Slide 1: Half-Year Report 2018
Q2 2018 Half-Year Report 2018 1 3 J U LY 2 0 1 8
Slide 2: Q2 2018 highlights
INTERIM REPORT Q2 2018 Q2 2018 highlights • Record quarter again • Revenue grew by 3% – All organic growth – Growth in both customer segments • Comparable EBITDA growth 4%, EPS growth 6% • Mobile service revenue growth 2% – Up-selling continues, but campaigns have decelerated growth. Good demand for
Slide 3: Growth in revenue and EBITDA continued
INTERIM REPORT Q2 2018 Growth in revenue and EBITDA continued Revenue Mobile service revenue Revenue, €m YoY change.% MSR, €m YoY change,% 13,3% 5,0% 5,5% 5,1% 8,4% 8,9% 8,1% Growth 3,9% • 4G up-selling 2,8% 1,6% continues • Mobile and digital services • Campaigns have • Equipment sales decelerated
Slide 4: Solid performance in both customer segments
INTERIM REPORT Q2 2018 Solid performance in both customer segments Consumer Customers Revenue and EBITDA1) Revenue, €m EBITDA, €m EBITDA-% Revenue +3%, EBITDA +3%1) + Mobile service revenue + Equipment sales 36% 36% 36% 36% + Digital services 33% - Traditional fixed services 278 99 292 104 294 97 27
Slide 5: Strategy execution
INTERIM REPORT Q2 2018 Strategy execution Build value on data Accelerate digital service business Improve performance by engaging people in building excellence 5
Slide 6: Growth in 4G and up-selling continues
INTERIM REPORT Q2 2018 Growth in 4G and up-selling continues Growth in 4G smartphone penetration Smartphone penetration1),% • 80% of customers use a smartphone 77 % 78 % 79 % 80 % 80 % 73 % 74 % 75 % – 94% (92) 4G-capable 71 % • 93% of phones sold 4G-capable Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17
Slide 7: Continuous improvement in quality builds competitive advantage
INTERIM REPORT Q2 2018 Continuous improvement in quality builds competitive advantage Significant incidents in 2017 (FICORA) All operators Elisa 70 60 50 Elisa A, B and C class yearly incidents 40 35 31 30 24 25 30 62 17 20 15 13 10 8 20 5 5 2 3 0 0 1 0 0 10 22 8 A B C 8 2014 2015 2016 2017 0 0 0 Cl
Slide 8: Elisa's unique capabilities and innovations drive continuous development of operational excellence
INTERIM REPORT Q2 2018 Elisa’s unique capabilities and innovations drive continuous development of operational excellence Incidents -50% in first 6 months, Fully automated Network Operation and customer complaints -15% Center (NOC) 0 persons Network Operation Center OPEX and CAPEX savings Automated
Slide 9: Focused portfolio of digital service businesses
INTERIM REPORT Q2 2018 Focused portfolio of digital service businesses Leveraging core business capabilities and providing interesting growth perspective Entertaining services International video conferencing • 300,000+ paying customers and high NPS • Over 400 corporate customers in 90 • Can be used
Slide 10: Outlook and guidance for 2018
INTERIM REPORT Q2 2018 Outlook and guidance for 2018 Macroeconomic environment has improved, but long-term structural challenges still remain. Competition remains challenging. • Revenue same level or slightly higher than in 2017 • Comparable EBITDA same level or slightly higher than in 2017 • CAPEX
Slide 11: Financial performance
Q2 2018 Financial performance INTERIM REPORT Q2 2018
Slide 12: Earnings growth continues
INTERIM REPORT Q2 2018 Earnings growth continues Q2 2018 P&L and growth1) Revenue YoY growth Revenue 2,8 % €458m -0,5 % 3,2 % 2,8 % EBITDA 4,1 % €157m Organic Divestments Total EBIT 6,6 % €98m Revenue change YoY, €12m 10 0 PTP 5,9 % €92m 0 2 458 EPS 6,2 % €0.47 445 Q2/17 Consumer Corporate Equipment
Slide 13: Organic growth continues in Estonia
INTERIM REPORT Q2 2018 Organic growth continues in Estonia • Revenue +8%, EBITDA +4% Revenue Revenue, €m YoY change, % – Mobile and fixed services 75,2 % 59,3 % 63,2 % • Churn down, post-paid base up 50,3 % – Post-paid voice churn 9.5% (12.1% in Q1) 7,8 % – Mobile post-paid base +5,000, pre-paid -3,
Slide 14: Stable CAPEX
INTERIM REPORT Q2 2018 Stable CAPEX • CAPEX1) €61m (64) CAPEX CAPEX / sales1) % Consumer, €m Corporate, €m – Consumer €41m (43) 15% 13% 12% 12% 13% – Corporate €20m (21) – CAPEX / sales 13% 23 – Full year according to 12% guidance 19 19 17 20 41 38 48 35 41 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 – 4G capacit
Slide 15: Solid cash flow continuing
INTERIM REPORT Q2 2018 Solid cash flow continuing • Q2 cash flow €81m (76), +7% Cash flow, €m + Higher EBITDA + Lower investments in shares + Positive NWC change 113 76 81 - Higher CAPEX and taxes 48 52 Strong cash conversion continues Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Cash conversion Change in net work
Slide 16: Efficient capital structure
INTERIM REPORT Q2 2018 Efficient capital structure • Capital structure according to target Net debt Net debt, €m Net debt / EBITDA1) – Net debt / EBITDA 1.5–2x 2,1 – Equity ratio >35% 1,9 1,8 1,9 1,6 1 231 1 201 1 120 1 073 1 018 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 • Return ratios improved further Return
Slide 17: Q&A
Q&A
Slide 18: Contacts
Contacts: Mr. Vesa Sahivirta Ms. Kati Norppa vesa.sahivirta@elisa.fi kati.norppa@elisa.fi +358 50 520 5555 +358 50 308 9773 investor.relations@elisa.fi
Slide 19: P&L by quarter
APPENDIX P&L by quarter EUR million Q2/18 Q1/18 Q4/17 Q3/17 Q2/17 Q1/17 Q4/16 Q3/16 Revenue 457,5 449,6 472,5 453,9 445,1 415,9 434,0 418,7 YoY growth 2,8 % 8,1 % 8,9 % 8,4 % 13,3 % 6,6 % 7,3 % 6,1 % Other operating income 6,0 1,1 2,6 1,5 0,8 0,7 1,5 1,8 Materials and services -176,5 -170,0 -190,2 -
Slide 20: Cash flow YoY comparison
APPENDIX Cash flow YoY comparison € MILLION Q2/18 Q2/17 CHANGE1) H1/18 H1/17 CHANGE1) 2017 EBITDA 160 148 12 313 291 22 608 Change in receivables 19 -23 42 26 -11 37 -59 Change in inventories 1 -8 10 8 -6 13 -11 Change in payables -5 28 -32 -30 13 -43 45 Change in NWC 15 -4 19 3 -4 7 -25 Financials
Slide 21: Cash flow by quarter
APPENDIX Cash flow by quarter € MILLION Q2/18 Q1/18 Q4/17 Q3/17 Q2/17 Q1/17 Q4/16 Q3/16 EBITDA 160 153 151 165 148 144 139 154 Change in receivables 19 7 -33 -15 -23 12 6 -30 Change in inventories 1 7 -5 0 -8 3 -2 -7 Change in payables -5 -26 36 -4 28 -15 8 11 Change in NWC 15 -12 -1 -20 -4 0 12 -26
Slide 22: Debt structure
APPENDIX Debt structure € MILLION. AT THE END OF QUARTER Q2/18 Q1/18 Q4/17 Q3/17 Q2/17 Q1/17 Q4/16 Q3/16 Bonds and notes 764 763 767 766 766 765 594 594 Commercial papers 267 151 115 207 258 193 199 201 Loans from financial institutions 205 205 209 210 216 215 218 219 Financial leases 26 26 26 26 26
Slide 23: Forward-looking statements
INTERIM REPORT 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 d