Salt loses ground after change of ownership

Sales decreased by 2.4 percent to CHF 1.285 billion. Adjusted operating profit before depreciation and amortization (EBITDA) declined by 4.9 percent to CHF 412.5 million. Salt excludes costs for restructuring and the name change from adjusted EBITDA. Following the sale, the mobile operator had renamed itself from Orange to Salt on April 23, which cost several tens of millions of francs. With these costs, unadjusted EBITDA is likely to have fallen even more. Salt does not disclose this figure, nor does it disclose the bottom-line result. In the first half of 2015, parent company Matterhorn Telecom Holdings posted a net loss of just under CHF 90 million here, following a small loss of CHF 1.1 million in 2014.

Management exodus

Salt has had an eventful year: Following the change of ownership, there was an exodus in top management in the summer. Four out of seven top managers left the company. Among them were Chief Technology Officer Johan Hall, Chief Commercial Officer Matthias Hilpert, Chief Customer Service Officer Tonio Meier and Chief Financial Officer Yann Leca. In November, human resources manager Amelia Raess also left. Finally, in December, Salt CEO Johan Andsjö threw in the towel and left the company with immediate effect. He was succeeded by the former head of Google Switzerland, Andreas Schönenberger, in mid-March 2016.

Harsh criticism

The new management team was harshly critical of the old management: The turnaround at Salt had been impaired by fierce competition and previous management mistakes, the mobile operator announced in a communiqué on Thursday. It said the revenue decline was primarily due to lower average monthly revenue per customer and the loss of customers. The total number of customers fell by 6.6 percent to 2.024 million. Prepaid customers in particular migrated away. The number of more lucrative subscription customers decreased by only 0.4 percent. The decline in adjusted operating profit was the result of high bad debt losses due to a failed IT changeover in 2014. In addition, Salt had insufficiently checked the creditworthiness of new customers. The mobile operator had sent thousands of customers incorrect bills in 2014 due to IT problems. As a result, the company had to be generous with discounts or when customers paid late. This had a knock-on effect on profits.

Job cuts

To counteract this, Salt put the brakes on costs and cut jobs. The number of full-time positions fell by 60 to 833 at the end of December 2015. The job cuts continued in the current year. Salt does not disclose figures on this. "While employees left in the back office and support areas, mainly as part of a volunteer program, new positions were created, particularly in the network area," Salt said Thursday: "The main part of the restructuring of Salt Mobile SA is largely complete." Salt had reintegrated core functions such as network and IT into the company last year. Previously, IT had been outsourced to Finnish service provider Qvantel, network rollout to Nokia Siemens and network operations to Ericsson.

Complete restructuring

The complete restructuring of Salt is also becoming increasingly visible to the outside world, the statement added. The new boss Schönenberger and the new management team would focus on profitable growth and efficient cooperation across business units. Silo thinking should no longer occur. In addition, a new product portfolio with five subscription price plans has been launched. These had a positive impact on the number of new contracts as of fall 2015, Salt announced. In addition, investments in direct and online sales have been stepped up, while only the most profitable indirect sales partnerships will be continued. And marketing will now be run internally with a smaller team. There would be no more outsourcing. A piquant detail on the side: When Salt refinanced its debts in April, 150 million flowed to the new owner Niel. (SDA)