0% 7 .5% Private debt 6 .0% 0 .0% 5 .2% 5 .2% 0 .0% 4 .5% 4 .5% Third-party debt instruments 34.5% 27.8% 8.6% 36.4% 29.3% 7.8% 37.1% Equity shares Switzerland 7 .0% 7 .2% 0 .0% 7 .2% 7 .1% 0 .0% 7 .1% Equity shares World 19 .0% 20 .1% 0 .0% 20 .1% 18 .9% 0 .0% 18 .9% Private markets 10 .0% 0 .0% 9 .4% 9 .4% 0 .0% 10 .1% 10 .1% Equity instruments 36.0% 27.3% 9.4% 36.7% 26.0% 10.1% 36.1% Real estate Switzerland 17 .0% 5 .4% 11 .9% 17 .3% 5 .2% 11 .3% 16 .5% Real estate World 9 .0% 0 .0% 7 .2% 7 .2% 0 .0% 7 .8% 7 .8% Gold 2 .0% 2 .1% 0 .0% 2 .1% 0 .0% 2 .1% 2 .1% Real value investments 28.0% 7.5% 19.1% 26.6% 5.2% 21.2% 26.4% Cash and cash equivalents 1 .5% 0 .0% 0 .3% 0 .3% 0 .0% 0 .4% 0 .4% Total plan assets 100.0% 62.6% 37.4% 100.0% 60.5% 39.5% 100.0% The Foundation Council determines the investment strategy with bandwidths within the framework of the legal provisions. Within its guidelines, the Investment Commission decides on how the investment strategy is to be implemented. As a competence centre, it coordinates all activities and implements the decisions. The investment strategy pursues the goal of achieving the highest possible return on assets within the framework of its risk tol- erance, and thus of generating income on a long-term basis to meet all financial obligations. This is achieved through a broad diversification of risks over various investment categories, markets, currencies and industry seg- ments in both developed and emerging markets. The interest rate duration of interest-bearing assets is 7.8 years (prior year: 7.9 years), and the average rating of these assets is A- (prior year: A-). Within the overall portfolio, all foreign currency positions are hedged against the Swiss franc following a currency strategy to the extent neces- sary to meet a pre-determined ratio of 16% (unhedged foreign currencies). Following this investment strategy, comPlan expects its results prepared in accordance with Swiss GAAP APR to show a target value for the value fluctuation reserve of 19.0% of total assets. Additional information on plan assets As at 31 December 2024, plan assets included Swisscom Ltd shares and bonds with a fair value of CHF 12 mil - lion (prior year: CHF 15 million). The effective income from plan assets was CHF 840 million in 2024 (prior year: CHF 481 million). In 2025, Swisscom expects to make payments to the pension funds for statutory employer contributions totalling CHF 270 million.
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192 Consolidated Financial Statements | Notes to the consolidated financial statements Assumptions underlying comPlan actuarial computations Assumptions 2024 2023 Discount rate 0 .98% 1 .51% Expected rate of salary increases 1 .18% 1 .83% Expected rate of pension increases –% –% Capital withdrawal ratio 34% 30% Interest on old age savings accounts up to 5 years 3 .67% 2 .89% Interest on old age savings accounts after 5 years 1 .07% 1 .51% Share of employee contribution to funding shortfall 40% 40% Share of employee contribution to surplus 50% 50% Life expectancy at age of 65 – men (number of years) 22 .33 22 .24 Life expectancy at age of 65 – women (number of years) 24 .12 24 .02 The discount rate is based upon CHF-denominated corporate bonds with an AA rating of domestic and foreign issuers and listed on the Swiss Exchange SIX. The assumption regarding the rate of salary increases is based on past values from recent years and takes long-term inflation expectations into account. No future pension increases are expected because comPlan does not have sufficient fluctuation reserves for this under pension law. The interest rate on the individual savings balances has been determined taking into account the BVG minimum interest rate for the mandatory BVG portion. Life-expectancy assumptions are arrived at through a projection of future mortality improvements in accordance with the Continuous Mortality Investigation Model (CMI) and are based on improvements in mortality actually observed in Switzerland in the past. The computations are made with a future long-term rate of mortality improvement of 1.75%. The change in the financial estimates resulted in an actuarial net loss of CHF 690 million in 2024. The drop in the discount rate resulted in a loss of CHF 749 mil- lion, whereas adjustments to other financial assumptions, in particular to the rate of salary increases and the rate of interest to be applied to the retirement savings accounts, resulted in a gain of CHF 59 million. For the event of an interest-induced funding shortfall, the risk-sharing attributes contained in the formal regula- tory framework relating to the handling of funding deficits are taken into account in the financial assumptions in two steps. As a first step, it is assumed that a gradual lowering of future pensions over a period of ten years will take place in order to close the funding gap. This is based upon a projection of the future conversion rate using a mixed rate for the mandatory and non-mandatory portions. The current legal conversion rate is applied for the mandatory portion. In the non-mandatory portion, the conversion rate is computed using the discount rate applied for the valuation. As a second step, the present value of the remaining funding gap between the regulatory con- tributions and the benefits adjusted in the first step is shared between the employer and the employees. The legal and de facto obligation of the employer to pay additional contributions is unchanged and assumed to be limited to 60% of the funding gap. This is based on the legal and regulatory provisions concerning the elimination of funding shortfalls as well as the measures actually decided upon by the Foundation Council and the employer in the past. If there is a surplus under IFRS, no limit is placed on the employer’s share of a funding shortfall in the second step. Instead, the gross surplus is reduced by an employee contribution of 50%. There was no interest-induced funding shortfall as at 31 December 2024, meaning that there is no assumption that pensions will be reduced. Gross surpluses arose as at 31 December 2023 and 31 December 2024. These have been reduced by the employee contribution of CHF 248 million (prior year: CHF 366 million). The change in the share of the employee contribution to the surplus is recognised in other comprehensive income.
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193 Sensitivity analysis comPlan Sensitivity analysis 2024 Defined benefit obligations Current service cost Increase Decrease Increase Decrease In CHF million assumption assumption assumption assumption Discount rate (change +/–0 .5%) (710) 806 (26) 31 Expected rate of salary increases (change +/–0 .5%) 38 (36) 4 (4) Pension changes (change +0 .5%/–0 .0%) 638 – 19 – Capital withdrawal ratio (change +/–5 .0%) (40) 40 (2) 2 Interest on old age savings accounts (change +/–0 .5%) 90 (85) 7 (7) Share of employee contribution to funding shortfall (change +/–10%) – – – – Share of employee contribution to surplus (change +/–10%) 50 (50) – – Life expectancy at age of 65 (change +/–0 .5 year) 174 (175) 3 (3) Sensitivity analysis 2023 Defined benefit obligations Current service cost Increase Decrease Increase Decrease In CHF million assumption assumption assumption assumption Discount rate (change +/–0 .5%) (640) 725 (23) 27 Expected rate of salary increases (change +/–0 .5%) 35 (34) 4 (4) Pension changes (change +0 .5%/–0 .0%) 578 – 16 – Capital withdrawal ratio (change +/–5 .0%) (18) 18 (1) 1 Interest on old age savings accounts (change +/–0 .5%) 77 (74) 6 (6) Share of employee contribution to funding shortfall (change +/–10%) – – – – Share of employee contribution to surplus (change +/–10%) 73 (73) – – Life expectancy at age of 65 (change +/–0 .5 year) 153 (154) 3 (3) The sensitivity analysis takes the movement in defined benefit obligations as well as current service costs into consideration by adjusting the actuarial assumptions by half a percentage point and half a year, respectively. In the process only one of the assumptions is adjusted each time, the other parameters remaining unchanged. In the sensitivity analysis, no change was made in view of a negative movement in pension increases as it is not possible to reduce current pensions. The assumed gradual reduction in conversion rates is left unchanged in the sensitivities of the discount rate shown. Significant judgements or estimates The determination of post-employment retirement benefit obligations requires an estimation of the future service periods, the development of future salaries and pensions, interest accruing on the employee savings accounts, the timing of contractual pension benefit payments and the employees’ share of the funding shortfall. This evaluation is made on the basis of prior experience and anticipated trends. Anticipated future payments are discounted at a rate based on Swiss franc-denominated corporate bonds from domestic and foreign issuers quoted on the Swiss Exchange with an AA rating. The discount rates match the anticipated payment maturities of the liabilities.
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194 Consolidated Financial Statements | Notes to the consolidated financial statements Accounting policies Actuarial computations of pension expenses and the related defined benefit obligations are carried out using the projected unit credit method. Current service costs, past service costs arising from pension plan amendments and plan settlements as well as administrative costs are reported in the income statement under personnel expense and interest accruing on net obligations as a finance expense. Actuarial gains and losses and the return on plan assets, excluding the amounts reflected in net interest income, are reported under other comprehensive income. The assumptions regarding net future benefits are made in compliance with the formal set of regulations gov- erning the pension plan. As regards the Swiss pension plans, the relevant formal regulations comprise the rules of the pension fund as well as the relevant laws, ordinances and directives concerning occupational benefit plans, in particular the provisions contained therein related to funding and measures to be taken to eliminate funding short- falls. Risk-sharing features in the formal regulatory framework are taken into account when arriving at financial assumptions; these limit the employer’s share of the costs of future benefits as well as involving employees in any necessary payment of additional contributions in order to eliminate funding deficits. Should the level of committed long-term disability benefits (disability pensions), irrespective of the number of years of service, be the same for all insured employees, the costs for these benefits are recognised on the date on which the event causing the disability occurs. Any net asset value from a defined benefit plan is recognised at the lower of the surplus and the present value of any economic benefit in the form of refunds or reductions in future contribu- tions, provided that the value fluctuation reserve set as a target by the Foundation Council is exceeded.
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195 5 Scope of consolidation The following chapter sets out details of the Group structure of Swisscom and includes disclosures concerning subsidiaries, joint ventures and associates . In addition, it outlines material changes in the Group structure and the corre - sponding impact on the consolidated financial statements . 5.1 Group structure Swisscom Ltd is the holding company of the Group. It essentially holds direct majority shareholdings in Swisscom (Switzerland) Ltd, blue Entertainment Ltd, Swisscom Broadcast Ltd and Swisscom Directories Ltd. Fastweb S.p.A. (Fastweb) is held indirectly via Swisscom (Switzerland) Ltd as well as an intermediate company in Italy. The Vodafone Italia companies, which were acquired at the end of 2024, are held by Fastweb S.p.A. Swisscom Re Ltd is the Group’s in-house reinsurance company. Swisscom raises finance in EUR through Swisscom Finance B.V. in the Netherlands. 5.2 Changes in the scope of consolidation Net cash flows from the acquisition and disposal of participations may be analysed as follows: In CHF million 2024 2023 Acquisition of Vodafone Italia less cash and cash equivalents acquired (7,360) – Acquisition of other business combinations less cash and cash equivalents acquired (10) (49) Payments for deferred consideration from business combinations (2) (13) Proceeds from sale of subsidiaries, net of cash and cash equivalents sold 2 2 Acquisition of equity-accounted investees (2) (3) Acquisition of non-controlling interests (15) – Total cash flow from the purchase and sale of shareholdings, net (7,387) (63) With the exception of the acquisition of Vodafone Italia, the other acquisitions and disposals of subsidiaries in 2023 and 2024 are not individually material. 5.3 Acquisition of Vodafone Italia In March 2024, Swisscom signed a sales agreement with Vodafone Group Plc regarding the takeover of 100% of Vodafone Italia for a purchase price of EUR 8.0 billion (cash and debt-free). The transaction was completed on 31 December 2024. Vodafone Italia will be merged with the Swisscom subsidiary Fastweb at a later date. The merger of Vodafone Italia and Fastweb is intended to combine complementary mobile communications and fixed telephone network infrastructures with expertise and practical knowledge, as well as establish a leading convergent provider on the Italian market. Thanks to economies of scale, an efficient cost structure and the anticipated high synergies, the merged company is expected to create considerable added value for all stake- holders through sustainable investments in the Italian telecommunications market, innovative, convergent services at competitive prices, and improved services and customer experiences in all market segments. The takeover of Vodafone Italia is a significant step towards implementing Swisscom’s strategic goal of achieving profitable growth in Italy. At this point in time, the preliminary total consideration for the acquisition of Vodafone Italia is EUR 7,821 million (CHF 7,360 million). The purchase price is subject to an adjustment based on Vodafone Italia’s final net financial position as at 31 December 2024. The purchase price adjustment is expected to be paid in March 2025. The pro- visional purchase price and the net cash flow from the transaction are as follows: In million EUR CHF Provisional purchase price 7,885 7,420 Cash and cash equivalents acquired (64) (60) Cash flow used in investing activities, net 7,821 7,360
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196 Consolidated Financial Statements | Notes to the consolidated financial statements Costs of CHF 60 million for legal counsel, due diligence, levies and charges were incurred in connection with the transaction. These costs were recognised in other operating expense. The business combination was provisionally recognised in the consolidated financial statements as at 31 Decem- ber 2024, as not all the information required to determine the fair values of the acquired assets and liabilities was available at the time Swisscom’s consolidated financial statements were prepared. The reasons for this are the size and complexity of the transaction and the fact that the acquisition of Vodafone Italia took place on 31 December 2024. The provisional figures are as follows. In million EUR CHF Cash and cash equivalents 64 60 Trade receivables 893 839 Other operating assets 450 425 Current income tax assets 74 69 Property, plant and equipment 2,192 2,063 Intangible assets 4,730 4,451 Right-of-use assets 2,115 1,990 Other assets 35 34 Financial liabilities (13) (12) Lease liabilities (1,802) (1,697) Trade payables (1,209) (1,137) Other operating liabilities (556) (523) Provisions (191) (180) Deferred tax liabilities (25) (23) Other liabilities (71) (67) Identified assets and liabilities 6,686 6,292 Goodwill 1,217 1,145 Cost of acquisition 7,903 7,437 Thereof cash payments 7,885 7,420 Therof cash flow hedge reserve reclassified 18 17 Within the framework of the purchase price allocation, the most important tasks are the valuation of intangible assets (mobile-phone licences and customer relationships) and property, plant and equipment (network infra- structure). In the provisional purchase price allocation as at 31 December 2024, customer relationships amount- ing to EUR 1.6 billion (CHF 1.5 billion) were recognized at fair value. The mobile-phone licences of EUR 2.2 billion (CHF 2.1 billion), property, plant and equipment and other assets and liabilities were recognised at their carrying amount in the provisional purchase price allocation as at 31 December 2024. The carrying amount of the trade receivables amounts to EUR 893 million (CHF 840 million) and is composed of the gross amount of EUR 1,116 million (CHF 1,049 million) less allowances of EUR 223 million (CHF 210 million). The goodwill comprises the synergies expected as part of the merger of the activities of Vodafone Italia and Fastweb, and intangible assets that do not qualify for separate recognition, such as employees. Further adjustments to the fair value of the identifiable assets acquired and liabilities assumed are possible up to twelve months from the date of acquisition. For this reason, the resulting goodwill and its allocation to the cash-generating units is also provisional. The acquisition of Vodafone Italia had no significant impact on Swisscom’s consolidated income statement for the year ended 2024 due to the acquisition date (31 December 2024). Vodafone Italia’s revenue for the year was estimated EUR 4.6 billion (CHF 4.3 billion). If the acquisition had taken place on 1 January 2024, Swisscom would have achieved an estimated revenue of CHF 15.3 billion. The fact that the transaction took place on the balance sheet date of 31 December 2024 means that Swisscom did not have all the information needed to determine the impact the acquisition would have had on Swisscom’s net income if it had taken place on 1 January 2024.
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197 Accounting policies Consolidation Subsidiaries are all companies in respect of which Swisscom Ltd has the effective ability to control the financial and business policies. Control is generally assumed where Swisscom Ltd directly or indirectly holds the major- ity of the voting rights or potential voting rights of the company. Companies acquired and sold are included in consolidation from the date on which they are acquired and deconsolidated from the date they are disposed of, respectively. Intragroup balances and transactions, income and expenses, shareholdings and dividends as well as unrealised gains and losses are fully eliminated. Non-controlling interests in subsidiaries are reported within equity in the consolidated balance sheet, but separately from equity attributable to the shareholders of Swisscom Ltd. The non-controlling interests in net income or loss are shown in the consolidated income statement as a com- ponent of the consolidated net income or loss. Changes in shareholdings of subsidiary companies are reported as transactions within equity insofar as control existed previously and continues to exist. Put options granted to own- ers of non-controlling interests are disclosed as financial liabilities. The balance sheet date for all consolidated subsidiaries is 31 December. There are no material restrictions on the transfer of funds from the subsidiaries to the parent company. Shareholdings over which Swisscom exercises significant influence but does not have control are accounted for using the equity method. A significant influence is generally assumed to exist whenever between 20% and 50% of the voting rights are held. Business combinations Business combinations are accounted for using the acquisition method. Acquisition costs are recognised at fair value as at the date of the business combination. The purchase price includes the amount of cash paid and the fair value of the assets ceded, liabilities incurred or assumed, and own equity instruments ceded. Liabilities depending on future events based on contractual agreements are recognised at fair value. All identifiable assets and liabilities that satisfy the recognition criteria are recognised at their fair values at the time of acquisition. The difference between the cost of acquisition and the fair value of the identifiable assets and liabilities acquired or assumed is accounted for as goodwill, after taking into account any non-controlling interests.
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198 Consolidated Financial Statements | Notes to the consolidated financial statements 5.4 Equity-accounted investees In CHF million 2024 2023 Balance at 1 January 27 26 Additions 2 3 Dividends (1) (3) Share of net results (2) – Dilution gain 1 1 Balance at 31 December 27 27 Selected key performance indicators for equity-accounted investees In CHF million 2024 2023 Income statement Revenue 229 212 Operating expense (224) (200) Operating income 5 12 Net income 1 10 Other comprehensive income – – Balance sheet at 31 December Current assets 148 146 Non-current assets 12 20 Current liabilities (72) (66) Non-current liabilities (29) (26) Equity 59 74
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199 5.5 Group companies Group companies in Switzerland 31.12.2024 31 .12 .2023 Capital and Capital and voting rights voting rights Share capital Registered name Registered office share in % share in % in million Currency Segment 4 Switzerland adapt solutions Ltd 2 Lindau 100 100 0 .1 CHF SCS Ajila Ltd 2 Sursee 90 60 0 .1 CHF OTH Artificialy Ltd 2,3 Lugano 18 18 1 .1 CHF OTH Audio-Video G+M Ltd 1 Saint-Gall 100 100 0 .1 CHF OTH autoSense Ltd 2,3 Zurich 33 33 0 .3 CHF OTH Axept Business Software Ltd 1 Saint-Gall 100 100 0 .3 CHF SCS Axept Business Software Ltd (St . Gallen) 2 Saint-Gall – 100 0 .3 CHF SCS Blue Entertainment Ltd 1 Zurich 100 100 0 .5 CHF SCS cablex Ltd 2 Muri near Berne 100 100 5 .0 CHF OTH camptocamp SA 1 Bussigny 53 100 0 .5 CHF SCS Credit Exchange Ltd 2,3 Zurich 15 15 0 .2 CHF OTH easypsim Ltd 1 Zurich – 100 0 .1 CHF OTH ecmt Ltd 2,3 Embrach 20 20 0 .1 CHF OTH Entertainment Programm Ltd 2,3 Volketswil 33 33 0 .6 CHF SCS finnova ltd bankware 2,3 Lenzburg 10 9 0 .5 CHF SCS Global IP Action Ltd 2 Freienbach – 33 0 .2 CHF OTH Innovative Government Ltd 1 Freienbach 90 90 0 .1 CHF OTH Innovative Web Ltd 1 Freienbach 90 90 0 .1 CHF OTH itnetX (Switzerland) Ltd 2 Rümlang 100 100 0 .1 CHF SCS JLS Digital Ltd 2 Lucerne 100 100 1 .3 CHF SCS MTF Solutions Ltd 1 Ittigen 100 100 0 .2 CHF SCS Parato Ltd 2 Ittigen 51 – 0 .1 CHF SCS Provis Ltd 2 Lindau 100 100 0 .4 CHF SCS SportPass (Switzerland) Ltd 2,3 Zurich – 25 0 .1 CHF OTH Swisscom Broadcast Ltd 1 Ittigen 100 100 25 .0 CHF OTH Swisscom Digital Technology Ltd 1 Lausanne 100 100 0 .1 CHF SCS Swisscom Directories Ltd 1 Zurich 100 100 2 .2 CHF OTH Swisscom Real Estate Ltd 1 Ittigen 100 100 100 .0 CHF SCS Swisscom IT Services Finance Custom Solutions Ltd 2 Olten 100 100 0 .1 CHF SCS Swisscom RE Ltd 1 Ittigen 100 100 10 .0 CHF SCS Swisscom (Switzerland) Ltd 1 Ittigen 100 100 1,000 .0 CHF SCS Swisscom Services Ltd 2 Ittigen 100 100 0 .1 CHF SCS Swisscom Trust Services Ltd 2 Zurich 100 100 1 .0 CHF OTH Swisscom Ventures Ltd 2 Ittigen 100 100 2 .0 CHF OTH United Security Provider Ltd 2 Bern 100 100 0 .5 CHF SCS Worklink Ltd 1 Bern 100 100 0 .5 CHF SCS 1 Participation directly held by Swisscom Ltd. 2 Participation indirectly held by Swisscom Ltd. 3 Investment is accounted for using the equity method. Through its representa- tion on the Board of Directors of the company, Swisscom can exercise a signifi- cant influence. 4 SCS = Swisscom Switzerland, FWB = Fastweb, OTH = Other
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200 Consolidated Financial Statements | Notes to the consolidated financial statements Group companies in other countries 31.12.2024 31 .12 .2023 Capital and Capital and voting rights voting rights Share capital Registered name Registered office share in % share in % in million Currency Segment 4 Germany cablex Germany GmbH 2 Stuttgart 100 – – EUR OTH Camptocamp Germany GmbH 2 Munich 53 – – EUR SCS Swisscom Telco LLC 2 Leipzig 100 100 – EUR OTH France Camtocamp France SAS 2 Le Bourget du Lac 53 – – EUR SCS SoftAtHome Ltd 2,3 Colombes 10 10 6 .5 EUR SCS Italy 7Layers S .r .l . 2 Florence 100 70 0 .2 EUR FWB Fastweb S .p .A . 2 Milan 100 100 41 .3 EUR FWB Fastweb Air S .r .l . 2 Milan – 100 – EUR FWB Swisscom Italia S .r .l . 2 Milan 100 100 505 .8 EUR OTH VEI S .r .l . 2 Ivrea 100 – – EUR OTH VND S .p .A . 2 Corregio 100 – 0 .1 EUR OTH Vodafone Gestioni S .p .A . 2 Milan 100 – 0 .6 EUR OTH Vodafone Italia S .p .A . 2 Ivrea 100 – 2,305 .1 EUR OTH Latvia Swisscom DevOps Latvia SIA 2 Riga 100 100 – EUR SCS Luxembourg DTF GP S .A .R .L 2 Luxembourg 100 100 – EUR OTH DTF GP II S .A .R .L . 2 Luxembourg 100 100 – EUR OTH Digital Transformation Fund Carried Partner SCSp 2 Luxembourg 100 100 – EUR OTH Digital Transformation Fund Initial Limited Partner SCSp 2 Luxembourg 100 100 – EUR OTH Netherlands NGT International B .V . 2 Capelle a/d IJssel 100 100 – EUR SCS Swisscom Finance B .V . 1 Rotterdam 100 100 0 .1 EUR OTH Austria Swisscom IT Services Finance SE 2 Vienna 100 100 3 .3 EUR OTH Spain Webtiser Spain Ltd 2 Madrid 100 100 0 .1 EUR SCS USA Swisscom Cloud Lab Ltd 2 Delaware 100 100 – USD OTH 1 Participation directly held by Swisscom Ltd. 2 Participation indirectly held by Swisscom Ltd. 3 Investment is accounted for using the equity method. Through its representa- tion on the Board of Directors of the company, Swisscom can exercise a signifi- cant influence. 4 SCS = Swisscom Switzerland, FWB = Fastweb, OTH = Other
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201 6 Other disclosures This chapter details information which is not already disclosed in the other parts of the report . For instance, it includes disclosures regarding income taxes and related parties . 6.1 Income taxes Income tax expense In CHF million 2024 2023 Current income tax expense 380 346 Adjustments recognised for current tax of prior periods (8) (14) Deferred income tax expense (52) 32 Total income tax expense recognised in income statement 320 364 Thereof Switzerland 310 346 Thereof other countries 10 18 In addition, other comprehensive income includes current and deferred income taxes, which may be analysed as follows: In CHF million 2024 2023 Foreign currency translation adjustments of foreign subsidiaries (3) (9) Actuarial gains and losses from defined benefit pension plans (4) (7) Change in fair value of equity instruments – (1) Change in cash flow hedges (8) – Total income tax expense recognised in other comprehensive income (15) (17) Analysis of income taxes The applicable income tax rate used to prepare the following analysis of income tax expense is the weighted average income tax rate calculated on the basis of the Group’s operating subsidiaries in Switzerland. The applica- ble income tax rate is 17.5% (prior year: 17.8%). The decline in the applicable income tax rate can be attributed to a reduction in the tax rates in various Swiss cantons. In CHF million 2024 2023 Income before income taxes in Switzerland 1,862 2,040 Income before income taxes other countries (1) 35 lncome before income taxes 1,861 2,075 Applicable income tax rate 17 .5% 17 .8% Income tax expense at the applicable income tax rate 326 369 Reconciliation to reported income tax expense Effect of changes in tax law in Switzerland (15) – Effect of use of different income tax rates in Switzerland 15 8 Effect of use of different income tax rates in other countries 8 15 Effect of non-recognition of tax loss carry-forwards 1 1 Effect of subsequent recognition of tax loss carry-forwards – (2) Effect of exclusively tax-deductible expenses and income (12) (15) Effect of exclusively non-tax-deductible expenses and income 5 – Effect of income tax of prior periods (8) (12) Total income tax expense 320 364 Effective income tax rate 17 .2% 17 .5%
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202 Consolidated Financial Statements | Notes to the consolidated financial statements Current income tax assets and liabilities In CHF million 2024 2023 Current income tax liabilities at 1 January, net 202 192 Recognised in income statement 372 332 Recognised in other comprehensive income (4) (9) Business combinations (69) 1 – Income taxes paid in Switzerland (245) (226) Income taxes paid in other countries (52) (87) Current income tax liabilities at 31 December, net 204 202 Thereof current income tax assets (82) (1) Thereof current income tax liabilities 286 203 Thereof Switzerland 283 189 Thereof other countries (79) 13 1 Incl. Vodafone Italia. See Note 5.3. Deferred income tax assets and liabilities 31.12.2024 31 .12 .2023 Net Net In CHF million Assets Liabilities amount Assets Liabilities amount Property, plant and equipment 72 (644) (572) 56 (620) (564) Intangible assets 1 (149) (148) 1 (132) (131) Right-of-use assets 18 (87) (69) – (98) (98) Lease liabilities 97 (20) 77 109 – 109 Provisions 130 (39) 91 106 (81) 25 Vodafone Italia 768 (791) (23) – – – Other 145 (140) 5 50 (64) (14) Total tax assets (tax liabilities) 1,231 (1,870) (639) 322 (995) (673) Thereof deferred tax assets 245 225 Thereof deferred tax liabilities (884) (898) Thereof Switzerland (697) (738) Thereof other countries 58 65 Tax loss carry-forwards for which no deferred tax assets were recognised expire as follows: In CHF million 31.12.2024 1 31 .12 .2023 Expiring within 1 year – – Expiring within 2 to 7 years 16 14 No expiration – – Total unrecognised tax loss carry-forwards 16 14 Thereof Switzerland 16 14 Thereof other countries – – 1 Excl. Vodafone Italia.
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203 Global minimum tax Swisscom falls under the scope of application of the OECD minimum tax. The global minimum tax regulations provide for payment of an additional tax to account for the difference between the effective GloBE (Global Anti Base Erosion) tax rate per country and the minimum rate of 15%. In Switzerland and most other countries where Swisscom operates, the laws introducing a global minimum tax entered into force on 1 January 2024. Swisscom has made an assessment regarding the global minimum tax based on applicable tax laws, the effective tax rates per country and information on the Group companies. Based on the assessment, Swisscom meets the condi- tions for applying the transitional safe-harbour rules under the minimum tax rules in each country concerned. Swisscom therefore does not expect to pay any additional income tax in connection with the global minimum tax. Swisscom is keeping an eye on developments in the minimum tax regulations and is assessing their impact on Swisscom on an ongoing basis. Swisscom applies the exception to recognising and disclosing information about deferred income tax assets and liabilities in connection with income taxes related to minimum tax, as provided in the amendments to IAS 12 published in May 2023. Other disclosures No deferred tax liabilities were recognised on the undistributed earnings of subsidiaries as at 31 December 2024 (prior year: CHF 6 million). Temporary differences of subsidiaries and equity-accounted investees for which no deferred tax liabilities are recognised as at 31 December 2024 amounted to CHF 3,779 million (prior year: CHF 3,556 million). Accounting policies Income taxes encompass all current and deferred taxes which are based on income. Taxes which are not based on income, such as taxes on real estate and on capital, are recorded as other operating expenses. Deferred taxes are computed using the balance sheet liability method, whereby as a general rule deferred taxes are recognised on all temporary differences. Temporary differences arise from differences between the carrying amount of a balance sheet position in the consolidated financial statements and its value as reported for tax purposes, which will reverse in future periods. Deferred tax assets are only recognised as assets to the extent that it is probable that they can be offset against future taxable income. Income tax liabilities on distributions of undistributed prof- its of Group companies are only recognised if the distribution of profits is to be made in the foreseeable future. If it is probable that the tax authority will accept the chosen tax treatment, the tax amount in the consolidated financial statements is the same as that entered in the tax return submitted. However, if this is not probable, the amounts will be different. The uncertainty is taken into account in the measurement, which requires a best-possi- ble estimate of the expected cash outflow. If there are few possible outcomes of the tax treatment, the most likely outcome is used to determine the tax liability. If there are a large number of possible tax consequences, an expected value is determined on the basis of a probability calculation. Current and deferred tax assets and liabilities are offset whenever they relate to the same taxing authority and taxable entity.
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204 Consolidated Financial Statements | Notes to the consolidated financial statements 6.2 Related parties Majority shareholder and equity-accounted investees Majority shareholder Pursuant to the Swiss Federal Telecommunications Enterprises Act (TEA), the Swiss Confederation (‘the Con- federation’) is obligated to hold a majority of the share capital and voting rights of Swisscom. On 31 December 2024, the Confederation, as majority shareholder, continued to hold 51% of the issued shares. Any reduction of the Confederation’s holding below a majority shareholding would require a change in law, which would need to be voted upon by the Swiss Parliament and would also be subject to the right of optional referendum by Swiss voters. As the majority shareholder, the Confederation has the power to control the decisions of the annual general meetings of shareholders which are taken by the absolute majority of validly cast votes. This relates primarily to resolutions concerning dividend distributions and the election of the members of the Board of Direc- tors. Swisscom supplies telecommunications services to, and also procures services from, the Confederation. The Confederation comprises the various ministries and administrative bodies of the Confederation and the other companies controlled by the Confederation (primarily Swiss Post, Swiss Federal Railways, RUAG and Skyguide). All transactions are conducted on the basis of normal customer/supplier relationships and on conditions applicable to unrelated third parties. In addition, financing transactions are entered into with Swiss Post under market conditions. Equity-accounted investees Services provided to/by equity-accounted investees are based upon market prices. Such participations are listed in Note 5.4. Transactions and balances In CHF million Income Expense Receivables Liabilities 2024 financial year Confederation 225 63 38 329 Equity-accounted investees 1 51 6 2 Total 2024 / balance at 31 December 2024 226 114 44 331 In CHF million Income Expense Receivables Liabilities 2023 financial year Confederation 198 64 41 328 Equity-accounted investees 2 43 7 2 Total 2023 / balance at 31 December 2023 200 107 48 330 Occupational pension schemes and compensation payable to individuals in key positions Transactions between Swisscom and the various pension funds are detailed in Note 4.3. Compensation paid to individuals in key positions is disclosed in Note 4.2. 6.3 Sale of shares in FiberCop In June 2024, Fastweb signed a contract for the sale of its 4.5% stake in FiberCop to Optics Bidco S.A., a subsid- iary of Kohlberg Kravis Roberts & Co. L.P. (KKR). KKR is thus acquiring all FiberCop shares held by Fastweb for an amount of EUR 439 million (CHF 423 million). The transaction was completed in July 2024. In Swisscom’s con- solidated financial statements, FiberCop was recognised at fair value through other comprehensive income and reported under other financial assets. The difference of EUR 189 million (CHF 181 million) between the purchase price and the previous carrying amount was recognised as income in other comprehensive income in the second quarter of 2024.
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205 6.4 Other accounting policies Foreign currency translation Foreign currency transactions which are not denominated in the functional currency are translated into the func- tional currency using the exchange rate prevailing at the dates of the transactions. Monetary items as at the bal- ance sheet date are translated into the functional currency at the exchange rate prevailing on the balance sheet date, while non-monetary items are translated using the exchange rate on the date of the transaction. Translation differences are recognised in the income statement. Translation differences are recognised in the income state- ment. Assets and liabilities of subsidiaries and equity-accounted investees reporting in a different functional cur- rency are translated at the exchange rates prevailing on the balance sheet date, whereas the income statement and the cash flow statement are translated at the average exchange rate. Translation differences arising from the translation of net assets and income statements are recorded in other comprehensive income. Significant foreign currency translation rates Closing rate in CHF Average rate in CHF Currency 31.12.2024 31 .12 .2023 31 .12 .2022 2024 2023 1 EUR 0 .941 0 .926 0 .985 0 .951 0 .973 1 USD 0 .906 0 .838 0 .923 0 .879 0 .900 Amendments to IFRS Accounting Standards and Interpretations whose application is not yet mandatory The following IFRS Accounting Standards and Interpretations published up to the end of 2024 are mandatory from the 2025 financial year onwards. Standard Name Effective from Amendments to IFRS 9 Adjustments to the classification and measurement of financial instruments 1 January 2026 Amendments to IFRS 7 and 9 Contracts relating to nature-based electricity 1 January 2026 IFRS 18 Presentation and disclosure of the financial statements 2 January 2027 Amendments to IAS 21 Lack of exchangeability 1 January 2025 IFRS 18 ‘Presentation and Disclosure in Financial Statements’ will replace IAS 1 ‘Presentation of Financial State- ments’ and is to be applied retrospectively. Swisscom expects to apply the new standard from the 2027 financial year and is currently reviewing the impact in particular with regard to the structure of the consolidated financial statements and the additional disclosure requirements for management-defined performance measures (MPMs). In addition, Swisscom is reviewing the impact on the way in which information is grouped in the consolidated financial statements. The other new or amended standards are not expected to have any material impact on Swisscom’s consolidated financial statements.
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206 Consolidated Financial Statements | Report of the statutory auditor PricewaterhouseCoopers AG, Birchstrasse 160, 8050 Zürich Telefon: +41 58 792 44 00, www.pwc.ch PricewaterhouseCoopers AG is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity. Report of the statutory auditor to the General Meeting of Swisscom Ltd, Ittigen Report on the audit of the consolidated financial statements Opinion We have audited the consolidated financial statements of Swisscom Ltd and its subsidiaries (the Group), which comprise the consolidated statement of comprehensive income for the year ended 31 December 2024, the consolidated balance sheet as at 31 December 2024, the consolidated statement of cash flows and the the consolidated statement of changes in equity for the year then ended as well as notes to the consolidated financial statements, including material accounting policy information. In our opinion, the consolidated financial statements (pages 142 to 205) give a true and fair view of the consolidated financial position of the Group as at 31 December 2024 and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with IFRS Accounting Standards and comply with Swiss law. Basis for opinion We conducted our audit in accordance with Swiss law, International Standards on Auditing (ISA) and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the 'Auditor’s responsibilities for the audit of the consolidated financial statements' section of our report. We are independent of the Group in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession, as well as the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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207 Swisscom Ltd | Report of the statutory auditor to the General Meeting Our audit approach Overview Overall group materiality: CHF 90 Mio. We conducted full scope audit work at three Group companies in two countries. These Group companies represent over 90% of the Group’s revenue. In addition, a specific audit scope was defined for another Group company in Switzerland. In addition, specific audit procedures were carried out at another reporting unit (consisting of three Group companies in Italy). As key audit matters the following areas of focus have been identified: • Recoverability of Fastweb goodwill • Revenue recognition – IT Services with Business Customers • Recoverability of technical installations and intangible assets • Assessment of litigation arising from regulatory and competition lawproceedings • Assessment of the provisional purchase price allocation for Vodafone Italia Materiality The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide reasonable assurance that the consolidated financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements. Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall group materiality for the consolidated financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate, on the consolidated financial statements as a whole. Overall group materiality CHF 90 Mio. Benchmark applied Profit before tax Rationale for the materiality benchmark applied We chose profit before tax as the benchmark because, in our view, it is the benchmark against which the performance of the Group is most commonly measured, and it is a generally accepted benchmark. We agreed with the Audit & ESG Reporting Committee that we would report to them misstatements with impacts on the income statement above CHF 4,5 million identified during our audit as well as any misstatements below that amount which, in our view, warranted reporting for qualitative reasons.
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208 Consolidated Financial Statements | Report of the statutory auditor Swisscom Ltd | Report of the statutory auditor to the General Meeting Audit scope We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates. The Group consists of three operating segments (Swisscom Switzerland, Fastweb and other Operating Segments) and operates mainly in Switzerland and Italy. Swisscom (Schweiz) Ltd generates most of the revenue. Another company that we identified as significant is Fastweb S.p.A. (Fastweb). In addition, due to the acquisition of Vodafone Italia as of 31 December 2024, the provisional acquisition balance sheet of a reporting unit (consisting of Vodafone Italia SpA, Vodafone Gestioni SpA and VEI SRL) is defined as material. The audits of Swisscom (Schweiz) Ltd and Swisscom Ltd were performed by the Group audit team. The audit procedures for Fastweb and Vodafone Italia were performed by the PwC component auditor in Italy, to whom we provided instructions and with whom we are in regular contact to discuss the treatment of transactions that are material to the consolidated financial statements as well as questions regarding valuation and disclosure. In addition, we participate in important discussions with Fastweb and Vodafone Italia’s management. The audit of these companies addresses a major part of the consolidated financial statements. Finally, we identified an additional subsidiary with significant balance sheet and income statement items, which is audited by the Group audit team. Group-wide topics, such as purchase price allocations, treasury, taxes, pension obligations, investments including goodwill and the implementation of new accounting requirements are addressed by the Group audit team. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
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209 Swisscom Ltd | Report of the statutory auditor to the General Meeting Recoverability of Fastweb goodwill Key audit matter How our audit addressed the key audit matter The impairment testing of goodwill relating to Fastweb was deemed a key audit matter for the following reasons: • As at 31 December 2024, the goodwill relating to the Fastweb operating segment amounted to CHF 471 million (2023: CHF 464 million), which is a significant amount. • In performing the annual impairment test of the Fastweb goodwill, management has considerable scope for judgement regarding the expected future cash flows, the discount rate (WACC) used and the forecasted growth. Please refer to note 3.4 ‘Goodwill’ (page 181) in the notes to the consolidated financial statements. During our audit, we assessed the design of the controls implemented to assess the recoverability of the Fastweb goodwill. We assessed with regard to the impairment test whether a correct valuation method was used, the calculation was coherent and the assumptions made were appropriate. In doing so, we challenged the input data and assumptions relating to the underlying cash flows of the impairment test. In addition, we compared the results of the current year with the forecasts made in the previous year in order to assess the appropriateness of the previous year’s assumptions. With regard to the discount rate used, we analyzed together with our own valuation specialists how it was derived and compared it with our own calculation. We examined whether the information on impairment testing in the notes to the consolidated financial statements was disclosed correctly and whether the sensitivity analyses presented indicate appropriately the risks of impairment. We consider the valuation method and the assumptions used by management to test for the impairment of the Fastweb goodwill to be appropriate.
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210 Consolidated Financial Statements | Report of the statutory auditor Swisscom Ltd | Report of the statutory auditor to the General Meeting Revenue recognition – IT Services with Business Customers Key audit matter How our audit addressed the key audit matter For the 2024 financial year, Swisscom reports revenue of CHF 11,036 million (2023: CHF 11,072 million). Of this amount, CHF 1,191 million (2023: CHF 1,154 million) is generated by the IT Services with Business Customers. The IT Services with Business Customers comprises integrated communications solutions (e.g. IT outsourcing) for large enterprises in Switzerland. We consider revenue recognition in the IT Services with Business Customers to be a key audit matter for the following reasons: • The specific projects within the IT Services are based on complex individual contracts that may include multiple performance obligations. The accounting treatment of these contracts requires management to estimate the expected transaction price and the timing of revenue recognition of the individual performance obligations. • The projects typically last between three and seven years. To ensure a loss-free valuation of ongoing projects, management has significant scope for judgement in its assessment of the future costs of each project. Please refer to note 1.1 ‘Segment information’ (page 151) in the notes to the consolidated financial statements. During our audit, we assessed the design and effectiveness of the controls implemented to ensure the correct recognition of revenue in the IT Services with Business Customers and evaluated whether management’s estimates are reasonable. We performed analytical audit procedures. On the basis of internal and external reports, we defined our expectations and critically assessed deviations from them. For a sample of contracts entered into in the 2024 financial year, we assessed the accounting treatment applied by Swisscom. In doing so, we assessed whether management’s estimate of the expected transaction price and ofthe timing of revenue recognition relating to individual performance obligations is appropriate. To address the significant scope for judgement when assessing future costs to ensure a loss-free valuation, we performed the following audit procedures: • We gained an understanding of the process implemented by management to assess future developments in the IT Services and critically assessed that process. • We discussed with Swisscom their expectations regarding the future development of individual projects and critically assessed those expectations on the basis of current developments. • Using a sample of projects, we compared Swisscom’s forecasts from the previous year with actual developments in the current financial year and analysed any variances. Finally, on the basis of a sample, we assessed whether the revenue in the IT Services with Business Customers was recorded correctly. To do so, we checked cash receipts for individual revenue transactions and obtained external balance confirmations from Swisscom customers. We consider management’s estimates relating to the recognition of revenue in the IT Services with Business Customers to be appropriate.
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211 Swisscom Ltd | Report of the statutory auditor to the General Meeting Recoverability of technical installations and intangible assets Key audit matter How our audit addressed the key audit matter We consider the recoverability of technical facilities and intangible assets of Swisscom Switzerland to be a key audit matter for the following reasons: • Swisscom recognises as of 31 December 2024 a total amount of technical installations with a net book value of CHF 10,661 million (2023: CHF 8,556 million) and intangible as-sets with a netbook value of CHF 6,124 million (2023: CHF 1,737 million). Both represent significant amounts. • Management has significant scope for judgement when assessing and determining the useful life of technologies that are in use. Please refer to note 3.2 ‘Property, plant and equipment’ (page 178) and note 3.3 ‘Intangible assets’ (page 180) in the notes to the consolidated financial statements We assessed the design and effectiveness of the controls implemented to ensure the correct impairment testing of technical installations and intangible assets. We also discussed with management the estimates of the future useful lives of existing technologies and critically assessed these on the basis of current developments at Swisscom and other telecommunications companies. We consider management's assessment of the expected period over which Swisscom derives economic benefits from the use of existing technologies to be appropriate.
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212 Consolidated Financial Statements | Report of the statutory auditor Swisscom Ltd | Report of the statutory auditor to the General Meeting Assessment of litigation arising from regulatory and competition law proceedings Key audit matter How our audit addressed the key audit matter Swisscom recorded as at 31 December 2024 provisions amounting to CHF 1,540 million (2023: CHF 1,263 million). Of this amount, CHF 152 million (2023: CHF 200 million) relates to provisions for litigation arising from regulatory and competition law proceedings. Swisscom provides regulated access services to other telecommunications service providers in accordance with the Telecommunications Act. The prices charged by Swisscom are subject to reviews by the Federal Communications Commission (ComCom). If the Commission issues a ruling against Swisscom, the prices charged must be reduced with retroactive effect. Swisscom is also a party to proceedings conducted by the Federal Competition Commission (COMCO). In the event of a final verdict establishing market abuse by Swisscom, COMCO may impose sanctions. A final verdict establishing market abuse issued by COMCO could lead to civil claims against Swisscom. We consider the assessment of the financial implications of litigation arising from regulatory and competition law proceedings to be a key audit matter because management has significant scope for judgement in estimating the probability, the timing and the amount of a potential cash outflow due to litigation. Please refer to note 3.5 ‘Provisions and contingent liabilities’ (page 183) in the notes to the consolidated financial statements. To address the significant scope for judgement in estimating the probability, the timing and the amount of a potential cash outflow due to litigation, we performed together with an internal legal expert the following audit procedures: • We discussed pending litigation with management and Swisscom’s internal legal counsel. • We obtained written statements from Swisscom’s external and internal legal counsel. • We gained an understanding of the process and controls implemented by management to identify, assessand recognise pending litigation, and critically assessed it. To assess the amount of the provisions established, we considered whether the underlying data were adequately factored into the calculation of the provisions. Finally, we assessed the recognition and disclosure in the consolidated financial statements of litigation arising from regulatory and competition law proceedings. We consider management’s approach to the treatment in the consolidated financial statements of litigation arising from regulatory and competition law proceedings to be appropriate.
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213 Swisscom Ltd | Report of the statutory auditor to the General Meeting Assessment of the provisional purchase price allocation for Vodafone Italia Key audit matter How our audit addressed the key audit matter Swisscom acquired Vodafone Italia as of 31 December 2024. Since all the information necessary to determine the fair value of the acquired assets and liabilities was not yet available at the time of preparing Swisscom's consolidated financial statements, Swisscom prepared a provisional purchase price allocation for the acquisition. This resulted in provisional values for assets, liabilities and goodwill. Please refer to Note 5.3 ‘Acquisition of Vodafone Italia’ (page 195) in the notes to the consolidated financial statements. We consider the provisional purchase price allocation of the Vodafone Italia acquisition to be a particularly key audit matter for the following reasons: • The acquired assets and liabilities of Vodafone Italia recognized as of 31 December 2024 represent significant amounts. • In preparing the provisional purchase price allocation, management applies judgement regarding the choice of valuation methods, input data and assumptions. Our audit procedures included assessing the appropriateness of the accounting policies applied by management and compliance with the applicable accounting standards for business combinations. For the assets and liabilities already recognised at the carrying amount by Vodafone Italia, we assessed that they were correctly included in the provisional purchase price allocation. For the newly recognised assets as part of the acquisition, we carried out the following audit procedures with the involvement of our valuation specialists: • We assessed whether a methodically appropriate valuation procedure was used to determine the fair values and whether the calculations are comprehensible. • In particular, we critically reviewed the respective input data and key assumptions, in particular the discount rate used, analysed their derivation and compared them with our own calculations. Finally, we reviewed the disclosure in the consolidated financial statements for the provisional purchase price allocation for the acquisition of Vodafone Italia. We consider management's approach to presenting Vodafone Italia's provisional purchase price allocation in the consolidated financial statements to be reasonable.
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214 Consolidated Financial Statements | Report of the statutory auditor Swisscom Ltd | Report of the statutory auditor to the General Meeting Other information The Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements, the consolidated financial statements, the remuneration report and our auditor’s reports thereon. Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Board of Directors’ responsibilities for the consolidated financial statements The Board of Directors is responsible for the preparation of consolidated financial statements, that give a true and fair view in accordance with IFRS Accounting Standards and the provisions of Swiss law, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s responsibilities for the audit of the consolidated financial statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law, ISA and SA-CH will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with Swiss law, ISA and SA-CH, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made. • Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
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215 Swisscom Ltd | Report of the statutory auditor to the General Meeting • Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the consolidated financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion. We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them regarding all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the Board of Directors or its relevant committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on other legal and regulatory requirements In accordance with article 728a para. 1 item 3 CO and PS-CH 890, we confirm the existence of an internal control system that has been designed, pursuant to the instructions of the Board of Directors, for the preparation of the consolidated financial statements. We recommend that the consolidated financial statements submitted to you be approved. PricewaterhouseCoopers AG Petra Schwick Arsim Arslani Licensed audit expert Licensed audit expert Auditor in charge Zürich, 12 February 2025
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Further Information ___________ Financial statements of Swisscom Ltd General disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218 Income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218 Balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219 Further disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219 Proposed appropriation of retained earnings . . . . . . . . 219 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220 Five-year review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225
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218 Further Information | Financial statements of Swisscom Ltd Financial statements of Swisscom Ltd General disclosures This is a condensed version of the financial statements of Swisscom Ltd. The full version and the report of the stat- utory auditor can be viewed on the Swisscom website. Y See www.swisscom.ch/jahresrechnung2024 Swisscom Ltd is a holding company under Swiss law. As at 31 December 2024, the Swiss Confederation, as majority shareholder, continued to hold 51.0% of the issued shares of Swisscom Ltd as in the prior year. The Telecommuni- cations Enterprise Act (TEA) stipulates that the Swiss Confederation shall hold the majority of the share capital and voting rights of Swisscom Ltd. The financial statements of Swisscom Ltd have been prepared in accordance with statutory requirements and the Articles of Incorporation. Distributable reserves are not determined on the basis of the equity as reported in the consolidated financial statements, but rather on the basis of equity as reported in the separate financial state- ments of Swisscom Ltd. Equity totalled CHF 8,903 million in the 2024 annual financial statements of Swisscom Ltd. Under Swiss company law, share capital and that part of the general reserves representing 20% of the share capital may not be distributed. On 31 December 2024, Swisscom Ltd held distributable reserves of CHF 8,841 mil- lion. The dividend is proposed by the Board of Directors and must be approved by Swisscom Ltd’s Annual General Meeting of Shareholders on 26 March 2025. Treasury shares are not entitled to a dividend. Income statement In CHF million 2024 2023 Other income – 1 Total operating income – 1 Personnel expense (13) (10) Other operating expense (5) (6) Total operating expenses (18) (16) Operating income (18) (15) Financial expense (152) (107) Financial income 159 132 Income from participations 3,021 263 Income before taxes 3,010 273 Income tax expense (7) (2) Annual profit 3,003 271
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219 Balance sheet In CHF million 31 .12 .2024 31 .12 .2023 Assets Cash and cash equivalents 1,386 81 Financial assets 11,382 5,497 Participations 8,431 8,416 Accrued dividends receivable from subsidiaries 2,950 – Other assets 94 39 Total assets 24,243 14,033 Liabilities and equity Interest-bearing liabilities 15,068 6,820 Other liabilities 272 174 Total liabilities 15,340 6,994 Share capital 52 52 Legal capital reserves/capital surplus reserves 21 21 Profit carried forward 5,827 6,695 Annual profit 3,003 271 Total equity 8,903 7,039 Total liabilities and equity 24,243 14,033 Further disclosures Information on the participation rights held by the members of the Board of Directors and the Group Executive Board is disclosed in the Remuneration Report (sections 2.5 and 3.5). As at 31 December 2024, guarantee obligations existed for Group companies in favour of third parties totalling CHF 235 million (prior year: CHF 250 million). In addition, financial assets totalling CHF 140 million (prior year: CHF 134 million) were not freely available. These assets serve to secure commitments arising from bank loans. Proposed appropriation of retained earnings The Board of Directors proposes to the Annual General Meeting of Shareholders to be held on 26 March 2025 that the available retained earnings of CHF 8,829 million for the financial year ending on 31 December 2024 be appropriated as follows: In CHF million 31 .12 .2024 Appropriation of retained earnings Retained earnings from previous year 6,966 Ordinary dividend (1,140) Balance carried forward from prior year 5,826 Annual profit 3,003 Retained earnings available to the Annual General Meeting 8,829 Ordinary dividend of CHF 22 .00 per share (1,140) Balance to be carried forward 7,689 If the proposal is approved, a dividend of CHF 22 per share will be paid to shareholders on 1 April 2025.
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220 Further Information | Glossary Glossary 3G: 3G is the third generation of mobile technology with a transfer rate of up to 42 Mbit/s. Swisscom intends to decommission 3G by the end of 2025 and use the freed-up resources for more modern and efficient tech- nologies. 4G: 4G is the fourth generation of mobile technology. It enables theoretical broadband data speeds of up to 700 Mbit/s via the mobile network. To do so, it bundles 4G frequencies to achieve the required capacity. 5G: 5G (and 5G+) is the latest generation of mobile tech- nology. Compared to 3G and 4G, it provides even more capacity, very short response times, and higher band- widths. 5G technology plays a major role in supporting the digitalisation of the Swiss economy and industry. Swisscom differentiates between 5G-fast (narrower coverage up to 2 Gbit/s and more) and 5G-wide (Swit- zerland-wide 5G coverage with up to 1 Gbit/s). 5G-fast is also known as 5G+. Both variants are more efficient than their predecessor technologies with respect to energy consumption and use of electromagnetic fields. asut: Swiss Telecommunications Association (asut). asut represents the telecoms industry. The association is committed to ensuring optimal general conditions for users and providers of services and products. OFCOM (Federal Office of Communications): OFCOM deals with issues related to telecommunications and broadcasting (radio and television) and performs offi - cial and regulatory tasks in these areas. It also prepares the decisions of the Swiss Federal Council, the Federal Department of the Environment, Transport, Energy and Communications (DETEC) and the Federal Communica - tions Commission (ComCom). Bandwidth: Bandwidth refers to the transmission capac- ity of a medium, also known as the data transmission rate. The higher the bandwidth, the more information units (bits) can be transmitted per unit of time (second). It is defined in bit/s, kbit/s, Mbit/s or Gbit/s. CDP: The CDP (formerly Carbon Disclosure Project) is a non-profit organisation whose goal is for companies, communities and countries to disclose and publish their environmental data, such as climate-damaging green - house gas emissions. Swisscom joined the CDP’s Supply Chain Programme in 2013 to create more transparency about the greenhouse gas emissions of its suppliers. Cloud: Cloud computing makes it possible for IT infra- structures such as computing capacity, data storage, ready-to-use software and platforms to be accessed dynamically via the internet as needed. The data centres, along with the resources and databases, are distributed via the cloud. The term ‘cloud’ refers to such hardware which is not precisely locatable. ComCom (Federal Communications Commission): Com- Com is the decision-making authority for telecommuni- cations. Its primary responsibilities include issuing con- cessions for use of the radio frequency spectrum as well as basic service licences. It also provides access (unbun- dling, interconnection, leased lines, etc.), approves national numbering plans and regulates the conditions governing number portability and freedom of choice of service provider. Container as a Service (CaaS): Container as a Service is a cloud-based service with usage-based payment. It offers companies a way to manage their virtualised applica - tions, clusters and containers, thereby simplifying and speeding up deployments. Containerisation: Containerisation is the packaging of software code into packages. These packages contain all the necessary components such as libraries, frameworks and other dependencies, and are isolated in their own container.
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221 CSR: Corporate social responsibility refers to corporate responsibility for people, society and the environment. Delivery as a Service (DaaS): Delivery as a Service is a service-orientated logistics business model that gives companies access to on-demand deliveries without hav- ing to hire and manage their own fleet. EcoVadis: The EcoVadis online platform supports the enforcement of environmental and social standards in global supply chains through uniform sustainability rankings of suppliers. As part of its risk management system, Swisscom bases its purchasing activities on the declarations made with EcoVadis by its suppliers. ESG: ESG refers to the consideration of environmental, social and governance issues. Footprint: The term ‘footprint’, also called carbon foot- print or CO2 footprint, is the result of an emission calcu- lation. It indicates the amount of greenhouse gas emis- sions released by an activity or a product. In the case of products, for example, the carbon footprint includes the total emissions caused by production, use and disposal. FTTH (Fibre to the Home): FTTH refers to the end-to-end connection of homes and businesses using fibre-optic cables instead of traditional copper cables. FTTS (Fibre to the Street)/FTTB (Fibre to the Building)/ FTTC (Fibre to the Curb): FTTS, FTTB and FTTC refer to hybrid broadband connection technologies (optical fibre and copper). With these technologies, optical fibre is brought as near as possible to buildings and in the case of FTTB right to the building’s basement; the existing copper cables are used for the remaining stretch. FTTx: FTTx refers to ‘Fibre to the x’. The placeholder ‘x’ denotes the expansion depth, i.e. the end point of the fibre-optic connection. FWA (Fixed Wireless Access): FWA is a broadband tech- nology based on 5G. With FWA, data is received via the mobile network, which means that no fixed-line con- nections are required. The user only needs a receiving device, a mobile router and a WLAN access point. Optical fibre: Optical fibre cables (or fibre-optic cables) are a transport medium for optical data transmission – in contrast to copper cables, which transmit data through electrical signals. Hyperscaler: A hyperscaler provides IT resources based on cloud computing. Cloud computing resources can be scaled largely horizontally, often with thousands of serv- ers and storage systems interconnected via high-perfor- mance networks. Currently, the most significant hyper- scalers include Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform (GCP) and IBM. ICT (information and communication technology): The terms ‘information technology’ and ‘communication technology’ were first combined in the 1980s to denote the convergence of information technology (informa - tion and data processing and the related hardware) and communication technology (technically aided commu- nications). Infrastructure as a Service (IaaS): Infrastructure as a Service enables quick on-demand provision of centrally managed cloud, computing, data storage and network resources in a virtualised environment. Interconnection: Interconnection means linking up the systems and services of two TSPs so as to enable the log- ical interaction of the connected telecommunications components and services and to provide access to third- party services. Interconnection allows the customer of one provider to communicate with the subscribers of another provider. Under the terms of the Federal Tele- communications Act, market-dominant telecommunica- tions service providers are required to allow their compet- itors interconnection at cost-based prices.
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222 Further Information | Glossary IoT (Internet of Things): The IoT connects things, devices and machines to enable recording of status and environ- mental data. This data provides the basis for optimising processes, such as early identification of failing machine components. IoT facilitates new business models based on this data or opens up new opportunities for interact- ing with customers. IPv6: The successor to IPv4, IPv6 is the sixth generation of the Internet Protocol. An IPv6 address is a unique, log- ical address assigned to a host within the network. JAC: Joint Alliance for CSR. The elimination of any vul- nerabilities identified is reviewed on a regular basis to ensure compliance with the environmental and social standards we expect. Within the framework of JAC, an international alliance of telecoms companies plans and conducts CSR audits of suppliers. Swisscom has been a member of JAC since 2012. Connectivity: Connectivity is the generic term used in IP services to denote the connection to the internet and the ability to exchange data with any partner on the net- work. Convergence (bonding technology): In the telecoms sec- tor, the term convergence usually denotes an interplay of mobile and fixed-network technologies or products that include both mobile and fixed-network services. Circular economy: The circular economy is characterised by the fact that raw materials are used efficiently and for as long as possible. If we succeed in closing material and product cycles, raw materials can be used again and again. LAN (local area network): A LAN is a local network for interconnecting computers, usually based on Ethernet. MPLS (Multiprotocol Label Switching): MPLS is a tech- nology that optimises the speed and efficiency of data forwarding within large networks and/or at the network edge. MVNO (mobile virtual network operator): MVNO denotes a business model for mobile communications. In this case, the corresponding provider (the MVNO) has either a limited network infrastructure or no network infrastructure at all. It therefore uses the infrastructure of other mobile communications providers. myclimate: The myclimate foundation supports Swisscom with the environmental assessment of its smartphone range, comparisons of sustainable ICT solu- tions and reviews of climate balances. Net promoter score (NPS): The NPS is a key figure that indirectly indicates customer satisfaction and directly indicates the willingness of customers to make a recom- mendation to others. It therefore serves as an analytical tool to determine customer satisfaction. Net zero: Net zero means that all greenhouse gas emis- sions caused by humans must be removed from the atmosphere again through reduction measures and thus the climate balance is net, or zero.
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223 NIRO: The Swiss Ordinance on Protection against Non-Ionising Radiation (NIRO) defines the maximum permissible electrical, magnetic and electromagnetic radiation from fixed installations in the frequency range from 0 Hz to 300 GHz. A two-stage protection concept was applied. At all accessible places, the exposure limit value, which corresponds to the recommendations of the WHO, must be observed. In order to take account of the precautionary principle required by the Environmen- tal Protection Act, values which are ten times stricter were set as a precautionary measure for places which are heavily used where people stay for long periods of time, based on technical feasibility and economic viabil- ity. OTT (Over the Top): OTT refers to content distributed by service providers over an existing network infrastructure that they do not themselves operate. OTT companies offer proprietary services on the basis of the infrastruc- tures of other companies in order to reach a broad range of users quickly and cost-efficiently. Platform as a Service (PaaS): Platform as a Service refers to cloud-based solutions for the development of appli- cations. It allows developers to work on apps and other software solutions without having to provide their own hardware or infrastructure. Roaming: Roaming is when a mobile user makes calls, uses other mobile services or participates in data traffic outside their home network, i.e. usually abroad. This requires that the mobile device in question is compati- ble with the roaming network. Router: Routers are devices for connecting or separat- ing several computer networks. They analyse incoming data packets according to their destination address and either block them or forward them accordingly (rout- ing). Routers come in different types, ranging from large machines in a network to the small devices used by resi- dential customers. SBTi and SBT: The goal of the Science Based Target ini - tiative (SBTi) is to encourage companies to increase their efforts to combat climate change by setting sci - ence-based targets. These targets focus on the quantity of emissions that must be reduced to meet the goals of the Paris Agreement – to limit global warming to 1.5°C. Scope 1: Direct GHG emissions resulting from own activ- ities (e.g. from the combustion of fossil fuels for heating and mobility or from refrigerants). Scope 2: Indirect GHG emissions resulting from purchased energy. Scope 3: All other GHG emissions resulting from upstream and downstream activities (e.g. in the supply chain). Secure Access Service Edge (SASE): Secure Access Service Edge is a technology that combines software-defined network functions with network security. Software-defined Wide Area Network (SD-WAN): Soft - ware-defined wide area networking is an automated, programmatic approach to managing enterprise net - work connectivity and circuit costs. It extends soft- ware-defined networking (SDN) into an application that enables companies to quickly set up an intelligent hybrid WAN. Radiation: Radiation is a form of energy that propa- gates as electromagnetic waves. A distinction is made between ionising and non-ionising radiation. Ionising radiation can change the building blocks of matter such as molecules or atoms, non-ionising radiation has too little energy for this. Therefore, non-ionising radiation cannot change atoms or molecules. Mobile networks use non-ionising radiation.
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224 Further Information | Glossary Streaming: Streaming is the transmission of audio and video signals over a network or the internet without the data having to be stored on a local device. Ultra-fast broadband: Ultra-fast broadband denotes broadband speeds of more than 50 Mbit/s – on both the fixed-line and mobile networks. FTEs: Throughout this report, FTEs is used to denote the number of full-time equivalent positions. Competition Commission (COMCO): The Competition Commission (COMCO) applies the Federal Act on Cartels and other Restraints of Competition (CartA). The aim of the CartA is to protect against the harmful economic or social impact of cartels and other constraints on compe- tition and by so doing foster competition. COMCO com- bats harmful cartels and monitors market-dominant companies for signs of anti-competitive conduct. It is responsible for overseeing mergers. It is also responsible for examining mergers and issuing statements on offi - cial decrees that affect competition. Zero Trust Network Access (ZTNA): Zero Trust Network Access is a product or service that creates an identity- and context-based, logical access boundary around an application or set of applications.
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225 Five-year review In CHF million, except where indicated 2020 2021 2022 2023 2024 Revenue and results Revenue 11,100 11,183 11,051 11,072 11,036 Operating income before depreciation and amortisation (EBITDA) 4,382 4,478 4,406 4,622 4,355 EBITDA as % of revenue % 39 .5 40 .0 39 .9 41 .7 39 .5 EBITDA after lease expense (EBITDAaL) 4,082 4,177 4,120 4,334 4,064 Operating income (EBIT) 1,947 2,066 2,040 2,205 1,951 Net income 1,528 1,833 1,603 1,711 1,541 Earnings per share CHF 29 .54 35 .37 30 .93 33 .03 29 .77 Balance sheet and cash flows Equity 9,491 10,813 11,171 11,622 12,155 Equity ratio % 39 .1 43 .6 45 .4 47 .0 32 .7 Capital expenditure 2,229 2,286 2,309 2,292 2,312 Operating free cash flow 1,853 1,891 1,811 2,042 1,752 Free cash flow 1,706 1,513 1,349 1,480 1,437 Net debt 8,206 7,706 7,374 7,071 15,597 Employees Full-time equivalent employees number 19,062 18,905 19,157 19,729 19,887 Average number of full-time equivalent employees number 19,095 19,099 19,046 19,461 19,918 Operational data Fixed telephony access lines in Switzerland in thousand 1,523 1,424 1,322 1,226 1,137 Broadband access lines retail in Switzerland in thousand 2,043 2,037 2,027 2,006 1,967 TV access lines in Switzerland in thousand 1,588 1,592 1,571 1,537 1,493 Mobile access lines in Switzerland in thousand 6,224 6,177 6,173 6,277 6,331 Access lines wholesale Switzerland in thousand 611 698 679 692 731 Broadband access lines retail in Italy in thousand 2,747 2,750 2,683 2,601 2,544 Broadband access lines wholesale in Italy in thousand 158 306 458 648 905 Mobile access lines in Italy in thousand 1,961 2,472 3,087 3,509 3,930 Swisscom share Number of issued shares in million of shares 51 .802 51 .802 51 .802 51 .802 51 .802 Market capitalisation 24,715 26,657 26,243 26,212 26,134 Closing price at end of period CHF 477 .10 514 .60 506 .60 506 .00 504 .50 Closing price highest CHF 577 .80 562 .40 590 .40 619 .40 571 .00 Closing price lowest CHF 446 .70 456 .30 443 .40 501 .20 486 .80 Dividend per share CHF 22 .00 22 .00 22 .00 22 .00 22 .00 1 Ratio payout/earnings per share % 74 .48 62 .20 71 .13 66 .61 73 .90 Information Switzerland Revenue 8,614 8,579 8,566 8,516 8,363 Operating income before depreciation and amortisation (EBITDA) 3,522 3,569 3,534 3,842 3,679 Capital expenditure 1,596 1,634 1,688 1,685 1,712 Full-time equivalent employees number 16,048 15,882 15,750 16,050 15,905 1 In accordance with the proposal of the Board of Directors to the Annual General Meeting.
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226 Further Information | Forward-looking statements Forward-looking statements This Annual Report contains forward-looking statements. In this Annual Report, such forward-looking statements include, without limitation, statements relating to our financial condition, results of operations and business and certain of our strategic plans and objectives. Because these forward-looking statements are subject to risks and uncertainties, actual future results may differ materially from those expressed in or implied by the statements. Many of these risks and uncertainties relate to factors which are beyond Swisscom’s ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behaviour of other market participants, the actions of governmental regulators and other risk factors detailed in Swisscom’s, Fastweb’s and Vodafone Italia’s (Fastweb + Vodafone) past and future fil- ings and reports, including those filed with the U.S. Securities and Exchange Commission and in past and future filings, press releases, reports and other information posted on Swisscom Group companies’ websites. Readers are cautioned not to put undue reliance on forward-looking statements, which relate only to the date of this communication. Swisscom disclaims any intention or obligation to update and revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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Publishing details Key dates ● 13 February 2025 2024 Annual Results and Annual Report ● 26 March 2025 Annual General Meeting ● 28 March 2025 Ex dividend date ● 1 April 2025 Dividend payment date ● 8 May 2025 2025 First-Quarter Results ● 7 August 2025 2025 Second-Quarter Results ● 6 November 2025 2025 Third-Quarter Results ● 12 February 2026 2025 Annual Results and Annual Report Published and produced by Swisscom Ltd, Bern Graphic Design Nordjungs Ltd liab co., Zurich Translation Supertext Ltd, Zurich Production MDD Management Digital Data Ltd, Zurich Printing Ast & Fischer Ltd, Bern Photography Gerry Amstutz, Franz Rindlisbacher, Zurich Printed on chlorine-free bleached paper © Swisscom Ltd, Bern The Annual Report is published in English, French and German. Online versions of the Annual Report German: www.swisscom.ch/bericht2024 English: www.swisscom.ch/report2024 French: www.swisscom.ch/rapport2024 The Sustainability Reports for Switzerland and Italy are published online at Switzerland: www.swisscom.ch/sir2024 Italy: www.fastweb.it/corporate General information Swisscom Ltd Headquarters 3050 Bern / Switzerland Telephone: + 41 58 221 99 11 Financial information Swisscom Ltd Investor Relations 3050 Bern / Switzerland Telephone: + 41 58 221 99 11 E-mail: investor.relations@swisscom.com Website: www.swisscom.ch/investor Social and environmental information Swisscom Ltd Group Communications & Responsibility 3050 Bern / Switzerland E-mail: corporate.responsibility@swisscom.com Website: www.swisscom.ch/responsibility For the latest information, visit our website www.swisscom.ch
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