Elisa Oyj Class A · OMXHEX:ELISA
Elisa Oyj Class A — Investor Day (March 2017)
31 slides from Elisa Oyj Class A's investor day presentation, Mar 30, 2017
Slide 1: Elisa's strategy and Estonia
Elisa’s strategy and Estonia Elisa Analyst Day, 30 March 2017 CEO Veli-Matti Mattila
Slide 2: Elisa's milestones in Estonia
Elisa’s milestones in Estonia 2011: Elisa Eesti #2 operator in Estonia 2017: Starman and Santa Monica 1994: Radiolinja 2005: Radiolinja Networks Estonia was Eesti and As United acquisitions established merged into Elisa Eesti 2013: 1995: Radiolinja 4G network 2002: Co-operation mobile network opened
Slide 3: Elisa's strategic focus areas
Elisa’s strategic focus areas Build value on data Accelerate digital service businesses Improve performance with customer intimacy and operational excellence Elisa Analyst Day 2017 Tallinn
Slide 4: Creating a full service operator in Estonia
Creating a full service operator in Estonia • Improving competitiveness in telecom services • Starman’s fixed networks Mobile ✓ • Expanding offering in digital services Fixed ✓ broadband • Consumer customers: Starman TV TV ✓ services Corporate • Corporate customers: Santa Monica ✓ networks Networks
Slide 5: Improving competitiveness in growing telecom and pay-TV services
Improving competitiveness in growing telecom and pay-TV services • Fixed broadband and data demand is growing • Pay-TV market is favorable • Nationwide coverage with FTTx network • 320,000 households, 50% coverage Starman’s cable networks Elisa Analyst Day 2017 Tallinn
Slide 6: Expanding offering in digital services
Expanding offering in digital services Starman TV services and Santa Monica Networks acquisition • Starman TV services for • Santa Monica Network ICT services consumers for corporates • Leading Pay-TV service in Estonia • Secure IT networks and data centre solutions • Linear and time-shifted TV • De
Slide 7: Realising synergy potential and improving performance
Realising synergy potential and improving performance Network throughput GB/s 14 • Cross-selling 12 • Mobile, fixed and TV services to 10 8 consumers 6 • Mobile, fixed and ICT services to 4 corporates 2 0 • Continuous improvement of 2014 2015 2016 excellence and quality in joint LTE session succees
Slide 8: Elisa Estonia
Elisa Estonia Elisa Analyst Day, 30 March 2017 Country Manager Sami Seppänen
Slide 9: Elisa Estonia in brief
Elisa Estonia in brief Elisa Estonia subscription base Postpaid consumer customer Postpaid corporate customer Prepaid 600000 • #2 in mobile 400000 • subscription market share c. 32% 200000 • Steadily growing postpaid subscription base 0 2010 2011 2012 2013 2014 2015 2016 • Strong growth in mobile in
Slide 10: Elisa Estonia mobile business
Elisa Estonia mobile business Elisa Analyst Day 2017 Tallinn
Slide 11: Strong position in mobile business in Estonia
Strong position in mobile business in Estonia Subscription market shares • Elisa a strong challenger Q4/2016 * • Elisa has been the leader in MNP (mobile Tele2 Elisa number portability) since 2010 24% 32% • In consumer customer segment Elisa is #1 both in prepaid and postpaid segment Telia 44% Prepa
Slide 12: Fixed network and Starman business
Fixed network and Starman business Elisa Analyst Day 2017 Tallinn
Slide 13: Starman at a glance
Starman at a glance Leading cable company in Estonia • 320,000 homes connected to cable network • 122,000 cable TV subs • 88,000 broadband subs • 60,000 DTT subs • 30,000 telephony subs • Pay-TV market leader • Hybrid fibre-coax (FTTx) network • Nationwide pay-DTT coverage in addition to cable netwo
Slide 14: Market leader in pay-TV
Market leader in pay-TV Market shares, Estonia (2016) Others 2% • Starman #1 in pay-TV market Telset 3% Viasat 8% • Starman’s TV customer base is fully digitalized, 36% of TV base are using NewGen interactive services Starman STV 18% 35% • Estonian pay-TV market is one of the highest penetrated in E
Slide 15: #2 in fixed broadband
#2 in fixed broadband Market shares, Estonia (2016) Others • Starman #2 in Estonia 9% • Starman has been the fastest growing fixed broadband STV Starman provider in the market 12% 23% • Potential of penetration increase • Coverage 50% of households Telia 56% Fixed broadband penetration per 100 inhab
Slide 16: Strongly performing company
Strongly performing company 50 Revenue, €m 39,5 • Starman has shown historically strong 40 37,2 33,6 organic growth 28,0 30,2 30 24,9 25,7 26,1 22,8 • Revenue CAGR of 9% over the 20 18,0 CAGR 9-year period 2007–2016 10 +9% • EBITDA has increased by 2.8 times 0 2007 2008 2009 2010 2011 2012 2013 2014
Slide 17: Turnaround in customer intake and sustained uplift in ARPUs
Turnaround in customer intake… Cable customers net growth (organic) 4000 2000 0 2012 2013 2014 2015 2016 -2000 -4000 …and sustained uplift in ARPUs Cable TV ARPU development, € Cable BB ARPU development, € 9,5 14 12 13,2 13,3 9,0 9,2 10 11,9 10,5 10,9 8,5 8 8,5 8,0 8,3 8,3 6 7,9 4 7,5 2 7,0 0 2012 2
Slide 18: Leader in product offering
Leader in product offering • Fastest home internet in Estonia • 500 Mbit/s available all over cable footprint • Time shifting service • 80 channels • Can be viewed within 14 days • Cloud-based recording service • 100 channels • Lifetime validity • Volumes up to 1 TB • TV Everywhere service • Linear
Slide 19: Santa Monica Networks business
Santa Monica Networks business “The increasingly digital environments of our customers require continuously faster reactions to different situations. We will significantly increase this capability with Santa Monica Network's solutions and expertise.” Elisa Analyst Day 2017 Tallinn
Slide 20: Santa Monica Networks' business
Santa Monica Networks’ business • Offers corporate and datacenter networks, and security solutions as well as services such as • architecture and specialist • management and monitoring • maintenance • training • Operates with a multi-vendor strategy • The largest product partners are Cisco and Junip
Slide 21: Full range of services by Elisa
Full range of services by Elisa Elisa + Starman + Free SMN Telia Tele 2 Viasat STV service Mobile voice and data (smartphones) Mobile broadband (tablet or PC) Fixed broadband TV service (terrestrial or cable TV / IPTV) Fixed voice (PSTN) Corporate networks Service provider’s own service Reseller of
Slide 22: Financial overview of recent acquisitions
Financial overview of recent acquisitions Elisa Analyst Day, 30 March 2017 CFO Jari Kinnunen
Slide 23: Starman acquisition's rationale
Starman acquisition's rationale Acquisition of a strong, well- • The Estonian pay TV market leader performing business • High profitability (2016 EBITDA-margin 43%) and growth track record • Highly complementary operations and service offerings Significantly enhances Elisa’s positioning in Estonia •
Slide 24: Santa Monica acquisition's rationale
Santa Monica acquisition’s rationale • New system integrator capability, supports IT and telecom operations Acquisition of an ICT business • Starman acquisition enables fixed line services to B2B segment and thus SMN operating in Finland and acquisition further strengths service offering in Estonia
Slide 25: Estonian business Pro Forma 2016
Estonian business Pro Forma 2016 Pro forma 2016 revenue breakdown Santa Pro Elisa Monica Forma Change EURm Eesti Starman Estonia 2016 % 24% Revenue 99 40 13 151 53% EBITDA 32 17 1 50 56% 76% EBITDA% 32% 43% 8% 33% EBIT 22 7 1 29 35% Consumers Corporates EBIT% 22% 17% 7% 19% Capex 10 10 0 21 99% CAPE
Slide 26: Reporting from Q2/17 onwards
Reporting from Q2/17 onwards P&L in data excel: Subscriptions in data excel: Estonian business including Elisa published Starman Pro Forma Q4/16 Q4/16 Q4/16 Starman and Santa Monica Mobile subscriptions 4 694 700 4 694 700 Networks Estonia Subscriptions in Finland 4 036 900 4 036 900 Subscriptions i
Slide 27: In-country and cross-border synergies
In-country and cross-border synergies Starman Santa Monica Networks • Synergies • Synergies • Cross-/up-selling • Cross-selling • Cost savings • Cost savings • CAPEX • EBITDA €4-5m by end-2019 • EBITDA €4-6m by end-2019 Elisa Analyst Day 2017 Tallinn
Slide 28: Acquisitions and valuation
Acquisitions and valuation Starman Santa Monica Networks (FI + EE) • Acquisition price €151m • Acquisition price €28m • Valuation • Valuation • Pre synergies EV/EBITDA <9x • Pre synergies EV/EBITDA <9x • Post synergies EV/EBITDA <7x • Post synergies EV/EBITDA <4x Elisa Analyst Day 2017 Tallinn
Slide 29: Acquisitions' financial impacts
Acquisitions’ financial impacts • Earnings per share • Both acquisitions EPS accretive in 2017 and onwards • CAPEX • Elisa’s CAPEX guidance and medium-term targets remain unchanged • Operative Cash Flow • Both companies have positive operative cash flow • Net Debt • Net debt / EBITDA remains in targ
Slide 30: Thank you!
Thank you!
Slide 31: Forward looking statements
Forward looking statements Statements made in this document relating to the future, including future performance and other trend projections, are forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circum