Notes to the consolidated financial statements - Swisscom

Review of the Group’s results
Other
Sale of real estate
Gain on the disposal
of shareholding
in Swisscom Mobile Ltd
Financial expense
Financial income
CHF in millions 2000 2001
Systems
Broadcasting
Swisscom Directories
bluewin
Billag AG
Other revenue
Revenue from external customers
Intersegment revenue
Net revenue
Segment expenses (incl. Intercompany)
EBITDA
Margin as a % of net revenue
Depreciation
EBIT
* fully consolidated as of 1.10.2000.
10 Swisscom Review of the Group’s results
603
202
26*
50
42
190
1 113
142
1 255
1 101
154
12.3%
161
(7)
477
180
79
61
47
175
1 019
213
1 232
1 090
142
11.5%
136
6
Change
–20.9%
–10.9%
203.9%
22.0%
11.9%
–7.9%
–8.4%
50.0%
–1.8%
–1.0%
–7.8%
–15.5%
185.7%
Revenue from third parties fell 8.4% year-on-year to CHF 1,019 million, mainly reflecting
the negative trend in the systems business where net revenue from external customers fell
20.9% to CHF 477 million. Revenue from the sale, rental and maintenance of private
branch exchanges declined as a result of increased competition and a reduction in prices
where as revenue in the service area rose. Broadcasting revenue, also declined by 10.9%,
primarily as a result of amended framework agreements with the Swiss Broadcasting
Corporation (SRG) and the sale of the satellite business. Internet Service Provider Bluewin
increased revenue from external customers by 22% to CHF 61 million, primarily as a result
of higher traffic volumes. In 2001 the number of subscribers rose 19.2% to 715,000.
EBITDA fell 7.8% to CHF 142 million. The first-time consolidation of Swisscom Directories
as of October 1, 2000 contributed to an increase of CHF 21 million in EBITDA. By contrast,
EBITDA in the systems business decreased from CHF 107 million to CHF 79 million as a result
of a reduction in revenue and margins.
In 2001 two agreements were signed for the sale of real estate, comprising 196 properties,
for CHF 2,585 million. At the same time, the Group entered into agreements to lease
back some of the sold property space.
The total gain on the sale of these properties after transaction costs and including the
reversal of environmental provisions was CHF 807 million. A number of the lease-back
agreements qualify as finance leases and the gain on the sale of these preperties will be
deferred and released to income over the individual lease terms. Swisscom recorded a
pre-tax gain of CHF 568 million on the sale of the other properties.
The agreement governing the purchase by Vodafone plc. of a 25% share in Swisscom
Mobile AG for CHF 4,500 million was concluded on March 30, 2001. In compliance with the
terms of the agreement, payment was made in two tranches, the first in Vodafone shares
in March 2001, the second in cash in September 2001. Net selling price after deducting
transaction costs of CHF 168 million (costs relating to the sale of the shares in the first
tranche, stamp duty on new issues and consulting fees) and an adjustment to the purchase
price of CHF 50 million was CHF 4,282 million and the gain recorded was CHF 3,837
million.
Financial expense increased from CHF 329 million to CHF 781 million as a result of the
following two items: CHF 219 million relating to the impairment of Swisscom’s investment
in Infonet Inc. and CHF 199 million relating to the write down of a loan given to UTA.
At CHF 426 million, financial income was 13% lower year-on-year. Income in 2000 includes
CHF 214 million from a cross-border tax lease transaction and a gain of CHF 80 million
from the transfer of an 8% shareholding in Bluewin. In 2001, the acquisition of AGI IT
Services AG and the transfer of 28.9% of Swisscom IT Services Ltd resulted in a dilution
gain of CHF 72 million. Interest income increased from CHF 143 million to CHF 336 million
as a result of increased cash resources and interest on earnings from the Mobile transaction
with Vodafone plc.