Elisa Oyj Class A · OMXHEX:ELISA
Elisa Oyj Class A — Q1 2003 Earnings Presentation
30 slides from Elisa Oyj Class A's earnings presentation, Apr 29, 2003
Slide 1: Elisa Corporation Interim Report January–March 2003
Elisa Corporation Interim Report 1 January 2003 – 31 March 2003
Slide 2: Contents
Contents • Review of Q1 2003 and Future Outlook − CEO Matti Mattheiszen • Group Key Figures and Financial Situation − CFO Vesa-Pekka Silaskivi • Performance of Business Areas − Group Spokesman Pekka Perttula Elisa Corporation Q1 Interim Report 2 29 April 2003
Slide 3: Review of Q1 2003 and Future Outlook
Review of Q1 2003 and Future Outlook Matti Mattheiszen, President & CEO
Slide 4: Elisa Increased its Competitiveness
Elisa Increased its Competitiveness • ElisaCom successfully built up its ICT activities and gained new corporate customers • Broadband access offerings were expanded to 15 new regions • Elisa Mobile implemented a regional sales channel organisation • Radiolinja successfully replaced the loss of Teli
Slide 5: Elisa Group Highlights in Q1 2003
Elisa Group Highlights in Q1 2003 • Group’s financial position remained stable − Operative CAPEX amounted to EUR 30 million, 8% of revenue − The Group generated EUR 44m (75 in 2002) operative cash flow* • Group revenue amounted to EUR 371m (384) − Revenue was affected by change in accounting princip
Slide 6: Restructuring Has Brought Major Cost Savings
Restructuring Has Brought Major Cost Savings • The new Group structure has enabled significantly lower fixed costs • Operating expenses decreased by EUR 21m Q1 2003 vs. Q1 2002 • Number of personnel decreased by 1300 Elisa Corporation Q1 Interim Report 6 29 April 2003
Slide 7: Outlook for 2003
Outlook for 2003 • The organic growth in revenue will be 3% at the maximum • In the current market outlook clean EBITDA and result is estimated to improve slightly from 2002 • Operative annual CAPEX as a percentage of sales will not exceed the 15% limit • Divestment of non-core business operations w
Slide 8: Group Key Figures and Financial Position
Group Key Figures and Financial Position Vesa-Pekka Silaskivi, CFO
Slide 9: Elisa Group Q1 2003 Financial Highlights
Elisa Group Q1 2003 Financial Highlights • Profitability of the Group remained stable − Profitability of Fixed Network Business remained good − Mobile business recovered from Q4 2002 but the aggressive competition continued to affect profitability − EBITDA of German-based business was in line with e
Slide 10: CAPEX of Sales was 11%, Operative CAPEX of Sales was 8%
CAPEX of Sales was 11%, Operative CAPEX of Sales was 8% 250 200 EUR million 141 21 150 42 100 38 2 4 2 5 12 4 31 5 5 1 50 109 20 21 73 72 4 76 9 70 48 49 46 30 0 Q1/01 Q2/01 Q3/01 Q4/01 Q1/02 Q2/02 Q3/02 Q4/02 Q1/03 Investments in shares GSM network buy-backs Investments in Fixed Assets Elisa Corpor
Slide 11: No One-off Write-Downs in Q1 2003
No One-off Write-Downs in Q1 2003 120 100 48 38 1 EUR million 6 17 16 0 80 3 11 14 16 14 12 14 60 2 11 11 12 40 66 65 58 66 60 64 64 20 44 45 0 Q1/01 Q2/01 Q3/01 Q4/01 Q1/02 Q2/02 Q3/02 Q4/02 Q1/03 One-off write-down Depreciation of goodwill Depreciation of fixed assets Elisa Corporation Q1 Interim
Slide 12: Cash Flow from Operations was EUR 44m
Cash Flow from Operations was EUR 44m Consolidated cash flow was EUR -10m (see appendix, page 23) 70 50 EUR million 30 10 -10 -30 -50 Q1/01 Q2/01 Q3/01 Q4/01 2001 Q1/02 Q2/02 Q3/02 Q4/02 2002 Q1/03 Cash flow from operations = clean EBITDA – net financial items – CAPEX (excl. GSM network buy-backs) E
Slide 13: Seasonality Affected the Net Debt Level
Seasonality Affected the Net Debt Level Consolidation of Sale of 900 Tropolys; change Sale of Elisa directory in debt reserving Instalia businesses 850 Sale of Direktia Seasonality 800 increased net EUR million debt (billing due dates and 750 interest payments) 700 650 600 Q1/01 Q2/01 Q3/01 Q4/01 Q1
Slide 14: Performance of Business Areas
Performance of Business Areas Pekka Perttula, Group Spokesman
Slide 15: Elisa Mobile Q1 2003
EBITDA / revenue, % 35 30 30 30 30 29 29 29 27 24 24 25 20 20 Elisa Mobile Q1 2003 20 neg. 15 10 Q4/01 Q1/02 Q2/02 Q3/02 Q4/02 Q1/03 Reported Clean • Revenue was EUR 175m (174) − Revenue growth was affected by increased competition, price erosion and termination of the Telia deal − Mobile business h
Slide 16: Volumes are Increasing, Prices Decreasing
Volumes are Increasing, Prices Decreasing • The number of subscriptions increased to the previous year’s level and was 1,348,000 (1,349,000) • Cubio Communications was signed up as a service provider • Usage of voice services increased by 6%, MOU was 531m (501) • Number of SMS increased by 4% to 109
Slide 17: Fixed Network Business Q1 2003
Fixed Network Business Q1 2003 • Revenue was EUR 170m (186) − Revenue difference results from divested directory media and installation businesses, change in accounting principles and price erosion of business customer products, total about EUR 10m − ICT activities successfully developed, new corpor
Slide 18: Fixed Network Business Focused on the Broadband Access Market
Fixed Network Business Focused on the Broadband Access Market No. of Subcriptions Q1/2003 Q1/2002 Change ISDN channels 229 300 272 400 -16 % Broadband channels 81 800 37 000 121 % Cable TV 172 400 157 900 9% Analogue and others 700 800 728 900 -4 % Total 1 184 200 1 196 300 -1 % • Strong growth in b
Slide 19: Germany-based Operations Q1 2003
Germany-based Operations Q1 2003 • Revenue was EUR 32m (27), growth 19% − Revenue growth estimate is 15% in 2003 • EBITDA was EUR -1m (-15*) − Due to seasonality factors EBITDA was slightly negative − Full year EBITDA margin target is 5%-8% of revenue • EBITA was EUR -7m (-24*) • EBIT improved to EU
Slide 20: Local Presence Brings Customers
Local Presence Brings Customers • Winning of new business customers continued despite the slow economy in Germany, about 2000 new customers in Q1 2003 • Higher ARPU in SoHo customers targeted with rebalancing of price structures 17 390 35 0 0 0 16 380 30 0,3 5 Business customers, '000 1 6 Mäkitorppa
Slide 21: Elisa Corporation Interim Report January–March 2003
Elisa Corporation Interim Report 1 January 2003 – 31 March 2003
Slide 22: Appendix
Elisa Corporation Interim Report Appendix 1 January 2003 – 31 March 2003
Slide 23: Operative Cash Flow Versus Consolidated Cash Flow 1Q 2003
Operative Cash Flow Versus Consolidated Cash Flow 1Q 2003, Major Differences Net Working Capital items 50 40 30 20 10 0 -10 -20 Operative Interest Billing due Other NW C Buy backs Consolidated cashflow payments dates items cash flow Elisa’s interest payments are weighted Fixed line customers are mai
Slide 24: Debt Maturity of Elisa's Bonds, Bank loans and Pension loans
Debt Maturity of Elisa’s Bonds, Bank loans and Pension loans 400 300 EUR Million 200 100 0 2003 2004 2005 2006 2007 2008 2009 >2009 Elisa Corporation Q1 Interim Report 24 29 April 2003
Slide 25: Main Decisions of the AGM on 4 April 2003
Main Decisions of the AGM on 4 April 2003 • Changes to Articles of Association − Name shortened to Elisa Corporation − Minimum and maximum share capital EUR 25 – 500m − Tenure of the board members from three to one year • No dividend from 2002 • Rights for share issue − The board was granted to issu
Slide 26: Radiolinja's Key Figures
Radiolinja’s Key Figures Radiolinja's key figures, EURm Q1/03 Q1/02 % 2002 Revenue 175 174 1% 739 Clean EBITDA 42 52 -19 % 117 Clean EBITDA-% 24 % 30 % 16 % Leasing adj. EBITDA 49 64 -23 % 229 Leasing adj. EBITDA-% 28 % 37 % 31 % CAPEX 16 33 -45 % 145 CAPEX excl. network buy-backs 7 13 96 Oper CAPEX
Slide 27: Elisa Group's Q1 2003 P&L
Elisa Group’s Q1 2003 P&L Elisa Group Excl. one-off items* EURm Q1/03 Q1/02 2002 Q1/03 Q1/02 2002 Revenue 371 384 1563 371 384 1563 Other income from operations 4 5 18 4 5 92 EBITDA 85 85 342 85 78 333 EBITDA margin 23 % 22 % 22 % 23 % 20 % 21 % Depreciation -65 -60 -255 -65 -60 -255 Goodwill deprec
Slide 28: Key Figures of Elisa Group
Key Figures of Elisa Group Elisa Group Q1/03 Q4/02 Q3/02 Q2/02 Q1/02 Q4/01 Q3/01 Q2/01 Q1/01 EURm Revenue 371 385 388 406 384 386 389 331 333 EBITDA 85 118 51 86 78 183 91 75 76 EBITDA-% 23 % 31 % 13 % 21 % 20 % 47 % 23 % 23 % 23 % Clean EBITDA 85 88 84 86 86 97 91 77 68 Clean EBITDA-% 23 % 23 % 22
Slide 29: Key Figures of Elisa Group (cont.)
Key Figures of Elisa Group (cont.) Business Areas Q1/03 Q4/02 Q3/02 Q2/02 Q1/02 Q4/01 Q3/01 Q2/01 Q1/01 Elisa Mobile Revenue 175 185 188 192 174 180 185 170 152 ARPU, EUR 38,5 41,3 43,0 43,5 41,4 42,7 44,2 45,3 42,2 Churn, % 14,4 21,2 14,0 12,7 18,2 14,4 15,5 13,9 13,9 Subscriptions 1 348 183 1 342
Slide 30: Q1 2003 Key Figures per Business Area
Q1 2003 Key Figures per Business Area Elisa Mobile Revenue EBITDA EBIT Clean EBITDA Clean EBIT Service- and Q1/03 Q1/02 Q1/03 Q1/02 Q1/03 Q1/02 Q1/03 Q1/02 Q1/03 Q1/02 network operators 165 166 41 53 14 18 41 53 14 32 Distribution companies 16 12 1 -1 1 -2 1 -1 1 -2 Intra-SBA sales -6 -4 Group booki