Slide 1: 3rd Quarter Results 2014
3rd Quarter Results 2014
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 2014 financial and operational highlights • Segment review • Strategy execution • Outlook and guidance for 2014 3
Slide 4: Q3 2014 highlights
Q3 2014 highlights • Best ever quarter • Mobile subscription base increased in spite of keen competition • Weak macro environment impacting corporate customer business • Consumer customer business performing well • Strong mobile data growth continues, smartphone penetration already 57% • Smartphones
Slide 5: Result improvement continued
Q3 2014 financial highlights Result improvement continued • Revenue €384m (395) 37% 36% 35% • EBITDA €142m (142*), 37% of revenue 33% 33% 31% 31% (36*) 30% 30% • EPS €0.43 (0.38) • CAPEX €52m (57), 11% of revenue (14) 401 396 395 387 390 382 384 384 • Net debt €1,043m (995) 361 • Cash flow €39m (51,
Slide 6: Mobile subscription base growing
Q3 2014 operational highlights Mobile subscription base growing 4535 4557 4552 4585 4490 4497 • Mobile subs increased by 33,600 in Q3 4427 4446 4470 • Growth in both customer segments • Estonia +9,500 subscriptions • Fixed broadband subscriptions decreased from previous quarter • Elisa Viihde IPTV c
Slide 7: Growth in data, minutes slightly decreasing
Q3 2014 operational highlights Growth in data, minutes slightly decreasing 1 755 1 747 • Mobile data YoY growth 80% 1 707 1 741 1 695 1 688 • 36.0bn megabytes (20.2) 1 662 1 638 1 632 • Outgoing minutes 16bn, slight decrease 19,3%20,0% 17,2% 17,7%18,0% 16,9% 17,6% • 597m SMS, at previous year’s leve
Slide 8: Business Segments
Business Segments NK
Slide 9: Growth in EBITDA and profitability
Q3 2014 Consumer Customers Growth in EBITDA and profitability 37% • Revenue €242m (247) 34% 34% 33% 33% • Growth through mobile and new services 31% 31% 30% 29% • Decrease in traditional fixed network, divestments, equipment sales and interconnection revenue 244 247 247 244 242 • EBITDA €90m (88*),
Slide 10: Revenue decreased, profitability up
Q3 2014 Corporate Customers Revenue decreased, profitability up 37% 36% 36% • Revenue €142m (148) 33% 33% 32% 32% 32% • Weak general economy 31% • Decrease in traditional fixed network, interconnection and roaming revenue, and divestments of non-core business • Growth in ICT and mobile services 157
Slide 11: Strategy execution
Strategy execution Build value on data Accelerate new services businesses Improve performance with customer intimacy and operational excellence 11
Slide 12: Strong smartphone base growth continues
Strong smartphone base growth continues Penetration in Elisa’s network in Finland 62% 63% 60% 61% • 57% of customers use smartphones 55% 57% 58% 57% 53% 54% 52% • 27% of total device base is LTE-capable 50% 48% • 46% of voice subscriptions* are data 40% bundles 38% 34% 31% • Most-sold phones in Sept
Slide 13: Elisa's 4G LTE network has the widest coverage
Elisa's 4G LTE network has the widest coverage • Active network building continued • 3000th 4G LTE base station opened • 4G* covers over 95% of Finns • 4G LTE covers over 90% of Finns * 4G = 3G DC and LTE 13
Slide 14: Elisa Viihde IPTV and Elisa Kirja eBook success continues
Elisa Viihde IPTV and Elisa Kirja eBook success continues • New content in Elisa Viihde • Sports • Travel • Crime dramas • Elisa Kirja strengthened it’s position as the leading publisher of Finnish e-books • Sales of e-books doubled compared to last summer 14
Slide 15: Strong capability in cybersecurity solutions and video conferencing services
Strong capability in cybersecurity solutions and video conferencing services • Investment in cyber security solutions • The most extensive data security services as a service from single operator/player • Nixu Ltd, an information security consultant, as a partner • CMSP certificate* for the highest
Slide 16: Outlook and guidance for 2014
Outlook and guidance for 2014 • Macroeconomic environment still weak in 2014 • Competition remains challenging • Revenue at the previous year’s level, or slightly higher • EBITDA excluding one-offs slightly higher than last year • CAPEX maximum 12 per cent of revenue 16
Slide 17: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 18: Strong growth in EPS continued
Strong growth in EPS continued EURm Q3/14 Q3/13 Δ 1) Δ% 1-9/14 1-9/13 Δ 1) Δ% 2013 Revenue 384 395 -11 -3% 1,150 1,146 3 0% 1,547 Other operating income 1 0 6 2 4 Operating expenses -243 -257 -760 -779 -1,061 EBITDA 142 138 3 2% 395 369 26 7% 491 EBITDA-% 37% 35% 34% 32% 32% EBITDA excl. one-offs 14
Slide 19: Revenue change, EURm
Revenue change, EURm 395 -4 -1 -1 - Roaming - Lower prices + Mobile - Interconnection + Estonia -5 in Finland and + Fixed broadband Estonia + Online services - PSTN 384 - Divestments + ICT services + Mobile - PSTN - Divestments Q3/13 Interconnection Equipment sales Consumer Corporate Q3/14 and roami
Slide 20: Efficiency measures decreased OPEX
Efficiency measures decreased OPEX Q3 Q4 Q1 Q2 Q3 • OPEX decreases in Q3/14 EURm 13 13 14 14 14 • Productivity improvements and synergies, e.g. Materials and 157 161 150 153 149 IT and personnel expenses services • Interconnection and roaming Employee benefit 62 78 65 63 54 • Equipment purchase cost
Slide 21: CAPEX in line with guidance
CAPEX in line with guidance 20% • Q3 CAPEX €43m (51*) 13% 13% 13% 13% 14% 13% 14% 15% 12% 11% • Consumer €24m (28*) 10% • Corporate €19m (23*) 5% 39 • 2014 CAPEX / sales guidance 12% 103 0% -5% 33 2 28 • Major CAPEX areas 6 5 25 0 0 -10% 21 21 23 24 20 22 23 • 4G/LTE rollout 19 -15% 30 29 28 32 28 •
Slide 22: Comparable cash flow improved
Comparable cash flow improved EURm Q3/14 Q3/13 Δ1) 1-9/14 1-9/13 Δ1) 2013 EBITDA 142 138 3 395 369 26 491 Change in receivables 0 -8 8 -13 3 -17 -13 Change in inventories 0 1 -1 2 6 -4 6 Change in payables -22 -3 -19 -18 -10 -8 2 Change in NWC -22 -9 -12 -29 -1 -28 -5 Financials (net) -2 -3 1 -15 -1
Slide 23: Stable revenue and EBITDA in Estonia
Stable revenue and EBITDA in Estonia • Revenue €25m (25) 25% 26% 28% 29% 27% 27% • Decrease in MTRs 26% 25% • Growth in mobile data 23% • EBITDA €7m (7) • CAPEX €2m (2 excl. licence fee) 30 29 • 4G/LTE, 3G Coverage 25 25 25 24 24 • Growth in mobile subs 9,500 QoQ 21 22 Q2 Q2 Estonian MTRs 2013 2014
Slide 24: Solid liquidity position
Solid liquidity position Bond and bank loan maturities 30.9.2014 • Cash and undrawn committed facilities €290m (506) 130 • Revolving Credit Facilities €50m drawn • Commercial paper programme • €200m in use as of 30 September 2014 170 300 300 • Solid credit ratings since 2003 131 59 • S&P BBB Positiv
Slide 25: Net debt at target level
Net debt at target level 2,1 2,1 2,0 2,0 2,0 1,8 1,7 1,7 1,7 • Capital Structure • Net debt / EBITDA 2.0× • Gearing 126% 1075 1043 1042 995 971 933 874 839 807 • Equity ratio 37.2% 41% 42% 36% 35% 37% 41% 34% 37% 33% Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 • Target setting Net Debt, EU
Slide 26: Thank you!
Thank you! Elisa IR App now available for iPhone, iPad and Android devices
Slide 27: Consolidated cash flow statement
APPENDIX SLIDE Consolidated cash flow statement EUR million 3Q14 2Q14 1Q14 4Q13 3Q13 2Q13 1Q13 4Q12 3Q12 Cash flow from operating activities Profit before tax 83 67 64 60 78 63 53 64 78 Adjustments to profit before tax 57 57 56 59 60 54 55 58 54 Change in working capital -22 -1 -6 -4 -9 0 9 -17 -24
Slide 28: Financial situation
APPENDIX SLIDE Financial situation EUR million 3Q14 2Q14 1Q14 4Q13 3Q13 2Q13 1Q13 4Q12 3Q12 Interest-bearing debt Bonds and notes 590 590 589 750 750 451 450 525 375 Commercial Papers 200 217 152 101 192 204 179 96 170 Loans from financial institutions 211 216 216 223 224 229 225 221 221 Financial l