Slide 1: Annual Results 2009
"CS elisa Annual Results 2009 12 February 2010
Slide 2: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO 2
Slide 3: CEO's review
CEO’s review • Financial and operational highlights • Segment review – Consumer Customers – Corporate Customers • Progress of 3G services • Strategy execution • Outlook for 2010 3
Slide 4: 2009 highlights
2009 highlights • Q-on-Q revenue growth • Clear profitability improvement • Strong growth in mobile net adds • 2009 EBITDA better than guidance a year ago • High profit distribution, 88% pay-out ratio • Successful launch of IPTV Elisa Viihde • Demand for virtual meeting services increased • 3G succe
Slide 5: 2009 financial highlights
2009 financial highlights Change in 2009 2009 Revenue € 1,430m -4% EBITDA * € 484m +1% Earnings per share € 1.13 +1% CAPEX € 171m -7% Cash flow € 252m -3% Net debt € 719m -11% * Excluding one-off items 5
Slide 6: 2009 operational highlights
2009 operational highlights Change in Change in 2009 2009 Q4 2009 Mobile subscriptions 3,329,000 +449,300 +111,300 Fixed broadband 467,200 -34,300 -8,500 Mobile ARPU 1) € 23.6 € -2.8 € -0.4 4) Mobile Churn 2) 14.5% +1.2%-units +0.2%-units4) Mobile usage, min 3) 6,345m +314m +59m Active 3G data users
Slide 7: Q4 2009 financial highlights
Q4 2009 financial highlights • Revenue € 365m (372) – Decrease in traditional fixed business revenue, approx. € -3m – Lower interconnection fees and roaming revenues, approx. € -3m – Lower equipment sales volumes, approx. € -1m • EBITDA € 121m (129), EBITDA margin 33% (35) – Market activities and se
Slide 8: Q4 2009 Consumer Customers
Q4 2009 Consumer Customers • Revenue € 217m (217) Revenue and EBITDA-% – Growth in mobile customer billing 217 220 217 209 202 – Lower fixed business revenue – Decrease in Estonia • EBITDA € 71m (72), 33% of revenue (33) 37 % – Higher market activity costs 33 % 32 % 33 % 33 % – Lower SAC per sub • E
Slide 9: Mobile KPIs' trends continued
Mobile KPIs’ trends continued ARPU Churn Usage 50 ARPU (€) and annualised churn (%) Outgoing traffic (million minutes) 1 800 45 1 600 40 35 1 400 30 1 200 25 1 000 20 15 800 10 600 5 0 400 9
Slide 10: Q4 2009 Corporate Customers
Q4 2009 Corporate Customers • Revenue € 148m (155) Revenue and EBITDA-% – Lower usage both in PSTN and 155 mobile 150 146 148 139 – Lower interconnection, roaming and equipment sales revenues – Growth in ICT services • EBITDA € 50m (57), 34% of 37 % 34 % 36 % 34 % 33 % revenue (37) – Decrease in rev
Slide 11: Strategy execution
Strategy execution New services and new markets Strengthening market position in core markets Integration of One Elisa 11
Slide 12: Strategy execution – operational efficiency
Strategy execution – operational efficiency Productivity improvements in Q4 2009: • Improved base station construction process – Delivery time more that halved – Decrease in failure rate • New systematic change management process to improve network performance – Rate of successful network updates an
Slide 13: Growth in 3G data users continued
Growth in 3G data users continued Active 3G users Active GPRS users Number of active mobile data users in Elisa’s network, thousands 1044 993 * 914 937 Increased 3G coverage, 90% of population, 300 cities 843 790 789 740 703 701 668 672 627 636 595 569 526 523 490 496 425 398 374 326 282 249 198 153
Slide 14: Growth in user friendly self service channel
Growth in user friendly self service channel Own Elisa and Own Saunalahti • Corporate customers – More than 37,500 corporate – 71% of orders through this channel – Full automation rate of the orders is 43% • Consumer customers – 370,000 customers, growth in 2009 40,000 – Y-o-y order growth 115% 14
Slide 15: New features in IPTV services
New features in IPTV services • New cities: Joensuu and Jyväskylä • Now also available on Elisa’s cable-TV – Includes 100 Mb/s broadband • New content from Warner Bros – WarnerFilm movie channel first in Europe – WarnerTV channel first in Finland 15
Slide 16: Elisa Vahti – Home security service
Elisa Vahti – Home security service • Easy and affordable home security service • On-line home monitoring – Through Internet – Through mobile terminal • Comprehensive service package – Wireless cameras and sensors – Automatic recording to network – Alarm services 16 8.2.2010 Elisa Vahti /
Slide 17: New services for corporate customers
New services for corporate customers • Virtual desktop – Traditional desktop replaced by virtual desktop – Flexible, data protected and cost efficient tools easily and fast • Solution to secure product safety of frozen food – Collects temperature information collectively with wireless sensors to a s
Slide 18: Outlook for 2010
Outlook for 2010 • Economic environment creates still uncertainty – Unemployment rate is expected to increase – The main risks relate to the development of the Estonian economy and the corporate customer business • Competition remains challenging • Revenue at the same level as in 2009 • EBITDA at th
Slide 19: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO 19
Slide 20: Profitability in Q4 2009
Profitability in Q4 2009 EUR million Q4/09 Q4/08 Δ 2009 2008 Δ Revenue 365 372 -7 1430 1,485 -55 Other operating income 2 3 4 7 Operating expenses -246 -246 0 -951 -1 020 69 EBITDA 121 129 -8 484 472 12 EBITDA excluding one-offs 121 129 -8 484 478 6 EBITDA-% 33% 35% 34% 32% EBITDA-% excluding one-of
Slide 21: Revenue change y-o-y
Revenue change y-o-y EUR million -13 -25 2 1 485 -19 + Mobile +/- Cable TV - PSTN + ICT services - Estonia - Mobile - PSTN 1 430 - Broadband - Estonia 2008 Interconnection and Equipment sales Consumer Corporates 2009 roaming 21
Slide 22: Total expenses decreased in 2009
Total expenses decreased in 2009 • OPEX decreases Q4 Q1 Q2 Q3 Q4 EURm 08 09 09 09 09 – Equipment purchase costs Materials and – Interconnection and roaming 159 146 144 143 144 services – Efficiency programs Employee benefit 43 47 48 43 51 • OPEX increases expenses – Personnel increased in call-cente
Slide 23: CAPEX decreased by 7% in 2009
CAPEX decreased by 7% in 2009 • Total CAPEX EUR 171m (184) CAPEX, EURm 2 – CAPEX/Sales 12% (12%) • Q4 by segments 28 – Consumer EUR 33m (36) 28 – Corporate EUR 28m (28) 5 1 • Major CAPEX areas 17 % 19 17 % 16 17 – 3G network rollout 11 % 10 % 10 % – Corporate networks 36 33 – IT systems 18 19 21 – C
Slide 24: Strong Cash flow continued
Strong Cash flow continued EUR million Q4/09 Q4/08 Δ 2009 2008 Δ EBITDA 121 129 -8 484 472 12 Change in receivables 10 28 36 132 Change in inventories -7 3 -9 7 Change in payables 23 2 10 -56 Change in NWC 26 33 -7 37 83 -46 Financials (net) -1 -4 3 -30 -39 9 Taxes for the year -11 -11 -55 -50 Taxes
Slide 25: Recession affects Estonian business
Recession affects Estonian business • Revenue decreased – Customer billing – Termination fee and roaming revenue 39 % 36 % 36 % – Equipment sales 35 % 32 % • CAPEX halved in 2009 • Growth in mobile subscriptions – +20 400 y-o-y 354 358 – +3 800 q-o-q 338 338 346 EUR million Q409 Q4/08 2009 2008 Reve
Slide 26: Capital structure within target range
Capital structure within target range • Capital structure Balance sheet KPIs – Net debt / EBITDA 1.5 – Gearing 80%, Equity ratio 46% 1,8 1,6 1,7 • Target setting 1,5 1,5 – Net debt / EBITDA 1.5 – 2x – Equity ratio >35% • Focus on cash generation 812 854 719 – CAPEX control 773 729 – Net Working Capi
Slide 27: CDO portfolio guarantee
CDO portfolio guarantee • Elisa provided maximum USD 60m guarantee in 2007 (detailed description in the Annual Report 2008) • The risk of the guarantee being called increased further during 2009 – Possible further credit default events in the portfolio may result in partial or full demands being mad
Slide 28: Profit distribution proposal
Profit distribution proposal • EUR 0.92 per share 302 % – Total amount EUR 143.3m – Pro Forma 31.12. Net Debt/EBITDA 86 after payment 1.8 – Dividend yield 6% * 149 % – Payout ratio 81% 43 • Payment date 31.3.2010 110 % 321 158 88 % 81 % • Record date 23.3.2010 77 % 79 62 37 • Authorisations proposal
Slide 29: Annual Results 2009
"CS elisa Annual Results 2009 12 February 2010
Slide 30: Consolidated Cash flow statement
APPENDIX SLIDE Consolidated Cash flow statement EUR million Q4 2009 Q3 2009 Q2 2009 Q1 2009 Q4 2008 Q3 2008 Q2 2008 Q1 2008 Q4 2007 Cash flow from operating activities Profit before tax 56 70 56 53 70 67 38 52 65 Adjustments to profit before tax 64 60 60 61 57 59 67 56 63 Change in working capital 2
Slide 31: Financial situation
APPENDIX SLIDE Financial situation EUR Million 31 Dec 2009 30 Sep 2009 30 Jun 2009 31 Mar 2009 31 Dec 2008 Interest-bearing debt Bonds and notes 572 572 570 606 606 Commercial Paper 74 62 119 101 56 Loans from financial institutions 80 80 80 80 80 Financial leases 23 24 27 27 27 Committed credit lin