Swisscom Ag · SIX:SCMN
Swisscom — Debt Investor Presentation (May 2020)
43 slides from Swisscom's debt investor presentation, May 2020
Slide 1: Green Bond Issuance
a os mi Sel reen Bond Issuance swisscom
Slide 2: Disclaimer
Disclaimer This presentation is provided for information purposes only and on the basis of the acceptance of this disclaimer. The information contained herein has not been reviewed or approved by any rating agency, government entity, regulatory body or listing authority and does not constitute listi
Slide 3: Agenda
Agenda 1. Green Bond Framework 2. Swisscom Credit Topics 3. COVID-19 Implications 4. Summary Appendix 3
Slide 4: Strategic Objectives of the Federal Council for Swisscom
« The Federal Council expects Swisscom to pursue a corporate strategy that is, to the extent economically possible, both sustainable and committed to ethical « principles. Strategic Objectives of the Federal Council for 1. Green Bond Framework Swisscom Ltd. Federal Council of the Swiss Confederation
Slide 5: Swisscom: more than 20 years of focus on sustainability
Swisscom: more than 20 years of focus on sustainability Selected achievements More for the people More for the environment More for Switzerland • 575k people trained in the • Introduction of "environmental • One of the best mobile networks responsible use of digital media management" in 1997 worldwi
Slide 6: Sustainability Strategy 2025 with ambitious objectives
The journey goes on: Sustainability Strategy 2025 with ambitious objectives Main targets 2025 More for the people More for the environment More for Switzerland We will support 2 million people per Together with our customers, we are We provide all people and year to develop their skills in the reduc
Slide 7: Together with our customers we reduce annual CO2 emissions by 169k tonnes
Together with our customers we currently reduce annual CO2 emissions in Switzerland by 169k tonnes. Further savings measures defined across all scopes. Scope 1-3: CO2 emissions by Swisscom Scope 4: CO2 savings by Swisscom customers using ICT services Scope 1: Direct Scope Scope 3: Indirect emissions
Slide 8: Measures to reduce energy consumption and CO2 emissions fall into three themes
Measures to reduce energy consumption and CO2 emissions fall into three broad themes 1. The Challenge 2. The Chance 3. The Chore Exponential growth in data Networks enable services Everyday operations can be traffic that allow customers to optimized constantly avoid CO2 Energy efficiency of networks
Slide 9: Green Bond Use of Proceeds
Green Bond Use of Proceeds decouple energy and CO2 from traffic growth, enable customers to reduce CO2 and reduce emissions of our own operations. Swisscom intended Use Green Impact ICMA GBP Supported SDG of Proceeds Scope 1 Scope 2 Scope 3 Scope 4 Reducing Saving Reducing travel Vehicle transportat
Slide 10: Fiber rollout (FTTH) reduces energy consumption
Fiber rollout (FTTH) reduces energy consumption, increases efficiency dramatically and enables energy savings through homeoffice and virtual conferences Selected Use of Proceeds: FTTH Network Green Impact development Ultra broadband (UBB) rollout as per YE 2019 1 Scope 2: Electricity consumption • F
Slide 11: 5G is much more energy efficient
5G is much more energy efficient and enables a range of new IoT applications Selected use of Proceeds: 5G Network Green Impact development 1 Scope 2: Electricity consumption • 5G: The benefits of 5G open the way • 5G: Efficiency gain (more bits with less energy consumption) compared for new possibil
Slide 12: All-IP migration and virtualization save energy
All-IP migration already saved 162 GWh and enables virtual conferencing. Virtualization saves significant energy in data centers and on customer premises. Selected Use of Proceeds: All-IP migration and Virtualization Network Green Impact development All-IP migration 1 Scope 2: Electricity consumptio
Slide 13: Low Power Network and IoT solutions
Low Power Network (LPN) is a highly energy efficient radio network specifically developed for IoT. IoT solutions allow customers to save energy and CO2 emissions. Selected Use of Proceeds: LPN and IoT solutions IoT Network Green Impact • LPNs (based on LoRa standard) enable 1 Scope 2: Electricity co
Slide 14: Innovative network cooling technologies
Innovative network cooling technologies reduce energy consumption and make conventional refrigerants obsolete Selected Use of Proceeds: Fresh-air Cooling Network Green Impact operations • Networks operations are energy intensive 1 Scope 1: Refrigerants and generate heat. Traditional cooling • By rep
Slide 15: Energy efficiency of operational buildings
Investments in the energy efficiency of operational buildings is an important lever to save energy and reduce Scope 1 emissions Selected Use of Proceeds: Energy efficiency of operational buildings Operational buildings Green Impact • Initiatives to reduce energy consumption, Scope 1: Heating Energy
Slide 16: Renewable energy and clean transportation
Swisscom produces renewable energy and increases the efficiency of its car fleet Selected Use of Proceeds: Renewable energy and Clean Transportation Renewable energy Clean transportation • Projects aim to increase share of renewable energy sources • Eligible projects aim to reduce energy consumption
Slide 17: Transparent management of proceeds and reporting
Transparent management of proceeds and reporting Project selection, management of proceeds and reporting Dedicated Green Bond Management of proceeds Reporting* Committee (GBC) • GBC formed by representatives from • Allocation of UoP with a focus on energy Allocation Treasury, Communications & effici
Slide 18: Key Messages
Key Messages • Swisscom with more than 20 years of track record in sustainability and among Top 10% Telcos worldwide • Sustainability strategy 2025 with clear and ambitious objectives for "people", "environment" and "Switzerland" • Together with our customers, we plan to reduce net CO2 output by 450
Slide 19: 2. Swisscom Credit Topics
2. Swisscom Credit Topics 19
Slide 20: Reliable returns for shareholders and bondholders
Reliable returns for shareholders and bondholders Financial Policy in a nutshell Stable, Attractive and Defend Topline High Profitability Strong Cashflows Affordable Dividend • Market share • High market share • Reasonable • 22 CHF per share defence • Premium positioning CAPEX/Sales • Attractive div
Slide 21: Well balanced maturity profile besides ample liquidity
Well balanced maturity profile besides ample liquidity Strong access to financial flexibility in 2020 despite refinancing requirements in 2020 Debt maturity profile as per Q1 20201 • Debt mix: Fix 80% vs floating 20% 2020 771 • Ø interest rate of 0.98% 2021 530 • Ø duration of 5.49 years 2022 500 •
Slide 22: Transaction structure changes from repack to direct issuance
Transaction structure changes from repack to direct issuance Issue through Swisscom Finance B.V. guaranteed by Swisscom Ltd. Background Swisscom AG • In February 2019 the Swiss Federal Tax Administration (“SFTA”) (Parent Company) changed its guidelines with regards to withholding tax. Interest / Pri
Slide 23: Transaction overview
Transaction overview Key terms and conditions Issuer Swisscom Finance B.V. Guarantor Swisscom AG Expected Rating A2 / A (Moody's/S&P - both stable) Status of notes Senior unsecured, Reg S, Registered, NSS Format / Listing Reg S / Euronext Dublin Currency EUR Size €500mn, no grow Issue date [•] May 2
Slide 24: 3. COVID-19 Implications
3. COVID-19 Implications 24
Slide 25: Actions taken to prevent COVID-19 implications and support customers
Actions taken so far to prevent COVID-19 implications and support customers Pro-active and balanced (risk) management key in this extraordinary situation • Government with • Working from home • 16 March-25 April >50% of shops • Swisscom supportive • specific intervention program policy implemented o
Slide 26: COVID-19 with possible impacts on business and financials
COVID-19 with possible impacts on business and financials1 … … although Swisscom showed a resilient performance in first two months of crisis B2C B2B Hardware Roaming Fastweb CAPEX • 80% of postpaid subs • Slowdown of • No impact for telco • Inbound • B2C sales with • Network with unlimited data ord
Slide 27: Voice and fixed data traffic up due to COVID-19 lockdown
Voice and fixed data traffic up in Switzerland due to COVID-19 lockdown Network capacities sufficient. No need for extra CAPEX (also for Fastweb) Mobile network Avg. volume evolution and capacity degree # of voice calls avg. call duration +70% +50% • Voice volume significantly up • Data with ordinar
Slide 28: 4. Summary
4. Summary
Slide 29: Strong sustainability positioning, excellent credit standing and solid Q1 2020 results
Swisscom with strong sustainability positioning, excellent credit standing and solid results in Q1 2020 Our green • One of the most sustainable telcos worldwide with a track record of over 20 years positioning Excellent • Together with our customers, we have net Outstanding negative CO2 emissions an
Slide 30: Cautionary statement
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
Slide 31: Appendix
Appendix a 31
Slide 32: The journey goes on: Sustainability Strategy 2025
The journey goes on: Sustainability Strategy 2025 Main Targets 2025 More for the environment Together with our customers, we are reducing net CO2 output by 450,000 tonnes (1% of Switzerland’s greenhouse gas emissions) More for Switzerland More for people We provide all people and From now until 2025
Slide 33: More than 20 years of Sustainability history (1/2)
More than 20 years of Sustainability history (1/2) Core pillar of strategy since many years 1997 2005 Introduction of Introduction of «Mistral» Environment Management Cooling with external air for regarding ISO 14'001 as one the fixed line, of the first companies Electricity savings in the worldwide
Slide 34: More than 20 years of Sustainability history (2/2)
More than 20 years of Sustainability history (2/2) Core pillar of strategy since many years 2011 2016 Member of Joint Audit Swiss Internet of Things as Committee (JAC) for a fair base for environmental supply chain friendly services Until today 1.3 mn working Swisscom customers save places audited a
Slide 35: 2019 another year of sustainability highlights
2019 another year of sustainability highlights Highlights 2019 Circular economy in action Learning robots Thymio 4,935 schools introduced five primary school Mobile aid gives second live to old phones. In 2019 86,000 devices financed 430,000 meals for classes to computational connected to the thinki
Slide 36: Awarded as one of the world's most sustainable companies
Awarded as one of the world's most sustainable companies External recognition of Swisscom's ESG commitments and achievements Member of several CR Ratings Global Compact SBTi: Science-based Target initiative RE100: Initiative 100% renewable energy* VBE EnAW: Energie-Agentur der Wirtschaft 36 * Since
Slide 37: Our environment - market and sector challenges
Our environment - market and sector challenges Swisscom is at the heart of the digital transformation and well positioned to benefit from it Stable environment in Switzerland • Switzerland, a synonym of quality, stability and solidity • Reliable political system • Quality conscious consumer base Sat
Slide 38: Our strategy
Our strategy Distinctive value proposition translates into leading market position in Switzerland since many years Best infrastructure Outstanding product portfolio • 99% of population with 4G and • Converged offerings – one 72% with 4G+ (up to 500 Mbps); subscription covers everything Strong UBB fo
Slide 39: Technologies explained
Technologies explained • Swisscom uses the term “fibre- optic technologies” to mean Fibre to the Home (FTTH) as well as network architectures in which copper cables are used in the last few metres of the connection, such as: • Fibre to the Curb (FTTC) • Fibre to the Street (FTTS) • Fibre to the Buil
Slide 40: Glossary
Glossary Sustainability terms (1/2) Audit: Term for a check carried out by external (or internal) experts regarding the fulfilment EU Code of Conduct for Broadband Equipment: The Code of Conduct sets out the basic of requirements and guidelines. principles to be followed by all parties involved in b
Slide 41: Glossary
Glossary Sustainability terms (2/2) NISV: In the Ordinance on Protection against Non-Ionising Radiation (NISV), Switzerland Sustainable Development Goals (SDGs): The 17 Sustainable Development Goals with their has regulated the limits for the maximum permissible electrical, magnetic and 169 sub-goal
Slide 42: Glossary
Glossary Technical terms 4G/LTE (Long-Term Evolution): 4G/LTE is the fourth generation of mobile technology. At Optical fibre: Optical fibre is a transport medium for optical data transmission – in present, LTE enables mobile broadband data speeds of up to 150 Mbps. contrast to copper cables, which
Slide 43: Glossary
Glossary Other terms Federal Office of Communications (OFCOM): OFCOM deals with issues related to telecommunications and broadcasting (radio and television) and performs official and regulatory tasks in these areas. It prepares the decisions of the Swiss Federal Council, the Federal Department of th