Slide 1: Annual Results 2014
Slide 2: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 3: CEO's review
CEO’s review • 2014 overview • Q4 2014 financial and operational highlights • Segment review • Strategy execution • Outlook and guidance for 2015 3
Slide 4: 2014 highlights
2014 highlights • Best ever result • Revenue was at the previous year’s level • Comparable EBITDA grew by 2%, EPS by 6%* • Dividend payment in 2014 was €1.30, total €207m • Mobile subscription base increased, fixed broadband slightly down • Strong mobile data growth continued, boosted by 4G LTE, dat
Slide 5: 2014 financial highlights
2014 financial highlights Profitability improved Change in 2014 2014 Revenue €1,535m -0.8% EBITDA €520m +2.3% EBITDA-% 33.8% +1% unit Earnings per share €1.41 +5.9% CAPEX €191m -5.1% Cash flow €224m +26.3% Net debt €1,001m +3.1% EBITDA and EPS excluding one-offs, CAPEX excluding LTE licences and inv
Slide 6: 2014 operational highlights
2014 operational highlights Growth in mobile data and subscriptions Change in 2014 2014 Mobile subscriptions 4,723,400 +32,800 Fixed broadband subscriptions 557,400 -8,300 Cable TV subscriptions 327,300 +14,700 Mobile ARPU 1) €15.3 €0 Mobile churn 16.6% -1.7% unit Mobile usage, minutes 2) 6,560m -27
Slide 7: Q4 2014 highlights
Q4 2014 highlights • Revenue decreased by approx. 4%, mobile service revenue grew by 2% • EBITDA decreased to €125m (134) • Extra expenses in Q4 • Mobile postpaid subscription base increased in spite of keen competition, prepaid base decreased • Weak macro environment impacting corporate customer bu
Slide 8: Q4 2014 financial highlights
Q4 2014 financial highlights Extra expenses affected result • Revenue €386m (401) 37% 35% • EBITDA €125m (134*), 32% of revenue 33% 33% 32% 31% 31% (33*) 30% 30% • Extra expenses €6m in Q4 • EPS €0.31 (0.37*) 401 396 395 390 • CAPEX €47m (57**), 12% of revenue (14) 382 384 384 386 361 • Net debt €1,
Slide 9: Q4 2014 operational highlights: Decrease in mobile prepaid
Q4 2014 operational highlights Decrease in mobile prepaid 4713 4691 4695 4706 4750 4723 4641 4636 4663 • Mobile subs decreased by 26,600 in Q4 • Prepaid base decreased by 32,400, postpaid base increased by 5,800 • Growth in Corporate segment • Estonia +2,900 subscriptions • Fixed broadband subscript
Slide 10: Q4 2014 operational highlights: Growth in data, churn slightly down
Q4 2014 operational highlights Growth in data, churn slightly down 45,2 • Mobile data YoY growth 90% • 45.2bn megabytes (23.7) 36,0 30,5 • Outgoing minutes 1.6bn, slight decrease 27,3 19,3 %20,0 % 23,7 17,7 %18,0 %17,6 % 16,6 % 20,2 17,2 17,2 % 16,9 % • 546m SMS, slight decrease 14,6 16,6 15,7 % • C
Slide 11: Business Segments
Business Segments NK
Slide 12: Q4 2014 Consumer Customers
Q4 2014 Consumer Customers Growth in EBITDA and profitability 37% • Revenue €239m (244) 34% 34% 33% 33% • Growth in mobile services and equipment sales 31% 31% 30% 29% • Decrease in traditional fixed network, divestments and interconnection revenue 247 247 244 242 • EBITDA €81m (79*), 34% of revenue
Slide 13: Q4 2014 Corporate Customers
Q4 2014 Corporate Customers Weak macro environment affected result 37% 36% • Revenue €146m (157) 33% 33% 32% 32% 32% • Weak general economy 31% 30% • Decrease in traditional fixed network, interconnection and roaming revenue, visual communication revenue and divestments of non-core business • Growth
Slide 14: Strategy execution
Strategy execution Build value on data Accelerate new services businesses Improve performance with customer intimacy and operational excellence 14
Slide 15: Strong smartphone base growth continues
Strong smartphone base growth continues Penetration in Elisa’s network in Finland • 60% of customers use smartphones 60% 61% 62% 63% 60% 58% 56% 57% • 40% of smartphones are LTE-capable 55% 54% 54% 52% 51% 48% • 47% of voice subs* are data bundles 40% • Most sold phones in December 34% 38% 31% 1. Ap
Slide 16: Significant growth in Elisa Viihde IPTV and Elisa Kirja e-book services in 2014
Significant growth in Elisa Viihde IPTV and Elisa Kirja e-book services in 2014 • Elisa Viihde IPTV’s video rental and programme library watching grew by 75% • Elisa Viihde is now also available for tablets and smartphones without fixed broadband • Mobile viewing increased 2.5 times • Elisa Kirja e-
Slide 17: Continuously developing new services, highlights from Q4
Continuously developing new services, highlights from Q4 • SquareTrade additional protection plan for smartphones and tablets • Quick replacement for broken mobile device • NFC payment technology to SIM card • For Elisa Lompakko wallet service – first in Finland • Elisa Etämittaus remote health meas
Slide 18: New technologies and sustainable services for our customers
New technologies and sustainable services for our customers • Elisa first in Europe to test two new coverage-enhancing technologies • Significant improvement of service quality at large public events. Enables excellent broadcast speeds over 4G LTE network. • A new portable mini-station to improve co
Slide 19: Outlook and guidance for 2015
Outlook and guidance for 2015 • Macroeconomic environment still weak in 2015 • Competition remains challenging • Revenue at the previous year’s level • EBITDA excluding one-offs at the previous year’s level • CAPEX maximum 12% of revenue 19
Slide 20: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 21: Best ever FY result, Q4 includes extra expenses
Best ever FY result, Q4 includes extra expenses € million Q4/14 Q4/13 Δ 1) Δ% 2014 2013 Δ 1) Δ% Revenue 386 401 -16 -4 1,535 1,547 -12 -1 Other operating income 2 2 8 4 Operating expenses -263 -282 -1,024 -1,061 EBITDA 125 122 3 3 520 491 29 6 EBITDA-% 32 30 34 32 EBITDA excl. one-offs 125 134 -9 -7
Slide 22: Revenue change, €m
Revenue change, €m 401 -8 6 -2 -11 386 - MTR reduction + Estonia + IT services + Mobile + Mobile + Fixed broadband +/- Estonia +/- Online services - PSTN +/- Cable TV - Visual Com - PSTN - Divestments Q4/13 Interconnection Equipment sales Consumer Corporate Q4/14 and roaming Customers Customers 1 54
Slide 23: Total expenses decreasing despite extra costs in Q4
Total expenses decreasing despite extra costs in Q4 Q4 Q1 Q2 Q3 Q4 • OPEX decreases in Q4/14 €m 13 14 14 14 14 • Productivity improvements and synergies Materials and 161 150 153 149 154 services • Interconnection and roaming Employee • OPEX increases in Q4/14 benefit 78 65 63 54 65 expenses 1) • Co
Slide 24: CAPEX in line with guidance
CAPEX in line with guidance 20% • Q4 CAPEX €47m (90, 57 excl. 13% 13% 13% 14% 13% 14% 15% licence) 12% 11% 12% 10% • Consumer €27m (48, 32 excl. licence) • Corporate €20m (42, 25 excl. licence) 5% 39 0% 103 • FY 2014 CAPEX €191m (240, 202 excl. licenses) 33 -5% 2 28 • CAPEX / sales 12% of revenue 6
Slide 25: Clear improvement in cash flow
Clear improvement in cash flow € million Q4/14 Q4/13 Δ 1) Δ% 2014 2013 Δ 1) Δ% EBITDA 125 122 3 520 491 29 Change in receivables 9 -17 25 -5 -13 9 Change in inventories -4 1 -4 -2 6 -8 Change in payables 4 12 -8 -14 2 -16 Change in NWC 8 -4 13 -20 -5 -16 Financials (net) -9 -9 0 -24 -25 0 Taxes for
Slide 26: Stable revenue and EBITDA in Estonia
Stable revenue and EBITDA in Estonia • Revenue €24m (25) 26% 29% 28% • Decrease in MTRs 23% 27% 27% 26% 25% 25% • Growth in mobile data • EBITDA €6m (7) • CAPEX €4m (3) • 4G LTE 29 25 25 25 • Change in mobile subs: 5,900 QoQ 21 24 22 24 24 Estonian MTRs 1 Jul 2013 1 Jul 2014 All operators, euro cent
Slide 27: Solid liquidity position
Solid liquidity position Bond and bank loan maturities 31 Dec 2014 • Cash and undrawn committed facilities €341m (438) 130 • Revolving Credit Facilities fully undrawn • Commercial paper programme • €210m in use as of 31 December 2014 170 300 300 • Solid credit ratings since 2003 131 59 • S&P BBB Pos
Slide 28: Return ratios improved
Return ratios improved 2,1 2,1 2,0 2,0 2,0 • Capital Structure 1,7 1,7 1,8 1,9 • Net debt / EBITDA 1.9x • Gearing 114% • Equity ratio 39.4% 1 042 995 971 1 075 1 043 1 001 839 933 807 42% 36% 35% 37% 41% 34% 37% 39% 33% • Target setting Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 • Net deb
Slide 29: Competitive remuneration continues
Competitive remuneration continues 149% 135% 126% • €1.32 per share dividend proposal 101% 104% 98% 94% • Total amount €211m 88% • Ex-dividend date 2 April 2015 • Payment 8 April 2015 1,80 1,42 1,30 1,30 1,30 1,30 1,32 • Dividend yield 5.8% 1) 1,00 • Pay-out ratio 94% 2008 2009 2010 2011 2012 2013 2
Slide 30: Download the Elisa IR App
Download the Elisa IR App Contacts: Mr. Vesa Sahivirta vesa.sahivirta@elisa.fi +358 102 623 036
Slide 31: Consolidated cash flow statement
APPENDIX SLIDE Consolidated cash flow statement EUR million Q4 2014 Q3 2014 Q2 2014 Q1 2014 Q4 2013 Q3 2013 Q2 2013 Q1 2013 Q4 2012 Cash flow from operating activities Profit before tax 63 83 67 64 60 78 63 53 64 Adjustments to profit before tax 59 57 57 56 59 60 54 55 58 Change in working capital 8
Slide 32: Financial situation
APPENDIX SLIDE Financial situation € million 31 Dec 14 30 Sep 14 30 Jun 14 31 Mar 14 31 Dec 13 30 Sep 13 30 Jun 13 31 Mar 13 31 Dec 12 Interest-bearing debt Bonds and notes 591 590 590 589 750 750 451 450 525 Commercial paper 210 200 217 152 101 192 204 179 96 Loans from financial institutions 211 2