Slide 1: 2nd quarter results 2012
2nd quarter results 2012 13 July 2012
Slide 2: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO 2
Slide 3: CEO’s review
CEO’s review • Q2 2012 financial and operational highlights • Segment review • Strategy execution • Mobile data and smartphone market development • Progress of new services • Outlook for 2012 3
Slide 4: Q2 2012 highlights
Q2 2012 highlights • Q2 performance was good and in accordance with our expectations • Profitability was at a good level • Earnings per share improved markedly • Mobile subscription base continued to increase • Mobile usage continued to grow • Elisa Viihde IPTV contributed to fixed broadband growth
Slide 5: Growth in revenue and earnings
Q2 2012 financial highlights Growth in revenue and earnings • Revenue € 389m (378) • EBITDA € 122m (121), 36 % 35 % – 31% of revenue (32) 33 % 32 % 32 % 33 % 32 % 31 % 31 % • EBIT € 72m (69) • CAPEX € 51m (54), – 13% of revenue 401 – H1 CAPEX € 92m, according to 389 383 382 378 378 guidance, 12% of
Slide 6: Subscription growth continued
Q2 2012 operational highlights Subscription growth continued • 93,000 new mobile subs 4 337 – Growth in both customer segments 4 094 4 158 4 244 3 991 3 898 – Strongest growth in voice and mobile 3 652 3 797 3 550 broadband subs – Estonia +14,700 subscriptions • Fixed broadband growth continued – Ne
Slide 7: Growth in usage, churn slightly down
Q2 2012 operational highlights Growth in usage, churn slightly down 1 804 1 797 • Growth in mobile usage 1 790 1 768 1 754 – Strong growth in data 1 749 1 739 1 719 1 707 – Outgoing minutes 1.8bn, YoY growth 2% 18,1 % – 561m SMS, YoY growth 13% 15,9 % 15,0 % 14,3 % 15,3 % • Churn* 14.1% (11.9) 11,9
Slide 8: Business Segments
Business Segments 8
Slide 9: Q2 2012 Consumer Customers
Q2 2012 Consumer Customers Growth in new services and mobile business • Revenue € 239m (227) 35 % – Growth in mobile usage, smartphone 34 % 33 % 32 % 32 % sales and online services 31 % 31 % 30 % 31 % – Growth in Estonia – Decrease in fixed telephony business and mobile interconnection revenue • EBI
Slide 10: Q2 2012 Corporate Customers
Q2 2012 Corporate Customers ICT service business up, traditional fixed down • Revenue € 150m (150) 36 % 37 % 34 % – Growth in mobile data, ICT services 34 % 34 % 33 % 32 % 32 % 32 % and equipment sales – Decrease in fixed network business and mobile interconnection revenue • EBITDA € 48m (49) – 32%
Slide 11: Strategy execution
Strategy execution New services and new markets Strengthening market position in core markets Integration of One Elisa 11
Slide 12: Mobile data and smartphone market grow strongly
Mobile data and smartphone market grow strongly Penetrations in Elisa’s network in Finland • Already one out of five customers uses 42,0 % 40,0 % a new type of smartphones 36,5 % • Smartphones top the list of most sold 33,5 % phones in June 30,0 % 1. Samsung Galaxy S III 26,0 % 2. Apple iPhone 4S 23
Slide 13: Growth in Windows phones in Finland
Growth in Windows phones in Finland Smatrphone operating systems in Elisa’s network Q2 / 2011 Q2 / 2012 Others 4% Windows 12% Symbian 3^ Android 35% Android 47% 39% Symbian 3^ 26% iPhone 17% iPhone 20% 13
Slide 14: Popular Elisa Viihde IPTV applications
Popular Elisa Viihde IPTV applications • More than 120,000 application downloads to tablets and smartphones – Browsing of TV programs and movie rental offering – Recording of favourite programs • For all major operating systems – Most recently to Windows phones
Slide 15: Elisa Kirja e-book to city libraries
Elisa Kirja e-book to city libraries • Libraries in Helsinki and Oulu lending out the Elisa Kirja e-book service on tablets – 2 libraries in Helsinki, 1 in Oulu – 50 e-books loaded on tablet • The service was also expanded to cover more than 100 out-of-print detective novels
Slide 16: Elisa eSali cloud service – an easy way to add server capacity
Elisa eSali cloud service – an easy way to add server capacity • With Elisa eSali cloud services corporate customers can expand their existing data center to Elisa’s cloud service – Connection occurs via technology developed by Elisa • Flexible solution to support corporate own cloud services
Slide 17: Outlook for 2012
Outlook for 2012 • Uncertainties in the general economy have also affected Finland. The macroeconomic outlook for Finland is weaker than the outcome in 2011. • Competition remains challenging • Revenue at the same level as last year • EBITDA excluding one-offs at the same level and EBIT will improve
Slide 18: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO 18
Slide 19: Strong earnings growth continued
Strong earnings growth continued EUR million Q2/12 Q2/11 Δ 2) Δ% 1H/12 1H/11 Δ 2) Δ% 2011 Revenue 389 378 12 3% 771 752 19 3% 1 530 Other operating income 1 2 -1 2 3 -1 6 Operating expenses -269 -259 -10 -530 -516 -14 -1 030 EBITDA 1) 122 121 1 1% 243 239 4 2% 506 EBITDA-% 31% 32 % 32% 32 % 33% Depr
Slide 20: Growth in service revenue and equipment sales
Growth in service revenue and equipment sales 389 0 + New services 8 (ICT and video) + Estonia + Mobile - PSTN 378 + Mobile + New services 11 (Online services) + Estonia -7 + Fixed broadband +/- Cable TV - PSTN + Volumes + Smartphones - MTR reduction Q2 2011 Interconnection Equipment sales Consumer
Slide 21: Equipment sales increased OPEX
Equipment sales increased OPEX • OPEX decreases in Q2 Q2 Q3 Q4 Q1 Q2 EURm 11 11 11 12 12 – Interconnection and roaming Materials and – Productivity improvements, e.g. IT and 159 156 170 158 164 services customer service Employee benefit • OPEX increases in Q2 expenses 57 49 59 61 61 – Equipment sale
Slide 22: CAPEX/Sales in line with guidance
CAPEX/Sales in line with guidance 20% • CAPEX in Q2 EUR 51m (47) 15% 14% – CAPEX/Sales 13% (12%) 13% 11% 20 12% 12% 13% 15% 11% 11% – Consumer EUR 30m (28) 10% – Corporate EUR 21m (19) 11 5% • H1 CAPEX EUR 92m (88) 4 25 21 21 – CAPEX/Sales 12% (12%) 20 19 0% 17 16 18 • Major CAPEX areas 18 -5% – 3G
Slide 23: Stable cash flow continues
Stable cash flow continues EUR million Q2/12 Q2/11 Δ1) H1/12 H1/11 Δ1) 2011 EBITDA 122 121 1 243 239 4 506 Change in receivables 22 9 13 24 12 12 -19 Change in inventories 0 1 -1 -7 -4 -4 -1 Change in payables -16 -21 5 -25 -33 8 -10 Change in NWC 6 -11 17 -9 -25 16 -31 Financials (net) -2 -1 -1 -21
Slide 24: Strong growth in Estonia continued
Strong growth in Estonia continued 32 % • Revenue € 28m (26) 30 % 30 % – Revenue growth 9% 28 % 27 % 27 % 27% 26 % – Strong growth in mobile subs – +72 500 YoY, +14 700 QoQ 23 % – Mobile broadband growing 28 • EBITDA € 8m (7) 26 27 26 25 23 23 23 – Revenue growth 21 • CAPEX € 1.4m (2.5) – 3G Coverag
Slide 25: Liquidity position is good
Liquidity position is good Bond and Bank loan maturities • Cash and undrawn committed facilities EUR 222m (302) 130 • Revolving Credit Facilities – EUR 130m maturing Nov 2014 10 – EUR 170m maturing Jun 2016 – EUR 115m drawn 2Q/12 170 • Commercial Paper Program – EUR 198m in use 300 • Credit ratings
Slide 26: Capital structure in line with targets
Capital structure in line with targets • Capital structure – Net debt / EBITDA 1.8 – Gearing 123%, Equity ratio 38% 1,8 1,7 – Dividend payment EUR 203m in Q2 1,5 1,5 1,6 1,5 1,6 1,6 1,5 • Target setting – Net debt / EBITDA 1.5 – 2x – Equity ratio >35% 776 845 793 788 909 752 725 752 754 42% 45% 43%
Slide 27: 2nd quarter results 2012
2nd quarter results 2012 13 July 2012
Slide 28: Consolidated Cash flow statement
APPENDIX SLIDE Consolidated Cash flow statement EUR million Q2 2012 Q1 2012 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Cash flow from operating activities Profit before tax 66 61 72 74 61 58 66 68 53 Adjustments to profit before tax 55 59 58 61 61 59 56 60 67 Change in working capital 6
Slide 29: Financial situation
APPENDIX SLIDE Financial situation EUR Million 30 Jun 12 31 Mar 12 31 Dec 11 30 Sep 11 30 Jun 11 31 Mar 11 31 Dec 10 30 Sep 10 30 Jun 10 Interest-bearing debt Bonds and notes 375 375 375 375 600 600 599 598 598 Commercial Papers 198 184 189 160 160 120 102 68 110 Loans from financial institutions 22