Elisa Oyj Class A · OMXHEX:ELISA
Elisa Oyj Class A — Q3 2013 Earnings Presentation
29 slides from Elisa Oyj Class A's earnings presentation, Oct 17, 2013
Slide 1: Slide 1
Slide 2: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 3: CEO's review
CEO’s review • Q3 2013 financial and operational highlights • Segment review • Strategy execution • Outlook for 2013 3
Slide 4: Q3 2013 highlights
Q3 2013 highlights • Operating environment remained challenging • Price campaigns have not been as intensive • Mobile subscription base continued to grow • Smartphone market is growing, penetration already 40% • Elisa Viihde IPTV success continued • Fixed broadband base decreased slightly • Accelera
Slide 5: Growth in revenue and profits
Q3 2013 financial highlights Growth in revenue and profits • Revenue €395m (387) • EBITDA €138m (134), 35% of 36% revenue (35) 33% 32% 35% 35% 31% 31% 31% • Excluding one-off items €142m, 36% of revenue 30% • EBIT €84m (85) • EPS €0.38 (0.38) • CAPEX €57m (51), excluding Estonian 401 389 387 396 390
Slide 6: Mobile subscriptions growth slowed down
Q3 2013 operational highlights Mobile subscriptions growth slowed down • 7,500 new mobile subscriptions in Q3 4 427 4 446 4 470 4 490 4 497 • Growth in corporate segment, decrease in consumer 4 244 4 337 segment 4 094 4 158 • Usage based, non-active subscriptions decreasing, bundles growing • Estoni
Slide 7: MoU decreased, strong growth in data
Q3 2013 operational highlights MoU decreased, strong growth in data • Mobile data YoY growth +65% 1 790 1 804 1 797 1 754 1 755 1 747 1 741 1 707 • Outgoing minutes 1.7bn, slight 1 695 decrease 18,0 % 17,2 % 19,3 %20,0 % 15,3 % 17,7 % 14,1 % • 599m SMS, YoY growth 4% 12,7 % 13,4 % • Churn* 18.0% (17
Slide 8: Business Segments
Business Segments
Slide 9: Q3 2013 Consumer Customers
Q3 2013 Consumer Customers Growth in revenue and profits • Revenue €247m (244) 35% • Growth through new services, PPO acquisition, mobile 34% 34% 33% data and equipment sales 32% 31% 31% 31% • Decrease in traditional fixed network business and 29% interconnection revenue • EBITDA €85m (83), 34% of r
Slide 10: Q3 2013 Corporate Customers
Q3 2013 Corporate Customers Growth through ICT services and PPO • Revenue €148m (142) 37% 36% 36% • Growth through ICT services and PPO acquisition and 33% mobile data 32% 32% 32% 32% 32% • Decrease in traditional fixed and mobile voice, and interconnection revenue • EBITDA €54m (51), 36% of revenue
Slide 11: Strategy execution
Strategy execution Build value on data Accelerate new services businesses Improve performance with customer intimacy and operational excellence 11
Slide 12: Mobile data growth continues
Mobile data growth continues Penetration in Elisa’s network in Finland • 40% of the customers use a new 55,0 % 57,0 % 58,0 % type of smartphone 50,0 % 52,5 % • Smartphones top the list of most sold 43,5 % 46,0 % phones in September 39,5 % 40,0 % 37,5 % 1. Nokia Lumia 520 35,5 % 34,0 % 2. Nokia 301 (
Slide 13: New cloud service for corporate customers
New cloud service for corporate customers • Appelsiini Povari – a new way to store and share data • Safe and easy to use cloud service • Service adapts to the company’s size, needs and requirements • Suitable for different terminals: smartphones, tablets and workstations • Data storage in Finland •
Slide 14: Cyber security service
Cyber security service • Service improve capability to anticipate and prevent cyber threats to companies • Ability to test and simulate threat situations with use of own services • In cooperation with the Jyväskylä University of Applied Sciences • Opens opportunities for students to acquire practica
Slide 15: New way to refill prepaid
New way to refill prepaid • Refill with SMS – first in Finland • For example parents can refill money for children and they pay with their debit or credit card • New flexible way • Refill prepaid subscriptions • For voice, SMS and data usage 15
Slide 16: Outlook for 2013
Outlook for 2013 • Macroeconomic environment still weak in 2013 • Competition remains challenging • Revenue at the same level or slightly higher than last year • EBITDA excluding one-offs at the same level as last year • CAPEX approximately 13% of revenue • PPO consolidation • Mid term target of max
Slide 17: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 18: Revenue and EBITDA improved
Revenue and EBITDA improved EUR million Q3/13 Q3/12 Δ 1) Δ% 1-9/2013 1-9/2012 Δ 1) Δ% Revenue 395 387 8 2% 1 146 1 158 -11 -1% Other operating income 0 2 2 4 Operating expenses -257 -254 -779 -784 EBITDA 138 134 4 3% 369 377 -8 -2% EBITDA-% 35% 35% 32% 33% EBITDA excl. one-offs 142 134 7 6% 374 377
Slide 19: Efficiency measures progressing
Efficiency measures progressing Accelerated cost efficiency measures continue • Streamlining product portfolio • Increasing efficiency in customer service • Improving sales efficiency • Simplification of IT • Decreasing costs in general administration Results in H2/2013 and continuing in 2014 • In Q
Slide 20: Revenue change
Revenue change Change Q3/13 vs Q3/12, EURm 395 8 387 11 -16 5 + PPO companies + PPO companies + Online services + ICT services - MTR reduction + Fixed broadband + Estonia + Estonia - Mobile +/- Cable TV - PSTN - Mobile - PSTN Q3/12 Interconnection Equipment sales Consumer Corporate Q3/13 and roaming
Slide 21: OPEX excluding one-offs flat YoY
OPEX excluding one-offs flat YoY Q3 Q4 Q1 Q2 Q3 • OPEX decreases in Q3/13 EURm 12 12 13 13 13 • Interconnection and roaming Materials and 163 171 146 155 157 • Productivity improvements services • general administration Employee benefit 53 62 64 66 621) expenses • OPEX increases in Q3/13 Other opera
Slide 22: CAPEX in line with guidance
CAPEX in line with guidance • Q3 CAPEX excluding licence fee 20% 14% €52m (51) 12% 11% 13% 13% 13% 13% 12% 13% 15% • CAPEX/Sales 13% (13) 10% • Consumer €28m (30) • Corporate €23m (21) 5% • 800 MHz licence fee in Estonia EUR 5m 103 0% • Major CAPEX areas -5% 5 • 3G and 4G coverage and upgrade 21 6 2
Slide 23: Cash flow
Cash flow EUR million Q3/13 Q3/12 Δ1) 1-9/13 1-9/12 Δ1) 2012 EBITDA 138 134 4 369 377 -8 501 Change in receivables -8 -31 23 3 -8 11 -14 Change in inventories 1 -7 8 6 -14 20 -19 Change in payables -3 15 -18 -10 -10 1 -16 Change in NWC -9 -24 14 -1 -32 32 -50 Financials (net) -3 -2 0 -16 -23 7 -30 T
Slide 24: MTR cuts effected Estonian revenue
MTR cuts effected Estonian revenue • Revenue €25m (30) • Revenue decrease 15% 30% 28% • MTR decrease 80% 27% 27% 27% 27% 25% 26% • Growth in mobile subs: +6,700 QoQ 23% • Mobile broadband growing • EBITDA €7m (7) • CAPEX €7m (2) 28 30 29 27 26 25 25 24 • 800 MHz licence €5m 21 • LTE, 3G Coverage • N
Slide 25: Solid liquidity position
Solid liquidity position Bond and bank loan maturities • Cash and undrawn committed facilities €506m (364) • Revolving Credit Facilities €300m fully undrawn • €300m bond issued in September 130 • 7+ years, maturing January 2021 • Coupon 2.75% • Commercial paper programme 10 300 300 170 • €192m in us
Slide 26: Capital structure at target level
Capital structure at target level • Capital structure • Net debt / EBITDA 2.0× 2,1 2,0 • Gearing 121% 1,8 • Equity ratio 35.5% 1,7 1,7 1,7 1,6 1,6 • Target setting 1,5 • Net debt / EBITDA 1.5–2× • Equity ratio > 35% • Cancellation of 2 million treasury shares 909 874 1 042 995 793 788 839 807 754 •
Slide 27: Appendix
Slide 28: Consolidated cash flow statement
APPENDIX SLIDE Consolidated cash flow statement EUR million Q3 2013 Q2 2013 Q1 2013 Q4 2012 Q3 2012 Q2 2012 Q1 2012 Q4 2011 Q3 2011 Cash flow from operating activities Profit before tax 78 63 53 64 78 66 61 72 74 Adjustments to profit before tax 60 54 55 58 54 55 59 58 61 Change in working capital -
Slide 29: Financial situation
APPENDIX SLIDE Financial situation EUR million 30 Sep 13 30 Jun 13 31 Mar 13 31 Dec 12 30 Sep 12 30 Jun 12 31 Mar 12 31 Dec 11 30 Sep 11 Interest-bearing debt Bonds and notes 750 451 450 525 375 375 375 375 375 Commercial paper 192 204 179 96 170 198 184 189 160 Loans from financial institutions 224