Elisa Oyj Class A · OMXHEX:ELISA
Elisa Oyj Class A — Investor Day (2018)
25 slides from Elisa Oyj Class A's investor day presentation, 2018
Slide 1: Group overview
Group overview Veli-Matti Mattila CEO
Slide 2: Elisa's unique strategy generates profit and growth
1 Performance update 2 Profit and growth generation 3 Medium-term targets and CEO priorities Elisa’s unique strategy generates profit and growth
Slide 3: Our revenue growth is among the best in Europe
Performance update Our revenue growth is among the best in Europe EURm 1 900 CAGR +6.7% 1 750 1 600 1 450 1 300 1 150 CAGR -1.4% (Peer group1 average) 1 000 2016 2017 LTM 1) European telecom operators, Source Bloomberg LTM = Last twelve months, 10/2017-9/2018 3
Slide 4: Our EBITDA has continued to grow…
Performance update Our EBITDA has continued to grow… EURm CAGR +7.0% 650 37% 550 36% 450 35% 350 34% 250 33% 150 32% 2016 2017 LTM EBITDA (Comparable) EBITDA-% (Comparable) 4
Slide 5: …our dividend has increased…
Performance update …our dividend has increased… 2,5 2,11 Including one-offs CAGR +9.3% 2,0 1,94 1,66 1,86 1,65 1,50 1,5 1,40 1,0 CAGR +8,6% 0,5 0,0 2016 2017 LTM EPS (Comparable) Dividend per share paid during the year 5
Slide 6: …and four of our five medium-term targets are on track
Performance update …and four of our five medium-term targets are on track Parameter Target by end of 2019 Revenue growth Above industry1) average EBITDA margin Above 37% CAPEX-to-sales ≤12% Capital structure Net debt / EBITDA 1.5-2× Equity ratio >35% Performance by 3Q2018 = Below track = On track 1)
Slide 7: We operate in an attractive telecom market
Profit and growth generation We operate in an attractive telecom market Affordable communication services 5G-ready mobile society PPP index prices for communication services • More frequencies per capita than anywhere else 120% in Europe1) – 400 MHz of 3.5 GHz frequency (5G) auctioned 110% 100% EU28
Slide 8: Elisa's unique strategy generates profit and growth
Profit and growth generation Elisa’s unique strategy generates profit and growth Increase mobile and fixed service revenues Grow digital service businesses Improve efficiency and quality 8
Slide 9: We see growing demand for fast, reliable and high-quality connectivity…
Profit and growth generation We see growing demand for fast, reliable and high-quality connectivity… User’s virtuous cycle of connectivity Traffic growth1) demand 70% video Increasing Increasing DEMAND for SUPPLY of 11× digital services digital services Increasing Increasing user VALUE USE of digita
Slide 10: …and human impatience is also an important 'killer app'
Profit and growth generation …and human impatience is also an important ‘killer app’ driving the need for faster connections Cloud interactivity Peak bandwidth is key for the user Instant gratification experience (human impatience Immersive VR is the killer app) Virtual reality (consumer) 8K video (
Slide 11: Our speed-based value capture model works
Profit and growth generation Our speed-based value capture model works Share of mobile voice subscription types 60% 50% 40% Q316 30% Q317 Q318 20% 10% <1% 0% 2G/3G (<21 Mbps) 3G (21 Mbps) 4G (50 Mbps) 4G (100 Mbps) 4G (200-300 Mbps) 5G-ready (600 Mbps) List prices 1 Mbps 10 Mbps 21 Mbps 50 Mbps 100
Slide 12: We are best positioned to monetise 5G with existing cell sites and frequencies…
Profit and growth generation We are best positioned to monetise 5G with existing cell sites and frequencies… High Excellent World’s best capacity potential to handle network frequency the increasing data demand density assets Elisa-FI Telenor-NO Macro cell sites Spectrum holdings2) Telia-FI per mill
Slide 13: …and have evident further potential in fixed broadband speed upgrades
Profit and growth generation …and have evident further potential in fixed broadband speed upgrades Share of consumer fixed broadband connections Potential to increase fixed network business 60% • 1 Gbit/s upgrade availability close to 50% 750,000 households 40% • Fibre build-up is based on demand 30
Slide 14: We are scaling digital service opportunities in domestic markets…
Profit and growth generation We are scaling digital service opportunities in domestic markets… M&A opportunities • Complementary offering and capabilities • Capacity to further scale Entertaining video services Digital services revenue • Over 10% organic breakdown, LTM CAGR 2016-LTM €290m 5-10% €1
Slide 15: … and pursuing high-growth digital service opportunities in global markets
Profit and growth generation … and pursuing high-growth digital service opportunities in global markets leveraging our proven capabilities M&A opportunities €20m Other • Customer access €30m International digital services • Complementary offering • Accelerating high-growth opportunities • Delive
Slide 16: Our systematic way to improve efficiency and quality continues to have significant potential
Profit and growth generation Our systematic way to improve efficiency and quality continues to have significant potential Engaged employees Satisfied customers Unique financial performance Positive impact on society 16
Slide 17: Highly engaged personnel and a strong learning culture drive continuous development…
Profit and growth generation Highly engaged personnel and a strong learning culture drive continuous development… Engaged personnel “Elisa’s leadership Elisa empowerment index (0-5) practices of coaching 4,5 and learning have 4,3 produced excellent results both in business 4,1 and within Elisians” 3
Slide 18: …increasing customer satisfaction and a positive impact on society
Profit and growth generation …increasing customer satisfaction and a positive impact on society Increasing customer satisfaction Reputation and contribution to society Elisa NPS • Only operator in top 10 in Finland’s 25,0 most reputable companies listing1) • Perceived as most sustainable teleoperato
Slide 19: We have developed industry-leading automation capabilities and software innovations…
Profit and growth generation We have developed industry-leading automation capabilities and software innovations… Capabilities in network management process Excellent results Customer needs-based analytics drive network increase in mobile data CAPEX investments 16× traffic in six years network fault
Slide 20: …and have successfully applied automation and machine learning
Profit and growth generation …and have successfully applied automation and machine learning in several other areas Fully automated fault management Preventive measures have reduced network faults by 70 per cent Robotic process automation 100% (RPA) reduces: • Manual work in billing and order handlin
Slide 21: External assessment certifies Elisa's unique systematic approach
Profit and growth generation External assessment certifies Elisa’s unique systematic approach to generate profit and growth Leadership 80 Business Results 70 Strategy 60 50 40 30 Society Results 20 People Elisa 10 D1, first decile points 0 Median D9, ninth decile points People Results Partnership &
Slide 22: We are set to achieve our updated medium-term targets
Mid-term targets We are set to achieve our updated medium-term targets Parameter Target by end of 2021 Revenue growth Above industry1) average EBITDA margin Above 37% CAPEX-to-sales ≤12% Capital structure Net debt / EBITDA 1.5-2× Equity ratio >35% 1) European telecom operators 22
Slide 23: CEO priorities
CEO priorities Increase mobile and fixed service revenues Grow digital service businesses Improve efficiency and quality 23
Slide 24: Thank you
elise CMD2018 THANK YOU.
Slide 25: Forward-looking statements
Statements made in this document relating to the future, including future performance and other trend projections, are forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will occur in