Slide 1: 3rd Quarter Results 2016
3rd QUARTER RESULTS 2016
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 2016 financial and operational highlights • Segment review • Strategy execution • Outlook and guidance for 2016 3
Slide 4: Q3 2016 highlights
Q3 2016 highlights • Revenue grew by 6% and EBITDA by 7% • Mobile service revenue grew by 5% • Consolidation of Anvia’s ICT businesses has started according to plan • Mobile subscription base unchanged, fixed broadband clearly up as a result of Anvia acquisition • Profit growth in Consumer Customers
Slide 5: Best ever quarter – revenue and EBITDA up
Q3 2016 financial highlights Best ever quarter – revenue and EBITDA up • Revenue €419m (395) Revenue, €m and YoY change, % 1,7 % 2,8 % 4,8 % 2,5 % 0,8 % 6,2 % -3,9 % -0,4 % • EBITDA €154m (145) • Comparable EBITDA €155m (145) • EBIT €98m (90) 386 390 394 404 390 393 419 381 • EPS €0.47 (0.43) Q4/14
Slide 6: Mobile service revenue growth continues
Q3 2016 operational highlights Mobile service revenue growth continues • Mobile service revenue up by 5% Mobile service revenue, €m and YoY change, % • Up-selling to higher speeds 8,3% 11,3% 9,1% 6,9% 1,8% 3,8% 6,0% 4,7% • More smartphones and data bundle subscriptions 190 192 188 186 183 178 169 17
Slide 7: Business segments
Business segments NK
Slide 8: Record high revenue and EBITDA
Q3 2016 Consumer Customers Record high revenue and EBITDA • Revenue €268m (251) Revenue, €m and YoY change, % • Growth through consolidation of Anvia’s ICT businesses 0,9 % 1,5 % 3,6 % 6,1 % 3,5 % 1,2 % 7,0 % -1,8 % • Strong growth in mobile service revenue • Growth in digital services and Estonia •
Slide 9: Growth in revenue, clear EBITDA improvement
Q3 2016 Corporate Customers Growth in revenue, clear EBITDA improvement • Revenue €151m (144) Revenue, €m and YoY change, % • Growth through consolidation of Anvia’s ICT businesses 2,0 % 1,4 % 2,7 % 8,0 % 1,0 % 4,7 % -2,6 % -7,1 % • Growth in mobile service revenue • Growth in digital services and i
Slide 10: Strategy execution
Strategy execution Build value on data Accelerate digital service businesses Improve performance with customer intimacy and operational excellence 10
Slide 11: Growth in 4G smartphones and data bundles continue
Growth in 4G smartphones and data bundles continue • 73% of customers use a smartphone 3G and 4G smartphone penetrations 1), % • 77% of smartphones are 4G-capable 68% 70% 71% 73% 63% 65% 66% 57% 60% • Of all models sold in Q3 3G • 93% were smartphones, of which all were 4G-capable (92% and 100% resp
Slide 12: Elisa Viihde – more domestic entertainment and sports content
Elisa Viihde – more domestic entertainment and sports content • Finnish version of the famous British comedy series The Office • In cooperation with Nelonen and BBC Worldwide • Second season of original Downshiftaajat series • Most watched series in Elisa Viihde • Second season begins in December 20
Slide 13: Fast fixed broadband coverage is expanding
Fast fixed broadband coverage is expanding • Coverage is extended in 2016 by 75,000 households around Finland • New technology enables even 100 Mbit/s speed for SDUs and even 1,000 Mbit/s speed for MDUs • Big advantage for e.g. remote work and entertainment services like online gaming • Elisa has mo
Slide 14: Elisa at the forefront of technological development
Elisa at the forefront of technological development • Elisa became first operator in Finland to test 5G • 5G enables e.g. virtual reality games, smart traffic, remote surgery and other future services • Elisa set world record: 1.9 Gbit/s speed in 4G network • Wi-Fi calls to mobile phones • Improves
Slide 15: Outlook and guidance for 2016
Outlook and guidance for 2016 Macroeconomic environment still weak in 2016, competition remains challenging • Revenue slightly higher than in 2015 • EBITDA excluding one-offs slightly higher than in 2015 • CAPEX maximum 12% of revenue 15
Slide 16: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 17: Strong revenue and earnings growth
Strong revenue and earnings growth • Revenue growth 6% EURm Q3/16 Q3/15 Δ 2) Δ% 1-9/16 1-9/15 Δ 2) Δ% 2015 • Anvia consolidation from 1 July onwards Revenue 419 394 24 6% 1,202 1,165 37 3% 1,569 EBITDA 154 145 424 405 532 • EBITDA growth 7% EBITDA-% 37 37 35 35 34 • Mobile service revenue growth Com
Slide 18: Revenue growth in both business segments
Revenue growth in both business segments • Organic revenue growth approximately 2% • Consumer Customers • Growth in mobile services, fixed services (Anvia consolidation), Estonian business and digital services • Corporate Customers • Growth in mobile services and fixed services (Anvia consolidation)
Slide 19: Growth continues in Estonia
Growth continues in Estonia • Revenue €26.3m (25.4) Revenue, €m and YoY change, % • Growth in mobile service revenue and equipment sales 4,6% 5,5% 4,3% 3,7% -2,4% -2,7% -2,1% 1,2% • Subscription base up by 7,000 mainly in prepaid 25,4 25,0 26,3 23,9 23,3 22,9 24,3 21,7 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15
Slide 20: Expenses increased due to Anvia consolidation
Expenses increased due to Anvia consolidation • Total OPEX increased to €267m (251) Material and services (blue), employee (yellow) and • Anvia consolidation 1 July 2016 other expenses (orange), €m, YoY change (black line) • Anvia transfer tax €1.7m -6,0% -1,9% -0,5% 3,4% 6,2% 0,7% 0,2% 6,4% 45 44 4
Slide 21: CAPEX lower, full-year guidance intact
CAPEX lower, full-year guidance intact • CAPEX €42m (46) Consumer (blue), Corporate (yellow) and shares 1) • Consumer €24m (26) (orange) €m, CAPEX/sales 2) (black line) % * • Corporate €18m (20) 12% 14% 12% 14% 12% 12% 11% 10% • CAPEX / sales 10%, 1–9/16 12% 85 15 14 1 13 1 9 3 • CAPEX / sales guida
Slide 22: Seasonality in cash flow
Seasonality in cash flow • Cash flow €47m (85) Change in cash flow, €m • Cash flow YoY change -€38m, excluding investments in 9 shares -€16m -26 -2 -2 4 • Cash flow excluding investments in -22 1 85 shares YTD €228m (236) 47 • Seasonality in negative NWC change Q3/15 EBITDA NWC Financials Taxes CAPE
Slide 23: Solid liquidity position
Solid liquidity position Bonds and bank loan maturities 30 September 2016 • Cash and undrawn committed credit Bonds (blue), Bank loans (green) and RCF (orange), facilities €333m (479) €m • RCFs €300m fully undrawn • New EIB €150m loan drawn, old €120m paid back in September 130 • Commercial paper pr
Slide 24: Capital structure on target and return ratios improved
Capital structure on target and return ratios improved • Net debt at target level Net debt (blue, €m), Net debt /EBITDA (orange line) • Net debt / EBITDA 1.8× 2,0 • Gearing 110%, equity ratio 40% 1,9 1,9 1,9 1,8 1,8 1,8 1,7 • Target setting • Net debt / EBITDA 1.5–2× 1 075 1 054 1 001 934 991 962 89
Slide 25: Contact
Contact: Mr. Vesa Sahivirta vesa.sahivirta@elisa.fi | +358 102 623 036 Elisa IR app
Slide 26: Cash flow YoY comparison
APPENDIX Cash flow YoY comparison € million Q3/16 Q3/15 Δ1) Δ% 1-9/16 1-9/15 Δ1) Δ% 2015 EBITDA 154 145 9 7% 424 405 19 5% 532 Change in receivables -30 -22 -8 -9 -12 -3 -2 Change in inventories -7 4 -11 3 7 -4 -6 Change in payables 11 18 -7 4 27 -23 7 Change in NWC -26 0 -26 -3 22 -24 -0 Financials
Slide 27: Cash flow by quarters
APPENDIX Cash flow by quarters € million Q3/16 Q2/16 Q1/16 Q4/15 Q3/15 Q2/15 Q1/15 Q4/14 EBITDA 154 134 137 128 145 131 129 125 Change in receivables -30 19 2 10 -22 15 -5 9 Change in inventories -7 3 6 -12 4 -2 5 -4 Change in payables 11 -2 -6 -20 18 -3 12 4 Change in NWC -26 21 3 -22 0 9 13 8 Fina
Slide 28: Debt structure
APPENDIX Debt structure € million, at the end of the quarter Q3/16 Q2/16 Q1/16 Q4/15 Q3/15 Q2/15 Q1/15 Q4/14 Q3/14 Bonds and notes 594 593 593 592 592 592 591 591 590 Commercial papers 201 215 146 171 229 219 169 210 200 Loans from financial institutions 219 195 195 200 200 205 205 211 211 Financial