Slide 1: Annual Results
SULTS ANNUAL RE
Slide 2: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 3: CEO's review
CEO’s review • 2016 overview • Q4 2016 financial and operational highlights • Segment review • Strategy execution • Outlook and guidance for 2017 3
Slide 4: 2016 highlights – best ever year
2016 highlights – best ever year • Revenue increased by 4% and mobile service revenue by 6% • Comparable EBITDA grew by 5% and EPS by 7%* • Dividend payment in 2016 was €1.40 per share, total €223m • Mobile subscription base decreased in Consumer Customers and increased in Corporate Customers segmen
Slide 5: 2016 financial highlights – comparable figures
2016 financial highlights – comparable figures Growth in revenue and in all earnings lines Change in 2016 2016 Revenue €1,636m +4.2% EBITDA €564m +5.3% EBITDA-% 34.5% +0.3 pp Earnings per share €1.66 +7.5% Mobile service revenue €762m +6.0% CAPEX €204m +4.2% Cash flow €281m +5.9% Net debt 1) €1,124m
Slide 6: 2016 operational highlights
2016 operational highlights Growth in mobile data and fixed broadband Change in 2016 2016 Mobile subscriptions 4,694,800 -45,600 Fixed broadband subscriptions 594,900 +61,000 Cable TV subscriptions 444,000 +113,700 Mobile ARPU 1) €16.6 +€0.6 Mobile churn 17.3% +1.2 pp Mobile usage, minutes 2) 6,404m
Slide 7: Q4 2016 highlights
Q4 2016 highlights • Q4 2016 was best ever fourth quarter • Revenue increased by 7% and comparable EBITDA by 6% • Mobile service revenue grew by 3.4% • Mobile subscription base decreased, especially prepaid, fixed broadband up • Solid profit improvement in Consumer Customers segment, Corporate Custo
Slide 8: Q4 2016 financial highlights
Q4 2016 financial highlights Growth in revenue and EBITDA • Revenue €434m (404) Revenue, €m and YoY change, % 6,2% 7,3% • EBITDA €139m (128, comparable 131) 1,7% 2,8% 4,8% 2,5% 0,8% -0,4% • EBIT €76m (68) 419 434 • Comparable EBIT €85m (77) 390 394 404 390 393 381 • EPS €0.37 (0.35) Q1/15 Q2/15 Q3/1
Slide 9: Q4 2016 operational highlights
Q4 2016 operational highlights Growth in mobile service revenue – decrease in subscription base • Mobile service revenue grew by 3.4% Mobile service revenue, €m and YoY change, % • Up-selling to higher speeds 8,3% 11,3% 9,1% 6,9% 3,8% 6,0% 4,7% 3,4% • More smartphones and data bundle subscriptions •
Slide 10: Business segments
Business segments NK
Slide 11: Q4 2016 Consumer Customers
Q4 2016 Consumer Customers Revenue and EBITDA increased • Revenue €272m (254) Revenue, €m and YoY change, % • Growth in mobile service revenue 6,1% 7,0% 7,0% 3,6% 3,5% • Anvia consolidation, digital services and equipment sales 0,9% 1,5% 1,2% increased revenue • Traditional fixed, interconnection an
Slide 12: Q4 2016 Corporate Customers
Q4 2016 Corporate Customers Growth in revenue, profit improvement continued • Revenue €162m (150) Revenue, €m and YoY change, % • Growth in mobile service revenue 8,0% 8,0% 4,7% • Anvia consolidation and digital services increased revenue 2,0% 1,4% 2,7% 1,0% • Traditional fixed, interconnection and
Slide 13: Strategy execution
Strategy execution Build value on data Accelerate digital service businesses Improve performance with customer intimacy and operational excellence 13
Slide 14: Growth in 4G subscriptions continuing
Growth in 4G subscriptions continuing • 74% of customers use a smartphone 3G and 4G smartphone penetration 1), % • 82% of smartphones are 4G-capable 71% 73% 74% 68% 70% 63% 65% 66% 60% 3G • Of all models sold in Q4 • 94% were smartphones, of which all were 4G-capable (93% and 100% respectively in Q3
Slide 15: Pioneering robot technology as part of daily routines
Pioneering robot technology as part of daily routines • UBTECH Robotics’ Jimu and Alpha robots for sale • Jimu robot is an innovative and easy assembly kit • Available from Elisa web store and Elisa Kulma flagship store • Robot schools for youngsters • Fun way to learn programming logic 15 SISÄINEN
Slide 16: New ways to exploit the business phone
New ways to exploit the business phone • New service for handset selection • Employees get better phone by paying additional fee themselves • Benefits of Oma Lasku (“My Invoice”) service • Upgrade of handset or subscription • Use of toll numbers (e.g. bus tickets or parking) • Buying the business ph
Slide 17: Elisa Innovation Challenge – high-grade competition
Elisa Innovation Challenge – high-grade competition • Winners of the two-part competition were domestic world-class innovations • Emergence, energy self-sufficient positioning solution • Lukoton, intelligent locking solution • Award presented at Slush 2016 • High-quality, international participants
Slide 18: Elisa has the fastest 4G network in Finland
Elisa has the fastest 4G network in Finland • Survey of 35 cities, towns and municipalities • Conducted by European Communications Engineering Oy (ECE) • Survey covered 60% of the Finnish population • Main roads were also covered • Elisa’s 4G network covers 99% of the population at the moment 18
Slide 19: Outlook and guidance for 2017
Outlook and guidance for 2017 Macroeconomic environment still weak in 2017, competition remains challenging • Revenue at the same level or slightly higher than in 2016 • Comparable EBITDA at the same level or slightly higher than in 2016 • CAPEX maximum 13% of revenue, mid-term target maximum 12% is
Slide 20: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 21: Growth in revenue and earnings continued
Growth in revenue and earnings continued € million, excluding one-offs Q4/16 Q4/15 Δ 1) 2016 2015 Δ 1) • Q4 revenue growth 7% Revenue 434 404 30 1,636 1,569 66 EBITDA 139 131 8 564 536 28 • Q4 EBITDA growth excluding EBITDA-% 32.0% 32.4% 34.5% 34.1% one-offs 6% Depreciation and amortisation -54 -54
Slide 22: Revenue growth in both segments, Anvia consolidation contributed positively
Revenue growth in both segments, Anvia consolidation contributed positively • Q4: Consumer and Corporate Revenue change Q4 YoY, €30m Customers -4 • Growth through Anvia consolidation 8 • Growth in mobile and digital services 11 • Decrease in fixed services* 15 434 • Organic growth approximately 3% 4
Slide 23: Revenue growth continued in Estonia
Revenue growth continued in Estonia • Revenue €25.8m (25.0) Revenue, €m and YoY change, % • Growth in mobile service revenue and equipment sales 1.2% 4.6% 5.5% 4.3% 3.7% 3.2% -2.7% -2.1% 25.4 25.0 26.3 25.8 23.3 22.9 24.3 21.7 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 • EBITDA €7.7m (7.9) EBIT
Slide 24: Anvia consolidation affected expenses
Anvia consolidation affected expenses • OPEX increased Material and services (blue), employee (yellow) and • Equipment purchases other expenses (orange), €m, YoY change (black line) • Personnel expenses -1.9% -0.5% 3.4% 6.2% 0.7% 0.2% 6.4% 6.1% • Anvia consolidation Q3/16 onwards 44 47 41 43 39 43 4
Slide 25: CAPEX according to guidance
CAPEX according to guidance • Q4 CAPEX €62m1) (50) Consumer (blue), Corporate (yellow), shares 2) (orange) licence (green) €m, CAPEX/sales 3) (black line), % • Consumer €35m (28) • Corporate €27m (22) 14% 14% 14% 12% 12% • Full-year CAPEX / sales 12%, in line 12% 11% 10% with guidance 85 22 • 700 MH
Slide 26: Starman acquisition
Starman acquisition • Announced on 13 December 2016 • P&L 2016 • No impact • Purchase price (EV) €151m • Balance sheet, end of 2016 • Loan provided to company and • Loan receivables €167m in Trade and other receivables sellers €167m • Estonian competition authority has • Cash flow statement 2016 ope
Slide 27: Cash flow affected by acquisitions
Cash flow affected by acquisitions • Q4 cash flow excluding Starman and Cash flow change, €m 1 -7 -13 share purchases improved by 76% to 11 34 €53m (30) 30 -168 • Change in NWC YoY €34m -115 • FY cash flow, excluding Starman and -2 share purchases improved by 6% to Q4/15 EBITDA NWC Financials Taxes
Slide 28: Solid liquidity position
Solid liquidity position Bonds and bank loan maturities, 31 December 2016 • Cash and undrawn committed credit Bonds (blue), loans (green), RCF (orange), €m facilities €214m (479) • €170m undrawn from €300m credit facilities 130 • Net financial items down by €3m in 2016 (excluding one-off +€3m) • Ave
Slide 29: Capital structure in target range
Capital structure in target range • Net debt in target range Net debt (blue, €m), Net debt / EBITDA (orange line) • Net debt / EBITDA 2.0× 2,0 2,0 1,9 1,9 • Gearing 116%, equity ratio 38% 1,8 1,8 1,8 1,7 • Target setting 1,075 991 1,054 1,007 1,124 • Net debt / EBITDA 1.5–2× 934 962 899 • Equity rat
Slide 30: Competitive remuneration continues
Competitive remuneration continues • Dividend proposal of €1.50 per share Dividend (blue), buy-backs (yellow) and pay-out ratio • Dividend growth +7.1% 126% 135% • Total amount €239m 101% 104% 98% 94% 92% 93% • Ex-dividend date 10 April 2017 88% • Payment 19 April 2017 1.42 1.32 1.40 1.50 1.30 1.30
Slide 31: Contacts
Contacts: Mr. Vesa Sahivirta vesa.sahivirta@elisa.fi Download the Elisa IR App +358 102 623 036
Slide 32: Cash flow YoY comparison
APPENDIX Cash flow YoY comparison € million Q4/16 Q4/15 Δ1) Δ% 2016 2015 Δ1) Δ% EBITDA 139 128 11 9% 563 532 31 6% Change in receivables 6 10 -3 -2 Change in inventories -2 -12 1 -6 Change in payables 8 -20 12 7 Change in NWC 12 -22 34 9 -0 10 Financials (net) -7 -8 1 -16 -18 Taxes for the year -22
Slide 33: Cash flow by quarters
APPENDIX Cash flow by quarters € million Q4/16 Q3/16 Q2/16 Q1/16 Q4/15 Q3/15 Q2/15 Q1/15 EBITDA 139 154 134 137 128 145 131 129 Change in receivables 6 -30 19 2 10 -22 15 -5 Change in inventories -2 -7 3 6 -12 4 -2 5 Change in payables 8 11 -2 -6 -20 18 -3 12 Change in NWC 12 -26 21 3 -22 0 9 13 Fin
Slide 34: Debt structure
APPENDIX Debt structure € million, at the end of the quarter Q4/16 Q3/16 Q2/16 Q1/16 Q4/15 Q3/15 Q2/15 Q1/15 Bonds and notes 594 594 593 593 592 592 592 591 Commercial papers 199 201 215 146 171 229 219 169 Loans from financial institutions 218 219 195 195 200 200 205 205 Financial leases 26 25 26 2