Slide 1: Second Quarter Results 2009
Second Quarter Results 2009 17 July 2009
Slide 2: Agenda
Agenda CEO’s review Financial review Veli-Matti Mattila, Jari Kinnunen, CEO CFO 2 17.7.2009 Second Quarter Results 2009
Slide 3: CEO's review
CEO’s review Financial and operational highlights Review of the Consumer Customer and Corporate Customer businesses Execution of the strategy Progress of 3G services Outlook for 2009 3 17.7.2009 Second Quarter Results 2009
Slide 4: Q2 2009 financial highlights
Q2 2009 financial highlights Solid performance in the current environment Revenue € 355m (372) Lower interconnection fees and roaming revenues, approx. € -2m Lower equipment sales volumes, approx. € -5m Decrease in traditional fixed business revenue, approx. € -6m EBITDA € 116m (109*), EBITDA margin
Slide 5: Q2 2009 operational highlights
Q2 2009 operational highlights Good growth in mobile subscriptions continued Change in Q2 2009 Q2 2009 Mobile subscriptions 3,152,600 +127,000 Fixed broadband 481,700 -13,600 Mobile ARPU * € 24.0 € -0.1 Mobile Churn ** 14.7% +0.7 %-units Mobile usage, min *** 1,589m +64m Active 3G data users 569,000
Slide 6: Q2 2009 Consumer Customers
Q2 2009 Consumer Customers Strong profitability improvement Revenue € 209m (218) Revenue and EBITDA-% Lower equipment sales 218 225 217 Decrease in traditional fixed lines 209 202 Lower interconnection fees in Finland and Estonia QoQ revenue growth – Both in mobile and fixed broadband EBITDA € 68m (
Slide 7: Mobile subscription KPIs
Mobile subscription KPIs Growth in usage, stable ARPU and Churn ARPU Churn Usage 50 ARPU (€) and annualised churn (%) Outgoing traffic (million minutes) 1 800 45 1 600 40 35 1 400 30 1 200 25 1 000 20 15 800 10 600 5 0 400 Q 02 Q 02 Q 02 Q 02 Q 03 Q 03 Q 03 Q 03 Q 04 Q 04 Q 04 Q 04 Q 05 Q 05 Q 05 Q
Slide 8: Q2 2009 Corporate Customers
Q2 2009 Corporate Customers Profitability maintained despite of downturn Revenue € 146m (153) Revenue and EBITDA-% Lower usage both in PSTN and mobile – partly compensated by mobile subs 153 155 149 150 growth 146 Decrease in equipment sales Lower interconnection fees and roaming revenues Growth in
Slide 9: Strategy execution
Strategy execution Elisa’s strategy New services and new markets 2005 – Strengthening market position in core markets 2003 – Integration of One Elisa 9 17.7.2009 Second Quarter Results 2009
Slide 10: Strategy execution: Operational excellence
Strategy execution Operational excellence Productivity improvements in Q2 2009: Delivery lead times and accuracy for corporate LAN/WAN connections and new mobile network sites improved several process enhancements and automation of manual tasks IT consolidation continued, amount of IT systems decrea
Slide 11: Growth in active 3G data users continues
Growth in active 3G data users continues Active 3G users Active GPRS users Number of active mobile data users in Elisa’s network, thousands 914 937 843 790 789 740 703 701 668 627 595 569 526 523 490 496 425 398 374 326 282 249 198 173 153 112 72 19 Q1/06 Q2/06 Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 Q4/07 Q1
Slide 12: New services: Elisa Viihde
New services: Elisa Viihde Bundled entertainment services Advanced digital IPTV service Integrates digital TV and internet Remote control through net or mobile phone 2500 h storage capacity for TV programs Premium channels Video-On-Demand services 24 Mbps fixed broadband for internet access 12 17.7.
Slide 13: Prepaid mobile broadband
Prepaid mobile broadband Saunalahti Prepaid Mobile Broadband First Prepaid mobile broadband on the market Excellent for foreign visitors and domestic holiday-makers Unlimited speed in the 3G network with best coverage 13 17.7.2009 Second Quarter Results 2009
Slide 14: Outlook for 2009
Outlook for 2009 Current economic environment creates uncertainty The economic environment has impacted the Estonian business and the Corporate Customer segment Competition remains challenging Revenue at the same or slightly lower level than in 2008 EBITDA excluding one-offs at the same or slightly
Slide 15: Agenda
Agenda CEO’s review Financial review Veli-Matti Mattila, Jari Kinnunen, CEO CFO 15 17.7.2009 Second Quarter Results 2009
Slide 16: Profitability improved in Q2 2009
Profitability improved in Q2 2009 EUR million Q2/09 Q2/08 ∆ H1/09 H1/08 ∆ 2008 Revenue 355 372 -17 706 739 -33 1,485 Other operating income 1 1 2 2 7 Operating expenses -240 -268 28 -477 -528 51 -1 020 EBITDA 116 105 11 231 213 18 472 EBITDA excluding one-offs 116 109 7 231 220 11 478 EBITDA-% 32.8
Slide 17: Revenue change y-o-y
Revenue change y-o-y EUR million -1 -4 -6 -1 -5 372 355 2Q/08 Interconnection Equipment Fixed Finland Mobile Finland Estonia 2Q/09 Finland sales Finland 17 17.7.2009 Second Quarter Results 2009
Slide 18: Total expenses continued to decrease y-o-y
Total expenses continued to decrease y-o-y Total OPEX decrease EUR 28m Q2 Q3 Q4 Q1 Q2 EURm 08 08 08 09 09 OPEX decreases Materials Equipment purchase costs 169 166 159 146 144 and services Interconnection costs Efficiency programs Employee In Q2/2008 extra billing and CRM benefit 42 32 43 47 48 syst
Slide 19: Strong Cash Flow
Strong Cash Flow EUR million Q2/09 Q2/08 ∆ H1/09 H1/08 ∆ 2008 EBITDA 116 105 11 231 213 18 472 Change in receivables 39 43 51 110 132 Change in inventories -3 0 -1 4 7 Change in payables -6 -13 -16 -61 -56 Change in NWC 30 30 0 34 52 -18 83 Financials (net) -2 -6 4 -17 -20 3 -39 Taxes for the year -
Slide 20: CAPEX decreased by 11% y-o-y
CAPEX decreased by 11% y-o-y Total CAPEX EUR 36m (41) CAPEX, EURm CAPEX/Sales 10% (10%) 2 Q2 2009 by segments 11 28 Consumer EUR 19m (22) Corporate EUR 17m (19) 1 5 19 17 % 19 Major CAPEX areas 16 17 11 % 11 % 3G networks and services 10 % 10 % Backbone and access networks 36 IT systems 22 23 18 19
Slide 21: Recession affected the Estonian business
Recession affected the Estonian business Revenue decreased Customer billing 39 % 39 % Termination fee and roaming revenue 37 % 36 % 36 % Equipment sales Growth in mobile subscriptions 11,200 y-o-y 8,300 q-o-q EUR million Q2/09 Q2/08 2008 335 342 338 338 346 Revenue 21 26 98 EBITDA 8 10 37 EBITDA-% 3
Slide 22: Capital structure within target range
Capital structure within target range Capital structure Balance sheet KPIs Net debt / EBITDA 1.6 Gearing 89% 2,1 1,8 1,7 Target setting 1,6 1,7 Net debt / EBITDA 1.5 – 2x Gearing 50 – 100% 109 % 107 % 104 % Focus on cash generation 93 % 89 % CAPEX control Net Working Capital Cost control 898 891 812
Slide 23: Liquidity position good
Liquidity position good Cash and undrawn committed Bond and Bank loan maturities facilities EUR 324m (220m) 500 Revolving Credit Facilities 400 EUR 170m maturing June 2012 EUR 130m maturing November 2014 EUR 5m in use Q2/09 300 10 Commercial Paper Program EUR 119m in use, back up with RCF 200 No cha
Slide 24: Distribution possibilities have remained
Distribution possibilities have remained Capital structure targets unchanged Net debt / EBITDA 1.5 – 2x Cash flow generation in focus Net debt / EBITDA and gearing are expected to decrease Authorisation from the shareholders Special dividend or capital repayment up to EUR 150m Share buy-backs up to
Slide 25: Second Quarter Results 2009
Second Quarter Results 2009 17 July 2009
Slide 26: Consolidated Cash flow statement
APPENDIX SLIDE Consolidated Cash flow statement EUR million Q2 2009 Q1 2009 Q4 2008 Q3 2008 Q2 2008 Q1 2008 Q4 2007 Q3 2007 Q2/2007 Cash flow from operating activities Profit before tax 56 53 70 67 38 52 65 89 67 Adjustments to profit before tax 60 61 57 59 67 56 63 41 47 Change in working capital 3
Slide 27: Financial situation
APPENDIX SLIDE Financial situation EUR Million 30 Jun 2009 31 Mar 2009 31 Dec 2008 30 Sep 2008 30 Jun 2008 Interest-bearing debt Bonds and notes 570 606 606 604 604 Commercial Paper 119 101 56 81 107 Loans from financial institutions 80 80 80 80 80 Financial leases 27 27 27 26 26 Committed credit li