Slide 1: Q1 2011 results, 20 April 2011
20 April 2011
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 • Q1 2011 financial and operational highlights • Segment review • Execution of the strategy • Progress of new services and smartphone market development • Outlook for 2011 3
Slide 4: Q1 2011 highlights
Q1 2011 highlights • Strong revenue growth continued • Profitability was at a good level • Mobile subscription base continued to grow • Smartphone market growth accelerated, excellent demand for 3G data services • Elisa Kirja e-book service was launched • Elisa Viihde IPTV success continues • AGM de
Slide 5: Revenue growth continued
Q1 2011 financial highlights Revenue growth continued • Revenue € 374m (353) – Growth in equipment sales and mobile 36 % services 33 % 33 % 33 % 33 % 33 % 35 % 32 % 31 % – Decrease in fixed telephony business and MTR – Growth in Online and ICT service businesses 383 374 • EBITDA € 118m (116) 360 365
Slide 6: Strong growth in mobile subscriptions continued
Q1 2011 operative highlights Strong growth in mobile subscriptions continued 3 898 • Mobile net adds 101,300 in Q1/11 3 652 3 797 3 550 – Growth in both customer segments 3 329 3 432 3 218 3 153 – Strongest growth in mobile broadband 3 026 and 3G subscriptions – Estonia +9,900 subscriptions • Growth
Slide 7: Mobile churn decreased further
Q1 2011 operative highlights Mobile churn decreased further • Growth in mobile services – Outgoing minutes growth +5% YoY – SMS growth +12% YoY 18,1 % • Mobile churn 14.3% (15.4) 15,4 % 15,9 % 14,7 % 14,5 % 14,7 % 15,0 % 14,0 % 14,3 % – Mobile churn decrease continued 1 749 1 739 – Keen competition
Slide 8: Business Segments
Business Segments 8
Slide 9: Growth in Online-services and equipment sales
Q1 2011 Consumer Customers Growth in Online-services and equipment sales • Revenue € 224m (214) 37 % 34 % 34 % – Growth in smartphones and Online- 33 % 33 % 32 % 31 % services 31 % 30 % – Decrease in fixed telephony business and mobile interconnection revenue • EBITDA € 67m (73), 30% of revenue – Hi
Slide 10: Strong growth in corporate customers' ICT services
Q1 2011 Corporate Customers Strong growth in corporate customers’ ICT services • Revenue € 150m (139) 36 % 36 % 34 % 34 % – Growth in ICT services, mobile usage 33 % 34 % 34 % 34 % and smartphone sales 31 % – Decrease in fixed network business • EBITDA € 51m (43), 34% of revenue – Revenue growth 154
Slide 11: Strategy execution
Strategy execution New services and new markets Strengthening market position in core markets Integration of One Elisa 11
Slide 12: Good growth in mobile broadband and smartphones
Good growth in mobile broadband and smartphones Penetration in Elisa’s network in Finland • Smartphone growth accelerated, still 22,0 % great growth potential 19,0 % 17,5 % • Smartphones top the list of most sold 15,0 % phones in March 2011 1. iPhone 4 11,5 % 2. Nokia E7 3. Nokia C7 4. ZTE Blade 6,5
Slide 13: Elisa Kirja – most extensive Finnish e-book service
Elisa Kirja – most extensive Finnish e-book service • May be used with tablets, smartphones, electronic readers and computers • Service includes the e-books and audio books • Smartphone applications for Android and Apple devices
Slide 14: Exclusive content for Elisa Viihde IPTV
Exclusive content for Elisa Viihde IPTV • Exclusive contract with the Nordic film distributor Nordisk Film • Exclusive rights to comprehensive range of domestic films – Producer Solar Films, MRP Matila Röhr Productions and Bronson Club • Smartphone applications for Android and Apple devices
Slide 15: Sales and marketing power with Digital Signage
Sales and marketing power with Digital Signage • Customer benefits – More effective customer service – Facilitates easy purchasing of products and services – Offers up-to-date information • Possible to incorporate a video conference connection to the solutions
Slide 16: Elisa the first in Finland to grant mobile certificates
Elisa the first in Finland to grant mobile certificates • Electronic identification using SIM card • Electronic signature • Facilitates online services and electronic commerce • The insurance company If was the first firm to deploy the ID certificate to its customers
Slide 17: Outlook for 2011
Outlook for 2011 • Positive trends of the general economy have continued • Competition remains challenging • Slight increase in revenue • EBITDA excluding one-offs to improve slightly • CAPEX maximum 12 per cent of revenue 17
Slide 18: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO 18
Slide 19: Strong revenue growth continued
Strong revenue growth continued EUR million Q1/11 Q1/10 Δ 2010 Revenue 374 353 21 1463 Other operating income 1 1 5 Operating expenses -257 -238 -19 -984 EBITDA 118 116 2 485 EBITDA excluding on-offs 1) 119 116 3 EBITDA-% 31% 33% 33 % EBITDA-% excluding one-off 1) 32% 33% Depreciation and amortisati
Slide 20: Revenue change YoY
Revenue change YoY 374 10 1 353 15 -5 + Mobile + ICT services + Online Services + M&A + Fixed broadband + Mobile +/- Cable TV - Estonia + Smartphones + Estonia - PSTN - MTR reduction - PSTN Q1 2010 Interconnection Equipment sales Consumer Business Q1 2011 and roaming customers Customers 20
Slide 21: Equipment sales and acquisitions affected OPEX
Equipment sales and acquisitions affected OPEX Q1 Q2 Q3 Q4 Q1 • OPEX decreased EURm 10 10 10 10 11 – Network operating expenses Materials and 140 148 148 163 158 services – Interconnections and roaming Employee benefit – Productivity improvements in various expenses 55 52 46 55 58 areas Other operat
Slide 22: CAPEX/Sales in line with guidance
CAPEX/Sales in line with guidance • Total CAPEX in Q1 EUR 41m (39) 17 % 17 % 20 % 15 % – CAPEX/Sales 11% (11) 13 % 15 % 11 % 11 % 11 % 20 11 % 2 • Q1/11 by segments 10 % 10 % 10 % – Consumer EUR 23m (24) 11 28 5% – Corporate EUR 18m (15) 28 4 25 • Major CAPEX areas 5 1 20 0% 16 – Fixed access and ba
Slide 23: Cash flow
Cash flow EUR million Q1/11 Q1/10 Δ 2010 EBITDA 118 116 2 485 Change in receivables 3 5 -2 2 Change in inventories -4 3 -7 -6 Change in payables -12 -12 0 11 Change in NWC -13 -4 -9 7 Finance income and expenses -17 -15 -2 -28 CDO Guarantee settlement -40 Financials (net) -17 -15 -2 -68 Taxes for th
Slide 24: Subscription growth continued in Estonia
Subscription growth continued in Estonia • Slight decrease in revenue – Lower MTR affected negatively 36 % 36 % 35 % 34 % • EBITDA decreased 32 % 31 % – Strong growth in mobile subscriptions 28 % 27 % – + 84,600 YoY, + 9,900 QoQ 24 % – One-off MTR settlement of EUR 1m EUR million Q1/11 Q1/10 2010 21
Slide 25: Liquidity position is good
Liquidity position is good Bond and Bank loan maturities • Cash and undrawn committed facilities EUR 344m (301m) 10 • Revolving Credit Facilities – EUR 170m maturing Jun 2012 – EUR 130m maturing Nov 2014 • Commercial Paper Program 300 – EUR 120m in use 226 • Credit ratings constant since 2003 – S&P
Slide 26: Capital structure in line with targets
Capital structure in line with targets Capital Structure 31.3.2011 Pro Target 1,8 1,7 1,7 Forma *) 1,6 1,6 1,5 1,5 1,5 1,5 1,5 Net Debt/EBITDA 1.5 1.8 1.5 - 2.0 Equity Ratio 37.6% 37.6% >35% Gearing 102% 121% - 812 854 817 773 729 719 752 725 776 752 *) Dividend EUR 140m included 43 % 41 % 45 % 48 %
Slide 27: Competitive profit distribution
Competitive profit distribution • EUR 0.90 dividend per share paid in 302 % 7 April 2011 – Total amount EUR 140m 86 – Dividend yield 6% * – Payout ratio 94% 43 • Authorisation max EUR 70m dividend or 149 % 136% max 5 million shares buy back 110 %402 126 % 88 % – Board of Directors plan EUR 0.40 per
Slide 28: Appendix
20 April 2011
Slide 29: Consolidated Cash flow statement
APPENDIX SLIDE Consolidated Cash flow statement EUR million Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009 Cash flow from operating activities Profit before tax 58 66 68 53 10 56 70 56 53 Adjustments to profit before tax 59 56 60 67 106 64 60 60 61 Change in working capital
Slide 30: Financial situation
APPENDIX SLIDE Financial situation EUR Million 31 Mar 11 31 Dec 210 30 Sep 10 30 Jun 10 31 Mar 10 31 Dec 09 30 Sep 09 30 Jun 09 31 Mar 09 Interest-bearing debt Bonds and notes 600 599 598 598 597 572 572 570 606 Commercial Papers 120 102 68 110 118 74 62 119 101 Loans from financial institutions 52