Slide 1: First Quarter Results 2010
"he elisa First Quarter Results 2010 23 April 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 • Q1 2010 highlights • Segment review – Consumer Customers – Corporate Customers • Execution of the strategy • Progress of new services • Outlook for 2010 3
Slide 4: Q1 2010 highlights
Q1 2010 highlights • YoY revenue growth – Consumer Customer business €+13m (+6%) – Corporate Customer business €-11m (-7%) • Good profitability and cash flow • Mobile subscription and usage growth continues • IPTV Elisa Viihde continues its success • Growth in 3G customer base continued 4
Slide 5: Q1 2010 financial highlights
Q1 2010 financial highlights Slight YoY growth in revenue • Revenue € 353m (351) – Growth in consumer mobile business 36 % 34 % 35 % – Decrease in traditional fixed business 33 % 33 % 33 % 33 % 30 % – Growth in online and ICT service 29 % business • EBITDA € 116m (115), 33% of revenue • CAPEX € 39m
Slide 6: Q1 2010 operational highlights: Mobile subscription growth continues
Q1 2010 operational highlights Mobile subscription growth continues • Mobile net adds 103,000 in Q1/10 – 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 2 695 2 773 – Estonia +5,400 in Q1/10 • Fixed broadband decrease slow
Slide 7: Keen but stable competition, growth in mobile usage
Q1 2010 operational highlights Keen but stable competition, growth in mobile usage • Growth in mobile usage – Outgoing minutes growth 8% YoY 15,6 % 15,4 % – SMS growth 6% YoY 14,7 % 14,5 % 14,7 % 14,1 % 14,0 % 13,3 % 12,0 % • Mobile churn 15.4% (14.0) – Slight increase, but still at normal level 1 6
Slide 8: Business Segments
Business Segments 8
Slide 9: Q1 2010 Consumer Customers
Q1 2010 Consumer Customers Strong YoY revenue growth • Revenue € 214m (202) 37 % 34 % – Growth in mobile customer billing and 33 % 33 % 33 % 32 % 32 % online services 31 % – Increase in equipment sales 27 % – Change in revenue allocation between segments €+2m – Decrease in fixed broadband 225 • EBIT
Slide 10: Q1 2010 Corporate Customers
Q1 2010 Corporate Customers Uncertainties in telco services, ICT services growing 39 % • Revenue € 139m (150) 37 % 36 % 34 % – Lower usage in traditional fixed 33 % 33 % 34 % 31 % – Decrease in mobile revenue 30 % – Change in revenue allocation between segments €-2m – Growth in ICT services 155 • EB
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: Determined improvement of productivity
Strategy execution Determined improvement of productivity Self-service and automatisation IT consolidation Sourcing and procurement Quality improvements 12
Slide 13: 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 1044 1051 993 937 914 843 790 789 740 703 701 709 668 672 627 636 595 569 526 523 490 496 425 398 374 326 282 249 198 153 173 112 72 19 Q1/06 Q2/06
Slide 14: New content in Elisa Viihde IPTV
New content in Elisa Viihde IPTV • Unique Formula 1 interactive experience coming to Elisa Viihde – Formula 1 fans can select how they wish to view the race from a range of exciting options – Rich-media and real time race information available • Finland's national public service broadcasting company
Slide 15: Increased openness in customer interaction
Increased openness in customer interaction • Real time information regarding mobile network available to Elisa and Saunalahti customers • Fault situation and maintenance work monitoring • First of its kind in Finland 15
Slide 16: Environmental friendly IT server centre
Environmental friendly IT server centre • New server centre in the city of Espoo • Heat recovery from the centre is used in district heating for Espoo • Internationally unique total energy solution 16
Slide 17: New corporate customer service concept
New corporate customer service concept • Advanced virtual service concept to facilitate improved interaction with corporate customers • Personnel familiar with customers' needs serve SME customers face to face through a video connection across different parts of Finland 17
Slide 18: Outlook for 2010
Outlook for 2010 • Economic environment still creates uncertainty – The main risks relate to the predictability of the Estonian economy and the corporate customer business development • Competition remains challenging • Revenue at the same level as in 2009 • EBITDA excluding one-offs at the same lev
Slide 19: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO 19
Slide 20: Slight growth in revenue, stable profitability
Slight growth in revenue, stable profitability EUR million Q1/10 Q1/09 Δ 2009 Revenue 353 351 2 1430 Other operating income 1 1 4 Operating expenses -238 -237 -1 -951 EBITDA 116 115 1 484 EBITDA-% 33% 33% 34% Depreciation and amortisation -54 -53 -216 EBIT 61 62 -1 267 EBIT-% 17% 18% 19% Profit befo
Slide 21: Guarantee expense provision
Guarantee expense provision • One-off provision of EUR 45 million – Booked in finance expenses – Relates to USD 60m guarantee given in 2007 – A tax asset of EUR 12m booked – Net negative effect on the 2010 result is EUR 33m – There is dispute with the arranger bank regarding guarantee obligations an
Slide 22: YoY revenue growth
YoY revenue growth 370 360 5 -8 2 3 350 + Mobile + ICT services + Online - Mobile 340 351 Services - PSTN 353 +/- Cable TV - Estonia - PSTN - Estonia - Broadband 330 Q1 2009 Interconnection and Equipment sales Consumer Corporates Q1 2010 roaming 22
Slide 23: Total expenses at same level as in 2010
Total expenses at same level as in 2010 • OPEX decreases EURm Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 – Equipment purchase costs Materials and 146 144 143 144 140 services – Productivity improvements – External services Employee 47 48 43 51 55 benefit expenses – Lower SAC Other operating 44 48 43 50 43 expens
Slide 24: CAPEX in line with guidance
CAPEX in line with guidance • Total CAPEX EUR 39m (34) 17 % 17 % 20 % – CAPEX/Sales 11% (10%) 15 % 11 % 11 % 2 11 % 11 % • Q1/10 by segments 10 % 10 % 10 % 10 % – Consumer EUR 24m (18) 28 5% – Corporate EUR 15m (16) 11 28 • Major CAPEX areas 1 5 1 0% – 3G network rollout 17 19 19 19 15 -5 % 16 17 –
Slide 25: Strong cash flow continued
Strong cash flow continued EUR million Q1/10 Q1/09 Δ 2009 EBITDA 116 115 1 484 Change in receivables 5 12 36 Change in inventories 3 2 -9 Change in payables -12 -10 10 Change in NWC -4 4 -8 37 Financials (net) -15 -15 -30 Taxes for the year -13 -17 -55 Taxes for the previous year -2 Taxes -13 -17 4
Slide 26: Recession effects on Estonian business
Recession effects on Estonian business • Revenue decreased 39 % 39 % – Customer billing 36 % 37 % 36 % 36 % 35 % – Termination fee and roaming revenue 32 % 31 % – Equipment sales • 294.200 mobile subscriptions – +25 800 y-o-y 26 – +5 400 q-o-q 24 25 23 21 21 21 21 20 EUR million Q1/10 Q1/09 2009 Rev
Slide 27: Capital structure in line with targets
Capital structure in line with targets • Capital structure 2,2 – Net debt / EBITDA 1.7 2,1 – Gearing 107%, Equity ratio 40% 1,8 1,7 1,7 1,7 1,6 • Target setting 1,5 1,5 – Net debt / EBITDA 1.5 – 2x – Equity ratio >35% • Focus on cash generation 955 898 891 – CAPEX control 812 854 773 729 719 817 – N
Slide 28: First Quarter Results 2010
"he elisa First Quarter Results 2010 23 April 2010
Slide 29: Consolidated Cash Flow Statement
APPENDIX SLIDE Consolidated Cash Flow Statement EUR million Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009 Q4 2008 Q3 2008 Q2 2008 Q1 2008 Cash flow from operating activities Profit before tax 10 56 70 56 53 70 67 38 52 Adjustments to profit before tax 106 64 60 60 61 57 59 67 56 Change in working capital
Slide 30: Financial situation
APPENDIX SLIDE Financial situation 31 Mar 31 Dec 30 Sep 30 Jun 31 Mar 31 Dec 30 Sep 30 Jun 31 Mar EUR Million 2010 2009 2009 2009 2009 2008 2008 2008 2008 Interest-bearing debt Bonds and notes 597 572 572 570 606 606 604 604 634 Commercial Papers 118 74 62 119 101 56 81 107 118 Loans from financial