Elisa Oyj Class A · OMXHEX:ELISA
Elisa Oyj Class A — Q1 2013 Earnings Presentation
31 slides from Elisa Oyj Class A's earnings presentation, Apr 19, 2013
Slide 1: 1st Quarter Results 2013
Slide 2: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 3: CEO's review
CEO’s review • Q1 2013 financial and operational highlights • Segment review • Strategy execution • Outlook for 2013 3
Slide 4: Q1 2013 highlights
Q1 2013 highlights • Keen mobile competition continued • Mobile subscription base continued to increase • Macro environment still challenging • Slight decrease in mobile usage • Smartphone market continued to increase • Elisa Viihde IPTV success continued • Growth in fixed broadband subscription bas
Slide 5: Q1 2013 financial highlights: increased campaigning continued
Q1 2013 financial highlights Increased campaigning continued • Revenue €361m (382) • Excluding MTR change €375m, 2% down 36 % • EBITDA €109m (121), 30% of 33 % 35 % revenue (32) 32 % 32 % 31 % 31 % 31 % 30 % • EBITDA excluding one-offs €111m, 31% of revenue • EBIT €59m (68) 401 389 396 387 382 • EPS
Slide 6: Q1 2013 operational highlights: subscription growth continued
Q1 2013 operational highlights Subscription growth continued • 23,900 new mobile subscriptions 4427 4446 4470 • Growth in corporate segment, consumer segment at 4337 4158 4244 the same level 3991 4094 3898 • Growth in voice and mobile broadband subs • Estonia +400 subscriptions • Fixed broadband gro
Slide 7: Campaigns increased churn
Q1 2013 operational highlights Campaigns increased churn • Strong growth in mobile data 1 790 1 804 1 797 1 768 • Outgoing minutes 1.7bn, slight decrease 1 754 1 755 1 747 1 739 • Data YoY growth 56% 1 707 • 496m SMS, slight YoY decrease −6% 20,0 % • Churn* 20.0% (15.3) 14,3 % 15,3 % 19,3 % 13,4 % 1
Slide 8: Business Segments
Business Segments
Slide 9: Q1 2013 Consumer Customers
Q1 2013 Consumer Customers MTR cuts and campaigns decreased revenue • Revenue €220m (232) 35 % • Smartphones and new services growth continued 34 % 33 % • Decrease in traditional fixed network business, mobile 32 % 32 % 31 % 31 % usage and interconnection revenue 30 % 29 % • EBITDA €63m (74), 29% of
Slide 10: Q1 2013 Corporate Customers
Q1 2013 Corporate Customers ICT business is growing • Revenue €142m (150) 37 % 36 % • Growth in ICT services 34 % 33 % • Decrease in mobile and fixed businesses, as well as in 32 % 32 % 32 % 32 % 32 % interconnection revenue • EBITDA €46m (47), 32% of revenue (32) • Decrease in revenue 156 150 150 1
Slide 11: Strategy execution
Strategy execution New services and new markets Strengthening market position in core markets Integration of One Elisa 11
Slide 12: Smartphone market growth continues
Smartphone market growth continues Penetration in Elisa’s network in Finland • One in three customers uses a new 55,0 % type of smartphone 52,5 % 50,0 % • Smartphones top the list of the 46,0 % 43,5 % most sold phones in March 39,5 % 1. Apple iPhone 5 35,5 % 32,0 % 32,5 % 2. Nokia Lumia 620 30,0 % 2
Slide 13: Commercial launch for Elisa Lompakko
Commercial launch for Elisa Lompakko • First in the Nordic countries • Multipurpose service • NFC payment • Virtual credit card for safe payment online • Money transfers between users 13
Slide 14: Growth in Elisa Viihde IPTV VoD service
Growth in Elisa Viihde IPTV VoD service • Nearly 60% of customers have used the Video on Demand service • More than one quarter use VoD on a weekly bases • Most popular categories • Action movies • Animations for families • Domestic movies Source: Elisa customer survey 11/2012 14
Slide 15: Elisa Office 365 has been a success
Elisa Office 365 has been a success • First operator to offer Office 365 cloud service • One of the leading Office 365 service providers in Europe • The number of customers is growing more than 10% monthly • In the beginning SMEs, now also big corporations 15
Slide 16: Loan negotiations on the net
Loan negotiations on the net • Banks use Elisa’s video service for personal banking and insurance contacts • Well received by customers • Natural banking contact with picture, voice and other material 16
Slide 17: Outlook for 2013
Outlook for 2013 • Macroeconomic environment still weak in 2013 • Competition remains challenging • Revenue at the same level as last year • EBITDA excluding one-offs at the same level or slightly lower than last year • CAPEX maximum 12% of revenue • Estimates excluding pending PPO acquisition 17
Slide 18: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 19: Challenging market environment in Q1
Challenging market environment in Q1 EUR million Q1/13 Q1/12 Δ 2) Δ% 2012 Revenue 361 382 -20 -5 % 1 553 Other operating income 0 1 5 Operating expenses -253 -261 -1 057 EBITDA 109 121 -12 -10 % 501 EBITDA excl. one-offs 111 121 501 EBITDA-% excl . one-offs 31 % 32 % 32 % Depreciation and amortisati
Slide 20: Accelerated profitability improvement
Accelerated profitability improvement In order to secure a good result Elisa has started new cost efficiency measures for example in the areas of: • Streamlining product portfolio • Increasing efficiency in customer service • Improving sales efficiency • Simplification of IT • Decreasing costs in ge
Slide 21: Revenue change
Revenue change Change Q1/13 vs Q1/12, EURm 382 -15 2 -3 -5 361 + Online services + Fixed broadband + ICT services - Estonia - Estonia + Smartphones - Cable TV - MTR reduction - Mobile - Mobile - PSTN - PSTN Q1/12 Interconnection Equipment Consumer Corporate Q1/13 and roaming sales Customers Customer
Slide 22: Total expenses decreased
Total expenses decreased Q1 Q2 Q3 Q4 Q1 • OPEX decreases in Q1/13 EURm 12 12 12 12 13 • Interconnection and roaming Materials and 158 164 163 171 146 • Productivity improvements services • network management and maintenance costs Employee • general administration benefit 61 61 53 62 64 expenses • OP
Slide 23: CAPEX in line with guidance
CAPEX in line with guidance • Q1 CAPEX €47m (42) 20% 14% 13% 13% 13% 13% • CAPEX/Sales 13% (11) 12% 12% 15% 11% 11% • Consumer €27m (24) 10% • Corporate €20m (18) • Major CAPEX areas 6 5% 21 • 3G and 4G coverage and upgrade 21 21 21 0% 19 20 17 • Fixed access and backbone networks 18 18 -5% • IT sys
Slide 24: Cash flow at the same level
Cash flow at the same level EURm Q1/13 Q1/12 Δ1) 2012 EBITDA 109 121 -12 501 Change in receivables 8 2 6 -14 Change in inventories 1 -7 9 -19 Change in payables 0 -9 9 -16 Change in NWC 9 -14 24 -50 Financials (net) -11 -19 7 -30 Taxes for the year -15 -11 -4 -62 Taxes for the previous year -10 Taxe
Slide 25: MTR cuts effected Estonian revenue
MTR cuts effected Estonian revenue • Revenue €21m (25) 30 % 30 % • Revenue decrease 14% 27 % 27 % 27 % MTR decrease 80% 26 % • 25 %25,51 % 23% • Growth in mobile subs: +400 QoQ • Mobile broadband growing • EBITDA €5m (7) • MTR decrease 30 29 27 28 26 26 • CAPEX €3m (2) 21 25 21 • 3G Coverage 1 Jan 1
Slide 26: Liquidity position remains good
Liquidity position remains good Bond and bank loan maturities • Cash and undrawn committed facilities €383m (364) • Revolving Credit Facilities €300m • Fully undrawn 31 March 130 170 • Commercial Paper Program 10 • €179.5m in use as 31 March 300 • Solid credit ratings since 2003 162 • S&P BBB 130 •
Slide 27: Capital structure in line with targets
Capital structure in line with targets • Capital structure • Net debt / EBITDA 1.7 • Gearing 118% 1,8 • Equity ratio 33% 1,7 1,7 1,7 1,7 1,6 1,6 1,5 1,5 • Target setting • Net debt / EBITDA 1.5 – 2x • Equity ratio > 35% 845 793 788 909 874 839 807 752 754 45% 38% 40% 43% 42% 38% 41% 43% 33% Q1/11 Q2
Slide 28: Competitive remuneration continues
Competitive remuneration continues 302% • EUR €1.30 per share paid in April 86 • Total amount €204m 149% 43 135% 126% 110% 101%98% • Pay-out ratio 98% 77% 79 402 88% 39% 285 221 202 203 204 123 116 156 9 • Strong commitment to competitive shareholder remuneration Dividend * Buy-back Pay-out ratio %
Slide 29: Appendix
Slide 30: Consolidated cash flow statement
APPENDIX SLIDE Consolidated cash flow statement Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 EURm 2013 2012 2012 2012 2012 2011 2011 2011 2011 Cash flow from operating activities Profit before tax 53 64 78 66 61 72 74 61 58 Adjustments to profit before tax 55 58 54 55 59 58 61 61 59 Change in working capital 9 -17 -2
Slide 31: Financial situation
APPENDIX SLIDE Financial situation EURm 31 Mar 13 31 Dec 12 30 Sep 12 30 Jun 12 31 Mar 12 31 Dec 11 30 Sep 11 30 Jun 11 31 Mar 11 Interest-bearing debt Bonds and notes 450 525 375 375 375 375 375 600 600 Commercial Papers 179 96 170 198 184 189 160 160 120 Loans from financial institutions 225 221 2