Swisscom AG (SCMN.SW) Q4 2024 Earnings Call Transcript

Good afternoon, and welcome to Swisscom's Full Year Results Presentation 2024. My name is Louis Schmid, Head of Investor Relations. And with me are our CEO, Christoph Aeschlimann; our CFO, Eugen Stermetz; and Walter Renna, CEO, Fastweb Vodafone. Before we move on to today's agenda, a few comments on Page 2 on our approach of financial communication this year obviously affected by the successfully completed acquisition of Vodafone Italia and its consolidation from 1st of January 2025. As you can see on this slide, we will present to you today, first, our financial results 2024 audited and excluding Vodafone Italia. Second, some selected figures on Vodafone Italia 2024 and Fastweb Vodafone 2024, both pro forma and preliminary to provide a basis for comparison. Pro forma stands for LTM last 12-month figures as in Vodafone Italia had been consolidated from first of January, restated for harmonization effects and unaudited. And preliminary means that the restatement and consolidations are not yet final. And third, the preliminary guidance 2025 for the group Switzerland and Italy as it is based on preliminary pro forma financials, provisional PPA and the new segment naming. Then on March 21, we will send a request for analyst estimates, as we usually do and simultaneously provide a restated pro forma facts and figures 2024 document for the group and the new segment Italy on a quarterly basis. And finally, on eighth of May with the Q1 2025 results presentation, we will also update our guidance 2025. After these brief explanatory remarks, let us now start the meeting with the agenda for today on Page 3. As you can see, Christoph starts the meeting with the first 3 chapters. Summary 2024, where he dives into some of last year's achievements, commercially, operationally and financially. Strategy update where Christoph presents Swisscom's strength for long-term success, the new Swisscom chapter and our strategic priorities 2025. Review of our business in Switzerland covering achievements 2024 and our focus 2025 and beyond. Then, Walter Renna, CEO of Fastweb Vodafone reviews our business in Italy. He will talk about the Vodafone Italia transaction and the industrial and financial performances of our Italian business and its plans going forward. After Walter's part, Eugen Stermetz, our CFO, will present our financial results 2024, including the preliminary guidance 2025. And in the wrap-up chapter, some final remarks from our CEO, Christoph. After the presentation, we will move directly to the Q&A session. With that, I would like to open the meeting and hand over to Christoph for his part. Christoph?

Thank you, Louis, and welcome from my side to our 2024 annual results presentation. Looking back at 2024, in my view, a very successful year, both in Switzerland and in Italy. In Switzerland, we have won all service and network tests, which are relevant for our customers, proving and demonstrating our leading customer experience. We also had a big year in terms of innovation. We launched many new products, as you will see later on in the presentation and especially advanced on the AI front, leveraging on our unique AI infrastructure. We also achieved a milestone in the fiber rollout, covering more than half of Switzerland with our FTTH footprint and delivered a solid financial performance throughout the year. On the Italian side, we also had some highlights. We were the second best mobile performer in the market throughout the full year. And for the first time in the history of Fastweb we were a mobile number portability leader in the second half of 2024. Also on the innovation front, we will see later on by Walter, we delivered many new products to the market, especially successful was the energy offering that we launched mid-2024. And we also delivered an AI factory in Italy to also offer sovereign AI infrastructure in the Italian market, which overall led to a very positive financial result, both in terms of growth of revenue of 7% and growth of EBITDA at the end of the year. And of course, not to mention the highlight of the year, the successful closing of the Vodafone Italy transaction on the 31st of December. In terms of RGU numbers, we have the following picture. I will first go into the Swiss market. So you can see that on the mobile side, over the year, our measures that we implemented to improve promotional attractiveness and the sales measure we took actually proved successful, and you can see a continuous improvement in the net adds quarter-by-quarter on the mobile front. So showing that our measures are clearly working. On the broadband, we have a roughly stable evolution, slightly improving as well in Q4. And what is bit more an accidental coincidence in the numbers, you can see that we lost 39,000 broadband RGUs on the consumer side, and we won 39,000 RGUs on the wholesale side, meaning that the number of connections on our network are -- were stable throughout 2024. And we also expect continued wholesale growth also in 2025. The TV decline was also somehow slowed down in Q4, but still a negative evolution as the TV market is shifting more to OTT and streaming offerings rather than traditional TV packages. On the Italian side, I think we had another outstanding year of growth, delivering over 400,000 net adds in the mobile market, bringing us to nearly 4 million RGUs on the mobile side with a very strong Q4. And on the other side, on the broadband market, we can see that we were nearly able to manage -- to halt the erosion or the loss of RGUs in our consumer business with minus 4,000 net adds in Q4, cumulated minus 57,000, but compensated largely by our growth in wholesale of over 0.25 million lines, bringing our wholesale activity to 900,000 lines for the first time in the history of FastWeb. So overall, I would say we have a good picture, both in Switzerland, but especially on the Italian front. This has led to the following financial results. We have a stable revenue at the group level with CHF 11 billion, driven by a decline in Switzerland, compensated by growth in the Italian market, even with the declining Swiss franc euro impact. On the EBITDA level, we have roughly stable evolution from an operational perspective, delivering CHF 4.552 billion of EBITDA, corrected for exceptional costs, which were mainly related to the transaction cost and the booking of anticipated synergy cost in total of CHF 227 million, bringing the reported EBITDA to CHF 4.355 billion. CapEx and free cash flow, roughly stable. Dividend proposed at CHF 22 table. And also despite our increased net debt due to the Italian transaction, we retain our excellent A- or A2 rating from Moody's, demonstrating the solid financial stature of Swisscom. On the leverage side, we are now at 2.4x, which is slightly better than the leverage of 2.5x we anticipated when we signed the transaction in March 2024. From an underlying perspective, you can see that we had further EBITDA growth in Italy [Technical Difficulty] erosion of CHF 112 million, which was nearly compensated by the cost savings of CHF 72 million, but not quite to the zero level. Okay. Now moving on to Slide #9 and looking a bit into 2025. We can see that the industry trends are largely unchanged -- sorry, I need to move. We continue to have rapid innovation cycle, especially on the satellite front but also on the AI front, we see massive change at a very rapid pace. We also see a bit a new approach to consolidation in the telco space in the European Union, which might impact the future in Italy. And we, for sure, see changing demands both on the B2C and B2B front, which opens up new opportunities for Swisscom. On the one side, we have an increased scale with our Vodafone transaction and the potential for convergence, but for sure, we have new opportunities on the AI front to, on the one hand, deliver new products to our B2B customers. but also largely improving our product quality and increase efficiency in delivering the same services at a lower cost. Now moving on to Slide #10. You will see 10 reasons why Swisscom is not only strong today, but will be stronger in the future. and I will now cover all of these 10 points in detail on the coming slides. The basis for our success is our proven strategy on Slide #11, which is based on our vision of innovators of trust. We will continue to focus very heavily on the first pillar of delighting customers, which is the basis of our success, making sure that we deliver the best products, the best service on the best networks to our customers and that we have high NPS in our market to impact churn on the one side and inside customers to stay with us and buy more from Fastweb, Vodafone and Swisscom. On the other side, we want to compensate ongoing price erosion in the telco market with new growth. For this, we need innovation. We invent new products, we bring new services to our customers. We have done so in 2024, launched many new offerings in the last year, and we'll continue to innovate in the coming years to deliver new products and services to our 34 million customer base for the future. Internally, we work on two pillars, achieving more with less, especially driving transformation the way we work and deliver our products to customers by digitizing, automating and adding AI into every process we have internally to be able to deliver at better and -- to be able to deliver better, faster and at lower quality -- lower cost, sorry. And then last but not least, we want to perform together working on skill changes, upskilling our workforce, making sure everybody is fit for the future and that we continuously improve the performance of working together between the different teams inside the Swisscom group. This leads to commercial excellence, why I believe Swisscom both in Switzerland and in Italy is a leader in digital life and digital business. We have a very strong focus on value. We want to make sure that we are a premium operator delivering premium service to our customer at the cost premium, and we want to offer best-in-class propositions and go to market. This leads to high NPS as we see in Switzerland but also in Italy at lower churn rates and generates benefits for both Swisscom and its customers. We are also working on our brand, this is especially important in Italy, obviously, with the ongoing merger between Fastweb and Vodafone, we need to do a lot of work on the brand to make sure that customer understands what is going on and believe in the brand for the future. and that we can keep the good traction in the market. But we also work on the Swisscom brand in Switzerland. We already have one of the strongest brands in Europe today, but we want to make it stronger, more approachable and we will work quite heavily on the branding this year to make sure that the Swisscom brand stands for premiumness in the market. On Slide 13, you can see our ambition on the networking side. First, on the Swiss side, we have now reached 52% of FTTH coverage in Switzerland. Our target for this year is 57%, so up by 5%. That's roughly 300,000 sockets that we will deliver this year. And our 2030 ambition is unchanged that we already previously announced. What is new that we announced today a 2035 ambition. We want to terminate the network rollout in the next decade. This means that we will build roughly 90% of fiber in Switzerland, and we'll simultaneously turn off the copper network on a nationwide basis by 2035. So this is an excellent news for the country and also for Swisscom, making sure that the network rollout is completed in the next 10 years and that we can also deliver the operational efficiency increase by turning off the copper network in the coming decade. Next to the wireline. We will also improve and continue to roll out the wireless network and intend to cover 90% with 5G plus in this year and up to 95% of population by end of the decade, 2030. Also in -- so we don't only invest in Switzerland, but also in Italy, we will continue our investments on the networking side. We don't implement or build FTTH connections ourselves. This is done by FiberCop and open fiber, but we intend, at the same time, to increase our passive FTTH footprint to continue to increase -- improve our cost base in the Italian market. And you can see the numbers, but the ambition is to cover 40% by passive services by 2030, and the country should also be covered 90% FTTH by this time. On the mobile front, we now own the best mobile network in Italy. The Vodafone network has won numerous awards, for example, from open signal but also from many other companies that test mobile quality and we are, by far, the quality leader in mobile in Italy and intend to keep it this way. So we continue to invest in this important asset and also improve the 5G rollout in the next years. I have an echo on my year, but -- so we intend to cover 79% of 5G coverage by end of this year, and 90% by 2030. And maybe one important note of this regard. We also have an upcoming spectrum auction in Italy in the next years. And I think it is important to state that from my point of view, the frame conditions in Italy are important to be able to actually achieve this commitment. And I think what we can say is the industry is probably in no position to sustain the same level of spectrum auction costs that we have seen at the last spectrum auction, and we are also discussing with various stakeholders. And we believe it would be much better for the digital infrastructure in Italy if there could be, for example, an extension for a couple of years for free of the current spectrum in exchange for coverage or capacity commitments that we intend to take to make sure that Italy continues to have a great digital mobile infrastructure in the future. Now moving forward to Page #14. You can see some of the highlights of our innovation in the past year. So we have launched many new services, for example, Swisscom Sure in the insurance space, Swisscom Sign in the digital document signing space or Fastweb Energia, which already has won over 60,000 customers, and maybe Walter will talk a bit more about this later on. We are also investing heavily on the B2B side. We launched new workplace offerings for SME, new cybersecurity offerings, both in Italy and in Switzerland. And of course, the AI factory or Swiss AI platform in Italy -- both in Italy and in Switzerland, which is an important basis for future growth in both countries. We are also working on the connectivity side, and I will talk a bit more about this later on in the B2B chapter. On the AI front, we are working on two sides of the medal. The one side is our offering for B2B customers, which is based on NVIDIA infrastructure, which we installed both in our Italian data centers and the Swiss data centers to offer a sovereign national infrastructure, which is fully compliant with all local regulatories and legal aspects. And on the other side, we are working very heavily on introducing AI in our internal processes, for example, co-pilots for our call center agents, AI-driven bots for the digital interactions between customers, but also internal tooling for other customers -- other employees internally with Swisscom GPT or Fastweb AI and lots of AI personalization and targeting going on, on the sales front in the B2C space or also on the technology side, working on network quality, rollout efficiency, fault detection or basically improved maintenance predictions with -- based on AI. So this is really one of the key topics for the future, both for the offering side on the B2B space, but also making sure that our products are better, faster and can be delivered at a lower cost to our customers in the coming years, and we will continue to invest heavily in this technology as we believe this is really transformative for our company. Now one word about our ESG strategy, which is unchanged. We still have the SBTi commitment of being net zero in 2035, which is a very ambitious target, but we want to be front runner on this commitment to the planet and go ahead as a good example. And we are also working on energy efficiency to use less energy or electricity especially, which is also an important driver of cost savings for the future. But we also not only commit to the environment, but we also commit to the society and local communities. We are very heavily invested in media training for the general public. We have an academy both in Italy and in Switzerland, where we train people on digitization. And we also want to be a responsible leader, especially in the trust and ethics area, we want to behave in the right way, make sure that data are protected and that we have an ethical and fair behavior in our supply chain, but also towards our customers and the employees locally. And you can see that this is honored by the various ratings. I think we are one of the only leaders which have the platinum medal in the EcoVadis space, we are the #1 in the Ethos ratings of which we are very proud. The seventh important point why we are stronger tomorrow is the Italian transformation that you can see on Slide 17, the acquisition -- sorry, maybe as a reminder, why did we engage in this important transaction for Swisscom. We bought 100% of Vodafone Italy for €8 billion. It offers us three distinct advantages: one, increased scale, which is important in the telecom sector; better convergence for our customers in mobile and wireline; and control and cost economics of the mobile infrastructure. We believe that this will deliver benefits for all customers and also for the country with an operator which is stronger, that can deliver better quality and invest more in the digital infrastructure of Italy. And through the tangible cost synergies of €600 million, it will also deliver the benefits to our shareholders by increasing the dividend over the coming years. First step next year, increasing the dividend to CHF 26. This brings us to a new Swisscom group profile that you can see on Slide #18. Our revenue will increase by 40% to CHF 15.3 billion. It is composed of three segments. The blue segment is Swisscom or is Switzerland, which is essentially Swisscom Switzerland, the telecom and IT business; the yellow part -- the yellow-orange part is the Italian segment, which is comprised of Vodafone and Fastweb, and we have the gray segment of CHF 400 million, which is the other segment our related and emerging business, network construction, local and broadcasting services, which are mainly domiciled also in Switzerland and deliver an important contribution to the group. Now what is interesting to see on this slide, I will not bore you with all the numbers, but you can see that we have now a very balanced setup within the group. Revenue pretty much split half-half between Italy and Switzerland. We have a half-half split between B2B and B2C. We have a pretty half-half split between mobile and wireline and in this case, a very balanced setup to take advantage of the different markets. And what you can also see is that IT is already a very important aspect of the group. In Switzerland, we generate 20% or €1.5 billion with our IT activities. And in Italy, it's €1 billion, representing about 14% and this share of wallet will continue to grow over time as IT services are growing much faster than the telecom side. On the market share side, you can see that we have a very strong position in Switzerland with around 50% market share and a very good and solid position now in Italy between 26% and 30%, which gives us the required scale to operate at an interesting cost level. Now summarizing our road map to success and long-term value creation. We have three priorities for every country. In Switzerland, it is all about stabilizing the telecom revenue top line, making sure that the erosion is as low as possible. We continue to work on our cost base to compensate effects of declining telco revenue. And at the same time, we want to deliver profitable IT growth to compensate also some of the telco service revenue erosion. On the Italian side, of course, priority #1 is the integration of Vodafone Italy, together with Fastweb and capturing the synergy potential and also in Italy, we need to work on the telco top line, especially the B2C mobile space. where we will invest a lot of energy and time to make sure that we can stabilize this over the coming future and grow beyond the core, for example, with energy offerings and at the same time, also scaling up our B2B IT business and continue the wholesale growth. So this is the overview of the group in general, and I will now go into the second chapter, talking more specifically about Swisscom Switzerland. And I will now move on to Slide #21. Looking back into '24, as I mentioned, we had many successes. We have won all the relevant service and network tests in Switzerland. We have launched a new loyalty program, which was very well received by our customers. and very appreciated. And we have launched many new products in Switzerland in the last year. both in the B2C and the B2B space. We launched new entertainment products, new football products, new insurance portfolio, and on the new Internet box with WiFi capabilities. And on the B2B side, we launched a new mobile offering, but also many new IT services with SME IT, the AI platform and many more that has been delivered last year. Also, I think the important point in Switzerland, I already mentioned before, is the milestone of 52% FTTH coverage in Switzerland that we intend to push to 57% this year. On the cost savings front, you have seen that we have delivered CHF 72 million of telco cost savings. We will continue to work on the cost savings front and make sure that we achieve more with less, mainly driven by digitization, automation and AI. And you can see some of the examples on the slide where we are -- the areas where we are working on. This brings me to consumer telecom. You can see, I would like to maybe talk first about the chart in the middle market shares. We typically show market share based on RGUs. And it is true that from an RGU perspective, we are sometimes losing market shares in relative or absolute numbers. But what I find interesting that if you look at the market share from a revenue perspective, we can actually see that the Swisscom revenue market share is completely stable over the past 3 years at 57% and we have one competitor, which slightly lost market share and the other main competitor, which is slightly growing. And we are very focused on market revenue shares because we want to make sure that we continue to have a healthy development in the market. This was achieved by ARPU stimulation. So you can see that the wireline ARPU are flat in our market at CHF 89 from a wireless -- wireline bundle, and wireless ARPU has been slightly declining to 49%, which is based on the ongoing shift from the main brand to the second brand. If you look at the ARPUs on the main brand and the second brand separately, you will actually see that ARPUs are stable on all the brands, which is an important effect that was achieved with many, many different measures we implemented last year, migrating from, let's say, older subscription models to the new more high-value subscription models. We also selectively increased prices in the last year that helped us to sustain stable ARPU over time. Unfortunately, the pricing measures we took in the last year also had an impact on NPS. You can see this the top right, our NPS slightly reduced from 21 to 17, and we will make sure this year that we will reinforce our NPS leadership but you can still see that we are at a very large lead compared to the -- our two competitors at 7 and minus 9. One of the priorities of this year is to continue to work on the reach of our brand. We want to make sure that we are present at enough sales level. We will continue to work on the Swisscom benefits to increase loyalty and we want to maximize the inflow on our main brand, and we launched for this effect about 2 weeks ago, a new family offering in Switzerland to make the main brand more attractive from a price perspective in the mobile market. On the RGU front, we are largely flat. I would say, the decline is mainly driven by the voice decline, which is a structural decline in the market. People are giving up the voice connectivity in exchange for a mobile number, and we expect this trend, obviously, to continue on for the ongoing -- for the next years. I think we became slightly more promotional this year. We adapted our approach. But what is important, we continue to be a price follower. We want to be a premium brand and win customers through quality and not through price. And what I think is a worthy of highlighting is our churn rates. They are roughly stable. We have record low churn rates around 8% to 9% in the market. And I believe this is a real testimonial to the quality that we deliver to our customers. which is really best-in-class. And you can also see that the penetration of the blue portfolio has still increased this year, also due to the measures we have taken of phasing out older subscription plans and moving customers onto the new blue portfolio, which was up by 3% on the mobile side and by 1% on the wireline side. Important for this year, as mentioned before, is the multi-mobile family offering that we launched to increase the inflow on the main brand. But at the same time, we also want to make sure our second and third brands remain attractive in the market so that we have a stable and healthy RGU development in -- both in mobile and in wireline. One last Slide #24 on B2C Telco. On the offering space, we believe we have the best entertainment proposition in Switzerland, and we continue to work on it to make it even better. We launched a new bundle offering called blue Binge. We launched a new XXL TV offering and expanded our football coverage, and we will continue to work on this, both on the streaming side with OTTs but also on the sports side to make sure that we can continue to grow in this space. And you can see that last year, we managed to generate 13% growth of subscriptions in the blue sports area, which is an important aspect also for this year, and we will continue to work on generating growth on the sports side to make this to continue the growing revenues on this side. Another aspect of the value-added services is the Swisscom Sure insurance portfolio. We launched this early last year, covering various different insurance products, and we will continue to work on these products this year and especially on the market push to make sure that the basis we have built last year that we can now scale up and win more customers for these new offerings. Now I will move on to the B2B Telco side on Slide #25. We launched a new mobile portfolio offering in the market, which is targeted, especially as SMEs, which was very well perceived and we have now started the migration of all our SME customers to this new product portfolio. This will still be ongoing also this year and next year. But it's important that we can move our customers to this new product portfolio as it has completely digital support processes as well, which will allow us to better serve the customer, at the same time, generate cost savings in the future. We are also successfully migrating our customers to the new wireline connectivity portfolio that we already launched 2 years ago, the Enterprise Connect portfolio. These migrations are also still ongoing this year and will be completed by end of '26, another important aspect of future cost savings on the B2B Telco side. I think the new offerings also generated new and high customer satisfaction. You can see that we have achieved record high NPS values both on the corporate side and the SME side with 43 and 35 NPS ratings, which was up very significantly compared to last year. And this is also, I think, a demonstration of our commitment to quality, both of the products but also the service side for our B2B customers. Unfortunately, we continue to see pricing pressure in the market, which you can see in the decline of the ARPUs on the wireless side, down from 27% to 26% and 49% to 47% on an aggregate number across all products, and we expect this pricing pressure to continue this year, especially in the SME space. And this is also why we decided to work on a new next-generation connectivity offering, where we will completely bundle together a security and connectivity because we believe that the future of connectivity is not just naked connectivity, but secure connectivity. And we want to bring this quality or this product in an easy way to our customers, and we will launch this new offering in the coming year. I cannot say more at the moment, but we will communicate in due time once we have launched the offering, and we believe this will be an important pillar of the B2B Telco evolution, especially if you look at next year and beyond. On the wholesale side, we also had a successful 2024 with nearly stable wholesale revenues. On the one side, we had our IRU business, which was slightly declining. And on the access side, we have seen a growth, which is mainly linked to the FTTH rollout and increased FTTH footprint, and we intend to continue to monetize our FTTH rollout through our wholesale arm, where we plan more growth on the fiber connectivity side. And you can see in the middle of the chart, that actually our fiber penetration on the wholesale side is already starting to increase. So we have more lines sold over the year from 692,000 to 731,000. And you can see the fiber penetration went up by nearly 5% in the wholesale portfolio, and we have now already peak fiber beyond us. In '25, we want to continue to materialize this growth on the FTTH side, and we also look at expanding our MVNO business to win new customers on the mobile side. On the telco cost front, we have lots of work going on. This is a super important topic to us, has always been. Swisscom has always worked very heavily on the cost base in the past years, and we will continue to work on our cost base in Switzerland in the coming years. As I already mentioned, this is very highly linked also to digitization and AI, and we will continue to reinforce these activities in '25 and '26. And you can see some of the benefits, for example, of the digital push. We have 4% more on eCare. We have 6% reduced contact center workload, which directly reduces our cost. And we have very encouraging results on our AI-driven -- Gen AI-driven chatbot with increased automation and solution rates. But it's not just about digital and AI, It's also about physical changes. We are experimenting with new shop format, intersection of physical and digital shops. We are working with pop-up shops to basically expand our shop footprint at a much lower cost. And this, we will continue also throughout 2025 to continue to transform our shop footprint. And we will also continue to work on the sourcing side. So making sure that some of the services can be produced in lower cost areas, especially by expanding the near-shoring of our call center capacity and moving it into Kosovo, Poland and Bulgaria. On the networking side, we have initiated the gradual copper phaseout. We are now at about 1.8 million copper lines, which is down by roughly 100,000 lines. So we are already behind peak copper, I would say. And we intend to reduce the copper estate to zero by 2035, as previously mentioned, in line or linked to the ongoing fiber rollout throughout the country. This will also lead to a significant decline of production locations. So these are central offices or street cabinets that will be dismantled and we expect a reduction of about 50% of those locations. We also worked on reliability and resilience. You can see that we managed to further improve the quality of our network. We have less incidents. We have improved time of repair. We have less reports. This leads not only to less cost on the networking side, but obviously also to less cost on the call center side. We have less calls, less track rolls to remediate issues, and we will continue to invest in this area to make sure that our reliability and resilience will continue to increase in the coming years. And this is also closely linked to ongoing simplification. If you have a simplified IT and network estate, it is easier to operate and cheaper. And we will continue to phase out IT applications, continue to phase out network platforms, and we have already achieved 23% reduction on the IT platform side, roughly the same on the networking side, and we will continue this important work in the coming years. Another important aspect is cost of production also on the IT side. And there, we are scaling up our own DevOps centers in Riga and Rotterdam. You can see that we went from 500 to 600 people in 2024. We are very happy with the scale-up and the quality in the centers, and we'll continue to invest in the center to reduce our daily cost of production on the network and IT side. Now moving on or leaving behind the telco space. We move into the IT space. which is linked to B2B. On this side, I'm happy that we managed to grow by 3.2% to CHF 1.2 billion service revenue. On top of this, you have to add around CHF 300 million of reselling hardware revenue, which brings you to the famous CHF 1.5 billion service -- IT revenue or the 20% of the overall Swiss revenues. We have strong demand on the IT infrastructure side, on security side. We have high growth on the AI side, with the AI practice has grown over 40% in the last year, and we will continue to expect growth in these areas. And on other aspects of the portfolio are slightly declining. As you know, we had the UBS, Credit Suisse merger, which impacted us to some extent as Credit Suisse was a big customer on the IT side. And we also have ongoing technology shifts on the workplace side, for example, Cisco or Webex being replaced by Teams or other offerings, which lead to lower revenues. But overall, we have a good balance of products which are more on the sunsetting side and many products which are on the growth side, which will allow us to continue to generate growth in the IT space in 2025. An important aspect of the IT business is profitability on Slide 30. We want to have the ambition to increase IT profitability by 50% in the coming years. To do this, we will continue to simplify our IT product portfolio. We will phase out older products or legacy products which are no longer required by our customers to decrease our cost base. We are working on our project methodology to deliver project at a higher margin. And at the same time, we will also transform our operating model this year with a reorganization to make sure that we can become more efficient in selling IT solutions and being better in -- or increasing operational excellence on the delivery side when we deliver these projects to our customers. This brings me to our -- or my last slide, summarizing our Swiss ambition. We are working on our telco top line to decrease the service revenue decline, both in B2C and in B2B. We need to continuously optimize our telco cost base to make sure that we can decrease our cost. We are working on CapEx efficiency to slightly decrease our CapEx envelope in this year. We will continue to work on FTTH and the profitable IT growth. Our ambition in Switzerland is very clear from a cash flow perspective, we want to deliver stable free cash flows from the Swiss business in the coming -- not only in '25, but in the coming years ahead of us. With this, I am closing on our Switzerland chapter and handing over to Walter for Italy.

Thank you, Christoph. Thank you, Louis. Good afternoon also from my side. I'm very happy to be here with you today presenting the results of Fastweb in '24, which has been an outstanding year for Fastweb, which ended with the transaction with the Vodafone Italia, which is a fantastic news because we are now building a leader in the Italian market. But let me go through the key achievements of '24 along the line our strategy. So in terms of the light customers, we have achieved outstanding results in the mobile, especially in H2 '24, we've been leading the mobile number portability. Our NPS is at record high in all the segments. The IT has been reinforced with new products and wholesale has exceeded the 900,000 customers, which is an amazing result. In terms of innovation, we have launched several services and products. The first one, Fastweb Energia launched in April last year. We are now at over 60,000 customers, proving that is very effective, and the feedback from our customers is very positive. The second one is related to artificial intelligence. We launched our strategy. We launched our AI factory. So we have switched on the first supercomputer of the latest technology with NVIDIA and we've also released our large language model, notably trained in Italian. Last but not least, partnership with Eolo to open new coverage for wholesale clients with a new technology delivering ultra broadband speed in very remote areas. For achieve more with less remarkable the sale of FiberCop stake for over CHF 400 million. We have reinforced our partnership with AWS from cloud to AI. And we are continuing the implementation of AI within the company. Now over 60% of our employees use AI tools every day. So moving to Page 34. As said Fastweb Vodafone is a unique opportunity to build the #1 customer choice in Italy by combining 2 very complementary companies. We confirm the strategic rationale, the slide you've already seen, but would like to underline the complementarity of infrastructure, assets and skills. Of course, also the market positioning is very complementary with two different DNAs coming together: one, fixed with a special focus on cloud and cybersecurity; the other from Vodafone mobile and beyond the core services related to mobile. Also in terms of customer segments, we cover all segments, from individual residential customer to large corporate and public administration, but also wholesale customer. In terms of innovation, we have a very wide product portfolio. And of course, we have the best assets in Italy regarding the telecommunication market, the best of fiber, the best of mobile and the best skills available. In terms of scale, Page 35, you see that combining forces Fastweb, Vodafone Italia has become a company of over €7 billion revenues, €1.8 billion EBITDAaL, we invest €1.4 billion CapEx in '24 for an operating free cash flow of €500 million. But also in terms of positioning, we are in a very good situation because we are the only operator which can deliver fixed mobile convergence with profit and infrastructure, and we cover all the services, all the markets from B2C, B2B and also wholesale fixed and mobile. Page 36 has been a journey since March '24, which end up in December '24, the 31st of December, when we did the closing after obtaining all the authorization, and since then started this new journey. On the seventh of January, we did a big event to celebrate the real day 1 of this new company, Fastweb Vodafone, with our new motto insieme, siamo futuro, together we are future. So we have launched our campaign -- commercial campaign, and we want to tell to our customers, they will be the one that will benefit more from this union, but also the country. And there is a lot of excitement also among the employees, and this is, for sure, a great start for this new venture together. Page 37, we confirm the synergies of €600 million up and running, and we also confirm the mobile synergies of €200 million thanks to the migration of mobile customer of Fastweb to the Vodafone network. This will help us in save roaming costs. And we also confirm the synergies related to optimization of the Vodafone services that we currently source from the group up to €150 million. In terms of integration cost is confirmed, €700 million with a different timing because we have anticipated some cost to '24 following the early closing respect of what we anticipated before. Next page, between closing -- between signing and closing with the time to work on our integration road map, so we have a robust plan, and we have clear synergies to achieve and clear milestone. We started the year with the new corporate brands, Fastweb plus Vodafone, but we will continue to rely on our three commercial brands, Fastweb, Vodafone and ho. We started the year in January also announcing the new ExCo that will lead the company in the next years, and we are now working to complete the organization and the reorganization in order to have as soon as possible one single team leading this new company. In terms of B2C, the focus is to make available as soon as possible, the benefit of the two companies to our customers. We've already started by making available the Fastweb Energia product to the Vodafone customer and we are gradually integrating also the go-to-market that will be up and running in the second half of this year. B2B and wholesale, a slightly different approach because we have a few big customers. We have already put in place joint team in order to offer to our customer a single point of contact and this will, for sure, help not only in the continuing -- developing the business together but also to avoid any disruption due to this transaction. On IT, the focus now is to really ensure the business continuity, enable the employees of the two companies to work together and take our time to create a robust plan for the consolidation of the two IT stack because we expect not only synergies but also to modernize their complete IT ecosystem. On network, we are very on track on migrating the Fastweb customers on the mobile network of Vodafone. And for the next year, we are preparing also the migration of the Vodafone fixed customer on the Fastweb fiber footprint. Let's go into the business unit. On Page 39, you see the B2C wireline, the title is very clear, the ambition is to stabilize the core while growing on the energy business. And we were very successful at Fastweb in '24, has been an amazing year because our value strategy is paying off because our customer base is flattening. We are reducing the slowdown -- we have slowed down the reduction of broadband customer whilst we are still growing a bit on ultra broadband. And most of all, the ARPU is flattening. This is the result of our effort to deliver a superior quality of service. And you can see that our NPS is 5 basis points higher than last year. which is our record ever. On top of that, we have launched our energy offer in April '24. And so far, we can account for over 60,000 subscribers on a growing trend. This is, for sure, helping in stabilizing the broadband customer base. As you can see, 80% of the sales were on the fixed customer base. With regard to Vodafone has been a transition year because the company changed the commercial strategy. There is more focus on value rather than on volume with higher prices. This had an impact on the customer base, as you can see, reduction by 4 basis points -- 4%, sorry. Nevertheless, has been a very important year because several commercial initiatives have been implemented that will have a positive impact in '25. The first of this initiative is, for sure, the extension of the FWA footprint. So the mobile network of Vodafone is also offering an opportunity to deliver ultra-broadband connection in remote areas, and this will, for sure, help in '25. On top to that, an important partnership with Telepass, which is helping us offering to our customers smart mobility services and creating store traffic, which is very important to drive sales in the future. Last but not least, the launch of [indiscernible] a mobile backup product for our WiFi customers. Looking at the future, the focus will be on quality again. We truly believe that customers deserve better quality and happy customers will stay with us. This will drive low down the churn and will also help us to sell new services like energy, which is a growing product that we would like to exploit over the course of '25 and next years, together with the proximity. Because combining the two retail chains, we have one of the most extended largest retail chains in Italy with roughly 10,000 shops. So we really want to be as close as possible to our customer in order to explain our multi-service proposition and grow on the core and beyond core services. On wireline, for Fastweb has been an incredible year, over 400,000 net adds. And as I said again, we were leading the mobile number portability market in the second half of '24. This is an amazing result. We are very happy. And this is not only related to our very convenient proposition of 5G, but also to the quality of service that we deliver. Again, also mobile plus 5 points growth in terms of NPS is an outstanding performance. This means that our customers really consider our service superior to the other. In terms of moving to Vodafone results for '24, again, a transition year due to this change in strategy, more focus on value rather than on volume. And also a fair treatment of the customers, which means no straight price increase in the customer base. This had an impact on sales -- lower sales, which has led to lower customer base, but the churn will benefit especially in '25. The second brand, oh is continuing to grow by 5% and is a great asset for -- also for the future. So looking ahead of us, '25 onwards. Again, the quality will be at the center of our strategy. Infrastructure will be key. We have today the best mobile network in Italy. As Christoph said, it's not only our analysis, is also a specialized company that awarded us as the best mobile network in Italy. It's not only infrastructure. We need to work also on the customer experience and improve as maximum we can the loyalty of our customers, also leveraging on artificial intelligence tools that we have already implemented successfully in Fastweb. Last but not least, we have three brands -- three commercial brands. And we would like to use the three brands to better address all the market segments from the premium market to the entry market, especially thanks to oh. Moving ahead, B2B, also a strong year for Fastweb revenues up to €1.2 billion, double-digit growth and especially thanks to IT that now represent 46% of our total revenues. So cybersecurity, cloud has been the enabler of this growth, and we are very happy also about the high proposition that we have launched in the market last year with the supercomputer and the new Italian LLM. Regarding Vodafone '24, a good year also for Vodafone with growing revenues, especially on IT related to some framework agreement in the public administration and also the mobile customer base is growing, thanks to the TM9 contract, which is the framework agreement for the mobile customer in the public administration space. Looking in the future, we started with a very strong position in the market with a very strong market share, both on fixed and mobile. We would like to continue to work with our customer and our customer base. To do so, we will, of course, invest in quality, but we will also leverage on our large sales force. We have over 1,000 employees that can really take care of our customer and exploit the best out of it. We'll continue to grow in IT. We have a very wide portfolio and we are present in all growing markets because cybersecurity, cloud, but also IoT and mobile private networks are all markets that are growing double digit, and we would like to exploit this opportunity. Wholesale -- also for the wholesale has been an incredible year. As you can see, over 900,000 UBB lines for Fastweb, plus 40% growth, new customer Edison signed last year. And in terms of revenues, plus 16% is a very strong performance. In '24, we signed two important partnership with Eolo. We now can offer over a footprint of 3 million, also an FWA ultra-broadband service for our customer. And this is very important because it's covering areas where today there is no fiber. Another important partnership with UNITIRRENO, we have not -- we have now the possibility to leverage on submarine cable from Sicily to Genoa, and we can really address all the traffic that is coming from the Middle East to Sicily and be a reference also for the international carrier. Regarding to Vodafone, €300 million revenues, stable with a very good portfolio of customer and the new signed customer CoopVoce, is migrating in these days. Looking at the future, we have a unique position in the market because we can leverage on a convergent proposition also on the wholesale. So we will exploit and leverage our portfolio customer to start doing cross-selling and upselling of fixed and mobile, leveraging on best network but also the best service that we can deliver to them. Final remark also on my side. Again, insieme, siamo futuro, this is our motto, together we are future. The focus of this year is really to build one team, to build one organization -- one winning organization and one winning culture. So focus on people first, but then focus on the results. First of all, synergies, €600 million confirmed up and running. We have a solid plan. We know what to do. We need to deliver as fast as we can. On top of that, stabilize the B2C Telco is fundamental. We know that it's the most competitive market. We have a strategy there. We need to deliver on stabilizing revenues. But at the same time, grow beyond the core. We will also leverage on the B2B IT and wholesale business that are going very well, so we would like to continue this growth also for this year. At the end, the ambition is for the medium term to grow our free cash flow. So having said that, to you Eugen.

Thank you, Walter. Thank you, everybody, and hello, everybody, also from my side. We will have to cover a lot of ground today, given the closing of the transaction on the 31st of December. So let me start somewhat unusually with summary before I actually get started. So first of all, full year 2024 results exactly in line with guidance and with our expectations, point number one. Point number two, Vodafone Italia 2024 numbers, exactly as expected and exactly as presented on March 15 when we signed the transaction. Third point, outlook on Italy. Confirmed, as Walter said, and expect exactly as guided on March 15 when we announced the transaction, which means synergies and synergy ramp-up confirmed, integration cost and integration cost ramp-up confirmed, deleveraging path confirmed and dividend outlook confirmed. So I could stop now, and we can move to Q&A, but I won't. So I go step by step through all the numbers, but I wanted to get that out of the way unless we get lost in the details. So as usual, I'm going to start on the group level with revenue and the EBITDA. So revenue was CHF 11 billion. Net of currency effect, up CHF 24 million, obviously quite a different mix. Switzerland down CHF 141 million and Fastweb up CHF 171 million. On the Swiss side, it was a mix of lower telco service revenues, but also lower hardware revenues. We sold less -- a lower number of handsets and a plus in revenue from the IT business, which compensated part of the loss on the telco side, but not fully. The quarterly evolution on the Swisscom side is pretty stable throughout the quarters with one exception, which is Q2, where we had better hardware sales than in the other quarters. On Fastweb growth CHF 171 million, plus 6.7%. Obviously, a huge success driven by B2B, increase in B2B revenues, mostly IT services, driven also by wholesale and the B2C revenue was roughly flat. The quarterly evolution, stable growth throughout all the quarters, maybe two spikes, one in Q2 and the other one in Q4, the one in Q2 was due to IT business, generating higher revenues and Eros compared to the prior year and the one in Q4, the spike in Q4 was due to B2B IT business. And there was always quite some hardware in there. So this is the overview over revenue. I'll now get to EBITDA, which is a bit more of a complicated story. So I'll spend some time on that to make sure that you understand all the bits and pieces. So revenue was CHF 4.355 billion, CHF 267 million down, exactly in line with the guidance that we gave on the second of January after the closing of the transaction. Now obviously, this decline compared to prior year is almost entirely due to costs in relation with the transaction. You see the bar with adjustments and currency of minus CHF 220 million. So before I go to the operating results, I'm going to walk you through the individual pieces in this column because it's quite important to understand also going forward. So within this CHF 220 million, there is three things in there. number one transaction-related expenses of CHF 227 million, and I'm going to break them down later. Secondly, there is the regular year-over-year changes in our adjustment related to regulatory proceedings, restructurings, et cetera. It's a small amount. It's plus CHF 26 million. And finally, there is the currency in there with minus CHF 19 million. So the main part of this CHF 220 million -- CHF 227 million is transaction related. And by the way, just in case I confuse you all the details on these numbers on Pages 62 to 64 in the analyst presentation. So I'll now dive into the CHF 227 million transaction-related expenses. There is two pieces in there. One is integration cost, CHF 167 million and the other one is transaction cost, CHF 60 million. Now the transaction costs are basically one-off and gone. We booked everything related to transaction costs already in 2024. By the way, we booked it in the Swiss segment, which might have caused some confusion in the consensus. So this is basically done and passed and we can forget about it. There is no more to come in 2025. So let's talk about the integration cost. Integration cost is CHF 167 million. That's originally a euro number. That's €176 million and this is costs in relation to the exit of our MVNO agreements and then our network sharing agreements in Italy, obviously, to make way for the migration of our customers from the Tim and WindTre network over to the Vodafone network. There is two pieces in there, and they are a bit different. So this is why I highlighted. There is one piece in there of €104 million, this is provisions for the exit from the MVNO agreement. We booked this provision on the 31st of December. It's related to costs that we will incur when we exit the MVNO agreements. These costs have no impact on free cash flow in 2024, as you shall see, but obviously, they will have some impact on free cash flow in later years, 2025 and to some extent, also 2026. More importantly, this €104 million are a part of the €700 million cash integration costs that we announced on March 15, the total is unchanged, as Walter already mentioned. So in other words, there is €600 million to go. We spent -- in the brackets, we spent €104 million, there is €600 million to go. The second piece within this €176 million is €72 million, and that is quite different. This is an impairment on some assets that are related to our network share -- the 5G network sharing agreement with WindTre, which is separate from the MVNO 4G agreement. This is an impairment on some assets, so there is no cash associated with that, neither in 2024 nor in 2025. And also important to understand in the broader context, the €72 million are not part of the €700 million cash integration costs that we announced on March 15. Some of you might have seen the footnote we had in there in the presentation. There was a footnote that said there is up to €150 million of noncash integration cost and this €72 million a part of this footnote of up to €150 million noncash integration cost. So transaction costs gone and €100 million out of €700 million total integration costs booked with €600 million to come. That's the bottom line. So with that out of the way, I can finally focus on the operating developments in 2024. So the underlying business, EBITDA from the underlying business was down CHF 47 million, fully in line with guidance on the Swiss side, minus CHF 41 million. So this was cost savings compensating a significant part of the service revenue decline. So this is essentially the spread between service revenue decline and cost savings and is exactly what we talked about 1 year ago in the same place. Service revenue decline essentially was a bit more pronounced than we anticipated at this point in time and cost savings were a bit strong and the spread essentially the same. On the Fastweb side, we had CHF 9 million of EBITDA growth on the back of CHF 171 million revenue growth. Now that looks like a bit of a mismatch, very strong revenue growth and a bit weaker EBITDA growth. Behind this story is a significant shift of revenues and then shift in the mix of revenue with different margin profiles, and I'm going to talk about this later. Finally, in segment Other, we are down CHF 15 million. This is exactly the increase in IFRS pension costs that we highlighted already back a year ago. On to the next page, Page 46, and this will be briefer, I promise. So that's on group CapEx and operating free cash flow group CapEx at CHF 2.3 billion was fully in line with the guidance, a bit up compared to prior year because CapEx in Switzerland was a bit higher, and I'm going to talk about that in a second. The quarterly fluctuations in CapEx that look a bit weird are fully due to the fact that in 2023, our fiber rollout was halted in the first quarter due to the switch from point to multipoint to point to point to point. And so the dynamics over the year were completely different in '23 and '24. In the early quarters of '23, we had rather low CapEx in fiber investments. And in the fourth quarter of 2023, we had very strong fiber CapEx. And in 2024, it was a bit -- in 2024, it was a bit more evenly spread over the quarters. Operating free cash flow in the group, CHF 1.752 billion, CHF 290 million down, obviously, for the same reasons and adjustments that I explained before the underlying number is minus CHF 85 million, mainly due to lower EBITDA in Switzerland and higher CapEx in Switzerland. Talking of Switzerland, I will move on to Page 47, speaking about revenue and EBITDA in Switzerland. So revenue was CHF 8 billion in Switzerland. If we look CHF 141 million down, if we look at the individual segments, it's mainly due to B2C, minus CHF 133 million. However, this looks a bit worse than it is. The service revenue decline was just CHF 61 million, the rest is mainly lower handset sales, less hardware sales, in particular, in the first quarter. B2B revenue is stable with plus CHF 2 million. So essentially, it was possible to compensate the service revenue decline with growth from the IT business, which was CHF 62 million, including the hardware other than the IT service revenue and the quarterly fluctuations are essentially due to the more volatile parts of the business like hardware and IT business. On to EBITDA. EBITDA of CHF 3.561 billion in Switzerland, CHF 184 million down, obviously, also here a lot of adjustments compared to prior year. One is we booked the transaction costs as opposed to integration costs, because the transaction cost of CHF 60 million, we booked in the Swiss segment. So this is part of the minus CHF 107 million adjustments. And then in the last year, in 2023, we had a significant release of a regulatory provision, which obviously now shows up as a negative. So this is how the CHF 170 million add up. And the operating effect of the underlying business is actually CHF 41 million down. If we look at the individual segments, B2C down just CHF 10 million, which is excellent. So in the B2C segment, it was possible despite the service revenue decline to almost maintain EBITDA. This was due to significant cost savings in the indirect costs on the one hand and on the other hand, also due to lower subscriber acquisition costs in 2024. B2B, unfortunately, a bit of a different picture, CHF 69 million down EBITDA. So basically, the service revenue decline fell down to the bottom line. Increased margin from the IT business was not able to compensate indeed. If you look at the fourth quarter, we had a quite bad quarter for the IT business. We did a review of some large projects. And out of this review, we booked some provisions. So this explains the minus CHF 35 million in the fourth quarter, hopefully, a one-off event that will not come back in 2025. Wholesale was stable. Infrastructure and support functions up CHF 35 million. This is where many of our cost savings that Christoph talked about before, flow through. They were biased towards the fourth quarter -- or the third quarter and fourth quarter of this year as we flagged quite a number of times over the course of the year. I'll move on to Page 48, deep diving into the Swiss P&L. Now in the top part, P&L by line items, the two most important items. So obviously, as always, service revenue decline on the one hand, CHF 61 million on B2C and CHF 51 on B2B in total, CHF 112 million down. And on the other hand, compensating for the savings in indirect telco costs of CHF 22 million, the spread between the CHF 2 million to CHF 40 million basically defines the decline in the EBITDA in 2024 on the Swiss side. I'll move on to the bottom left of the chart, service revenue evolution. You can already see CHF 2024 million, CHF 112 million; 2023, minus CHF 72 million. So 2024 was a bit tougher in terms of service revenue compared to 2023. However, if you look at the individual segments, B2B was quite similar to '23. In '23, we had a decline of minus CHF 54 million; in 2024 minus CHF 51 million. So basically, same, same but different on B2B. In B2C, it was indeed a bit tougher. We had minus CHF 61 million service revenue decline against minus CHF 18 million in the previous year. So what happened? First of all, you need to remember that we did not pass on the VAT increase to our customers. So that's a CHF 15 million effect. So actually, the comparison between '24 and '23 dynamics is a bit better than it looks like at first sight, it's a bit overstated with CHF 61 million. It's rather CHF 45 million plus/minus versus minus CHF 18 million in the year before. Nevertheless, promotional intensity was quite strong in 2024 in the Swiss market. We still had very low churn, which is very good, but generating net adds was tough in this environment, in particular, on the second and third brand. So this explains the development on ARPU. As Christoph already mentioned, we did a very good job basically maintaining the ARPU on the Swisscom brand and on second and third brands with the one exception, the effect we always have the change in mix of revenues from first brand to second and third brands. But apart from that, ARPU is stable. So our measures to stabilize ARPU and they actually increase ARPU on the wireline side worked quite well. One word to Q4. You see the Q4 number with minus CHF 34 million, which looks a bit stronger than the previous quarters. So my warning is this is not a trend, okay? Don't read too much into it. Obviously, on the B2B side, B2B is always a bit more chunky. Service revenue evolution in the quarters depends sometimes on some large customers coming on stream or leaving with a lot of individual lines. So on B2B, it's always more volatile. On B2C, the minus CHF 17 million that look worse like the minus CHF 13 million, there is some CHF 2 million to CHF 3 million one-off in there in connection with roaming. And please don't forget that the baseline number for these change numbers is still CHF 1 billion per quarter roughly on the B2C side. So don't read too much into this, what looks like a trend graphically on this slide. And that takes me to the outlook for service revenue, which is always an important topic for you. We assume in the guidance which I will come to later, a service revenue decline on the Swiss side of about CHF 100 million. So this is what we saw in 2024, roughly without the VAT effect on the B2C side. I'll move on, operating free CapEx and operating free cash flow. We can do this quickly. CapEx was CHF 1.7 billion on the Swiss side -- or CHF 1.725 billion, a bit higher than in 2023, mainly due to some one-off items. So we bought a data center in the French part of Switzerland. We invested more in the mobile core. So due to this rather one-off items, CapEx was a bit higher. This will not translate into next year, as I will explain in the guidance. Operating free cash flow of CHF 1.6 billion, down CHF 190 million. Obviously, the really relevant number here is the adjusted number, minus CHF 83 million. And given that some of the CapEx increase compared to previous year was some one-off items, as I mentioned, the reality of operating free cash flow evolution in Switzerland is actually much more stable than this number suggests, and I'll get back to that when I talk about the guidance. On to Italy, Page 50. First, revenue, €2.8 million, plus €176 million. If you look at the individual segments, the B2C segment was stable with mobile revenues increasing and wireline revenues decreasing and in the end, stable, even a bit increasing in the third and the fourth quarter. We heard about Fastweb Energia. So the numbers are not big yet there on that business, but still, they also helped in the third and fourth quarter to come out with a positive balance year-over-year in service revenue in B2C at Fastweb. B2B, very strong growth, €115 million, mostly IT business, also some hardware in there, particularly in the fourth quarter. So this is why you see the spike in the fourth quarter. Very pleasant growth in wholesale, in particular because it's high margin, plus €54 million or 16%, so quite impressive. The quarterly evolution that you see is due to the fact that apart from the UBB business, which defines the underlying trend in these numbers is also the euro business which jumps around a bit. So in the second quarter, we had a strong growth due to lower yields in the previous year. And the -- you had the opposite effect in the fourth quarter, it looks like slow growth, but it's actually just high euro sales in 2023. The underlying growth is very impressive from the UBB business. EBITDA, €706 million 2024, €92 million down. Again, here in the adjustments, obviously, all the €176 million of integration costs that we booked. And then there is one factor going against this in 2023. At the end of the year, we announced the strategy change for the fixed wireless access business and had a one-off charge in 2023, which now shows up as a positive number. So the balance between the two integration cost in '24 and strategy change in '23 defines the €102 million. If we leave all of this aside, focus on the underlying business or development of the underlying business. Adjusted EBITDA is up €10 million. This is the euro figure we saw the CHF 9 million figure before €10 million up. So where does it come from in terms of segments, B2C was down, €39 million, maybe surprisingly at first sight, given the stable or even slightly increasing revenue, what's happening here, high-margin wireline revenue drops out. And on the margin level cannot be compensated by the wireless revenue that comes in. The wireless revenue is, by definition, lower margin because, as you know, we are an MVNO. And also, it's even more low margin because given that we are an MNVO, we pay for higher data consumption, the data consumption went up in our customer base, not only in the new customers, but also obviously in the customer base. So the additional margin generated by the mobile business was very low, which obviously is one of the main reasons we do the transaction we talk about so much. So move on B2B. B2B was flat on the EBITDA line with minus €2 million despite the impressive growth, a similar effect going on here. Traditional telco wireline business dropping out, very high margins. So it takes a lot of IT business revenue growth with lower margin order to make up for this loss, which was successfully done in 2024 with keeping EBITDA essentially stable. Wholesale, plus €29 million. Obviously, this is the very good news in this P&L, high-margin revenue growth. The wholesale revenue -- the wholesale EBITDA essentially defined the EBITDA growth at Fastweb in '24 together with cost savings. So with lower cost of €22 million in the infrastructure and support functions, which was mainly due to lower energy cost in 2024. I'll move on to Page 51. CapEx was stable at €628 million in Italy, a bit less on the wireless network because we stopped the dedicated network for fixed wireless access last year and a bit higher on customer-driven CapEx, given the activations of the wholesale customers and FTTH migration. Operating free cash flow number, €28 million, practically meaningless, given more of the adjustments. So the adjusted number is €204 million, €10 million plus year-over-year, which is exactly the €10 million we also saw on EBITDA. I will move up back to the group level to the free cash flow bridge. Free cash flow was very strong at €1.437 billion, slightly below prior year, roughly in line with the number that we had over the last 10 years as all of you know, our dividend is €1.14 billion. So the dividend is very well covered, also in 2024. There is two noteworthy things in that bridge. One is all the transaction costs I talked about the adjustment -- sorry not the transaction costs, the integration costs are not cash effective, so they don't show up here. They actually show up in the net working capital bridge where you see a strong plus. And this is obviously the costs dropping into EBITDA, but then not dropping down into free cash flow. That's the one thing I would highlight -- like to highlight. And the second thing is we did have much lower net interest paid in 2024. This is basically the proceeds of the funds we raised for the Vodafone transaction that we invested and that lowered our net interest paid in 2024 quite significantly. Finally, on the group level, the net income bridge. Net income is CHF 1.542 billion. This one is affected by all the integration costs that we incurred in 2024. So it's CHF 169 million down. It's basically due to these integration costs and in particular, the closing on the 31st of December. As you know, we anticipated the closing originally to happen in the first quarter of 2025. Had this happened as originally planned, the net income would basically have been stable. Obviously, we are very happy that closing took place on the 31st of December. I now leave the realm of audited 2024 financials. And I would like to give you a first impression of the financial statements of Vodafone Italia in 2024 of the pro forma combined of Fastweb Vodafone 2024 and then of pro forma combined group, Swisscom Group 2024 as a jump-off point before we talk about the guidance. Louis pointed it out at the start, and this is really important. These numbers are preliminary. We have not yet completed all the accounting restatements and reporting restatements and consolidation. So these numbers are still subject to change. This is why we show €0.X billion rather than precise numbers, which we will finally show on the 21st of March. But we believe it's important to talk about these numbers. There has been no reporting on Vodafone Italia for more than a year, neither by us nor by Vodafone. But we -- and we believe the numbers we have now are sufficiently stable in order to give an impression where we stand and about the direction of traveling. So first of all, on March 15, we talked about our expected numbers or about our estimates for Vodafone Italia 2023 numbers. And these estimates were €1 billion EBITDAaL and €300 million operating free cash flows. These numbers for 2023 have been confirmed, and they are actually stable into 2024. So the EBITDAaL number and the operating free cash flow number for 2024 are also €1.3 billion. Obviously, a lot is going on underneath, and I would like to cover the most important factors briefly. One is -- important is service revenue. So service revenue was down in 2024, roughly €200 million, this is mainly from mobile and within mobile, mainly from B2C. So there was a strong decline in subscriber numbers and also ARPU declined a little bit. With ARPU among other things being driven by a rather technical factor, which is mobile termination rates were reduced from '23 to '24 in Italy, and this shows up in the B2C service revenue decline. This was just one component. The subscriber numbers is obviously the major one. But on ARPU, this is what's happening. Also, B2B mobile was down despite the growth in subscriber numbers, what's going on here. Vodafone Italia won the so-called TM9 framework agreement with the public administration, which will add a lot of RGUs over time, however, at pretty low prices. And the ramp-up is in full swing. And in 2024, it was not possible for this TM9 ramp-up to compensate the general decline in RGUs with a different outlook into 2025 as we will cover later. Now, wireline, by the way, was roughly stable with B2C a bit down and B2B a bit up. So the challenge in terms of service revenue in Vodafone Italia is mainly related to B2C mobile. Then, against the service revenue decline, there was a strong growth in the IT business. So what we saw in Fastweb and what we knew we will also see in Vodafone was confirmed. The strong growth in the IT service revenue related to public administration framework agreements, mainly plus €100 million. So the net change in revenue year-over-year was minus €100 million. There were also cost savings in 2024 of about €100 million here again, energy savings coming down. Unfortunately, that's not something that translates immediately into the same amount of savings in the next year. But in 2024, it was an important component of savings and also some slower -- smaller personnel expense, such that in the end, as I mentioned at the start, EBITDAal was stable as was operating free cash flow. So the baseline is as expected. The decline is as expected. We always said we assume a further decline in the mobile business. But that obviously also means, as Walter already pointed out, that next to realizing the synergies, stabilizing B2C and generating further growth in IT and other areas is a key priority going forward in the Italian business. I will move on, and I will try to, in a couple of steps, take you from the old world of Swisscom audited 2024 financials to the new world of what Fastweb Vodafone and the group looks like in the main financial KPIs on a pro forma combined basis of 2024. Also on an adjusted basis because this will give us the perfect jump-off point in order to talk about the guidance. So I'll start on the left-hand side in the old world. Step number one is, in the future, we will focus as many other telcos do on EBITDAal rather than EBITDA is the main operating financial KPI. Why is that? With the acquisition of Vodafone Italia, we acquired quite significant lease expenses, among others, in connection with the tower agreement with INWIT but also in connection with subscriber lines. So leaving these costs out would make EBITDA quite less useful as a measure of profitability and for internal financial steering. So we move to EBITDaL. So the EBITDaL numbers for the Swisscom Group are CHF 4.1 billion. That's basically CHF 300 million lease expense deducted from the CHF 4.4 billion EBITDA. So CHF 4.1 billion is the starting point on the group, CHF 3.3 billion in Switzerland and €0.7 billion in Italy, step one. Then step 2, in order to build the story for the guidance later on, we focus on adjusted numbers, so the -- at the group level, the €4.1 billion EBITDA on an adjusted basis are CHF 4.3 billion. So this is the whole transaction integration cost story that I talked about before and at Fastweb at CHF 0.8 billion instead of CHF 0.7 billion. Now step #3, adding in Vodafone Italia with the numbers that we just saw on the previous slide, also taking into account consolidation which really plays only on revenue has basically no influence on EBITDAal or operating free cash flow, but takes out close to CHF 100 million of revenue in the consolidation process between the two companies. So on the Italian side, rightmost column of this chart, we end up with a starting point pro forma 2024 numbers of €7.3 billion of revenue, €1.8 billion of EBITDAal and €500 million of operating free cash flow. And you can read the group numbers for yourself once we add in Switzerland. Just one further note, the Italian numbers do already include the accounting restatements, harmonization of accounting policies that we already did. We focused mostly on IFRS 16 because these are the big tickets where things change. For most of these adjustments, actually operating free cash flow does not change. So that's very important. Operating free cash flow is typically untouched. So it's just between EBITDAal and CapEx. And for one important change on subscriber line, it's not even EBITDAal is changed, but only EBITDA has changed. So these numbers despite all the accounting harmonization that we have to do are quite stable. Before I get to the guidance, let me talk about leverage -- net debt and leverage. Why do I do this here and not under the audited financials? The Vodafone acquisition is already in our balance sheet as of 31st of December, but obviously, it's not in the P&L. So in order to have a meaningful discussion of leverage numbers, we need the adjusted numbers -- sorry, we need the pro forma numbers that we just talked about on the previous pages, note #1. Note #2, I mentioned that we moved to EBITDAal as a main financial metric. But for cash -- sorry, for leverage, we stick to EBITDA. Why is that? Our leverage target -- or leverage cap from the government of 2.4x is simply defined as net debt, including lease liabilities, divided by EBITDA. So for leverage purposes, we stick to EBITDA. So let me walk you briefly through the net debt evolution first. So we started out with CHF 7.1 billion of net debt at the end of 2023 increased by CHF 8.5 billion over the course of the year or actually not over the course of the year, but mostly on the 31st of December of 2024, ending up with a net debt of CHF 15.6 billion. Obviously, almost all of that is due to the acquisition of Vodafone Italia. You see the yellow bars on the left, CHF 7.4 million on the purchase price. So you might remember the CHF 8 billion enterprise value that we announced, we actually paid CHF 7.8 billion on the basis of the provisional purchase price adjustment, net debt, net working capital, et cetera, and the €7.8 billion or CHF 7.4 billion. Then by acquiring Vodafone Italia, we acquired significant lease liabilities of CHF 1.7 billion, a large part of it related to wireless infrastructure. So a big contract in here is obviously the INWIT MSA, the power agreement. And together with the free cash flow, which obviously reduced net debt, the dividend, which increased net debt and the proceeds from the FiberCop sale and some other effects, we end up at CHF 15.6 billion net debt. Finally, the accounting restatement leads to an additional lease liability of CHF 0.3 billion. So that takes us on a pro forma basis end of 2024 to a net debt of CHF 15.9 billion. And to this, we can compare a pro forma EBITDA. The pro forma EBITDA for 2024 is CHF 6.6 billion. How do we get to that number? You remember the CHF 5.2 billion EBITDAal from the previous page, taking out again the adjustments to get to a reported number is CHF 5.0 billion. And then we have €1.6 billion of lease expense in our P&L pro forma 2024. So adding that back in, we get to CHF 6.6 billion of EBITDA. And dividing one by the other, gives a leverage pro forma of CHF 2.4 billion at the end of 2024. A couple of more words on the balance sheet and on the debt. Our leverage is stable at A. The rating agencies did exactly what they said they would do. So after the closing, they downgraded us by one notch and we still end up with one of the best ratings in the sector. Actually, with Moody's, we ended up at the exact same rating we had for pretty much last 10 years because they upgraded us just a year or 1.5 years ago, and now we got the downgrade by one notch. So everything completely as expected, our financing is very conservative. 86% of the financing mix is fixed interest. The currency mix is aligned with the EBITDA currency mix in order to insulate us from any fluctuations in the Euro, Swiss Franc exchange rate. Interest rates still very low, so the average interest rate is still above 1.8%. The incremental interest expense from the transaction was just CHF 200 million. And the maturity profile is well diversified over many, many years. The two high towers you see here in 2027 and 2029 are due to the term loan that we took on to finance part of the transaction. And obviously, we will probably not pay this back as a bullet payment at the end of the term. But refinance in the meantime as we go. So with that, I finally get to Page 57, the guidance. On the left-hand side, you see, again, the pro forma numbers 2024 to have a point of reference. And on the right-hand side, you see the guidance numbers for group Switzerland and Italy. Please note that there is a third segment other, which we don't show here because the numbers are pretty small. And please note also that Italy is in euro, so I don't try to add up the Switzerland and Italy numbers, they will not fully give the group number. Final word before I get going on the guidance, this guidance is preliminary for all the reasons that Louis gave at the start. So once we will be done with accounting, reporting, consolidation and all that, we are just owners of the business since 6 weeks and in particular, once the purchase price allocation is finalized, which is at the moment, provisional, we will update the guidance on the 8th of May. So this is the best we know today. I'll start with Switzerland. So for Switzerland, the revenue guidance is CHF 7.9 billion to CHF 8.0 billion, slightly down with telco service revenue decline of about €100 million that I mentioned before, partially compensated by revenue growth from the IT segment. EBITDAaL guidance CHF 3.3 billion to CHF 3.4 billion, slightly down year-over-year. We again expect a negative spread between telco service revenue decline of CHF 100 million and cost savings of about CHF 50 million. CapEx guidance, about CHF 1.7 billion, flat or rather slightly down given the one-offs that I mentioned we had in 2024. Such that finally, the operating free cash flow guidance on Switzerland is CHF 1.7 billion, as Christoph already mentioned, stable free cash flows from Switzerland, very important component of our guidance. I'll now talk about Italy. So the revenue guidance is approximately €7.3 billion, so stable. However, with lower telco service revenues, €100 million to €200 million lower, compensated by €100 million to €200 million higher revenues from other businesses like IT, energy and wholesale. EBITDAaL guidance, €1.6 million to €1.7 million, underlying decline of about €100 million driven obviously by the service revenue decline of €100 million to €200 million, which is only partially compensated by the incremental margin from IT and wholesale and by the synergies, which in 2025 are still quite low. As you know, on top, there will be integration costs in EBITDAaL integration cost and OpEx of about €50 million. CapEx guidance, €1.5 billion to €1.6 billion. Very importantly, the underlying number is stable. We are not going to spend more on CapEx in Italy. The underlying number is €1.4 billion. However, there is €150 million of integration costs that we will spend in 2025, and there is a further item of about €50 million of CapEx that we will get compensated for by Vodafone, it's in relation with the original INWIT agreement. It's CapEx, but we will get compensated for this. So we'll adjust for this in the end. But in the reported numbers, it will be part of the numbers. Operating free cash flow guidance, basically the sum total €0.1 billion to €0.2 billion. Very important on an adjusted basis, this is €400 million. So an underlying decline of about €100 million, which comes down from the EBITDAaL and on top, integration costs of €200 million, €150 million in CapEx, €50 million in OpEx plus the adjustment of €50 million in CapEx that I mentioned. So in a nutshell, stable free cash flows from Switzerland, certainly a transition year in Italy with the full integration costs already hitting the 2025 numbers and the synergies still being quite minor, but in line with what we presented on March 15. So let me summarize the guidance on the group level. Revenue now Swiss Francs, obviously, CHF 15 billion to CHF 15.2 billion revenue. that's down from pro forma 2024. On the one hand, due to a slight decline in Switzerland, but mostly due to the fact that for the guidance, we assume the euro Swiss franc exchange rate of 0.93 versus a euro Swiss franc exchange rate of 0.95 in the pro forma combined numbers that gives a CHF 150 million downdraft on revenue. Next, EBITDAaL guidance, approximately CHF 5 billion, slightly down in Switzerland, about CHF 150 million down in Italy for the reasons that I mentioned, including integration costs. CapEx, CHF 3.1 billion, CHF 3.2 billion underlying flat at about CHF 3 billion, and the rest of the increase is integration costs in Italy. The guidance for leverage is also stable, 2.4x end of 2024 -- end of 2025. We expect a roughly stable reported EBITDA and the somewhat lower net debt, and this will end up in roughly the same number on leverage in 2025. Finally, we reiterate our dividend guidance for the dividend to be paid out in April 26, which is CHF 26 per share and is as always subject to Swisscom achieving these financial objectives that are set out here in the guidance. I'll move on to my last chart. I would like to give you an overview or a perspective on our financial policy or essentially confirming our financial policy, our leverage outlook and our dividend outlook. I'll start with the financial policy, which rests on three pillars, long-term value creation, which basically means free cash flow accretion. So stable free cash flows from the Swiss business and growing free cash flows from synergies in Italy. But as we know, it's not only about synergies, the equation has actually three parts. One is realizing synergies. The second is stabilizing B2C telco and the third one is generating profitable growth with other businesses like IT wholesale and energy. Second pillar of the financial policy, attractive dividend. So we always pay out a high share of free cash flow. We like the dividend to be covered by free cash flow even if it will be closed in 2025 and probably an exception. The dividend will grow in line with free cash flow evolution, as announced previously. Third pillar, strong balance sheet. So our target leverage is below 2.4x and the target rating remains the A rating. I'll briefly talk about the leverage outlook, bottom right. So I already said, we expect a leverage of 2.4x in 2025. And in principle, leverage will decline over time with EBITDAaL from the Italian business growing. There is one bump in the road that some of you already know. We talked about this on March 15 last year. In 2026, leverage will actually go up a little bit. We assume at the moment that we will renew the INWIT Tower agreement at this point in time, which will add significant lease liabilities, although we will certainly take a close look at this agreement and probably also look at alternatives. But for the moment, we assume a prolongation of that agreement and therefore, a bump in the road of deleveraging. I'll move on to the dividend outlook. I reiterate or reiterate our ambition to increase the dividend over time as free cash flow accrue from synergies in Italy. And for the avoidance of doubt, we are fully aware that in 2025, the payout ratio will be in the range of 100%. However, I want to be clear, our dividend guidance of '26 does not depend on the details of this payout ratio, whether it's 95% or 100% or 105%. Our dividend guidance of CHF 26 per share depends entirely on us achieving the financial objectives set out in the guidance on the guidance page. So my closing statement is or my closing message is CHF 26 in '26. And with that, over to you, Christoph.

Good. Thank you very much for bearing with me for one last slide before we go into Q&A. Swisscom is strong today and will be stronger tomorrow. As you have seen, we have a strong long-term value focus both in Italy as well as in Switzerland, and we have a proven and working strategy. We will continue to invest into our future, building the best networks both in Switzerland and in Italy. We will continue to work on retaining our #1 position in Switzerland to make sure that free cash flow generation remains stable in Switzerland. And we are already working very hard on becoming the #1 customer choice in Italy to generate the future cash flows based on future growth, but also the realization of the merger synergies. This will lead overall to an attractive shareholder return. First step next year is to pay out a higher dividend, CHF 26 in '26, but then continued growth of the dividend as we continue to grow our free cash flow generation in the future. Thank you very much for your attention and now I hand over to Louis for Q&A. A - Louis Schmid: Thank you, Christoph. Now it's time for the Q&A session. [Operator Instructions] With that, I would like to open the second part of today's meeting with the first question coming from Polo Tang. Polo, the floor is yours.

It's Polo Tang from UBS. I have three questions, one on Switzerland, two on Italy. So the first one is in terms of Swiss price rises, Sunrise and Salt have announced price rises of 1.8% to 2% from March. So what impact do you think these increases will have on the broader Swiss market and on Swisscom. So for example, do you see any room for price adjustments for either new Swisscom customers or existing Swisscom customers? And I noticed that in your commentary on Swiss service revenues in 2025, you expect a decline of minus CHF 100 million. So this implies not much of an improvement outside of the VAT headwind dropping away? Is this not conservative? And then just in terms of Italy, so two questions for Walter. It's been 6 weeks since you've closed the deal to acquire Vodafone Italia. As you spend time with the business, is there anything that has surprised you either positively or negatively about the Vodafone Italia business? And the second question on Italy is can you talk about what you're seeing in terms of competitive dynamics? So are you seeing any changes in Q1 versus Q4? And what are you seeing in terms of Italian mobile in particular?

Thank you, Polo. First question goes to Christoph, second and third question to Walter.

Okay. So Polo, on the Swiss competitive environment, actually, we do expect quite a similar environment this year versus last year, as you pointed out, with regards to the service revenue guidance. And the reason being that even though Salt and Sunrise increased their prices on their back book or existing customers, they continue to remain very aggressive in the market trying to win new customers with promotions, typically lifetime promotions around minus 50%, up to minus 70%. We have second brands in the market that are calling our customers to try to win them back in a very aggressive approach. And this is also why we believe this strategy is not sustainable in the long run of the other brands like increasing prices for customers and trying to win aggressively on the market. And this also prevents us from executing back book price increases as we already have a very substantial ARPU delta with the other brands in the market. As long as they continue to be so aggressive on promotions, we basically cannot move on our back book pricing. And this is why we expect quite a similar evolution this year versus last year. Walter?

Yes. Thanks, Polo. In terms of surprises after 6 weeks, I would say, no negative surprises so far. For sure, a couple of positive one. The first one is on talent and people, honestly, very high-quality, very good people, culture, which is similar to the one of Fastweb, and this is a great start to working together for building a winning organization. The second one is related to the mobile network, it's better than expected. So we are really impressed by the quality of the mobile network. This would be an asset that we will leverage on in the coming future. In the terms of competitive dynamics, to be honest, I don't see big changes in the competitive dynamics so far. Probably some sign of relief, but I cannot say that it is a recurring trend at the moment. So the market is quite competitive, both on fixed and mobile, there are attackers and newcomers and the competition is quite tough.

Thank you, Polo. Next question comes from Andrew.

It's Andrew Lee from Goldman Sachs here. I just had two questions. One, essentially a follow-up from Polo, just on the B2B side. Has competitor intensity changed there at all? You mentioned in your commentary through your presentations that we shouldn't read too much into the fourth quarter in B2B. But obviously, one of your competitors is guiding on share gain to deliver growth. So any change in B2B competition in Switzerland would be helpful. And then second question, just on the cost cutting. This year, you achieved about CHF 80 million underlying cost savings, so significantly above the guided CHF 50 million. You're guiding for CHF 50 million plus in the midterm, but do you think you can continue to achieve a bit more than CHF 50 million in the near term or materially more than CHF 50 million in the near term?

Thank you, Andrew. First question goes to Christoph and the second one to Eugen.

Okay. So on the B2B, I think indeed, it's important that Q4 is not sort of a general trend that you can just multiply by 4. Especially in the corporate segment, in Q4, we had two or three large customer contracts that ended in Q4 -- or in Q3 that actually impacted Q4 quite heavily. This will obviously not repeat itself in the next quarter. But B2B remains a segment which is very competitive. It has always been competitive in the past 2, 3 years, and we expect the same competition to remain in place also this year. You can see that from an RGU basis, we are actually not losing RGU. So are in a position to maintain our market share. In the corporate space, we actually won back more customers from competition than we lost over -- throughout the year, which shows that we are competitive, but we have remaining pressure on the ARPU in the B2B sector, especially on the SME space, which is what both of our competitors are actually targeting when they talk about revenue, market share gains. They are more, in particular, alluding the SME segment, where we are experiencing quite a lot of pressure, especially on the mobile side. And this is a topic we are working on intensively since last year to, let's say, soften the impact in the coming months. But let's say, for this year, we do expect something similar as we had -- we have seen last year in the prior year.

On the second question, so I would not systematically expect an outperformance compared to our midterm guidance on the topic of cost savings. Yes, we had CHF 72 million this year against the CHF 50 million plus that we announced. There will always be variations around that number. It can be up like this year, but can also be down. As you know, we go about cost savings in a very long-term manner. There is no low-hanging fruit anymore. So we tackle the tough things like fiber rollout, which reduces maintenance costs and customer care costs. We tackle digitalization of the customer interface, which reduces customer care costs. We tackle the very tough nuts like IT simplification, this is very long-term staff. And so the CHF 50 million that we believe we can save for a couple of years per year is well informed. And yes, there will be variations up and down, but not systematically in one direction or the other.

Thank you, Andrew. Next question comes from Josh Mills.

It's Josh Mills here from BNP Paribas Exane. I have three questions all on Italy, please, if I may. And I'll focus on the guidance on Slide 57. So I know that you haven't put the 2023 numbers on this slide, but I think if I stitch them together, it would look like on the revenue front, you were growing slightly in 2024 versus 2023, perhaps stable in service revenues. And now for 2025, we're guiding for stable revenue, but with sales revenue declines. So the first question is, at what point do you assume that you will stabilize the overall service revenues in the Italian business? The second question, if I move on to EBITDA after lease, if you're guiding for million CHF 150 million lower, restructuring cost of CHF 50 million, broadly net out the CHF 60 million synergies that you're guiding for. So let's call an 8% organic EBITDA decline in 2025. Again, that's worse in the pro forma trends that we saw in 2024. So if it is an 8% EBITDA decline in Italy, how much of that is due to the mix shift you identified during the call? And how much of it is due to the additional investments you're going to need to make to turn Vodafone around. And perhaps if you could elaborate and say at what point you think you'll get to a stable EBITDAaL in Italy? And then the final part of the question, sorry to go on. On Telecom Italia's call earlier today, they called out the fact that they expect to win a new MVNO business to broadly offset the revenue losses they're seeing from Fastweb. And the only MVNO in the market that could be is Poste Italiane, which is currently on the Vodafone network maybe contributing CHF 50 million to CHF 100 million of revenue. So does this guidance you're presenting here today include the assumption that you will lose MVNO revenues over the coming years?

Thank you, George. The first two questions will be covered by Eugen or answered and the last one by Christoph.

So trying to capture all your -- it was a -- it was three long questions, okay. So I'll try my best. So on revenue, the outlook is stable revenue with service revenues coming down and IT and other revenues going up, balancing out at zero. This is -- we have not shown 2024 pro forma combined numbers for Vodafone and Fastweb in any details. But this is roughly the picture that we also see in 2024. So there was a service revenue decline, as I mentioned, on the Vodafone side. There was also a small service revenue decline on the Fastweb side, which we didn't talk about in the past, but it's all being compensated by growth in the IT. So what we actually guide for, for 2025 is a gradual reduction in the service revenue decline from what we saw in 2024 and 2025. For 2026, you ask when is it going to stabilize. Let me first talk about the, let's say, tactical elements of '25 versus '24, and then we can speculate about 2026. So why is 2025 with CHF 100 million, CHF 200 million a smaller decline than what we saw in 2024? There is at least two elements in there. One is on B2C mobile. I mentioned that a part of the decline in 2024 was due to the reduction of the mobile termination rates. So that reduces ARPU. This will not going to repeat itself in 2025. So that reduces already the downdraft on the service revenue. The second element is on B2B mobile, where we saw a decline in 2024 despite the win of the Tier 9 contract, so a big framework contract with the public administration for provision of mobile phones. And this contract will have its full effect in 2025. So the numbers on B2B should also be better than in 2024. And finally, there is a technical effect obviously, the exchanges between the Vodafone brand and the Fastweb brand come down dramatically. This is on an level RGU level zero-sum game, but on an ARPU level, this should help sustain the ARPUs in the mobile business. So this is say, the ideas behind the evolution from the 2024 numbers that we sold to 2025 service revenue. On 2026, we do not provide a guidance today, just as a general rule. So here, we are talking about the general trend into 2026 and what's going on strategically. I will hand this over to Walter, if I may, at a later stage. I just try to cover your second question before we get there. So on EBITDAaL, you're basically saying that when are we going to see stable EBITDAaL, and what is different between 2025 and 2024? So maybe on difference between 2024 and 2025, one that I did not talk about is that in 2024, on the Vodafone side, costs came down I mentioned the roughly €100 million reduction in costs. We do not assume a cost reduction in 2025. Obviously, there will be cost reduction in the future as synergies kick in, but we are not there yet. That's quite clear. Quite to the contrary, some of the costs increased from '24 to '25, such as the Tower agreement with INWIT. So eventually, EBITDAaL that we guide a bit lower in 2025 will stabilize once the downdraft on the B2C mobile business is compensated by the increased margin from the other business revenues. But much more importantly, it's compensated by the synergies. And as you know, from our synergy outlook, we expect the mobile synergies to hit already in 2026. So we will start migrating the mobile customers in 2025. We plan to complete this migration by the end of 2025. So from '25 to '26, without going into guidance discussion for a year ahead, it's safe to assume that this CHF 200 million in synergies will happen from '25 to 2026 and should certainly be enough to compensate any further downdraft from the rest of the ongoing business. Number 3 was...

The MVNO.

Yes, right.

Okay. So on the MVNO question, I mean, obviously, we don't know to which MVNO Pietro was alluding to that he wants to win back as Vodafone has several customers, not just PosteMobile but several others. And I think if I'm right, he talked about '26 going onwards, so this topic does not impact our revenue guidance for 2025 that we have published today, and we will not publish a revenue guidance for 2026. So this topic is more sort of a midterm topic that we need to address. But what I can say is from my point of view, somehow it doesn't make really sense because if you've seen that Vodafone has won CoopVoce and they actually won Coop from TIM. So TIM is now -- Coop is now migrating away from TIM onto our network. This is ongoing. And on the other side, we have said that we have the best mobile network in Italy. So I don't really understand why TIM -- why PosteMobile would migrate on a worse mobile network and actually decrease customer experience for their Poste customers, doesn't seem like a very sustainable strategy to me. And if TIM wants to compensate the loss of revenue that we are generating today with Fastweb, this would actually mean that Poste has no economic benefit or lower prices for moving from Fastweb Vodafone on to the TIM network and should TIM be in position that they want to really aggressively lower the prices to make it more attractive for Poste. At the end, it might even have bad repercussions on TIM by further accelerating aggressiveness on mobile in the market by having a very aggressive MVNO. So I'm not even sure if it's in the interest of the industry that has happened. So I think overall, we will see. I mean, from what I can tell, the MVNO customers are very happy. Vodafone customers, they are happy with the service they get from Vodafone today. And we will obviously make sure that they remain happy and we will also fight for those customers that they remain on our network. And so -- and then we will see in '26 how it has finally played out.

All right. Walter, maybe.

A short answer. So on '25 onwards, the ambition is to gradually stabilize the service revenue, especially on the B2C mobile that we know is the main driver of this decline. There are two technical effects or two inertial effects. One is related as Eugen said, the lowering down the exchange between Fastweb and Vodafone, this will have an immediate impact and come down the decline of service revenues from our side. From the other side, the other technical effect is that our inertial effect is that the difference between the front book and back book will gradually go away. On top of that, there is a clear strategy from our side to work on inflow ARPU, to increase the inflow ARPU. This will allow to compensate the back book that we lose on churn from one side. On the other side, as we said, we'll work on convergence, and this will further reduce churn and this will have another positive impact on the service revenue.

Thank you, Walter, and thank you, Josh. Let's move to the next question coming from Luigi Minerva.

Hello, Louis. Good afternoon, everybody. I have, if I may, two questions on Switzerland, then 2, 3 on Italy. So starting from the Switzerland one. I was wondering if you can -- having in mind ideally, you would like to stabilize better the retail competitive environment. I was wondering if you have any room to flex your muscle on the wholesale side. So for example, charging more for wholesale fiber access to your competitors so that it creates a sort of higher support for you and a higher unit cost for them when they think about retail pricing. Secondly, on copper switch off, if you can perhaps give us an update on the potential benefits both in terms of OpEx but also in terms of one-off monetization opportunities, whether it's real estate or the copper itself? And then moving to Italy. I was intrigued by the comments about the INWIT MSA. So obviously, you assume renewal, but you hinted that you're going to look into it. And I was wondering, if you can elaborate a bit more and to what extent the MSA had scope for renegotiation and for savings for your operations? And then finally, I was wondering why do you need three brands in Italy? So I understand the junior brand because everybody else has. But Vodafone and Fastweb, if I may, are kind of similarly positioned. I think Fastweb is a higher-value brand. But why do you need 2 brand in similar segment? Isn't there a risk of confusion, cannibalization?

Right. Thank you, Luigi. The first question will be answered by Christoph.

So excellent question, Luigi, and would be a very good strategy. But unfortunately, there is no room to increase the wholesale prices for fiber connectivity. There is the price regulator that is watching closely over those prices. And so on that side, unfortunately, we cannot monetize in a better way or increase unit costs for users on that side. So I think we cannot use the wholesale avenue to sort of influence the retail structure of the market. Second question, I will continue on the copper switch-off. So there are many potential benefits on corporate switch-off. The obvious one is higher NPS of customers using fiber connectivity. It's new, it's more stable, it's higher quality. There are less incidents. So you have less truck rolls, less call center calls. We have once the copper is switched off, you have less maintenance costs, less electricity. So there are numerous different benefits that we will realize over the coming years and they are included in our long-term minus CHF 50 million cost improvement guidance. And the part of this CHF 50 million ambition is always linked to the fiber copper switchover. Obviously, in the next 1 or 2 years, this portion is still very small as the numbers are still small, and most of the benefits will more kick in the early '30s, rather than the next 1 or 2 years. There are also some one-off potential benefits like selling the extracted copper, but we don't expect huge revenues from that side as the extraction costs are also and recycling costs are quite high, but it will generate sort of a slight net positive delta in the coming years.

Thank you, Christoph. Then Eugen?

Yes, on the INWIT agreement, obviously, I do not want to elaborate too much. I don't want to create the impression that we negotiated over the air, so to speak. But let me state a couple of facts. So one fact is this is a very important agreement. The INWIT agreement is one of the most important agreements associated with a high cost, one of the most important agreements of Vodafone Italia. And INWIT is a very important partner for us because obviously, the towers are a very important asset for a mobile operator. But it's also obvious, and I would even say it's a fact that when the agreement was done originally, it was done with Vodafone basically on both sides of the table. And given the valuation of infrastructure assets, it seems obvious to me to make sure in such a negotiation or in such a construction of an agreement, to have as much EBITDA and on the infrastructure side and as little on the service side as possible. So quite simply, we probably paid too much. So what we will do is we will benchmark this agreement very thoroughly on the one hand, to Cellnex prices in Italy. On the other hand, to the other customers, that INWIT has. There is not only TIM and us, there is also other customers and we'll benchmark these prices to international comparables, what other companies pay in other countries. And then we'll have a friendly and frank discussion with our commercial partner on the topic.

Yes. So thanks, Luigi. It's a good question. And by the way, you are right. I mean Vodafone and Fastweb brands are positioned on the high end of the market. So probably in the future, it makes no sense to have two brands on the same space. But for this year, we cannot create confusion in our customers. So we will continue with the three brands, and we will assess all the options that we have and take a decision that can only impact from '26 onwards.

Thank you, Walter. Next question comes from Steve.

Thank you, Louis. 3.5, if I may, please. First, just coming back to the Italian leasing situation. Clearly, there is -- I'm sure there is plenty of room for discussion and negotiation. But just to sort of be clear on the net debt impact, I think back in March, you suggested that on a kind of mark-to-market basis, you might add sort of €2 billion to the debt if you -- when you renew the leases. Just to be clear, as things stand today, I think you're capitalizing Vodafone's lease costs at about 2x. And obviously there's a lot of things in there, a lot of different lease costs, and you're talking about capitalizing 4 times. What are the moving parts there? Sort of what are the different outturns. And maybe just quickly, how long are you able to stay above 2.4x per your legal position with the Swiss government, that would be good to know? And then just coming back to the pro forma numbers you gave us for 2024 in Italy. It doesn't sort of feel like losing CHF 200 million of service revenue compensated with CHF 100 million of IT revenue and CHF 100 million of OpEx is flat EBITDAaL. I mean you've told us that in absolute terms, but is that the case in percentage terms? I mean, that could be an 8% decline, obviously, it could be CHF 1.04 billion to CHF 960 million. So can you give us a sense of what the sort of percentage year-on-year movement in that Italian EBITDAaL line was? That would be great. And then just finally going back to Switzerland, IT Solutions. I mean you talked about growth, but I think if you strip out except IT solutions and BT we're probably down about 2% or 3% in 2024. Is that right? And if so, do you think you can restore growth? I think it declined a couple of percent in Q4, but can you restore growth in '25 and beyond to compensate for slightly higher service revenue declines, that would be great?

Thank you very much, Steve. So I think the first two questions definitely going to Eugen, the third one, either Eugen or Christoph.

Yes. So Steve, many thanks for your questions. I'll start on the net debt one. So yes, you're right, we flagged about a CHF 2 billion increase of lease liabilities once we renew. And if we renew the INWIT agreement in 2026 and we still stick roughly to that number. However, it's important to understand there is still a lot of unknowns in this number. So our best estimate at the moment is €2 billion. But obviously, it depends always on the terms of the renewal of that agreement, which we don't know yet. Then in general, on the lease liabilities side on Vodafone Italia or new Fastweb Vodafone. There is in the lease liabilities two, three different items. So first of all, there is wireless infrastructure. i.e., INWIT, but not only. So there is also other tower leases, for example. There is real estate in there and there is subscriber lines in there. So Vodafone Italia accounts for the cost of subscriber lines as lease. And so these generate lease liabilities. And by the way, one of the accounting restatements we had to do is we had to choose between a policy of everything lease on the Vodafone side and nothing lease on the Fastweb side. We went for the lease version of Vodafone. It represented a smaller change, but this leasing of subscriber line gives you a very odd lease multiplier. Why? Because you have the lease expense, the cost of the subscriber lines and IFRS forces you to recognize a lease liability that is consistent with the contract duration. Now if you have a contract duration, a minimum contract duration of 24 months, so you've got a lease of 24 months. If you got with your end customer contract duration of just 1 month, you've got at least liability of 1 month. So you get a very odd relation between lease expense and lease liability. And this explains the top level figure that you see, lease multiplier that is quite low, and it would go too far to get into all the details here, but these are the main components of wireless infrastructure, real estate and subscriber lines. On the second part of the question, we are allowed to stay above 2.4 temporarily. There is no exact rule what temporarily means. But as I said out before, we have the clear ambition by 2027 to reach our target leverage, which is below 2.4x and then to delever further. So the delevering path -- the deleveraging path that we presented on March 15 is exactly the same today even as if you might have noticed the absolute numbers have changed a bit since our presentation back then. Then second question, I will unfortunately not go into -- even if I know that might be frustrating at this point of time, I will not go into single-digit percentage comparisons between 2024 and 2023, there is a reason why we put these rough numbers in there. It's not because we want to hide anything, but because 2023 were not our numbers at all. In 2024, we are still in the process of aligning all the accounting and reporting policy and also consolidation. And we don't want to put out a precise number today that we might have to already change in 6 weeks from now on March 21. So I will ask you for your patience. On March 21, we will send our 2024 pro forma combined numbers to a single million, and then all these questions will be able to be answered.

Thank you. And then on IT?

Yes, I can take the IT question. So you're right that part of the growth you've seen in IT is coming from inorganic steps with the acquisition of except. But there is still some organic growth left, I would say lower than we expected. In 2024, we had some growth issues on the workplace side with lower-than-expected sales. And I think I also mentioned during the presentation, we were also impacted by the UBS Credit Suisse merger, which was an important IT customer, where we needed to absorb the lack of revenue or let's say, they were moving services that we were providing to their own UBS delivery center. And this compensation was quite -- it needs to be done first. This has been achieved in 2024, but it impacted the organic growth rate that you see in the topline. And we expect 2025 to go back to what we expect to grow in line with market.

Next question comes from Christian.

Good afternoon gentlemen. Christian Bader from ZKB. And first of all, I have to say thank you for this comprehensive presentation. And I have three questions. First of all, I think you mentioned the aim to grow the Italian wholesale business again this year. Can you give us some evidence that the momentum can be achieved this year like you have shown it in 2024? Secondly, I remember when you presented the merger with Vodafone Italia the first time, there was some information about the benefit for you from tax loss carried forward that would say, keep your overall tax charge relatively low. Can you maybe repeat some of these statements and ultimately, I'm interested to get some sort of guidance for the corporate tax rate, at least in the near term, at least. And my third question is a very simple one. You had a very good interest income in the last quarter in 2024 for the reasons that you mentioned. And yes, can you give us some sort of guidance what you expect for this year in terms of absolute numbers or maybe an interest rate? That's it for me.

Thank you, Christian. First question will be answered by Walter, second and third by Eugen.

Yes. So thank you very much for your question on wholesale business. Basically, we'll continue along the line of '24, especially in wireline, we see a growing trend. So we would like to really exploit the momentum there with our customers growing very well. On mobile, we have Coop ramping up. So we are several customers growing in our wholesale business.

Good. On the second question, so I can confirm that there are significant tax loss carryforwards on the level of Vodafone Italia, which we obviously intend to maintain. And so on your question on the tax rate. So the expected tax rate is given in the analyst presentation of 18% to 19%, but that's for the IFRS financials. The thing that is probably really more important for you is how much tax are we actually going to pay. And on that, we confirm what we said a couple of months ago that we do not expect to pay a significant amount of income taxes on any earnings from Vodafone Italia going forward. So for tax payments, you can pretty much take the '24 numbers if you look for a 2025 guidance. At least that's our view today. And with tax payments, obviously, there is always some payment schedules, et cetera, involved. So that might vary. But as a rough starting point, I think the 2024 number is good enough. Then on interest expense, we have it in the presentation somewhere. So we expect interest expense of up to CHF 250 million in 2025. And we talked about the incremental interest expense being not more than CHF 200 million, and that is confirmed.

Thank you, Eugen. Thank you, Christian. Next question comes from Maurice.

It's Maurice Patrick from Barclays. Just a couple from my side, please. In the presentation, you gave a change in the penetration of the second and third brand in Switzerland. I think you showed a 2 to 3 percentage point shift in the penetration of second and third brands. I suspect that's driven a lot of the ARPU downstream. So curious to understand your thoughts in terms of the next 12 months, should we expect a similar growth, or if you like substitution of main brand to sub-brand? The second question, I saw you restated the Vodafone fixed wireless access base with broadband in Italy. Curious to your thoughts as to how important you see the balance of fixed wireless access compared to the use of copper and fiber in Italy as you look forward at broadband in the next 12 to 18 months?

The first question will be answered by Christoph and the second one by Walter.

Okay. So on your question, so yes, the driver of the ARPU downspin that we have seen of minus CHF 1 on mobile was driven by the switch from first brand to the second brand. And we expect a similar evolution also this year. What is important to note is that we are also working on measures to increase the inflow on the main brand and actually tilt the balance more towards the main brand going forward. So for example, one week ago, we launched the We are Family mobile offering where -- which is a household convergence offering for mobile. So you get bundling benefits if you have multiple mobiles in the same household. And this only exists on the main brand with the intention to divert more traffic onto the main brand versus the second brand. But I would say, overall, it is safe to assume that in 2025, we will see broadly speaking, a similar trend of second, third brand slightly increasing in the penetration.

Walter?

Yes. So FWA is very important because our strategy on ultra broadband relies on FTTH, of course, but also on FWA, which is extremely important to cover areas where fiber is not present today and will arrive very later in the years. And this coverage today is roughly 5 million FWA coverage and is growing together with our 5G network.

Thank you, Walter. And thank you, Maurice. Next question is coming from Nuno.

This is Nuno Vaz from Bernstein. So 3 on Italy, I think, very quick ones and then one on Switzerland, if I may. So on Italy, if I understood correctly, you've mentioned that you don't expect much cost savings in 2025, excluding some synergies. But what I was wondering is I remember that, for example, the brand royalty of Vodafone was included in the price tag. Is that something that is already a cost saving in '25? Could I just get an update on that? And then the 10% of synergies in '25, are those factored into the outlook? And then some cost initiatives that Vodafone had done. So for example, the restructuring in employees, lower energy costs, have none of these contributed to a lower cost base? So that's my first question. Second question on CapEx because considering the decline in the high-margin topline, one might expect that you might be a bit looking to reduce a bit of CapEx rather than keep it flat, including integration costs. So just wondering, especially on 5G investments, when might those peak if we might see at some point some decline in CapEx? Just to understand at what point in the investment cycle you might be at. And I also understand you're investing in the fixed network as well, but I'm sorry, focus on 5G. Very quick question, last on Italy is the EBITDAaL. Is it what we might call a cash EBITDAaL? Or is there some cash impacts that we should be aware that will come in the free cash flow at the group level, things like severance payments, for example, any working capital movements that Vodafone Italy might have had that we should be aware of? And last question, just on Switzerland, very quick one as well. The guidance usually was for gross savings of CHF 100 million, offset by higher energy expenses, higher labor costs, gross OpEx. I just heard the CHF 50 million this year. So I was just curious if there's any impact here and considering the high that we had sort of peak service revenue loss, why the cost savings are not coming a bit more?

Thank you, Nuno, for the 4 questions, which will all go to you, Eugen.

All go to me. I try to keep up. I try to keep up. So on the cost savings in Italy 2025, the brand royalty. So we are not going to pay for the brand. Vodafone Italy obviously paid for the brand to the group. But we excluded all costs related to services that Vodafone Italy procured from the group and that we will not need from January 1, we excluded already from 2024 numbers. So year-over-year, you will not see a benefit out of stuff that Vodafone Italy needed and used and we don't need as of January 4. What you will see in the numbers over time is as we change the sources of these services or the cost of these services decline or we discontinue services, this you will see over time. But in 2025, the impact of this is probably not massive. So that's the first one. Are the synergies factored into the outlook? Yes. So there is synergies on the mobile side, which should start. I talked about the migration of mobile customers onto the Vodafone network. Now that will happen over the course of the year. So there will not be a massive impact. The full impact will be in 2026, but there will be some impact. And I think we flagged about €40 million or so in direct cost. But please note that on the mobile COGS, the mobile COGS in the first instance on the Fastweb brand customers will still go up because we are still on the MVNO agreement. And as we increase customers, the COGS will go up and as data consumption increases, the COGS will go up and the synergies will go against that. So year-over-year in 2025, you won't see a huge impact. Finally, energy was a significant driver of EBITDAaL or rather of OpEx and EBITDAaL in 2024 in Vodafone Italy. Energy costs came down significantly, but we do not expect much of an effect going into 2025. So that's on the cost savings. Then CapEx might be 5G CapEx, I would defer to Walter, if I may. The third one was, is there any significant noncash elements in EBITDAaL? There might be some. There might be some. For example, you have costs associated with the tower agreement that are booked according to IFRS 16. So there are some noncash components in there that will then show up in the free cash flow statement. But off the top of my head, I would not have a significant item to flag here that we would need to factor into the model to get from EBITDAaL via CapEx to operating free cash flow and then in the end to free cash flow. Obviously, net working capital variations, there will be, but that has nothing to do with the definition of EBITDAaL per se. Finally, on the Swiss side, energy actually -- energy costs in 2024 actually increased again. And fortunately, we were quite well hedged against the energy cost spike in '22 or whenever it was, but hedging means also that you always pay an average price over a couple of years. So for a while, our energy costs increased. Also in 2024, it should be a bit of a tailwind in 2025, but not really much. It's all factored into the guidance anyway. On the personnel side, we assume we will have an increase of personnel costs due to the negotiations that are going on or about to be completed in 2024. We had about CHF 20 million, and that's probably a rough number also to take into account in 2025, and it's factored into the guidance and into the CHF 50 million number that we gave you on cost savings. Sorry about the 5G CapEx peak.

No, I mean, as you have seen the coverage today is 75% of population. So this coverage will go up to 90%. So you have seen the profile of the coverage growth. Therefore, we see CapEx spending on 5G there. Let me also highlight that in '25, we will have also some CapEx for capacity to host the Fastweb customer on the mobile network that will be a one-off effect that lately we will not get in the future.

Thank you. Now we are coming to the last question for today before closing the meeting. This question is coming from Ajay.

This is Ajay Soni from JPMorgan. Just a couple on Swiss Fiber. The first one was your Swiss Fiber CapEx, are you seeing any pressure on the rollout costs from maybe wage inflation? Some other European players have highlighted this recently. So that's the first one. The second one is just regarding a follow-up actually to the wholesale pricing on fiber. Does your wholesale pricing contract have any inflation-linked pricing within it? And if not, when are these prices next up for review?

Thank you very much. Both questions will be answered by Christoph.

So the -- actually, we -- I mean, of course, there are elements of costs where there is an inflation pressure in the fiber construction side. But also, we are working on efficiency measures and to improve the processes, rollout strategy, materials used in the rollout. And overall, the ambition is to keep costs stable or actually even decrease cost per line built, which is a very big ambition. But for the moment, we see that we can keep the cost of rollout for an equivalent socket stable despite inflationary pressures on some of the elements. On the second side, no, there is no inflation clause on the wholesale pricing. The prices are actually publicly available and agreed with the regulator. So any, let's say, inflation adjustment would need to be built -- would need to be discussed with the regulator, and we do this on an annual basis. But so far, inflation in Switzerland, as you know, is quite low. And I don't -- at the moment, probably difficult to increase prices based on inflationary arguments.

Thank you, Christoph. Thank you, guys. At this point, it is from our side. And in case of any follow-up questions, please do not hesitate, ask from the IR team. Thank you for your participation, and have a nice evening. Thank you.