Prepared and filed by St Ives Burrups

 

Form 6-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Report of Foreign Private Issuer
Pursuant to Rules 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

Dated: April 1, 2003

Swisscom AG
(Translation of registrant’s name into English)

Alte Tiefenaustrasse 6
3050 Bern, Switzerland
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F            Form 40-F  

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ___

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ___

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes            No  

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-______

 

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Analyst meeting
Annual results 2002

“rock-solid-return(s)”

 

 

26 March 2003, Zurich

 

1
     

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Cautionary statement regarding forward-looking statements

"This communication contains statements that constitute "forward-looking statements". In this communication, 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 past and future filings and reports filed with the U.S. Security and Exchange Commission and posted on our Websites.

Readers are cautioned not to put undue reliance on forward-looking statements, which speak only of 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.”

 

2
     

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  Agenda Analyst meeting, 26 March 2003    
Subject   Speaker   Starts
on
Slide		  
                 
    The Overview   Jens Adrian CEO   4
                 
Domestic wireline business   Adrian Bult,  
    • highlights 2002   CEO Swisscom   13 
    • the key questions & answers   Fixnet    
                 
  Domestic wireline business   Carsten Schloter,  
    • highlights 2002   CEO Swisscom   22 
    • the key questions & answers   Mobile    
                 
Other businesses      
    • highlights 2002   Mike Shipton, CSO   28
    • the key questions & answers        
                 
  Group financials      
    • highlights 2002   Ueli Dietiker, CFO   36
    • the key questions & answers        
                3
                 

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The Overview
  
     
     
     
     
     
     
     
     
  Jens Alder, CEO Swisscom  
 
 
 
 
 
 
 
 
 
 
 
 
    4
   

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  2002 in review
     
  Key financials   Key achievements
     
     
           
  in CHF mm 2002   change  
 
 
  Net revenue 14,526   2.5%  
           
  EBITDA 4,413   0.1%  
           
  EBIT1 2,408   7.7%  
           
  Reported net income 824   (83.4%)  
           
  CAPEX 1,222   (1%)  
           
  Net debt 642   nm   
           
  Book leverage2 9%   nm   
           
  Number of FTE's 20,470   (4.0%)  
 
 
  Adj. net income3 1,319   12.4%  
           
  Adj. EPS in CHF4 19.92   24.8%  
 
 
     
  1 before exceptional item
  2 net debt / shareholders’ equity
  3 adjusted only by substantial exceptional items, net of taxes
  4 number of outstanding shares at YE 2002: 66.2mm
     
 
     
  Successfully defended strong market position
     
  Launched several new products and price packages in wireline and wireless markets
     
  On track with operating cost reductions
     
  Finalised new organisational structure, reduced workforce by 858 FTE's (-4%)
     
 
     
  Have not been able to execute large acquisition options, that would satisfy investment criteria
     
  Completed few minor investments into "ventures" as "entry-ticket-options" (more recently for example into public WLAN)
     
 
     
  Robust financial management and strong balance sheet
     
  Defined new return policy: "delivering full annual equity free cash flow to shareholders"
     
     
     
     


 


On the back of strong results, Swisscom proposes
“rock-solid-returns” to shareholders

 
    5
     

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  Swisscom introduces new Return Policy to shareholders  
       
         
from “dividend policy”   to “return policy”  
     
     
         
 
 
         
  paying approx. half of adjusted net
income + opportunistic return of
funds through share buy back

 returning the full annual equity free  cash
 flow (EFCF) to shareholders,  through:

 • dividends
 • par value reduction
 • share buy backs

  
         
   Rationale for new Return Policy:
         
    Better reflects corporate strategy  
     

 

 
    Ties in capital structure considerations. Return Policy takes it from cash flow perspective instead of profit (P&L) perspective. Enables company to retain strategic flexibility, as balance sheet will not be weakened. Includes debt repayments so that strategic flexibility is restored as quickly as possible should the company acquire  
         
    Offers better yield than current dividends can do. The minimum return will be half of adjusted net income (i.e. like dividends in the past), with more to be paid if EFCF is higher  
         
    Builds on strong business outlook  
        6
         

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  New Return Policy - reflects strategy
         
        7  
         

 

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  New Return Policy - ties in considerations
of strategic flexibility and capital structure
         
 
         
  Return Policy takes it from cash flow perspective. Current business cash flows are higher than profits mainly due to fact that depreciation charges are - and will be - substantially higher than level of capital expenditure. Taking profits as the basis for returns to shareholders would hence lead to creation of cash pile    
         
 
         
  Return Policy deliberately subtracts cash required for acquisitions. This highlights the company’s view that acquisitions have to be cashflow accretive to make sense: otherwise money should be returned    
         
 
       
  Return Policy reflects company’s desire to retain strong balance sheet by including debt repayments. Underlines company’s wish to restore strategic flexibility as fast as possible through conscious debt maturity management in case of debt-funded acquisitions    
         
         
         
    In conclusion, the new Return Policy prevents Swisscom from building again a cash pile, as all annual free cash generated is returned to either providers of debt or equity. At the same time, this Policy does not weaken the balance sheet    
         
        8  
         

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  New Return Policy and financial year 2002:
offers better yield than dividends only can do 		 
         
  Remarks  
       
       
       
       
  CHF 12/share compares to CHF 11 for 2001, and represents 60% of adjusted net income. Higher dividend also possible through the accretion effect of the 10% share buy back concluded in 2002. Reflects ongoing commitment to pay around half of adjusted net income in form of dividends.
Will be paid on May 9, 2003 		 
       
  To pay remaining EFCF after dividends in PVR would imply CHF 6/share. However, this would be sub-optimal, as we should reduce the PVR straight away to a final nominal value of CHF 1/share. Hence, the full remaining CHF 8/share will now be returned.
Will be paid by August 2003 latest 		 
       
  As a result, Swisscom will return the full EFCF plus an additional CHF 142mm to shareholders in 2003  
             
         
         
    High return for year 2002 through dividends and par value reduction payable
in 2003. No share buy back (SBB) in 2003, unless government decides
to dilute. That may trigger Swisscom to do a SBB in order to serve
the interests of free float holders 		   
         
        9  
         

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  New Return Policy - builds on strong outlook
       
  Remarks  
   
Taxes payable in 2003 are expected to be substantially lower due to loss-carry- forward and timing effects. This is a positive one-off effect that cannot be expected in 2004  
Opportunity driven, but only if value accretive  
Without further debt-funded acquisitions, there will be no material further debt repayments to be done as of 2004  
Minimum return is approx. half of adjusted net income through ordinary dividend payment. Any top-up through share buy back in 2004  
   

Return Policy made sustainable through targeted measures that increase the
distributable reserves (see last chapter on group financials for details)

 10
   

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Update on the “quest for acquisitions”
                   
  Criteria     Explanation       Rationale  
                   
            What is the uniqueness of the constellation?
what makes Swisscom a better investor than a financial investor directly:		  
  sustainability     Focus on sustainable cash flow    
      generation and accretion    
      to group cash flows    
             
             
  strategic fit     Potential synergies, and ability      
      to exploit these through   – we may be the only acceptance  
      control     buyer for a majority stake  
            – we can sweat the asset better  
              thanks to our experience  
  management     Availability of experienced        
      management team   – we can extract some synergies with    
              current operations  
                 
  price     Attractive valuation   – we may improve the position  
              of the combination in the  
  size/risk     No major shift in existing     run-up to potential further  
      risk profile     industry consolidation  
                   
  So far not been able to execute convincing options. Having looked at most possibilities, the route forward is opportunistic. If new possibilities arise, Swisscom will continue to screen these, using its robust set of criteria  
   
   
                  11
                   

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In summary
     
     
     
  Your 3 “bets” when investing in Swisscom  
     
   
     
  Swisscom is able to sustain strong annual equity free cash flows - through continued strong operational performance  
     
   
     
  Swisscom doesn’t have a long term strategic (scale) problem if it doesn’t acquire, and only acquires if this is value accretive  
     
   
     
  Swisscom will return all equity free cash flow to shareholders while preserving a strong balance sheet  
     
    12
     

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  Domestic wireline business  
       
   
   
   
   
  Adrian Bult, CEO Swisscom Fixnet
   
   
   
   
   
   
   
   
   
   
  13  
   

 

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Highlights 2002
   
                 
    Key financials Fixnet       Key achievements FX    
                 
               
  in CHF mm 2002 change   Stabilised overall market share after  
 
    renumbering at 59%  
  Net revenue 1 6,443 (2.2%)        
               
  EBITDA 1,903 (4.3%)   Reduced FTE’s by 7%, costs by 1%  
            and CAPEX by 2% while increasing  
  EBITDA margin 29.5% (2.3%)     investments in new business  
               
  EBIT 848 (6.7%)        
               
  CAPEX 585 (2.0%)   Exceeded target of Broadband; rolled  
            out close to 200k lines  
  Number of FTE's 8,010 (7.3%)        
 
       
               
                 
    Key financials Enterprise Solutions       Key achievements ES    
                 
               
  in CHF mm 2002 change   Improved customer relationships  
 
       
  Net revenue 1 1,450 (8.5%)   Moved from technology-driven products  
            to target group offerings  
  EBITDA 68 (40.4%)        
               
  EBITDA margin 4.7% (34.7%)   Established partnerships (e.g. with  
            Unit.net)  
  EBIT 36 (55.6%)        
               
  CAPEX 23 (20.9%)   Reduced future cost base through  
            ongoing restructuring  
  Number of FTE's 1,410 (9.4%)        
 
       
  1  including intersegment revenue            
     
  Strong cash generative business, however full focus on efficiency
improvements required to ensure sustainability		  
     
     
    14
     

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   Q1. Overall volume development?
     
  Significant retail traffic reduction through renumbering
and market reduction
   
         
  Change in retail traffic volumes of FX+ES
(in mm minutes)		    Decline in local and DLD traffic
    – New renumbering introduced
            in April 2002 - one off effect
            (1,000mm)
        – Market reduction on SCM
        retail traffic (388mm)
      – Surf effect (350mm)
      – Market share loss (270mm)
      – Hard mobile substitution
         
  Increased F2M traffic due to higher
    mobile penetration
     
  Stable international traffic
     
  Reduction in value added services
      – Reduced dial-up traffic due to
        ADSL substitution
  – Carrier specific filtering
             
     
  Action to stabilize market shares will be taken in 2003  
     
     
  1) Gross increase estimated at 73mm minutes; 7mm minutes lost due to hard mobile substitution  
    15
     

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   Q2. Fixed-to-Mobile substitution?       
   
  Overall mobile impact on wireline revenues neutral
     
  Estimated impact of Mobile on FX + ES national retail traffic 1  

National traffic volumes (in mm minutes)

   
Loss of ca. 1.5% access lines due to hard mobile substitution (largely line cancellation)
     
  – Estimated impact 66,000 lines
     
  – Traffic 79mm minutes
   
Overall market reduction impacted Swisscom retail traffic by 388mm minutes
     
  – Maximally 300mm attributed to soft mobile substitution
     
  – Remaining reduction attributed to other behavioral changes (e.g., e-mail use)
     
     
     

Lost minutes gained back by mobile operators with
Swisscom Mobile being main beneficiary		  
 

1 Includes national and F2M traffic. Not included is international and wholesale traffic

 
  2 Revenues include CHF 10mm lost access revenues  
  3 Estimate of maximum impact based on observed market reductions of total 388mm minutes and analysis of national traffic  
  4 Attributable to traffic change. Other changes such as change in rebates are not included  
    16
     

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   Q3. Voice over Cable?       
   
  Cablecom’s recent Voice offer appears quite attractive as first line offer
   
         
  Strong growth of broadband in 2002   Comparison of Cablecom to FX offers 2  
         
                   
        One Line Two Lines  
       
 
    Add-on to
existing
Cable BB-offer 		  -18% -23%  
                 
                 
    Combined
Cable BB/Voice
package 		  -8% -12%  
                 
                 
    Cable BB/Voice
package as second
line 3		   +12% +17%  
                   
                   

However, similar to other European Cable providers in Europe,
Cablecom will need to prove to be able to deliver satisfactory voice services

  
 

1 Estimated. Source: Swiss Press, Swisscable report

  
  2 Relative to Swisscom FX retail prices (in %). Approximated values  
  3 Standard telephony access is kept at Swisscom 17
     

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   Q4. ADSL business case?       
   
  ADSL expected to be cash flow positive from 2004/2005
   
         
  Background   Business case characteristics  
         
 

Swiss market characterised by aggressive

     Recurrent ARPU/Subs1) (CHF/month):  
    growth in broadband market. Swisscom     – around CHF 49 on a standalone basis  
    pushes mainly for defensive reasons     – around CHF 31 on a net basis (after substitution)  
             
       

CAPEX per new subs moving down towards CHF 500-550

  
             
       

Swisscom ADSL expected to be cash flow positive in 2004/2005 - including negative effects from substitution, and earlier on a standalone basis. Latest review indicates approx. 400k subs for breakeven standalone

  
             
       

Business case further improved through the side effect of protection of voice minutes that may otherwise be lost to cable operators

 
             
             
             

Breakeven - on a standalone basis - at approximately 400k ADSL

 
 

1) Blended ARPU, WS and retail over all bandwidth offers

  
  2) Estimates. Source: Swiss press, Swisscable report 18
     

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Q5. Swisscom and regulation?  
     
     
A. General overview    
     
     
New regulatory obligations in 2002
  
Important legal proceedings in 2002
 
 
     
     
USO ’03-’07; price ceiling access/traffic  
Cost-orientation of IC-charges  
     
     
Numbering plan and local CPS   ADSL WS-pricing and cross subsidies  
     
     
Lawful interception   Mobile termination prices  
     
     
     
Regulatory obligations in progress
     
     
     
Revision Telecommunications Act; Access to facilities, where Swisscom is considered market dominant (e.g. local loop unbundling); prohibition of bundles    
Revision Antitrust Act; restrict handling of dominance and immediate sanctioning of abusing it  
         
Revision Telecommunications Ordinance; cost-oriented interconnection to leased lines, local loop unbundling  
Revision Radio&TV Act; proposed subsidising of content provider by Infrastructure provider; restricted legal protection
  
          19  
           

 

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  Q5. Swisscom and regulation?  
       
       
B. Where does Swiss regulation differ from the rest of Europe?
       
 
Ex-post type of regulation instead of ex-ante regulation as in Europe
  
No ULL in Switzerland
   
Swiss regulator wanted to have ex-ante regulation introduced. Swiss government rejected to propose to parliament this extension of competence on 19.2.2003 Situation remains as is (i.e. ex-post)
Regulator wants to introduce all forms of unbundling. Government has decided on 19.2.2003 to introduce this both over change in ordinance, and simultaneously over a change in the telco law
 
Swisscom is welcoming the government’s decision, since impact of ex-post type of regulation are more foreseeable
  Swisscom is clearly opposing ULL:
 
Introducing ULL over change of ordinance would infringe powers of parliament and would represent effective expropriation
 
Broadband competition is strong without ULL thanks to strong alternative cable infrastructure
  ULL takes away investment incentives, and will leave large geographies excluded from access to broadband infrastructure
 
Government proposes revision of telecommunications act to parliament with today’s ex-post regulation
  Swisscom will actively fight against ULL:
  Change in ordinance will end up in supreme court
 
Change in law requires lengthy process through parliament, and perhaps even referendum
     
  Effective introduction - if at all - not until '05/'06
      20  

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  Q6. Outlook Swisscom Fixnet?  
     
 
           
 
Key Trends
    Increasing regulatory pressure
         
      Increasing mobile substitution
         
      Continued Broadband growth
           
           
           
 
       
 
Strategy
     Secure leading position in voice
         
      Continued cost reductions:
        platforms and products
         
      Continued broadband push
           
           
           
 
Targets 2003
    EBITDA-Margin at 30%
         
      Improved customer satisfaction
         
      3 to 2 voice platforms
         
      Number ADSL lines in operation at YE: 350K
           
           
 

Retain strong position through operational improvements and targeted new offerings

  21  
   

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  Domestic wireless business  
     
 
 
 
 
 
 
Carsten Schloter, CEO Swisscom Mobile
 
 
 
 
 
 
 
 
 
 
22   
 

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  Key financials and achievements
     
     
     
     
         
  Key financials   Key achievements  
         
                   
                 
  in CHF mm 2002 change          
   
       
        Grew revenues by 3.2% to CHF 4,1bln while Swisscom Mobile market share remained constant at 65%
Total subscribers (mm) 3.6 6.9%  
       
ARPU (CHF/month) 86 -4.4%  
       
Net revenue 1 4,112 3.2%  
        Increased EBITDA by 5.2% to almost CHF 2bln (48% margin) due to lower COGS
EBITDA 1,974 5.2%  
       
EBITDA margin 48.0% 1.9%  
         
EBIT 1,685 6.3%   Launched several products for Messaging, Mobile Solutions and Wireless LAN, positioning Swisscom Mobile at the forefront in Europe
       
CAPEX 392 24.5%  
       
Number of FTE's 2,358 11.2%  
 
1 including intersegment revenue      
     
 
     
  Robust performance thanks to innovative portfolio
and strong customer base 		 
 

 

 
 
 
23   
 

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   Q7. Operational development?  
           
             
             
             
           
    ARPU development   Comments  
           
             
             
      Market penetration in CH reached 77.5% at YE 2002  
           
      Market gross adds reduced to 1.6mm, of which Swisscom Mobile achieved over 50%  
           
      Swisscom Mobile's successful retention program lead to a low churn of 17% churn p.a. (15% on postpaid, 20% on prepaid)  
           
      ARPU non-voice (SMS, data traffic) at CHF 8 despite data tariffs on European average (9% of ARPU)  
           
      ARPU voice decreased due to right grading, dilution from new subs, and economic downturn  
             
             
     
  Slow down in ARPU erosion and decrease in churn  
     
             
            24   
             

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Q8.
 Update on partnership with Vodafone?    
     
     
     
  Enlarged operative co-operation and collaboration
       
       
    – active use of global purchasing agreements
       
       
    – complete integration into operative and financial benchmarks
       
       
    – extensive management and specialist training and development
       
       
    – governance through Supervisory Board, including Vodafone representatives
     
     
  Extensive cooperation with Vodafone GP&S
       
       
    – Participation in all workgroups in technology and products
       
       
    – Vodafone’s one-brand products implemented (e.g. Eurocall, assisted roaming)
       
       
    – Rollout of Vodafone live! planned in Q4 2003
       
 
                 
  Strategic rationale of partnership confirmed  
           
     
     
   
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  Q9. Update on roll out UMTS / WLAN?      
             
             
             
             
 
 Comments
  
 Investments
 
             
             
  UMTS network rollout on track   CHF 113mm cumulative investment by end  
          of 2002 - license inclusive  
  Rollout based on an aggressive site        
    acquisition   CHF 350 mm further capital expenditure  
    – Original license obligation of 20%     planned until end of 2005  
      population coverage already surpassed        
      by end of 2002   Will invest into WLAN as “add-on” to UMTS  
               
    – Increased public resistance of rollout of   Have signed already 350 hotspot contracts  
      new antennas     in Switzerland, to be operational in 2003.  
          These 350 hotspots cover approximately  
   License obligation for end of 2004 is 50%     80% of relevant hotels and conference  
    population coverage      centres. Currently >100 hotspots on-air,  
          single-digit million additional investment  
  First launch of commercial activities in 2003     required in 2003 for the remaining 250  
    for corporate customers     hotspots  
             
  Launched Public WLAN (in Switzerland  
Will roll out in-train WLAN coverage  
    under Swisscom Mobile, in other countries        
    through Swisscom Eurospot)        
             
             
       
   
UMTS roll out advancing faster than competition,
  
   
and at lower cost than originally anticipated
 
       
   
 
           
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    Q10.  Outlook Swisscom Mobile?
 
   
 
             
   
             
   
   Key
   trends		      
    3 On-going pressure on voice ARPU, continued growth in Data  
         
   

Emphasis on go to market for new products (e.g. MMS, Mobile Office

 
     

solutions, WLAN, third parties B2B2C)

  
         
    Key regulatory issues: mobile termination costs and NISV  
         
             
   
             
   

     Strategy		      
    Extend USP’s (Network Quality, Customer care, Innovative products and  
      services) to maintain leading market position  
         
    Roll out of UMTS network and WLAN with goal of best national and  
      international coverage  
         
    Reduce customer acquisition costs  
         
    Further improve internal efficiency  
         
             
   
             
        Targets
    2003 		     
    Stretch targets on penetration and ARPU of new products and services  
         
    Increase lead on customer satisfaction  
         
    Decrease churn  
         
    Further increase absolute EBITDA and FCF  
         
             
   
           
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  Other businesses  
     
     
     
     
     
  Mike Shipton, CSO Swisscom  
     
     
     
     
     
     
     
     
     
     
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Key financials and achievements - debitel
   
   
   
       
Key financials - debitel
       
     
in CHF mm 2002   change
       
Total subscribers (mm)  10.1   0.6%
       
ARPU (€/month)1 17   2.8%
       
 Net revenue2  4,111   8.0%
       
EBITDA2 159   (15.0%)
       
EBITDA margin2 3.9%   (20.4%)
       
EBIT2 97   (28.7%)
       
CAPEX2 68   3.0%
       
Number of FTE's 3,299   (6.9%)
1  according debitel accounting standards (US GAAP)
2  under IAS accounting standards
       
  Key achievements
       
       
    Robust performance
       
          – 8%-revenue2 increase (driven by all        countries)
       
          – further cost savings realised
       
          – increased equity ratio from 20% to        24%1
       
          – no net debt 1
       
    Positive EBIT-contribution of international
      business
       
    Strengthened distribution power
       

 
 
 
Positive business development despite difficult market conditions
 
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Q 11: Swisscom and Debitel?
     
     
     
1999 - Swisscom acquires majority in Debitel - for strategic reasons   2003 - Swisscom holds majority in Debitel - as important financial stake
     
 
Rationale:
     
  acquire UMTS license in Germany
     
  turn Debitel into an operator
     
  combine customer base with Swisscom
    Mobile - to realise economies of scale
 
Situation:
     
  not possible to acquire license at
    justifiable price
 
Decision:
     
  find different solution for gaining footprint
    for Swisscom Mobile (done through
    Vodafone partnership)
     
  refocus Debitel as a network independent
    ESP, with access to UMTS platforms
    without being a licensed operator
     
Implications (1):
     
  Debitel moves from strategic investment
    to an important financial investment
     
     
 
Implications (2):
     
  Swisscom has to treat Debitel as any
    other important financial investment
     
  Swisscom has to create options with
    flexibility
     
What to do:
     
  actively support Debitel in their corporate
    development: any action that generates
    shareholder value (also in the long run) is
    in the interest of its shareholders:
    Swisscom with a 93% direct stake
    inclusive
     
  review frequently the value of our
    investment, and do impairment test.
    Result: Swisscom now has € 10/share
    book value as per 31.12.2002
     
  create options that improve flexibility with
    respect to Swisscom's stake. Result:
    Swisscom secured a right (call option) to
    get above 95% stake. This provides
    freedom to either increase free float,
    squeeze out or sell stake. No decision
    imminent
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  Key financials and achievements - segment Other
     
  Key financials - segment Other   Key achievements  
               
  in CHF mm 2002 change   Swisscom IT Services:  
 
       
  External revenue 833 12.3%  

Completed PMI process with AGI

 
               
       of which Systems 406 (14.7%)  

Successfully positioned IT Services brand in the Swiss IT Market

 
               
       of which IT Services 210 nm  

Defined services & solutions portfolio

 
               
       of which Broadcast 162 (10.6%)  

Installed sales organisation & processes

 
               
  Net revenue 1 1,463 4.3%   Integrated Conextrade  
               
  EBITDA 111 (18.4%)   Swisscom Systems:  
               
  EBITDA margin 7.6% (21.6%)   Operational start as of January 1, 2002  
               
  EBIT (114) (22.6%)  

Completed set up of a restructuring plan

  
               
  CAPEX 103 (40.5%)  

Completed full re-engineering of process

 
            and IT architecture  
  Number of FTE's 4,374 (0.1%)        
 
       
  1 including intersegment revenue           

Both IT Services and Systems experience effects from more difficult
market and macro economic environment

 
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  Q12. How is the general economic development impacting your business?     
   
   
   
   
  Overall economic environment   Impact and outlook for Swisscom  
             
 

Slow economic recovery with modest but robust GDP growth - small improvement for 2003 and higher growth in 2004 expected

  

Residential Market: Revenues in fixed- line and mobile more protected against economic downturn and rise in unemployment rate:

 

 
 

Continued structural weakness in equipment investments by Swiss enterprises and weak private and corporate consumption for non-basic needs

 

 

 

–  commodity serving basic needs

–  non-cyclical behaviour

Business Market: Investment related revenues from solutions business under pressure - however, less established operators suffering most

 

Impact on Swisscom of current weak economic environment is limited in residential segment, more serious in business segment

 
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  Q13. Outlook Swisscom IT Services and Swisscom Systems?     
   
   
   
   
      Swisscom IT Services and Swisscom Systems  
 

 

        
   Key trends  

Decline in demand for network and telephony equipment

  
   

Delay of new investment in telecom and IT systems due to

  
      economic climate  
   

Market growth below expectations mainly due to pricing

  
      pressures and continuation of strong competition - even if  
      further consolidation is taking place  
 

 

       
   Strategy        
   

Continue execution of restructuring plans

  
    Acquire necessary skill set for solution market  
    Improve again our cost management  
    Continuously streamline product portfolio  
         
           
   Targets        
    Improved efficiency especially in improved sales- and  
      delivery processes  
    Improved customer satisfaction - long term success  
      factor  
         
           
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   Q14. How do you look at options for product bundling?  
       
       
       
  Residential: price bundles  
   
       
       
  Swisscom well positioned to provide bundles as market leader in fixed and mobile telephony but considers bundles mainly for defensive reasons  
       
  No aggressive price bundles launched by competitors so far in residential market and Swisscom not a first-mover  
       
  Potential bundling packages that Swisscom could envisage are  
       
    – Voice/broad band  
       
    – Fixed/mobile  
       
  However, potential regulatory hurdles for implementation (“market dominance”) exist  
     
Corporate: solution bundles  
 
     
     
Corporate customers demand for integrated solutions including e.g. voice, data (both fixed and mobile) and IT  
     
Though international players are present in the market for corporate solutions, Swisscom has unique local capabilities  
     
Swisscom's Enterprise Solutions has been at forefront of corporate bundled solutions  
     
     
     
     
     
     
     

     
  Swisscom has a unique bundling capacity in Switzerland
for both residential and corporate		  
   
   
   
     
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   Q15. How does your CAPEX-profile look?  
       
       
  CAPEX development  
   
       
       
 
   
     
Background  
 
     
     
80% of CAPEX in the Fixnet and Mobile segment  
Fixnet: CHF 585mm (-2% YOY)  
  – CAPEX in new businesses and capacity extension represent 60-65% of total with focus on ADSL, IP, SDH, optical cable and transport network  
  – Maintenance CAPEX on existing installations represents the remaining 35-40%  
Mobile: CHF 392mm (+24% YOY)  
  – Build-out of UMTS and W-LAN infrastructure; capacity increase of 2 and 2.5G networks  
  – Increase of CHF 77mm as result of UMTS investments  
   
 
   

CAPEX as % of sales of Swisscom incl. and excl. debitel sustainably below European peers, partially due to PPP, but also because of efficient asset and investment management

  

     
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    Group financials 2002    
         
         
         
         
    Ueli Dietiker, CFO Swisscom    
         
         
         
         
         
         
         
         
         
         
      36    
         

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  Key figures and financial highlights
 
Key figures
 
 
in CHF mm   2001 change  
Net revenue 14,526 2,5%  
       
EBITDA 4,413 0.1%  
       
EBIT1 2,408 7.7%  
       
Net income 824 (83.4%)  
       
Net debt 642 nm  
       
CAPEX 1,222 (0.1%)  
       
Number of FTE's2 20,470 (4.0%)  
ADj. net income3 1,319 12.4%  
Adj. EPS in CHF4 19.92 24.8%  
  
1 before exceptional item
2 excluding Work Link (252 people)
3 adjusted only by substantial exceptional items
4 number of outstanding shares at YE 2002: 66.2mm
   
  Financial highlights
   
   
  Revenue development inline with expectations
     
  Solid EBITDA performance: CHF 4,4bln
     
  EBIT grew by 7.7% mainly due to lower
depreciation and amortisation
     
  Impairment of debitel goodwill (CHF 0,7bln)
     
  Adjusted net income of CHF 1,3bln (+12.4%)
     
  Successful share buyback led to an adjusted
EPS accretion of 11%
     
  In total, CHF 5,5bln (>20% of balance sheet total)
in cash returned to shareholders in 2002
     
  Strong balance sheet and solid ratios, also after completion of share buyback
     
  Strong cash generation
     
     

 
     
  Simply steady, simply solid. Simply Swisscom  
     
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  External revenue development
     
 
     
in CHF mm Fixnet Mobile ES debitel Other Corporate Net revenue
2001
2002 		4,921
4,888 		3,127
3,255 		1,486
1,365 		3,808
4,111 		742
833 		90
74 		14,174
14,526
% (0.7%) 4.1% (8.1%) 8.0% 12.3% (17.8%) 2.5%
   
     
  Stable at first sight, shifting underneath  
     
    38

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  Cost overview
     
 
     
     
  Compared to 2001, almost unchanged level of total OPEX  
     
    39

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   Group EBITDA development
 
 
 
   in CHF mm
Fixnet
Mobile
ES
debitel
Other
Corporate
EBITDA
2001
2002
1,989
1,903
1,876
1,974
114
68
187
159
136
111
107
198
4,409
4,413
%
(4.3%)
5.2%
(40.4%)
(15.0%)
(18.4%)
85.0%
0.1%
 
EBITDA stable, and in line with guidance
 
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    Reported net income  
           
         
         
     (in CHF mm) 2001 2002    
         
         
      EBIT excluding exceptional items 2,235 2,408  
         
      Exceptional items 1  3,275 (702)  
         
         
      EBIT including exceptional items 5,510 1,706  
         
 
 
         
      Net financial result (355) (311)  
         
      Income before income taxes, equity in net income
    of affiliated companies and minority interest     		 5,155 1,395  
         
 
 
         
      Income tax benefit (expense) 15 (361)  
         
      Equity in net income of affiliated companies 32 95  
         
      Minority interest (238) (305)  
         
           
      Net income 4,964   824    
           
         
         
  1 Exceptional items in 2001: impairment of goodwill CHF 1,130mm, gain on sale of real estate CHF 568mm and the gain on partial sale of Swisscom
Mobile CHF 3,837mm; exceptional item in 2002: impairment of goodwill CHF 702mm 		 
 
 
         
Substantial lower net income due to lack of exceptional gains and
a further impairment of goodwill in 2002
 
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  Adjusted net income
   
           
           
   (in CHF mm) 2001 2002    
           
           
  Net income 4,964 824    
           
  Impairment of debitel goodwill 1,130 702    
           
  Gain on sale of real estate portfolios (568)      
           
  Gain on partial sale of Swisscom Mobile (3,837)      
           
  Tax effect on exceptional items, net (515) (207)    
           
           
  Adjusted net income 1,174 1,319    
 
 
           
  Number of shares (in mm, at ye) 73.55 66.2    
           
  Adjusted EPS (in CHF) 15.96 19.92    
           
 
 
           
           
 
Share buyback in 2002 led to an adjusted EPS accretion of 11%
    
           
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  Reconciliation: loss under US GAAP resulting
from new rule on impairment accounting
     
     
                         
    under IAS   under US GAAP     P+L impact    
  (in CHF mm) Goodwill     Goodwill   Customer list     delta US
GAAP to IAS		    
                         
  Balance at YE '01 2,085     2,648   174        
                     
  Impairment because of new US GAAP standard       (1,636)     (1,636)    
                     
  Additions (28)     4   8      
                     
  Amortization '02 (302)     (30)   (81) 191    
                     
  Balance at YE '02, before impairment '02 1,755     986   101      
                     
  Impairment '02 702     (986)     (284)    
                   
 
  Balance at YE '02, after impairment '02 1,053     0   101     (1,729)    
                         
                         
  Fair value (€ 10/share) 1,053     0   1,053          
                         
                         
                 
  Additional impairment and amortization charges for debitel goodwill due to
new US GAAP accounting standard leads to a net loss under US GAAP		  
                       
                         
                        43
                         

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  Group capital structure
     
     
           
    (in CHF mm) 31.12.2001 31.12.2002    
           
    Short term debt 1,757 1,016    
           
    Long term debt 2,413 1,505    
           
    Interest bearing debt excl. finance lease 4,170 2,521    
 
 
    Long term net finance lease obligation 1,330 1,192    
           
    Less: financial assets from lease-and-leaseback transactions (1,295) (1,104)    
           
    Less: cash, cash equivalents and securities (7,104) (1,967)    
           
           
    Net (cash) debt (2,899) 642    
           
           
    Shareholders’ equity 12,069 7,299    
           
    Balance sheet total 24,349 16,958    
           
           
    Book leverage ¹ (24.0)% 8.8%    
           
    Equity ratio ² 49.6% 43.0%    
           
           
       
  Strong balance sheet ratios, offering opportunity to increase return to
shareholders - introduction of “return policy” 		 
         
           
           
1 Book leverage = Net debt / Shareholders’ equity        
2 Equity ratio = Shareholders’ equity / Total assets        
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    Q16. What’s the situation with your distributable reserves?  
       
       
       
                       
                       
    (in CHF mm) Shareholders'
equity
Swisscom AG		   Share
capital		   non-
distributable
reserves		   distri-
butable
reserves		    
                       
                       
    31.12.2001 8,013   1,250   250   6,513    
   
   
    Dividend, PVR and SBB paid in 2002 (5,521)   (654 ) (131 ) (4,736 )  
                       
    Net income under Swiss GAAP 1,599           1,599    
                       
    31.12.2002 before extra reserves 4,091   596   119   3,376    
   
   
                       
    Extra reserves created through change in accounting treatment of dividends from group companies 1,125           1,125    
                       
    31.12.2002 before 2002 profit distribution   5,216   596   119   4,501    
   
   
                       
    Dividend in 2003 (794)           (794 )  
                       
    PVR in 2003 (530)   (530 ) (106 ) 106    
                       
    After 2002 profit distribution, before 2003 profits 3,892   66   13   3,813    
                       
                       
                       
                       
                       
                       
    Effective distributable reserves increased,
supporting continuation of Return Policy over years to come 		   
 
 
 
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   Q17a. Pension fund: facts at YE 2002?
 
       
   
     
  Under-funding under Swiss pension regime of CHF 304mm
(represents a 94%-coverage) determines future CF impact 		 
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   Q17b. Pension fund: implications?
 
       
    From the difference under IAS between the PV of funded obligations and the fair value of plan assets, legally only the under-funding of CHF 304mm determined by Swiss pension regime requires further financing measures
         
    There are different ways to finance the under-funding of CHF 304mm:
         
      —   increased contributions from Swisscom,
           
      —   higher employee's contribution,
           
      —   changed pension fund benefits and / or
           
      —   improvement of the plan's rate of return
           
      No decision to be expected before summer 2003
       
    Impact on annual results 2003:  
               
      —   P&L: max CHF 50mm, from  
               
            —  a)  recognition of actuarial losses  
               
            —  b)  change in assumptions of the expected rate of return on plan assets  
               
      —   CF: max CHF 15mm per %-point increase in employer contribution  
               
            subject to decision of the pension fund committee  
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   Q18. Overall outlook?
 
       
   
     
  ¹ Compared to 2002  
     
     
 
Outlook 2002 - striving for CHF 4,4bn EBITDA
 
    48
     

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Thank you for your attention!

 

 

(Other) Questions & Answers

 

 

 

 

For further information, please contact:
Swisscom - Investor Relations
phone +41 31 342 2538
fax +41 31 342 6411
or visit our homepage: www.swisscom.com/ir

  
     
     
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Analyst meeting
Annual results 2002

 

“back-up slides”
handout at analyst meeting

 

 

26 March 2003, Zurich

 
     
     
    1
     

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    2
     

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  1. Swisscom Fixnet  
     
     
     
     
    3
     

 

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  Stabilized decline in Fixnet revenues  
         
       
       
  Price increase ISDN light  
  Hard mobile substitution  
       
  Increased F2M traffic  
  Introduction renumbering plan  
  Market share losses, surf effect1 and mobile subs.  
       
  Higher volumes WS and ADSL growth  
  Lower LRIC pricing  
       
  ADSL growth  
  Price reduction cards and shrinking use of 111  
       
  Reduction volumes and prices voice traffic  
  Price reduction leased lines  
       
       
       
       
       
       
       
       
    1 Shift to VAS  
       
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  Penetration still very high, but access substitution
due to mobile starting to become visible 		 
          2%
         
  Access Lines (Voice)   Comments  
         
 
  Overall penetration still at over 98% households  
         
    Loss of ca. 1.5% access lines due to hard mobile substitution1  
         
    Estimated impact 66,000 lines  
         
    ISDN growth less aggressive than in the past due to ADSL increase and first indications of a saturation on the market  
         
    Similar trend in 2003; no discontunuities expected  
           
      1 Subscriber cancels access subscription. Estimated overall impact CHF 10mm (access only)  
     

 

  
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  Stabilized traffic market shares  
         
         
  Overall market share stabilized
at 59%1		   Substantial additional win-backs achieved, net-churn reduced  
         
   

 
           
    1 Estimated values        
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  Improved Service to the customer  
     
  Substantial improvements in Customer Care  
     
      2001   2002  
     
 
  First resolution rate
— fulfillment
— assurance
N.A.
60%
90%
80% 		 
             
  Response time high
value customers		 90 secs1) <20 sec's for 80%  
             
       
    Customer satisfaction high, stable and comparable to competition  
             
 




Residential customers
satisfaction index
stable at 8.5		 Trust, brand and quality of service recognized as clear distinction factors  
       
 

Still negative price-perception: will be addressed with new marketing campaign  
  1) Not discriminated for different segments        
           
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  Tight OPEX control: OPEX reduced, despite increased restructuring costs
   
   
    Description  
 
 
    Headcount reduction (>600 FTE’s)  
    Increased restructuring charges (CHF 50mm higher than in 2001)  
         
    Reduced mobile termination costs  
    Reduced international termination costs  
         
    Reduced network maintenance costs  
    Reduced IT-infrastructure costs  
    Reduced marketing costs  
           
          8
           

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  Reduced CAPEX while growing in new businesses  
     
  CAPEX
(in CHF mm)		  
  Investing in the future    

     
 
 
     
    9
     

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  Strong ADSL growth, surpassed the inflection point of maximum cash exposure  
     
     
 
ADSL growing faster
than cable
  
Aggressive growth last months of 2002 to exceed 215 k contracts signed1
 
 
 
 
      1 ADSL connections in operation per YE 2002: 195k  
         
         
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  Bluewin secured leadership  
     
  Despite aggressive broadband growth sustained narrowband leadership  
     
 
 
 
         
 
Portal Reach2 : re-confirmed market leadership
 
         
              2nd   Microsoft.com 21.9%  
  1st   Bluewin.ch    28.9%            
              3rd   Google.ch 21.4%  
  1 Estimated. Source: Swiss Press, Swissable report              
  2 Nielsen/Netrating, December 2002              
                       
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2. Swisscom Mobile
  
     
     
     
     
     
     
     
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Strong operational performance 2002
           
 
Subscriber development
 
Comments
  
   
 
 
Market penetration in Switzerland reaches 77.5% at year-end
  
   
 
  
 
Market gross adds reduced to 1.6mm, of which Swisscom Mobile achieves over 50%
  
 
   
 
  
 
Swisscom Mobile’s successful retention program leads to a low churn of 17% churn p.a. (15% on postpaid, 20% on prepaid)
  
   
 
  
 
Market share remain almost constant with Swisscom Mobile at 65% and competitors at about the same share
  
   
 
 


















 
          13

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High management attention to improve cost efficiencies

           
           
 
Breakdown of costs
 
  Comments
  
           
   
Network and interconnection cost stable although traffic increased
 
   
 
 
  
   
SAC at CHF 212mm reduced by 15%, SRC doubled to CHF 141mm
 
   
 
 
  
   
Total COGS down to 34% of revenue (35% in 2001)
 
   
 
 
  
   
 Further investment in staff to 2,359 FTE’s to push new business opportunities (UMTS, WLAN, Mobile Solutions)
  
         
   

Other OPEX stable

 

 

 

 

  
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  Strict customer focus to provide superior quality  
         
  USP network quality:  
    – We offer to our customers all state-of-the-art technologies on mobile communication such as GSM, GPRS, UMTS, WLAN at the best coverage within Switzerland and abroad.  
           
  USP customer service:  
    – We offer to our customers at all touch points such as shops, call centers and communication a superior service with an emotional touch.  
           
  USP products:  
    – We offer for customers the broadest range of products fitting to their needs both on business and leisure. We are the leader in innovation on messaging services and mobile solutions.  
           
           
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  3. debitel  
     
     
     
     
    16
     

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  debitel operational performance 2002  
         
 


     
  Customer growth despite deactivation of sleeping customers (Germany: 1.4mm, international: 0.3mm) and saturated markets  
       
  International contribution increased from 28% (2001) to 30% (2002)  
       
  17% revenue increase from debitel international mainly caused by acquisitions made in France and The Netherlands  
       
  Further improvement of successful customer retention measures  
       
  Proven first class service: awarded as no. 1 by customers and sales channels  
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  Strengthening of distribution power through
attractive distribution program 		 
         
       
  Extension of the exclusive distribution contract with EP: for five more years (Germany); EP: took a 2%-stake in debitel; retention programme open for further sales partners  
       
  Co-operation with additional sales channels such as Ringfoto (Germany)  
       
  Acquisition of Videlec and Télécom Option (France), Tiscali (Denmark)  
   
        18
         

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  3G    
           
  Current status - ESP implementation  
           
  Implementation of ESP model in Germany on track  
    –   First company to offer content billing  
    –   Specified access to network operators' infrastructure ensured by ESP-contracts  
    –   Advanced product and service development of Jamba!  
    –   Technical ability of hosting platforms such as portal platform  
           
  Roll out of ESP-model in Slovenia and the Netherlands  
    –   ESP contract with KPN mobile and extended cooperation agreement with O2 (The Netherlands)  
    –   extended Cooperation agreement with Mobitel (Slovenia)  
           
           
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  3G  
         
  ESP model - general conditions for further implementation  
         
  Secure debitel’s positioning regarding the German regulatory framework for UMTS  
    – debitel is actively involved to review German telecommunication law  
         
  Ability of billing various services and contents  
    – implementation of new billing system to cover various tariffs and products on the way  
         
  Ability to design products and mobile value added services and to extend service offerings  
    – develop “answer” to network operators portal strategy in line with ESP-strategy  
    – launch of own MMS-services  
         
         
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  Product / service development  
         
         
  Extension of debitel mobile service offerings:  
    – Multi-Media Messaging Services (MMS)  
    – in addition to own portal (Jamba!) access to network operator portals such as i-Mode, Vodafone Life!  
    – launch of “partner card” (2 SIM-cards, 1 monthly fee) across different networks  
    – innovative tariffs such as “debitel Automatic in Denmark” (monthly fee will automatically decreased according to usage)  
         
  Content billing for Jamba!/debitel and third parties (e.g. Club Nokia, Microsoft Network Online)  
         
  Further service developments follow ESP strategy  
         
         
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  Strategic direction 2003  
       
       
  Further consolidation of the telecommunication market, especially in Germany - will be closely examined by debitel  
 

Additional expansion to be evaluated  
       
  Target setting 2003 and onwards:  
       
     
       
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4. Other
 
 
 
     
     
     
   
    23
     

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Operational performance 2002 		 
                 
 
Swisscom Systems
  
Swisscom IT Services
  
   
   
             
 
Operational performance
Completed PMI process below assumed costs
  
   
–
approx. 3,000 PBX sold and 90,000 rent and maintain contracts
Market growth below expectations generated high price pressure
  
 
Market development
   
–
Swisscom Systems suffered from a declining demand for network and telephony equipment caused by the deteriorating economic situation, which has led many customers to postpone new investments in telecommunications equipment.
Above market growth of external revenue although missing external revenue target
 
EBIT target exceeded
 
Adjusted resources according to weak market demand
 
Further cost improvement measures identified through benchmarks
  
   
   
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  Product-/service development  
     
  Swisscom Systems  
       
 
Successfully introduced IP-based systems and system extensions of major suppliers (Siemens, Nortel, Ascom) to serve those customers who need a VoIP or integrated Voice/VoIP infrastructure
  
       
 
The product line of Alcatel was introduced to the portfolio as an alternative to Ascom in the small customer segment
 
       
 
With the purchase of a CTI / Unified Messaging solution for MS Outlook Swisscom Systems can offer an add-on solution to its customers in the strategically important overlap between desktop computing and telephony
  
       
       
       
  Swisscom IT Services  
       
 
Redefined existing solution sets to meet market requirements and demand  
       
 
Defined portfolio across 3 key trends in the Swiss market: 
   — business integration  
   — business mobility  
   — IT - outstanding		  
       
 
Focusing industry verticals: financial services, telecom  
       
 
Assessing opportunities in new industry verticals: healthcare, insurance, government  
       
       
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  5. Group Financials  
     
     
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  Solid operating performance ...  
     
  EBITDA and margins   Per employee ratios1  
         
     
         
      1 FTE employee numbers at end of period: 20,604 (2000), 20,835 (2001) and 20,471 (2002)  
         
         
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  ... and ongoing healthy balance sheet  
     
  Net debt and net debt/EBITDA   Book leverage and equity ratio  
         
     
         
      Book leverage = net debt / shareholders’ equity
Equity ratio = shareholders’ equity / total assets 		 
         
         
        28
         

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  Headcount development  
     
     
   
     
    29
     

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  Cost breakdown

 

    
         
         
  Goods and services purchased   Other operating expenses  
         
     
         
         
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  Impairment of debitel goodwill, under IAS    
       
       
  (in CHF mm) Goodwill  
       
  Book value of debitel as per 31.12.2001, € 18 2,084  
 
 
       
  Amortisation of goodwill (265)  
  Impairment of goodwill (702)  
  Other adjustments, net (64)  
       
  Book value of debitel [93%] as per 31.12.2002, € 10 1,053  
 
 
       
  Future amortisation p.a. 156  
 
 
       
       
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  Drivers of financial result    
       
       
 
Financial expense 2002
  
Financial income 2002
  
             
  (in CHF mm)      (in CHF mm)     
 
 
 
  Interest on debt and finance lease
246
   Interest
168
  
  PV adjustment on accrued liabilities
25
   Dividends
8
  
  Impairment charge on Infonet
111
   Gain on CB tax lease transactions
28
  
  Impairment charge on Swiss
41
   Other
2
  
  Currency losses
71
        
  Other 
23
        
             
  Total financial expense
517
   Total financial income
206
  
             
             
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  Overview of income tax payments                    
                       
                       
   
1998
  
1999
  
2000
  
2001
  
2002
  
                       
  P+L Statement                    
  Current income tax expense
409
  
317
  
439
  
499
  
123
  
  Deferred income tax (benefit) expense
(90)
  
218
  
201
  
(514)
  
238
  
  Total income tax expense
319
  
535
  
640
  
(15)
  
361
  
 
 
  CF Statement                    
  Income taxes paid
26
  
135
  
398
  
678
  
537
  
 
 
  Balance Sheet                    
  Current tax liabilities, net
225
  
457
  
519
  
359
  
-57
  
 
 
  Difference between current and paid income taxes
383
  
182
  
41
  
-179
  
-414
  
                       
                       
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  Tax calculation 2002                    
                       
                       
  (in CHF mm) EBT1   Income tax expense   Tax rate  
                       
        current    deferred   total       
                       
  reported numbers 1,395   123   238

 

 361   25.9%  
                       
 
 
                       
  Result of the transition from a parent company to a holding company, net         (115)

 

 (115)      
                       
  Impairment of debitel goodwill 702   127   80   207      
                       
 
 
                       
  adjusted numbers 2,097   240   213   453   21.6%  
                       
  1 EBT = earnings before taxes                    
                       
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  Group cash flow statement (I)        
             
             
  (in CHF mm) 2001   2002  
             
  EBITDA 4,409   4,413  
 
 
    Change in working capital, net 275   2  
    Payments for early retirements (225)   (43)  
    Special contribution to pension fund (440)      
    Net interests 48   (78)  
    Income taxes paid (678)   (537)  
    Gain from cross-border tax lease transactions     28  
             
    Net cash provided by operating activities 3,389   3,785  
             
             
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  Group cash flow statement (II)        
           
           
  (in CHF mm)
2001
  
2002
  
           
  Net cash provided by operating activities
3,389
  
3,785
  
 
 
     CAPEX
(1,234)
  
(1,222)
  
     Proceeds from sale of real estate
1,734
      
     Proceeds from partial sale of Swisscom Mobile
4,282
      
     Proceeds from sale of affiliated companies
73
  
42
  
     Investments, net
(894)
  
(92)
  
     Purchase (sale) of current financial assets, net
(3,059)
  
2,896
  
     Other cash flows from investing activities, net
(53)
  
(52)
  
  Net cash from investing activities
849
  
1,572
  
 
 
  Net cash used in financing activities
(2,709)
  
(7,454)
  
  Net increase (decrease) in cash and cash equivalents
1,529
  
(2,097)
  
  Cash and cash equivalents at the end of the perios
3,788
  
1,682
  
           
           
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  CAPEX analysis

 

    
         
         
  Group CAPEX development   Capital expenditures 2002  
         
     
         
         
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  Change of net debts  
     
     
 
 
     
     
    38
     

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  Swisscom AG
   
   
Dated: April 1, 2003 by:
Name:
Title:		 /s/ Stephan Wiederkehr
Stephan Wiederkehr
Senior Counsel
Head of Corporate & Financial Law