Slide 1: Annual Results 2012
Slide 2: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 3: CEO's review
CEO’s review • 2012 overview • Q4 2012 financial and operational highlights • Segment review • Strategy execution • Outlook for 2013 3
Slide 4: 2012 highlights
2012 highlights • Revenue growth again exceeded the industry average • Good growth in Estonia • Profitability maintained, EPS grew by 3% • 2012 dividend payment € 1.30, yield 8%, among the best in the industry • Strong growth in New Services continued • Mobile and fixed broadband subscriptions devel
Slide 5: 2012 financial highlights
2012 financial highlights Result according to guidance Change in 2012 2012 Revenue €1,553m +1.5% EBITDA €501m -1.0% Earnings per share €1.33 +3.2% CAPEX €193m -2.0% Cash flow €155m -25.4% Net debt €839m +6.4% 5
Slide 6: 2012 operational highlights
2012 operational highlights Use of services increased Change in 2012 2012 Mobile subscriptions 4,446,200 +288,400 Fixed broadband subscriptions 505,100 +18,700 Mobile ARPU 1) €17.5 €-1.6 Mobile churn 2) 16.5% +3.4% unit Mobile usage, minutes 3) 7,103m +52m SMS, units 2,230m +208m 1) Revenue / SIM 2)
Slide 7: Q4 2012 highlights
Q4 2012 highlights • Good profitability level • Mobile subscription base continued to increase • Slight decrease in mobile usage • Strong growth in smartphone market • Elisa Viihde IPTV contributed to fixed broadband growth • Elisa to acquire fixed network operator PPO’s telecom and IT businesses •
Slide 8: Q4 2012 financial highlights
Q4 2012 financial highlights Campaigning increased at year-end • Revenue € 396m (401) • EBITDA € 124m (133), 31% of 36 % revenue (33) 35 % 33 % 32 % 32 % 32 % 31 % 31 % 31 % • EBIT € 74m (79) • EPS € 0.32 (0.36) • CAPEX € 50m (58), 13% of revenue 401 396 • 2012 CAPEX 12% of revenue 389 387 383 382 3
Slide 9: Q4 2012 operational highlights: subscription growth continued
Q4 2012 operational highlights Subscription growth continued • 19,500 new mobile subscriptions 4427 4446 • Growth in corporate segment, slight decrease in 4337 4158 4244 consumer segment 3991 4094 3898 • Growth in voice and mobile broadband subs 3797 • Estonia +13,500 subscriptions • Fixed broadband
Slide 10: Q4 2012 operational highlights: campaigns impacted churn
Q4 2012 operational highlights Campaigns impacted churn • Strong growth in mobile data 1 790 1 804 1 797 1 768 • Outgoing minutes 1.7bn, slight decrease 1 749 1 754 1 755 1 747 1 739 • Data YoY growth over 50% • 564m SMS, YoY growth 6% • Churn* 19.3% (13.4) 15,0 % 14,3 % 19,3 % 17,2 % 13,4 % 12,7 %
Slide 11: Business Segments
Business Segments
Slide 12: Q4 2012 Consumer Customers
Q4 2012 Consumer Customers Growth in new services and smartphones • Revenue € 247m (245) 35 % • Smartphones and new services growth continued 34 % 33 % • Estonian revenue increased 32 % 32 % 31 % 31 % 31 % 30 % • Decrease in traditional fixed network business, mobile usage and interconnection revenu
Slide 13: Q4 2012 Corporate Customers
Q4 2012 Corporate Customers ICT business is growing • Revenue € 148m (156) 37 % 36 % • Growth in ICT services 34 % 34 % 33 % • Decrease in mobile and fixed businesses, as well as in 32 % 32 % 32 % 32 % interconnection revenue • EBITDA € 47m (52), 32% of revenue (33) • Decrease in revenue 154 156 150
Slide 14: Strategy execution
Strategy execution New services and new markets Strengthening market position in core markets Integration of One Elisa 14
Slide 15: Smartphone market growth continues
Smartphone market growth continues Penetrations in Elisa’s network in Finland • Almost one in three customers uses 52,5 % 50,0 % new a type of smartphone 46,0 % 43,5 % • Smartphones top the list of most 39,5 % sold phones in January 35,5 % 1. Nokia Lumia 800 32,0 % 30,0 % 28,0 % 2. Apple iPhone 5 27
Slide 16: New Elisa services
New Elisa services • Elisa Vahti Live • Real time video to smartphone or tablet • Elisa Wallet • “Mobile enabled” payment, separate online credit cards, internet and mobile applications, as well as money transfers between users • Elisa eSali data center • Flexible server capacity from the virtual da
Slide 17: New way to enjoy Elisa eBook
New way to enjoy Elisa eBook • Elisa has developed a new way to experience children’s books • Eero-combines illustrations with voice over narration • The book can be downloaded from Elisa eBook application to tablets (Android or iPad) or smartphones (Android, iPhone or Windows Phone 7) 17
Slide 18: Ranked #1 in the Nordic climate index
Ranked #1 in the Nordic climate index • Elisa awarded first place in the Carbon Disclosure Project (CDP) climate index of the telecom industry • Companies were ranked on the basis of climate reporting • Relevant emission reduction factors are • Increase in mobile working solutions • Growth in demand
Slide 19: High-speed network with wide coverage
High-speed network with wide coverage • Increase in nationwide network capacity and speed • 3G coverage above 95% of population, more than one million active data users • 4G speeds already in over 200 municipalities • LTE speeds in 42 cities • Good demand for 4G speeds in 2012 19
Slide 20: New international call rates
New international call rates • New roaming pricing model for international calls • For corporate customers: competitive and transparent pricing in Europe, Russia, China and the United States • In cooperation with Vodafone 20
Slide 21: Outlook for 2013
Outlook for 2013 • Macroeconomic environment still weak in 2013 • Weakness is expected to be stronger in first half of the year • Competition remains challenging • Revenue and EBITDA excluding one-offs at the same level as last year • First half of 2013 is expected to be slightly below first half of
Slide 22: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 23: FY according to guidance, in Q4 more campaigns and macro effect
FY 12 according to guidance, in Q4 more campaigns and macro effect EUR million Q4/12 Q4/11 Δ 2) Δ% 2012 2011 Δ 2) Δ% Revenue 396 401 -5 -1% 1 553 1 530 23 2% Other operating income 1 2 5 6 Operating expenses -273 -270 -1 057 -1 030 EBITDA 124 133 -9 -7% 501 506 -5 -1% EBITDA-% 31% 33% 32% 33% Deprec
Slide 24: Revenue change
Revenue change Change Q4/12 vs Q4/11, EURm -4 401 16 -10 -6 + Online services 396 + Fixed broadband + Estonia + Estonia +/- ICT services + Smartphones +/- Cable TV - MTR reduction - Mobile - Mobile - PSTN - PSTN Q4/11 Interconnection Equipmment Consumer Corporate Q4/12 and roaming sales Customers Cu
Slide 25: Equipment sales increased OPEX
Equipment sales increased OPEX Q4 Q1 Q2 Q3 Q4 • OPEX decreases in Q4 MEUR 11 12 12 12 12 • Interconnection and roaming Materials and 170 158 164 163 171 • Productivity improvements services • e.g. outsourced services, network Employee management 59 61 61 53 62 benefit expenses Other operating • OPEX
Slide 26: CAPEX/Sales in line with guidance
CAPEX/Sales in line with guidance • Q4 CAPEX EUR 50m (58) 20% 15% 14% 13% 13% 13% • CAPEX/Sales 13% (14) 12% 12% 15% 20 11% 11% • Consumer EUR 29m (37) 10% • Corporate EUR 21m (21) 5% 21 • FY CAPEX EUR 193m (190) 1) 25 19 21 21 21 0% 17 • CAPEX/Sales 12% (12) 18 18 -5% • Major CAPEX areas -10% 37 31
Slide 27: Cash flow affected by NWC change
Cash flow affected by NWC change EUR million Q4/12 Q4/11 Δ1) 2012 2011 Δ1) EBITDA 124 133 -9 501 506 -5 Change in receivables -7 -10 3 -14 -19 5 Change in inventories -5 5 -10 -19 -2 -18 Change in payables -6 10 -16 -16 -11 -6 Change in NWC -17 4 -22 -50 -31 -19 Financials (net) -7 -1 -6 -30 -31 1 T
Slide 28: Growth in Estonia continued
Growth in Estonia continued • Revenue EUR 29m (27) 30 % 30 % • Revenue growth 12% 27 % 27 % 27 % Growth in mobile subs: +66,400 YoY, +13,500 QoQ 26 % • 25 % 26% • Mobile broadband growing 23 % • EBITDA EUR 8m (7) • Revenue growth 30 29 27 28 26 26 23 25 21 • CAPEX EUR 5m (5) • 3G Coverage Q4/10 Q1/1
Slide 29: Fixed network operator PPO acquisition
Fixed network operator PPO acquisition • Acquisition of PPO's telecom EUR million Elisa Acquisition 1) and IT businesses 2012 2011 Consumer 962 40 • Published on 20 December 2012 Corporate 591 60 • Including 67% of Telekarelia Oy and 46% Kymen Puhelin Oy shares Revenue total 1 553 100 EBITDA 501 22
Slide 30: Liquidity position remains good
Liquidity position remains good Bond and bank loan maturities • Cash and undrawn committed facilities EUR 340m (334) • Revolving Credit Facilities EUR 300m • Fully undrawn 4Q/12 130 170 • Commercial Paper Program • EUR 96m in use 10 300 • Solid credit ratings since 2003 • S&P BBB 162 • Moody’s Baa2
Slide 31: Capital structure in line with targets
Capital structure in line with targets • Capital structure • Net debt / EBITDA 1.7 • Gearing 98%, Equity ratio 43% 1,8 1,7 1,7 1,7 1,6 1,6 1,6 1,5 1,5 • Target setting • Net debt / EBITDA 1.5 – 2x • Equity ratio > 35% 845 793 788 909 874 776 839 752 754 43% 38% 40% 43% 42% 45% 38% 41% 43% Q4/10 Q1/1
Slide 32: Competitive remuneration continues
Competitive remuneration continues 302% • EUR € 1.30 per share proposal 86 • Total amount € 204m 149% • Pro Forma Net Debt/EBITDA 2.1 135% 43 126% • ex-dividend date 26 March 2013 110% 101%98% 88% 77% 402 • Payment date 9 April 2013 79 285 39% Dividend yield 7.8% 1) 221 202 203 204 • 123 116 156 • P
Slide 33: Appendix
Slide 34: Consolidated cash flow statement
APPENDIX SLIDE Consolidated cash flow statement EUR million Q4 2012 Q3 2012 Q2 2012 Q1 2012 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Cash flow from operating activities Profit before tax 64 78 66 61 72 74 61 58 66 Adjustments to profit before tax 58 54 55 59 58 61 61 59 56 Change in working capital -
Slide 35: Financial situation
APPENDIX SLIDE Financial situation EUR million 31 Dec 12 30 Sep 12 30 Jun 12 31 Mar 12 31 Dec 11 30 Sep 11 30 Jun 11 31 Mar 11 31 Dec 10 Interest-bearing debt Bonds and notes 525 375 375 375 375 375 600 600 599 Commercial Papers 96 170 198 184 189 160 160 120 102 Loans from financial institutions 22