Slide 1: 2010 Third Quarter Results
elisa @) 3 2010 Third Quarter Results 22 October
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 • Q3 2010 highlights • Segment review – Consumer Customers – Corporate Customers • Execution of the strategy • Progress of new services • Outlook for 2010 3
Slide 4: Q3 2010 highlights
Q3 2010 highlights • YoY revenue growth continued • Good profitability and cash flow • Mobile subscription and usage growth continues • Voddler to strengthen IPTV Elisa Viihde offering • Focus on the smartphone market • Decision on extraordinary dividend of € 0.50 per share, total amount € 77.9m – O
Slide 5: Q3 2010 financial highlights
Q3 2010 financial highlights Solid revenue development • Revenue € 363m (360) – Growth in mobile services 36 % 34 % 35 % 35 % – Decrease in fixed business 33 % 33 % 33 % 33 % 33 % – Growth in online and ICT service business • EBITDA € 127m (131), margin 35% • CAPEX € 42m (40), 11% of revenue 374 372
Slide 6: Q3 2010 operational highlights: Mobile subscription growth continued
Q3 2010 operational highlights Mobile subscription growth continued • Mobile net adds 102,500 in Q3/10 3 652 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 – Estonia +24,000 subscriptions • QoQ growth in fixed bro
Slide 7: Q3 2010 operational highlights: Increased competition in mobile broadband
Q3 2010 operational highlights Increased competition in mobile broadband • Growth in mobile usage – Outgoing minutes growth 8% YoY – SMS growth 14% YoY 18,1 % • Mobile churn 18.1% (14.5) 15,4 % 15,9 % 14,7 % 14,5 % 14,7 % 14,1 % 14,0 % – Competition mainly in mobile 1 719 12,0 % 1 707 broadband, but
Slide 8: Business Segments
Business Segments 8
Slide 9: Q3 2010 Consumer Customers
Q3 2010 Consumer Customers Revenue growing • Revenue € 225m (220) 37 % 34 % 34 % – Growth in mobile customer billing and 33 % 33 % 33 % 32 % 32 % 31 % online services – Decrease in fixed business • EBITDA € 77m (81), margin 34% – Increase in sales costs – New service launches 225 225 220 – Focus on
Slide 10: Q3 2010 Corporate Customers
Q3 2010 Corporate Customers Corporate Customer business at solid level 39 % • Revenue € 139m (139) 37 % 36 % 36 % 34 % 34 % – Increase in mobile revenue 33 % 34 % 31 % – Growth in ICT services – Decrease in fixed business • EBITDA € 50m (50), margin 36% 155 149 150 148 146 147 • CAPEX € 16m (19) 139
Slide 11: Strategy execution
Strategy execution New services and new markets Strengthening market position in core markets Integration of One Elisa 11
Slide 12: Strategy execution: 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 1255 1221 1044 1051 993 914 937 905 843 790 789 807 740 703 701 709 668 672 627 636 595 569 526 523 490 496 425 398 374 326 282 249 173 198 153 112
Slide 13: Voddler to strengthen IPTV Elisa Viihde offering
Voddler to strengthen IPTV Elisa Viihde offering • Voddler’s services provided first to Elisa customers in Finland • More than 2,500 movies, television series and documents • Ad-based video service, 80% of the offering is free of charge • Elisa provides Voddler’s media services in Finland 13
Slide 14: Focus on the smartphone market
Focus on the smartphone market • Smartphone market is picking up • Creates new demand for mobile data services Android iPhone • Many benefits to customers – Wide variety of applications and easy to use for consumers – Productivity improvements and process rationalisation for corporate Symbian 14
Slide 15: "Omaguru": Seamless technical support for customers
“Omaguru”: Seamless technical support for customers • Comprehensive support regarding the use of digital devices, systems and applications • Targeted to households and SOHO customers • Specialised help desk – Personalised customer service – Specialists available online 15
Slide 16: Outlook for 2010
Outlook for 2010 • Positive trends of the general economy have continued • 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 16
Slide 17: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO 17
Slide 18: Growth in revenue continued
Growth in revenue continued EUR million Q3/10 Q3/09 Δ 1-9/10 1-9/09 Δ 2009 Revenue 363 360 3 1081 1066 15 1430 Other operating income 1 0 3 2 4 Operating expenses -237 -229 -722 -705 -951 EBITDA 127 131 -4 362 363 -1 484 EBITDA-% 35% 37% 33% 34% 34% Depreciation and amortisation -54 -54 -162 -160 -2
Slide 19: YoY Revenue growth
YoY Revenue growth 363 3 360 -2 2 + Mobile + Online Services + ICT services + Estonia +/- Cable TV - PSTN - Broadband Q3/09 Interconnection Equipment sales Services Q3/10 and roaming 19
Slide 20: Sales costs affected OPEX
Sales costs affected OPEX • OPEX decreases EURm Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 – Network operating expenses Materials and 143 144 140 148 148 services – Interconnections and roaming Employee – Credit losses reduced benefit 43 51 55 52 46 expenses • OPEX increases Other operating – Sales costs expense
Slide 21: CAPEX/Sales in line with guidance
CAPEX/Sales in line with guidance • Q3 CAPEX EUR 42m (40) 17 % 17 % 20 % – CAPEX/Sales 11% (11%) 13 % 15 % 11 % 11 % 11 % 11 % 2 • Q1-Q3 CAPEX EUR 142m (117) 10 % 10 % 10 % – CAPEX/Sales 12% (10%) 11 28 5% • Q3 CAPEX by segments 28 4 – Consumer EUR 26m (21) 5 1 20 0% 16 – Corporate EUR 16m (19) 19 1
Slide 22: Cash flow
Cash flow EUR million Q3/10 Q3/09 Δ 1-9/10 1-9/09 Δ 2009 EBITDA 127 131 -4 362 363 -1 484 Change in receivables -17 -25 4 26 36 Change in inventories -4 -2 -3 -3 -9 Change in payables -6 4 -12 -12 10 Change in NWC -27 -23 -4 -11 11 -22 37 Financials (net) -11 -12 1 -27 -29 2 -30 Taxes for the year -
Slide 23: Liquidity position is good
Liquidity position is good Bond and Bank loan maturities • Cash and undrawn committed facilities EUR 317m (324m) 10 • Revolving Credit Facilities – EUR 170m maturing Jun 2012 – EUR 130m maturing Nov 2014 – Fully undrawn Q3/10 300 • Commercial Paper Program 226 – EUR 68m in use, back up with RCF • Cr
Slide 24: Estonian growth continued
Estonian growth continued • Slight increase in revenue 39 % – Growth in corporate segment 37 % 36 % 36 % 35 % 34 % – Consumer segment flat 32 % 31 % • 401,800 mobile subscriptions 28 % – + 47,500 YoY – + 24,000 QoQ 25 23 21 21 21 21 21 22 20 EUR million Q3/10 Q3/09 2009 Revenue 22 21 84 EBITDA 7 7 2
Slide 25: Capital structure in line with targets
Capital structure in line with targets • Capital structure – Net debt / EBITDA 1.5 – Gearing 84%, Equity ratio 45% 1,8 1,7 1,7 1,7 1,6 1,5 1,5 1,5 1,5 • Target setting – Net debt / EBITDA 1.5 – 2x – Equity ratio >35% 891 854 812 773 817 752 729 719 725 48 % 46 % 41 % 43 % 41 % 45 % 40 % 42 % 45 % Q3
Slide 26: Extraordinary dividend of EUR 0.50
Extraordinary dividend of EUR 0.50 • EUR 0.50 per share 302 % – Total amount EUR 77.9m – Ex-date 25 October 2010 86 – Payment 3 November 2010 149 % • Based on the AGM EUR 100m 43 126 % authorisation 110 % 402 88 % 77 % 79 285 • After the payment 221 39 % – Dividend yield 9% * 123 116 156 0% 0% 0% –
Slide 27: 2010 Third Quarter Results
elisa @) 3 2010 Third Quarter Results 22 October
Slide 28: Consolidated cash flow statement
APPENDIX SLIDE Consolidated cash flow statement EUR million Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009 Q4 2008 Q3 2008 Cash flow from operating activities Profit before tax 68 53 10 56 70 56 53 70 67 Adjustments to profit before tax 60 67 106 64 60 60 61 57 59 Change in working capital
Slide 29: Financial situation
APPENDIX SLIDE Financial situation EUR Million 30 Sep 2010 30 Jun 2010 31 Mar 2010 31 Dec 2009 30 Sep 2009 30 Jun 2009 31 Mar 2009 31 Dec 2008 30 Sep 2008 Interest-bearing debt Bonds and notes 598 598 597 572 572 570 606 606 604 Commercial Papers 68 110 118 74 62 119 101 56 81 Loans from financial i