Swisscom lowers annual forecast after acquisition of Vodafone Italy

Swisscom completes the acquisition of Vodafone Italia, adjusts EBITDA forecast, but anticipates significant long-term synergies.

1/3/2025, 12:12 PM
Eulerpool News Jan 3, 2025, 12:12 PM

Swisscom has lowered its profit forecast for 2024 after the acquisition of Vodafone Italia, a transaction worth 8 billion euros, was completed on December 31. The merger with Swisscom subsidiary Fastweb will bring significant structural savings but will cause higher short-term costs.

The Swiss telecommunications company now expects earnings before interest, taxes, depreciation, and amortization (Ebitda) between 4.3 and 4.4 billion Swiss francs, down from a previous range of 4.5 to 4.6 billion francs. The reason for this is costs of up to 200 million euros arising from the integration and planned exit from existing network usage agreements. These expenses concern the migration of Fastweb mobile customers to Vodafone Italia's network.

The merger of Fastweb and Vodafone Italia marks a crucial step towards the consolidation of the Italian telecommunications market. The Italian government and the competition authority approved the deal in November. Swisscom expects annual cost savings of around 600 million euros through synergies. The acquisition also allows the British Vodafone Group to withdraw from the Italian market while Swisscom significantly expands its presence there.

Despite the adjustment of the EBITDA forecast, the targets for revenue, investments, and dividends remain unchanged. The free cash flow should also not be affected, emphasized Swisscom. The completion of the transaction was originally expected for the first quarter of 2025 but could be realized early, necessitating the inclusion of the costs in the 2024 financial year.

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