Slide 1: 2010 Second Quarter Results
> 2010 Second Quarter Results q a * — elisa Q2 16 July 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 • Q2 2010 highlights • Segment review – Consumer Customers – Corporate Customers • Execution of the strategy • Progress of new services • Outlook for 2010 3
Slide 4: Q2 2010 highlights
Q2 2010 highlights • YoY revenue growth continued – Consumer Customer business €+8m (+4%) – Corporate Customer business €+1m (+1%) • Good profitability and cash flow • Mobile subscription and usage growth continues • IPTV Elisa Viihde continues its success • Corporate Customer business improved • IC
Slide 5: YoY growth in revenue continued – H1 CAPEX according to target
Q2 2010 financial highlights YoY growth in revenue continued • Revenue € 364m (355) – Growth in mobile services 36 % 34 % 35 % – Decrease in fixed business 33 % 33 % 33 % 33 % 33 % – Growth in online and ICT service 29 % business • EBITDA € 119m (116), 33% of revenue • CAPEX € 47m (36), 13% of reven
Slide 6: Mobile subscription growth continued
Q2 2010 operational highlights Mobile subscription growth continued • Mobile net adds 118,000 in Q2/10 3 550 – Growth in both customer segments 3 329 3 432 3 218 3 153 – Growth in mobile broadband, postpaid 2 880 3 026 2 830 and prepaid 2 773 – Estonia +14,300 in Q2/10 • Fixed broadband at the previ
Slide 7: Keen but stable competition, growth in mobile usage
Q2 2010 operational highlights Keen but stable competition, growth in mobile usage • Growth in mobile usage – Outgoing minutes growth 8% YoY – SMS at the last year’s level • Mobile churn 15.9% (14.7) 15,4 % 15,9 % 14,7 % 14,5 % 14,7 % 14,1 % 14,0 % – Slightly above normal range 13,3 % 1 719 12,0 % 1
Slide 8: Business Segments
Business Segments 8
Slide 9: Q2 2010 Consumer Customers
Q2 2010 Consumer Customers YoY revenue growth continued • Revenue € 217m (209) 37 % 34 % – Growth in mobile customer billing and 33 % 33 % 33 % 32 % 32 % 31 % online services – Decrease in fixed business 27 % • EBITDA € 68m (68), 31% of revenue – Revenue growth – Increase in sales costs and new 225
Slide 10: Q2 2010 Corporate Customers
Q2 2010 Corporate Customers Corporate Customer business improved 39 % • Revenue € 147m (146) 37 % 36 % 34 % 34 % – Increase in mobile revenue 33 % 33 % 34 % 31 % – Growth in ICT services – Decrease in fixed business • EBITDA € 51m (48), 34% of revenue – Revenue increase 155 153 – Decrease in OPEX 14
Slide 11: Strategy execution
Strategy execution Uudet palvelut ja New uudetservices and markkinat new markets Markkina-aseman Strengtheningpäämarkkinoilla vahvistaminen market position in core markets Yhden Elisan integrointi Integration of One Elisa 11
Slide 12: Growth in 3G data users continued
Strategy execution Growth in 3G data users continued Active 3G users Active GPRS users Number of active mobile data users in Elisa’s network, thousands 1221 1044 1051 993 914 937 843 790 789 807 740 703 701 709 668 672 627 636 595 569 526 523 490 496 425 398 374 326 282 249 173 198 153 112 72 19 Q1/
Slide 13: New markets for successful Elisa Viihde IPTV
New markets for successful Elisa Viihde IPTV • Expanded content by top sport events in HD quality – World Championship Ice Hockey – FIFA World Cup • New movie releases • Offering expanded to 12 new towns 13
Slide 14: New services: Elisa Audio book
New services: Elisa Audio book • Streaming from net or downloading to PC, mobile terminal or mp3 player • Personal electronic bookshelf • Wide variety of books – Service cooperation with publishers – Selection includes all audio books published in Finnish – Books available also in other languages 14
Slide 15: Elisa acquired a leading Nordic video conference company
Elisa acquired a leading Nordic video conference company • Elisa acquired 68.8% of Videra Oy, market leader of video conferencing in Finland • Revenue approx. EUR 14m • Acquisition price maximum EUR 13m • Personnel 43 • Strong position in corporate and public sectors • Strengthens Elisa’s ICT busine
Slide 16: Elisa has widest 3G coverage
Elisa has widest 3G coverage • European Communications Engineering research: – Elisa has widest coverage – Best signal strengths – Highest data speeds – Lowest interference levels • Strong 3G network expansion continues – Almost 100 new areas • First 4G network in Helsinki for pre-commercial use 16
Slide 17: Outlook for 2010
Outlook for 2010 • Positive trends of the general economy have continued favourably – Bottom of recession seems behind • Competition remains challenging • Revenue at the same level as in 2009 • EBITDA excluding one-offs at the same level as in 2009 • CAPEX 10 – 12 per cent of revenue 17
Slide 18: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO 18
Slide 19: Growth in revenue and EBITDA
Growth in revenue and EBITDA EUR million Q2/10 Q2/09 Δ H1/10 H1/09 Δ 2009 Revenue 364 355 9 717 706 11 1430 Other operating income 1 1 2 2 4 Operating expenses -247 -240 -485 -477 -951 EBITDA 119 116 3 234 231 3 484 EBITDA-% 33 % 33% 33 % 33% 34% Depreciation and amortisation -54 -53 -108 -106 -216
Slide 20: YoY revenue growth
YoY revenue growth 364 2 1 4 355 2 + Mobile + Online Services +/- Cable TV + Mobile - PSTN + ICT services - Estonia + Estonia - Broadband - PSTN Q2/09 Interconnection Equipment sales Consumer Business Q2/10 and roaming customers Customers 20
Slide 21: Market activities affected OPEX
Market activities affected OPEX • OPEX decreases EURm Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 – Productivity improvements Materials and 144 143 144 140 148 – Network operating costs services – Offices and other facilities Employee benefit 48 43 51 55 52 expenses Other operating • OPEX increases expenses 48 43
Slide 22: H1 CAPEX in line with guidance
H1 CAPEX in line with guidance • Total CAPEX in Q2 EUR 47m (36) 17 % 17 % 20 % – CAPEX/Sales 13% (10%) 13 % 15 % 11 % 11 % 2 11 % 11 % • Total CAPEX in H1 EUR 85m (70) 10 % 10 % 10 % – CAPEX/Sales 12% (10%) 11 28 5% • Q2 2010 by segments 11 28 – Consumer EUR 27m (19) 5 1 20 0% – Corporate EUR 20m (1
Slide 23: Solid cash flow continued
Solid cash flow continued EUR million Q2/10 Q2/09 Δ H1/10 H1/09 Δ 2009 EBITDA 119 116 3 234 231 3 484 Change in receivables 16 39 21 51 36 Change in inventories -2 -3 1 -1 -9 Change in payables 6 -6 -6 -16 10 Change in NWC 20 30 -10 16 34 -18 37 Financials (net) 0 -2 2 -15 -17 2 -30 Taxes for the ye
Slide 24: Estonia revenue at the same level
Estonia revenue at the same level • YoY revenue at the same level 39 % 39 % • Market activities affected EBITDA 37 % 36 % 36 % 35 % • 377,800 mobile subscriptions 32 % 31 % – + 31,900 y-o-y 28 % – + 14,300 q-o-q 26 25 23 21 21 21 21 21 20 EUR million Q2/10 Q2/09 2009 Revenue 21 21 84 EBITDA 6 8 29 E
Slide 25: Capital structure in line with targets
Capital structure in line with targets • Capital structure – Net debt / EBITDA 1.5 2,1 – Gearing 93%, Equity ratio 42% 1,8 1,7 1,7 1,7 1,6 1,5 1,5 1,5 • Target setting – Net debt / EBITDA 1.5 – 2x – Equity ratio >35% 898 891 854 812 773 817 752 729 719 • Cash and undrawn committed facilities 40 % 41
Slide 26: Distribution capability maintained
Distribution capability maintained • Capital structure targets unchanged – Net debt / EBITDA 1.5 – 2x • Cash flow generation in focus – Net debt / EBITDA and gearing are expected to decrease • Authorisation from the shareholders – Special dividend up to EUR 100m – Share buy-backs up to 10m shares 26
Slide 27: 2010 Second Quarter Results
> 2010 Second Quarter Results q a * — elisa Q2 16 July 2010
Slide 28: Consolidated cash flow statement
APPENDIX SLIDE Consolidated cash flow statement EUR million Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009 Q4 2008 Q3 2008 Q2 2008 Cash flow from operating activities Profit before tax 53 10 56 70 56 53 70 67 38 Adjustments to profit before tax 67 106 64 60 60 61 57 59 67 Change in working capital
Slide 29: Financial situation
APPENDIX SLIDE Financial situation EUR Million 30 Jun 2010 31 Mar 2010 31 Dec 2009 30 Sep 2009 30 Jun 2009 31 Mar 2009 31 Dec 2008 30 Sep 2008 30 Jun 2008 Interest-bearing debt Bonds and notes 598 597 572 572 570 606 606 604 604 Commercial Papers 110 118 74 62 119 101 56 81 107 Loans from financial