Swisscom Ag Ittigen R/Shs

Good afternoon and welcome to Syscom's full year results presentation 2024. My name is Louis Schmidt, Head of Investor Relations, and with me are our CEO, Christoph Eschleman, our CFO, Eugen Sternmetz, and Walter Renner, CEO, Fasvet Vodafone. Before we move on to today's agenda, a few comments on page two 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 you today first our financial results 2024 audited and excluding Vodafone Italia. Second, some selected figures on Vodafone Italia 2024. and FASA Vodafone 2024, both pro forma and preliminary, to provide a basis for comparison. Pro forma stands for LTM, last 12-month figures, as if Vodafone Italia had been consolidated from 1st 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 21st 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 8th of May, with the Q1 2025 results presentation, we will also update our guidance 2025. After these brief introductory 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 three chapters. Summary 2024, where he dives into some of last year's achievements commercially, operationally, and financially. Strategy update, where Christoph presents Swisscom strengths 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 Renner, 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 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 ads 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 a 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 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 ads 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 ads in Q4, accumulated minus 57,000, but compensated largely by our growth in wholesale of over quarter 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 11 billion Swiss francs, driven by a decline in Switzerland, compensated by a 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 4.552 billion Swiss francs of EBITDA, corrected for exceptional costs, which were mainly related to the transactional costs and the booking of anticipated synergy costs in total of 227 million Swiss francs, bringing the reported EBITDA to 4.355 billion Swiss francs. CapEx and free cash flow roughly stable. Dividend proposed is a 22 Swiss franc stable. 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 2.5 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. Erosion of 112 million which was nearly compensated by the cost savings of 72 million but not quite to the zero level. Okay, now moving on to slide number nine 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 cycles, 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 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 number 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 number 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 better, faster, and at lower cost. 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. 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 will 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, 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 FiberCorp and OpenFiber, 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. 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 OpenSignal, 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 ear. So we intend to cover 79% of 5G coverage by end of this year and 90% by 2030. And maybe one important note with 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 a spectrum auction cost 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 number 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 Energy, 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 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 metal. 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 regulatory 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 based on AI. So this is really one of the key topics for the future, both for customers, 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 SPTI commitment of being net zero in 2035, which is a very ambitious target. But we want to be frontrunner 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 trainings 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 Ecovadi space. We are the number one 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 euros. 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 euros, 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 26 Swiss francs. This brings us to a new Swisscom Group profile that you can see on slide number 18. Our revenue will increase by 40% to 15.3 billion Swiss francs. 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, yellow-orange part is the Italian segment, which is comprised of Vodafone and FastWeb. And we have the grey segment of 400 million Swiss Francs, 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 dollars. with our IT activities. And in Italy, it's 1 billion euro 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 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 roadmap 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 for 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 number one 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 number 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 products. and on the B2B, a new internet box with Wi-Fi 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 have been delivered last year. Also, I think the important point in Switzerland, I already mentioned before, is the milestone of 52% FTPH coverage in Switzerland that we intend to push to 57% this year. On the cost-saving front, you have seen that we have delivered 72 million Swiss francs of telco cost savings. We will continue to work on the cost-saving 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, 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 three 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 89 Swiss francs from a wireline bundle. And the 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 at 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 our two competitors at seven and minus nine. 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 two 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 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 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 only 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 wire line 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 both in mobile and in wire line. One last slide, number 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 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 number 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 two 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 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. 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 Axis 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 revenues. 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 2025, 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 call space in the past years, and we will continue to work on our call space 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, GenAI-driven chatbots 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 formats. 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 nearshoring of our call center capacity and moving it into Kosovo, Poland and Bulgaria. On the networking side, we have initiated the gradual copper phase out. 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 estates 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 the 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 truck 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 a 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 the 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 will 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 1.2 billion Swiss francs service revenue. On top of this, you have to add around 300 million of reselling hardware revenue, which brings you to the famous 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 UPS 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 projects 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 or increasing operational excellence on the delivery side when we deliver these projects to our customers. This brings me to 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 costs. 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 2025, 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, Lore. 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 Vodafone Italia, which is 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 H224, 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've launched several services and products. The first one, Fast Hub Energia, launched in April last year. We are now at over 60,000 customers, proving that it's 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 natively trained in italian last but not least a 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 fiber cop stake for over 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 number one customer choice in Italy by combining two very complementary companies. We confirm this strategic rationale, this slide you have already seen, but we would like to underline the complementarity of infrastructure, assets, and skills. Of course, also the market positioning is very complementary with the two different DNAs coming together. One fixed with the special focus on cloud and cybersecurity, the other from Vodafone on mobile and on beyond the core services related to mobile technology. 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, Fasto Bonafonitalia, has become a company of over 7 billion revenues, 1.8 billion EBITDA. We invest 1.4 billion CAPEX in 2024 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 property and infrastructure, and we cover all the services, all the markets from B2C, B2B, and also wholesale fixed and mobile. Page 36. It's been a journey since March 24, which ended 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 7th of January, we did a big event to celebrate the real day one of this new company, Faster 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, it's confirmed 700 million with a different timing because we have anticipated some cost to 24 following the early closing respect to what we anticipated before. Next page. between signing and closing with the time to work on our integration roadmap. So we have a robust plan and we have clear synergies to achieve and clear milestones. We started the year with the new corporate brands, Faster plus Vodafone, but we will continue to rely on our three commercial brands, Faster, Vodafone and O. We started the year on 7th of 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 customer. 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 a joint team in order to offer to our customer a single point of contact, and this will for sure help not only in 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 IT stack, because we expect not only synergies, but also to modernize the complete IT ecosystem. On network, we are very on track now. 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. It's been an amazing year because our value strategy is paying off because our customer base is flattening, we are reducing the slowdown, we are slowing down the reduction of broadband customer whilst we are still growing a bit on Ultra Broadband and most of all the ARPO is flattening. This is the result of our efforts to deliver a superior quality of service. And you can see that our MPS is five basis points higher than last year, which is our record ever. On top to 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, there 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, a reduction by 4%. Nevertheless, it has been a very important year because several commercial initiatives have been implemented that will have a positive impact in 2025. The first of this initiative is for sure the expansion 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 2025. On top to that, an important partnership with Telepass, which is helping us offering to our customer smart mobility services and creating store traffic, which is very important to drive sales in the future. Last but not least, the launch of Sempreconnessi, a mobile backup product for our Wi-Fi customers. Looking at the future, the focus will be on quality again. We truly believe that customer deserve better quality and happy customer 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 chain we have one of the most extended and largest retail chain 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 WideLine, for FastHub, it's been an incredible year. Over 400,000 net adds. And 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 5G. points, growth in terms of MPS 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 sale. lower sales, which has led to lower customer base, but the churn will benefit especially in 2025. The second brand O is continuing to grow by 5% and is a great asset also for the future. So looking ahead of us, 2025 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 Christophe said, it's not only our analysis. It's 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 much as 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 will 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 all moving ahead b2b Also year strong, year for FastWeb, revenues up to 1.2 billion, double-digit growth, and especially thanks to IT that now represents 46% of our total revenues. So cybersecurity cloud has been the enabler of this growth, and we are very happy also about the AI 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 start with a very strong position in the market with a very strong market share, bottom 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 market. Salesforce, 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 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 2024, we signed two important partnerships 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 Uniterreno, we have now the possibility to leverage on a 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 Vodafone, 300 million revenues, stable, with a very good portfolio of customers and the new signed customer, Copvoce, 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 up-selling 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 to that, stabilize the B2C telco is fundamental. We know that is 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, I answer that to you, Eugen.