Key performance indicators for planning and managing the cash flows are operating income before depreciation and amortisation (EBITDA) and capital expenditure on property, plant and equipment and intangible assets. EBITDA is driven mainly by revenue and margins. Swisscom’s remuneration system is tied to value generation via variable performance-related components. The variable performance-related component is based, among other things, on financial targets such as net revenue, EBITDA margin and operating free cash flow as well as on the target of customer net promoter score.
Value-oriented business management
|In CHF million, except where indicated||31.12.2013||31.12.2012|
|Non-controlling interests in subsidiary companies||29||27|
|Enterprise value (EV)||32,235||28,498|
|Operating income before depreciation and amortisation (EBITDA)||4,302||4,477|
|Ratio enterprise value/EBITDA||7.5||6.4|
The sum of market capitalisation, net debt and minority interests in subsidiaries is the enterprise value (EV) derived from the share price. Minority interests are stated at carrying amount. Swisscom’s enterprise value increased year-on-year by CHF 3.7 billion or 13.1% to CHF 32.2 billion. Market capitalisation grew by CHF 4.0 billion, while net debt fell by CHF 0.3 billion. At the end of 2013, the ratio of enterprise value to EBITDA was 7.5 (prior year: 6.4). Had EBITDA remained unchanged, the ratio would have been 7.2. The enterprise value/EBITDA ratio is a key figure used to compare Swisscom with other companies in the sector. With a factor of 7.5, Swisscom is above the average for Europe’s former state telecom companies. A lower interest rate, lower average tax rates and a solid market position have made a significant contribution to this higher factor.