Swisscom Ag Ittigen R/Shs

Welcome to Swisscom's full year results presentation 2025. My name is Louis Schmidt, Head of Investor Relations and with me our CEO Christoph Eschlimann, our CFO Eugen Sternmetz and Walter Renner, CEO FastWeb Vodafone. Let us now start the meeting with the agenda for today on page two. As you can see, Christoph presents the first three chapters, achievements, where he dives into some of last year's highlights commercially, operationally and financially. Strategy Update, where he presents Swisscom's framework Lead, Innovate, Perform to grow free cash flow. And the review of our business in Switzerland, covering achievements 2025 and our focus 2026. Then, Walter Renner, CEO of FastWeb Vodafone, reviews our business in Italy, He will talk about the integration of Vodafone Italia and the industrial performance of our Italian business and its plans going forward. After Walter's part, Eugen Sternmetz, our CFO, will present the financial result 2025, including the guidance 2026. And in the wrap-up chapter, some final remarks from our CEO, Christoph Eschlemann. 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.

Thank you, Louis. Welcome to our 2025 results presentation. From my side, I will directly move to page number four. 2025 was quite an eventful year for the Swisscom Group, both in Switzerland and Italy. We put in place a new lean group organization. put in place a new group-wide sustainability strategy and for the first time in over 10 years we have confirmed that we will vote at the AGM for a dividend increase of 18% to 26 Swiss Francs per share. Despite the integration of Vodafone Italy and the new debt financing, we were able to maintain a sector leading credit rating of A2, which I am very pleased about. We achieved strong results both in Switzerland and in Italy. In Switzerland, we were voted strongest telco brand according to Brand Finance. We won all service tests, both in shop hotline and on the network side. And with Beam, we launched a successful new B2B connectivity portfolio. The highlights in Italy are obviously linked to the integration of Vodafone and FastWeb, where the integration and synergy realization is in full swing and ahead of plan. We also announced a round-sharing agreement with Telecom Italia a couple of weeks ago, about which Walter will talk a bit more in detail. Another major milestone in Italy was also the alignment of the go-to-market portfolios. So while we still have two brands in Italy with FastWeb and Vodafone, the B2C product portfolio has been completely aligned and we have exactly the same offering on mobile and on wireline under the FastWeb and the Vodafone brand, which creates a great momentum in the market. Moving on to the next slide number five, we can see an overview of the net ad trends both in Switzerland and in Italy. I think we have a stable development in Switzerland. If you look at the postpaid side, we had plus 44,000 net ads in Q4, bringing us to 185,000 net ads on the mobile side. Pretty stable performance throughout the year. Whereas on broadband and TV we were able to improve the negative trends we had in Q1 and Q2 to still slightly negative in Q4 with minus four and minus six thousand, but very much improved compared to Q1 at the beginning of the year. If you combine the broadband evolution on the retail side with minus 29,000 with the performance on the wholesale side of plus 37,000 you can see that overall we have a net positive effect on the broadband penetration in Switzerland. On the fixed voice side we have the usual mobile fixed voice substitution which continues and which we expect to continue also in 2026. On the Italian side I will start with the broadband picture so you can see that the wholesale side we have a very pleasing performance with Q4 being roughly at the same level as Q1 after a bit weaker Q2 and Q3. with a total of plus 221 000 net ads and also on the retail side we were able to substantially improve dynamics in the market with continuous slowdown of the b2c erosion over the the four quarters bringing us also to a net positive effect of plus 37 000 net ads in the market On the mobile side, we have a slightly different evolution. As you know, we are executing a strategy change in the market and moving from a volume to a value strategy on the B2C retail side. And you can see some of the net debt effects in Q4. Walter will give you a bit more details on the execution of this strategy. So far it goes exactly according to plan and we are pleased with the results. The negative net ads are basically linked to three effects. As you know, we have increased front book prices, which led to a slightly lower order intake. We are aligning back book pricing to front book pricing, which created some incremental churn effects. This brought us a bit more negative net ads on the B2C side, but the most important effect is actually the slowdown of TM9 contribution on the B2B side. where most of the themes of the TM9 government contract have been onboarded until Q3. And in Q4, there was no more growth coming from that contract. So now you can see mostly the negative B2C contribution in the overall numbers, whereas in Q1 and Q2-3, there was still positive counterbalancing of the TM9 ramp up in the overall numbers. On slide six, you can see that we have achieved the guidance with a stable operating free cash flow in Switzerland and also stable operating free cash flow in Italy, despite the transition year and many moving pieces in Italy. This is something we are especially proud of. pleased about and eugen will deep dive in great detail into the financial numbers so i will not go through the the revenue numbers on this slide but we will do this later in the section of eugen sternets so i move on to the strategy update i will go directly to page number eight i think after the stability or transition year of 2025 where our main goal was to provide stable free cash flows both from Italy and from Switzerland. We are now ready to grow free cash flow on the group level. We will do this with several means. We have a proven strategy and now a new scale in Italy. We will continue to invest in best network and services. We will continue to innovate mostly in security, AI and cloud. And we will of course perform in the market, striving to be the number one customer choice in both countries, continue our transformation both in Switzerland and in Italy to remain a high performing organization so that overall on the Swisscom Group level we can generate growing free cash flows in this year but also in the future. One word around our strategy. We have a proven strategy framework that we put in place a couple of years ago. It is centered around four pillars. First and most importantly is to consistently delight customers by providing best experience, best network, best hotline and great shops or shopping experience. I think this is really the key cornerstone of our success in both countries. while at the same time constantly innovating and delivering new products and services to the market, being it in the core mobile or fixed, but also in adjacent markets around energy, insurance or entertainment and TV services, which allows us to also be competitive in the future. And as you know, telco is also under price pressure, so achieving more with less and constantly driving operational excellence, delivering better quality service at higher automation rates with higher digitization is one of our key focus also to achieve further cost savings in Switzerland and in Italy and at the same time we are constantly upskilling our employee base so that we can continue to improve the overall performance of our employee base going forward as we have really high transformation work going on with the digital and AI transformation driving a lot of the change going forward. Overall, with this strategy, we can deliver on the group ambition as you can see on slide number 10. We want to be a trusted leader in the digital life of our consumers and in the business of our SME and corporate customers. This is based on a couple of key cornerstones. As you know, we are very adamant on having the best networks because we do believe that either on the IT side, but also obviously on mobile and fixed side, you need the best networks as a basis of providing or having satisfied customers, both in B2C and B2B. On the B2C side, we are very much focusing on a premium positioning on the telco space. We have a multi network, brand offering, trying to segment the market in the right way. Whereas on the B2B side, next to the premium positioning, we are also focusing very much on a comprehensive telco and IT product portfolio centered around security, cloud and AI next to connectivity. Wholesale helps us in both countries to increase the utilization of our infrastructure assets, to get more out of the infrastructure that we are building by leveraging additional brands, reselling our connectivity in different market segments. Overall, this will lead to rock-solid financials, leading to a long-term value creation based on stable free cash flows from the Swiss business, growing free cash flows from synergies in Italy and this will allow us to deliver an attractive and growing dividend in the future years in line with free cash flow evolution. Next to delivering higher dividends to our shareholders, we obviously do not forget our bond investors. We also focus on a strong balance sheet, good rating and continue to deliver the Swisscom Group balance sheet. now one part of leading in both market is also having the required scale to make the necessary investments and you can see this on slide number 11 we have now achieved number one or number two position both in both markets and in both in both countries and both markets mobile and fixed I will not go through all the numbers. I think they're quite clear on the slide. But this allows us to have the relevant scale to drive investments in both countries and continue to improve customer experience. And we also have a very well diversified revenue mix, both in Italy, but also in Switzerland, between the different segments, B2B, B2C and wholesale, but also between telco and the IT side, which continues to grow in both countries. countries and i think this is an important aspect going forward also for the the coming years positioning swiss common faster vodafone as the integrated comprehensive telco and i.t player delivering sovereign infrastructure and uh and products to our corporate customers On number 12, you can see our ambition on leading on the network side. So you see that in 2025, we continue to build out FTTH in Switzerland and also increase our coverage in Italy. So interestingly enough, we have exactly the same FTTH coverage in both countries, 56%. Our target in Switzerland is to continue the FTTH rollout and reach 60% coverage by year end with still the same ambition 2030 roughly 75-80% and our long-term ambition 2035 when we end the fiber rollout of roughly 90% fiber coverage. In Italy, as you know, OpenFibre and FibroCop continue to roll out FTTH. This also increases the FASWEB Vodafone FTTH coverage. If everything goes according to plan, the target is to reach 65% FTTH coverage in Italy by end of this year and roughly 90% at the end of 2030. Next to the FTTH side, we also continue to roll out 5G in both countries. So we also have exactly the same 5G plus coverage in both Italy and Switzerland standing at 89%. We target roughly the same percentages for next year with 91% coverage in Switzerland and 92% coverage in Italy with the long-term 2030 ambition of roughly 95% 5G plus coverage. In both countries we are constantly winning network tests demonstrating that we do indeed have the best networks for our customers. networks is the basis of what we do but obviously you also need to say sell and service our customers so investing in service excellence and sales excellence is an important aspect of our strategy of delighting our customers so in both countries we continue to invest in our customer loyalty programs with happy in in italy or swisscom benefits in switzerland These programs are highly appreciated by our customer base and we will continue to add value to these loyalty programs going forward. We also continue to invest in our sales and care network to make sure that it is of high quality, highest excellence, but also expanding the footprint as we will see a bit later, especially on the Swiss side. We also have many or multiple brands in both markets which we intend to continue to use as it is an important aspect of tiering the retail market and being able to offer premium products up to like the no-frills offering in the budget segments of the market. Next to networks and sales and service, excellent. An important aspect of the strategy you've seen is to continuously innovate and bring new products to the market. I think Swisscom and Vodafone FastWeb are innovation powerhouses. We never stop bringing out new ideas and new products to our customer base. At the moment, the most important aspects of these innovations are centered around network renovation internally to make sure that we have state-of-the-art networks in the core in Italy and in Switzerland. And then a lot of it is centered around AI and cybersecurity. making sure that our customers can not only connect, but also connect securely. So this is done through the Beam offering in Switzerland, for example, which we launched in the last year. And in both countries, we invest heavily on the AI side to provide sovereign AI infrastructure to the market. Next to these, we also expand our cloud and application offerings. And especially in Italy, we are focused on the energy market, which is liberalized, which allows us to grow on that side. And you have seen that we have already managed to win over 100,000 customers, which is an excellent result and very pleasing. also encouraging for this year as we expect quite a lot of growth coming from the energy space also in 2026. So you can see innovation is really at the core of Swisscom in Italy and in Switzerland and we will continue to focus and invest heavily in these topics as we believe that this is the only way to constantly bring more value to our customers and also generate new revenues and compensate in some form or the other the price erosion that is happening on the, let's say, classic connectivity in mobile and the fixed space. Another important topic everybody talks about is obviously AI, and we cannot conclude this analyst presentation without talking about AI. So AI has many important aspects. One of them is obviously generating new revenues with new product offerings. So for this, we have offerings in both markets that allow us to sell professional services, helping our customers using AI and implementing AI solutions. So we have offerings both in Italy and Switzerland to do this. We help customers working on LLMs, on new models, on tuning models. We rent models as a service or we go up to the infrastructure level where we have an NVIDIA infrastructure in both countries allowing to run AI workload in a sovereign mode. So you can really see that on the B2B space we cover the full value chain from consulting up to infrastructure to really help our customers use this new technology and hopefully for us this brings new revenue for the company. We also use AI internally for two purposes. One is delivering a better customer service at a lower cost, being it in network or in customer care, for example, but also to drive up and cross-selling, churn reduction, churn prevention, and stimulate sales with the right message at the right moment for the right customer so that we can trigger the best conversion rate in upselling and cross-selling and customer value management or customer base management. around which we are experimenting a lot with AI initiatives to drive sales in our core market segment mobile and fixed. So we have overall three elements on the AI which are important. Driving sales on our existing offerings, becoming better and more efficient and selling new AI dedicated services to our B2B customers but also in the B2C space. Last but not least, on the innovation side, I want to talk about sustainability. Sustainability today, from my point of view, is not optional, but it needs to be very well integrated with our group strategy. So we really want to be at the forefront of sustainability because we believe that it not only is obviously good for the planet, but at the same time, it also helps us to drive business performance if we take care of our environment, but especially if we also take care of our society, about suppliers, employment conditions and act with the right governance, especially behaving in a trusted, ethical way, which from our point of view is absolutely mission critical for our brand positioning in the market and being able to sell to our customers digital services like cloud, cyber or AI services, which are rooted in a deep trust that we treat the customer data in the right way, which is very tightly linked to behaving in the right way from a governance perspective. So you can see that the ESG topics tie very neatly together with our business strategy and really underpins or helps us to drive business performance by at the same time doing something good on these dimensions. So we are committed to continuing our path. For the first time in the history of Swisscom Group, we have a group-wide sustainability strategy, which we put in place now post Vodafone acquisition. So this is something I'm very happy about. And for the first time also, we have an integrated annual report, which tackles all the financial and ESG topics under a simplified CSRD framework. So you can also see that we are making progress on the financial reporting side, which I am very pleased about. So we're coming to the performing side. So what will be the result of all of these actions we talked about or the priorities in this year? So for Switzerland, it is clearly managing the telco top line, slowing down the service revenue erosion by working on new levers with new products or the price increase we announced a couple of weeks ago. We continue to work on telco cost. aiming at delivering cost efficiencies again in 2026 and of course we want to continue to grow profitably on the IT side and overall if we manage to execute these three priorities properly we will have stable free cash flows from Switzerland in this year. On the Italian side, the most important topic is obviously to continue to drive the integration and capture the synergy potential that we announced when we signed the deal. And Walter will talk a bit more detail about what we intend to do this year. We will continue the telco turnaround that we started last year to stabilize service revenue in Italy, both in B2B and the B2C space. And as in Switzerland, we will continue to scale the IT part of our business, but also the energy business to create new revenues and go back to top line growth in Italy in the next quarters. upon executing those three priorities we will also then have growing free cash flows from italy so that overall on the group level we also have growing cash flows coming out of the group this was it on the group strategy update i will now move to chapter the next chapter which is the business update in switzerland i will start with slide number 19. where you can see the 2025 achievements. So I think we really successfully reinforced our number one or our position as number one customer choice in Switzerland. We had a lot of activity around delighting our customers. We worked a lot on our branding, our positioning. We had a big brand update. in the Swiss market which we executed with very positive feedback. We continued to expand our shop footprint to reach our customers even better and we managed to win all the service tests as I already mentioned before. As we improved and delighted customers, we at the same time optimized our cost base. So you can see that we delivered another year of telco cost delivery of over 50 million of cost savings that were delivered. And we started to work more intensively now also on capex efficiency that we continue to improve also this year going forward. Overall, we invested over 500 million Swiss francs in the FTTH rollout and we are fully on track to achieve our targets by 2030. We are also focusing quite a lot on the fiber monetization and you will see some numbers later on that we made really great progress, especially on the fiber penetration side. The IT growth continues. It was slightly lower than expected in 2025, but we continue to be committed to the IT growth and continue to invest both in the cloud and security space, bringing out new portfolios to really drive also the revenue growth in this year. And what I'm really pleased about is that we were able to further improve the profitability of the IT business. And we also plan to further improve profitability in this year. Now what does this mean for B2C? You can see on the B2C overall we have like a dual strategy in the market. We need to defend our core market at the same time we attack with the second and third brands to overall keep the value as high as possible. you can see that the blended arpu is still declining in switzerland roughly one swiss francs this is mainly linked to the fact that we still have a brand mix shift from the main brand to the lower brands with wingo and cope and micro mobile essentially the prices on the individual brands are roughly stable we have executed a price increase last year on wingo plus one swiss francs And you have seen that we announced now a price increase also on the Swisscom main brand. And we will see the impact of this going forward in 2026. Really, I think highlight also on the B2C side is the increased fiber penetration, which went up by 7% last year. On the one side linked to the increased fiber footprint, of course, that we built. But we are also very actively working on the copper decommissioning so that we can shift customers over to the fiber network wherever there is a fiber network and the copper network in parallel. You can see the effects of this now going quite impressive uptake of plus 7%. This will be one of the main priorities also in this year. Continue the rollout, continue penetration. and counter the ARPU pressure with the best service, the best products, so that we can keep the NPS high and churn low. This you can see in the middle, we have quite a big NPS lead in the market compared to our competitors and we continuously work on this to make sure that our customers continue to be happy, which they seem to be. as we have record low churn. You can see on the right hand side, 7.3% on mobile and 8.5% on B2B, on the broadband, sorry, not B2B, on broadband. And we continue to work on keeping this lower churn level, one by customer satisfaction, but obviously also by extending things like the Swisscom benefit program to make sure that the customers which are with us remain happy and loyal to the brand. Overall, we managed to win 100,000 RGU's accumulated over the year. You can see that the second and third brand penetration slightly increased on the mobile side, went up to 36%. and on the wireline side we had a slight decrease of 17 000 net ads whereas the the second brand penetration increased also by two percent points to 30 percent and we do expect a similar movement again in this year Now on page number 21 you can see also some more information on the B2C business. We continue to grow in entertainment, sports and streaming. So we have another year of growth on the blue sports subscription side by plus 3% and we will continue to invest in this adjacency also going forward in this year. to make sure that customers not only buy broadband, but also TV and other adjacent services in the entertainment space. Something which I'm very pleased about as well is the launch of new AI offerings for consumers in Switzerland. So we launched Swisscom MyAI, which is basically a sovereign chat GPT. for customers, which we launched a couple of months ago, and we were able to attract 67,000 users on this platform. So this year, our focus will again be to expand capabilities of this AI solution for consumers and continue to accelerate the growth and make sure that as many customers as possible start using our AI solution. So this year will not be so much about monetization of this offering, but rather growing the customer base. And then we will look into monetization a bit later down the road. another key topic that we are driving this year is a security as a differentiator so we not only want to have the best network but also the securest network so we launched a couple of products like a security dashboard or identity monitor last year and we will continue to launch new security features also going on this going forward this year to really make sure that security becomes like a new growth avenue for us. As you can see that last year we were able to grow revenues by 4% and we will continue to invest and launch additional security features for consumers going forward as we do believe that next to connectivity, having a secure connectivity is absolutely crucial for our consumers. The more they are in the digital space, the more they use digital services, the more cybersecurity and protection will be more important. Now moving on to B2B on slide number 22. First you can see ARPUs are down by minus 2% so there is still quite a lot of price pressure in the market. This has two effects I would say. One is really the competitive pressure in the market both in corporate and SME. but also still ongoing technology shifts such as MPLS to SD-WAN which allows customers to substitute high value connectivity with lower end connectivity that basically drives down our average ARPU per product. The RGU base is roughly stable or slightly increasing overall where it's growing on wireless it was slightly declining on wireline as we lost a couple of bigger corporate customers in 2024 and over the last year these locations have been migrated that led to a slight decline on the wireline side in the last year. We talked already several times about BEAM and I think we will talk about BEAM every quarter this year because it is really a key cornerstone of our new connectivity proposition on the B2B side, really unifying connectivity with cybersecurity. So we launched it about half a year ago. We managed to bring nearly 40,000 users and nearly 1,000 locations onto the new platform. We are very pleased with these numbers. They are ahead of our expectations. And we continue to drive sales now going forward in this year to really ramp up as much as possible the number of users and locations onto this new and very innovative service. And as you can see, there is quite a big market demand. There is good response we see from our customers, both in the corporate but also on the SME side. And we will continue to invest in this product, bring out new features, new capabilities, which are especially important to our bigger SME and the corporate space. so that we can really fulfill the full breadth of cybersecurity offerings so that we can drive revenues with BEAM not only this year but especially also in the outer years 27 and onwards. One important aspect to drive the BEAM take-up on the wireline side is the SD-WAN technical migration. So this is something you see at the bottom of the slide. We now stand at 67% of all wireline connections which have been migrated from MPLS to SD-WAN. And we strive to complete this migration by end of this year. So reaching 100% SD-WAN base in our wireline business of B2B. This is also the necessary requirement so that you can move on to the beam offering because on the beam side everything is software driven. So this is an important aspect that we will focus on this year so we can finish these technical migrations. And once this is done, also ARPU effects from MPLS SD-WAN movement should start to fade out. You will obviously still see them in 2027 as you have the year-on-year comparison with 2026. But going forward, at least this sort of structural technology effect will fade away over time. On the NPS side, we had a successful year in 25. We have a great NPS both in corporate and SME and we're able to keep it stable overall. I'm moving on to wholesale on page number 23. We are the leading wholesaler in Switzerland and we want to defend this position. I think we are doing a great job on the wholesale side. We have a high customer satisfaction with many, many customers that we are serving. What is important or especially important with regards to the fiber rollout is that we can continue to drive the access service revenue on the wire line side. So you see this on the bottom left of the chart. We had a 9% growth in wireline revenues from the access side going from 186 million to 203 million in 2025 and we intend to continue to grow this access revenue as the fiber footprint continues to grow and as we continue to monetize our infrastructure What is also especially pleasing is that on the wholesale side we already have more than 50% or precisely 51% of all active connections are already on FTTH. 49% are on our copper network and we expect this FTTH share to continue to grow throughout 2026. And what this means is that basically the service revenue, you see this 203 million are generated already by over half by the fiber side, meaning it is future proof, it is protected also going forward. And I think this is an important aspect of making sure that the wholesale revenues we have on copper are migrated to the FTTH side as we continue to build out the network. Now, next to revenue, obviously cost is also an important topic in the telco space. So you can see on page number 24 what we are doing on the cost side. So we have many different levers that we are pulling on to decrease our cost base. So one of them in the service center side is increasing the nearshoring share of our workload. So you see the advancement that we made in the last year and we will continue to nearshore more of the outsourced workload also this year to generate cost savings or like a factor cost savings and at the same time we are also working on the digitization of customer service where we have very encouraging results on the chatbot side so you can see the automation rate or basically the number of incidents that the chatbot can really successfully autonomously solve which has gone up from 30 to 53 percent meaning that we can serve much more customer incidents through the chatbot channel making it a much more effective channel and allowing us to generate more cost savings in the future Now with agentic AI and progress in AI, we do expect this 53% to further increase over the coming years and making this chatbot and also increasingly voice bot, so voicifying the chatbot service, a much better and more effective channel going forward on the hotline side. we're also experimenting with digital features in shops we are trying out or experimenting with new lean shop format so we want to increase our shop footprint meaning having more shops throughout switzerland but at the same time decreasing our cost base in the shop side so we do this by digitizing shops on one side by having new leaner formats so one of them is for example we have like pop-up stores which we only have on weekends in shopping malls And so we are experimenting with different aspects to always optimize the cost of sales in the physical channel. We are not only doing this on the B2C side, we are also obviously working on a call center workload on the B2B side. So you can see at the bottom the achievements. We have on the B2B side, workload reduction by simplifying our product portfolio, moving to FTTH. We have less costs also on B2B. And overall, this allows us or allowed us to decrease the B2B telco cost base by 4% year-on-year in 2025. And we will continue to work on our telco cost base also or B2B telco cost base going forward this year. Now on page 25 you can see some highlights linked to the network where we also focus on generating cost savings. So one of the structural cost savings that we will see also going forward is obviously the copper At the peak, we had 2 million active copper connections inside Swisscom. Today, we stand at 1.6 million active copper connections. That's minus 20%. Over the past two years, we reduced by 200,000 the number of connections. in 2025 and expect a roughly similar decline also this year by again a drop of around 200 000 copper line so you can see that we are making good progress on the copper phase outside and we are completely on track to achieve our phase out target of 2035. We're not only working on the access networks, we're also working very heavily since many, many years, basically since I'm at Swisscom in 2019, we are working on modernizing our core platforms. So you can see that in 2019, we had 57 core IP optical platforms. We are now standing at 35. platforms and we continue to modernize and phase out older legacy platforms and our ambition is to reach 18 core platforms within the next two years meaning a 70 percent reduction compared to 2019 and this is obviously also generating continuous cost savings as we are able to turn off certain platforms both in fdes but also electricity maintenance costs etc So going forward, we are focused to deliver more telco efficiency. Our guidance for this year, 2026, is 50 million cost savings in Switzerland, working on the same levers as the past, network and IT simplification and phase out, data and AI, leaner and more agile organization, factor cost optimization with nearshoring, and more and more digital customer interaction on B2C and B2B. Now, last topic on the Swiss side, B2B IT on page number 26. Sorry, I just need to have a quick drink. So we are the leading Swiss IT provider in Switzerland and we want to leverage this position to unlock more growth. You can see that in 2025 we were able to grow plus 2%, which is slightly below our expectations. But last year was not an easy year in Switzerland on the IT side with all the tax uncertainty with the US, with other macro uncertainty leading many of our customers to delay some of the IT redimension. some of the IT investments. So I'm pleased that we still managed to generate a small growth of 2% in these market conditions. At the same time, we worked on our cost base on the IT side. We improved our EBITDA margin to 6.5% and we are intending to further improve this margin also going forward in this year. We do this by continuously also automating and digitizing service offering on the B2B IT side. And as I already mentioned before, we will continue to push the AI side and the private cloud, sovereign cloud offerings at the same time as leveraging our strategic partnerships with several different vendors in the IT space. Now to summarize all of this before my voice completely stops working. We focus on managing the telco top line, trying to slow down the service revenue erosion by growing the wholesale access by at the same time working on the best products and care. We will continue to generate telco cost savings. with high discipline both on OPEX but also working on CAPEX efficiency and as mentioned previously we are working on our IT side to on the one side grow the IT business and make it more profitable and achieving all of these three objectives overall we will deliver stable free cash flows in 2025. Now Walter will explain to you how we will grow free cash flows in Italy.

Thank you, thank you, Christoph. Welcome to everybody also from my side. We are at page 29. I'm very happy to say that through this has been a transition year for Italy, as Christoph said, but we are very happy about the results. Why? For three reasons. First of all, we delivered on promises, especially on synergies. You will see that we are ahead of the plan. We also deliver a stable free cash flow despite all the challenges of this year. And last but not least, we set the foundation for the future growth from this year onwards. So let me enter into the main achievements of this year. Of course, integration is the first one. We started very early in 25 to integrate two organizations and now we have a fully integrated single team that is driving the business. We also aligned the go-to-market and product portfolio of the two brands, Vastob and Vodafone. And as I said, we have delivered, over delivered on synergies. This is very important for us because this shows that the deal rationale is confirmed and even reinforced. Another important strategy project for the year is the run sharing agreement with TIM. It's a preliminary agreement still subject to authorization, but is extremely important for us because this will bring us additional value in the medium term. Why? For three reasons. First of all, this will accelerate the 5G rollout in the low density areas, namely the towns with less than 35,000 inhabitants. Therefore, will bring more value to our customer. A better service, a wide 5G coverage, so good for our customers. Second, this model allows us to be totally independent from a commercial and technical point of view, so we can bring our own innovation on those areas. Last but not least again the efficiency gains because we'll save electricity, we'll save maintenance and this will bring additional value to the company. As said, the other priority for us was and continues to be the stabilization of our telco service revenue. We have started the year with main KPIs going in the wrong direction, but we were able to change this trend all over the year. So we are very happy on how we're executing our value strategy. Value strategy, which means we bring more value to our customer and we can continue to work with them with new products. But there is not only stabilization of revenues. We have worked also to develop new growth areas. So wholesale is one of those. Both on fixed and mobile, we are continuing to grow and we'll discuss in a second. But also energy is growing very well together with the IT in the B2B market. Page 30. I will deep dive the integration. I said for us was key and crucial to start working together as fast as a Vodafone. So we achieved to have a single team already in place by mid-25 and then we worked to align processes, HR processes, but also to set a new framework for the new culture of the company. So in 26, looking forward, we are working to optimize our organization. There are still areas of efficiency that we want to gain, but we need also to establish and implement the new winning culture that we are designing together with the old employees. Another important aspect is related to the integration of our product portfolio, but also of our sales force, both on fixed, mobile, both on B2B and in B2C. As you can see from the slide already, all our shops have been changed to a dual branding, So in all shops you can find both Fastweb and Vodafone products. This is an improvement and a boost of the sales of the two brands. And then our operating model. Our operating model is changing. Since January this year, we have completed the legal merger between Vodafone merged into FastWeb. This will bring massive simplification for our processes. So we need to work along this line also in 26 for simplification of processes, consolidation of location all over Italy, and also aligning HR policies for all our employees. Next page, synergies. I said we are progressing very well. We are very happy about the progress on the synergies, especially on the migration of the faster mobile SIMs, the 4 million SIMs on the Vodafone network. This has enabled us to reach the 200 million synergies upper running for 26. So we completed this migration head of plan. So we are very happy for what we did. We'll continue to work on synergies in 26. We need to work on fixed. network because we need also to optimize the access cost by leveraging on the best of breed of footprint we have in faster Benvodafone which will bring additional efficiency but also new technologies to our customers. Another important element is that we are working on reviewing our tower strategy. The current terms and conditions of our contracts are not sustainable, especially in light of the telco market that is very competitive. and with strong pressure on margins. So we will work on that front. We unfortunately cannot say much. As you know, this is a very sensitive topic. So please understand that we will not answer any further questions on this topic. I can only say that, as usual, we try to work with our partners to find a win-win solution. But at this stage, we will investigate all the options that we have on the table to maximize the value. for our shareholders. Another important piece of the synergies that we realized in 2025 is the disentanglement or the insourcing of some services that are currently provided by Vodafone Group. So we worked very hard with our teams to define migration plans and to start executing on those. Just to give an example, we are very proud that at the very beginning of the year, we've been able to introduce our Wi-Fi 7 modem on Vodafone customer that is completely managed by us. This has brought simplification on processes and efficiencies on cost. So we will continue to work on new services to insource, but we will also continue to collaborate with Vodafone Group where we see that there is a value in working together. So all in all, in 2025 we overachieved the synergies by 35 million, very happy about that, and we are on the right trajectory to reach the 600 million at 2029. So now we are working on consolidating IT, on consolidating the networks, and to further optimize the external spend. Page 32, B2C. As you know, consumer market is very complex, is highly competitive, but we decided to exit the volume strategy, which focuses only on promotion. So we moved on a value strategy. Value strategy means bring value to our customer in a more for more approach. For this reason, we worked very hard on our product portfolio, on our pricing, to bring to our customer the best products on fixed and mobile. It's not only that, we also worked on quality, we are increasing the customer experience to our customers and this has turned into a very satisfactory trend of the ARPU in outflow gap which has been reduced by 60% both on fixed and mobile during the 25 if compared to last year. So if you look to the customers, you see that on mobile, the customer losses are 2.7% true, that you don't see improvement there. But to be honest, in that losses, most of them are related to low value customers. We're talking about tourist SIM, we're talking about second SIMs. We've been able to keep and develop our customer base, our high value customer base. On the B2B is more evident the result of this strategy. As you can see the losses on fixed are reducing quarter on quarter. We are very happy about this development which again set the trend for 2026. Another important pillar of our value strategy is also to deliver transparent and simple offer to our customers. And this is extremely important because if you treat well the customer, then they will stay with you. And this is very evident if you look to the churn reduction in mobile and fixed, which has been very satisfactory to us. Last but not least, we continue to work on enhancing the customer experience. We have seen the MPS growing in all the brands, both on fixed and mobile, and this is crucial because customers start to understand that we deliver value to them and they recognize our brands as premium brands with quality. If I look at 26, we need to continue on this trend. We need to continue to deliver value to our customer. We need to continue to deliver quality to our customer, to bring new products to our customer that are in line with their expectation. But it's also a matter of being transparent with our customer. This is the reason why we are continuing to align the front book and the back book prices to reduce the in-out spreads and therefore also reduce the churn and then extend the convergence benefits because the more the customer buys new services, the more they are loyal. Last but not least, we need to work on optimizing sales structure. We need to work on increasing the MPS by continuing to improve the customer experience. And during the course of this year, we will also introduce new AI-driven tools, which will help us both on churn reduction, but also on cross-sell and up-sell of our services. On page 33, we talk about B2B in 25. We know very well how to manage this segment. We put together immediately the best of the two in terms of a product portfolio, so we can deliver the best of fixed thanks to the fast web experience. We can deliver the best of mobile thanks to Vodafone. experience, and skills, we are combining all this and bringing it to our customers. And this is extremely important because it's allowing us to gain traction in the order intake, especially on the high value customer. The order book is growing very well. This means that we deliver value to our customer and they are continuing to buy from us. The churn is also very important, so we started immediately to renegotiate the contracts that were going to expire. We did in advance and we did with a different approach, which is a value approach. So we started to offer to them more value in exchange of a longer contract. So this is working because we see the choice table that you can see also on the RGU's that are growing on mobile thanks to TM9, pretty stable on fixed thanks to this strategy. Also, NPS for us remains key. Also in the B2B, we are number one on fixed with the faster brand. Number one on mobile, thanks to the Vodafone brand. We'll continue to work and bring innovation to our customers. Also working on some initiative like the mobile private network, which shows how we can deliver also complex project to our customers. On 26, again, we need to continue to work along this line. Order intake will continue to grow also in 26. We will continue to simplify our product portfolio in order to offer always the best products to our customers. We need to work on churn, but also to optimize and maximize the value of our complementary public sector tenders. Again, also for B2B, customer experience is key. We'll introduce AI in the operations also in the B2B, and this will bring us additional value for this segment. Wholesale for Wholesale was a great year, 25, both on fixed and mobile. You see on this page the growth that we did on fixed, over 200,000 lines, but also mobile, over almost 2 million lines added to our network thanks to the co-op voucher migration on our net. This shows the superiority of our proposition, the quality that delivered through our network. But as you can see, we are not only working on the network, we are also delivering operational excellence. You see a couple of KPIs that are improving significantly. The activation process is shortening and also the one-day resolution is improving considerably. So in 26 we'll continue to grow in the ultra broadband market leveraging on our strong customer base. We will try to drive up the FTTH because we see more value on those customers and so we will continue to strengthen the operation on that front. We will also continue to work on mobile. We would like to minimize the post losses that will happen this year and we are also working to find new customers. One of those is KAI that will launch in the course of 2026. Energy, another important key driver of growth for us, both on consumer and B2B. We launched energy in May 24. And now after one year and a half, we are very happy about the development of this service. Especially in terms of growth of customer, you see we are over 100,000, but we are growing also in terms of new acquisition. We did 141,000 acquisitions in 2025. So we will continue to scale up this service, this business. We open the Fastweb Energy offer to the Vodafone customer base. We still see space of growth on that front. We are also continuing to open new sales channels to Fastweb Energy. We are very happy about the development of the B2B, especially in the small and small business where we see still space for growth. So we'll continue to work to increase the customers on that front. But we will also work on the value creation as we want to evolve from a pure reseller towards a market operator. This will increase the margins that we do on those services. And energy is also very important to strengthen our convergent proposition because we will push more and more on what we call super convergence, fixed, mobile and energy together. This will bring additional value, additional loyalty from our customers. B2B IT is another important driver of growth in the B2B market. We are working on three main products. One is cloud. Over the course of 25, we have invested in building a strong product portfolio. which is based on sovereignty, but also on the capability to offer a multi-cloud proposition to our customer. So as you can see from the picture, we have our own proposition. FastCloud is 100% built from us, so it's bringing sovereignty 100%, but we have also significant partnership with AWS and Oracle that are growing very well in the cloud market. Cyber security is another important element of our proposition. We offer network security but also cyber security services to our B2B customers. We will introduce AI also in that front to enter also this OSME market where you need more automation in order to have a proposition that is compelling with this segment. Last, AI. AI is key, as Christophe said, in our strategy. We have developed internally in Italy an end-to-end solution for our customers. From the infrastructure, we have a supercomputer in Milan, which we can leverage. We have our own LLM models. We are developing new applications on top of that. We want to bring all this to our customers. to offer them a sovereign proposition, but also compliant with all the regulations in Italy and in Europe. This business is developing very well. As you can see, we have over 25,000 licenses sold in 2025, mostly to SOASMAE, but we are very happy with the result of this new segment. So in 26, we need to work to expand the services to continue to grow on that front and to bring more value to the overall company. Last slide from my side. Again, we are very happy about what we did in 25. We are working very hard to integrate two big companies. We now already have a single organization working. We need to have a single culture, a successful culture. And the future proof operating model, this is the focus of this year, but we need also to accelerate on synergies ramp up. The target of this year is 300 million. We are fully on track to deliver on that. So we will deliver on that front. Second priority is to continue the technical turnaround. You have seen KPIs changing direction in the right direction. So we need to continue to execute our value strategy and we need to continue to grow on the wholesale business despite the losses of poste. Last but not least again, scale growth thanks to energy and IT, new businesses that are growing very well. We have a good product development in place, so we think that with these three pillars we can continue, we can start to generate growth in the mid-term. Thank you very much and I leave the floor to Eugen.