Slide 1: Interim Report Q2 2019
Q2 2019 Interim Report Q2 2019 1 2 J U LY 2 0 1 9
Slide 2: Q2 2019 highlights
INTERIM REPORT Q2 2019 Q2 2019 highlights • Revenue slightly down – Equipment sales, interconnection revenue • Growth in comparable EBITDA • Mobile service revenue growth 1.9% – Up-selling continues • Post-paid voice churn slightly down from 19.7% to 18.0% – Competition remained keen, campaigning co
Slide 3: Slight EBITDA growth despite keen competition
INTERIM REPORT Q2 2019 Slight EBITDA growth despite keen competition Revenue Mobile service revenue Revenue, €m YoY change.% MSR, €m YoY change,% Decrease • 4G up-selling 2,8% 1,6% 1,1% 1,5% 2,1% 1,9% 0,0% -0,4% -2,2% -1,3% • Equipment sales continues • Interconnection • Product changes and roaming
Slide 4: Growth in EBITDA, slight revenue decrease
INTERIM REPORT Q2 2019 Growth in EBITDA, slight revenue decrease Consumer Customers Revenue and EBITDA1) Revenue, €m EBITDA, €m EBITDA-% Revenue -1% - Equipment sales - Interconnection and roaming revenue 38% 38% 37% 36% 35% - Divestments and traditional fixed services + Mobile and digital services
Slide 5: Strategy execution
INTERIM REPORT Q2 2019 Strategy execution Increase mobile and fixed service revenues Grow digital service businesses Improve efficiency and quality 5
Slide 6: Steady growth in 4G and up-selling continues
INTERIM REPORT Q2 2019 Steady growth in 4G and up-selling continues Growth in 4G smartphone penetration Smartphone and 4G speed penetration,% Smartphone penetr.1) 4G speed penetr.2) 4G 50 Mbps penetr.2) • 84% of customers use a smartphone 82% 83% 84% 78% 79% 80% 80% 81% 77% – 97% (94%) 4G-capable 75
Slide 7: Leading the way in 5G introduction
INTERIM REPORT Q2 2019 Leading the way in 5G introduction • Presales of Huawei, OnePlus, HTC and ZTE devices started • Sales of 5G mobile broadband subscriptions started – 600 Mbps at EUR 34.90 per month – 1 Gbps at EUR 44.90 per month – First phones and subscriptions sold and in commercial use • Wi
Slide 8: Expansion of digital service businesses continued
INTERIM REPORT Q2 2019 Expansion of digital service businesses continued Domestic digital services International digital services • Arctic Circle original series has been sold to • Elisa acquired Polystar, a Swedish analytics more than 20 countries. It will be seen in and assurance software company,
Slide 9: Outlook and guidance for 2019
INTERIM REPORT Q2 2019 Outlook and guidance for 2019 The positive development of the macroeconomic environment is decelerating in Finland. Competition remains challenging. • Revenue same level or slightly higher than in 2018 • Comparable EBITDA same level or slightly higher than in 2018 • CAPEX maxi
Slide 10: Financial performance
Q2 2019 Financial performance INTERIM REPORT Q2 2019
Slide 11: Growth in EBITDA, slight decrease in revenue
INTERIM REPORT Q2 2019 Growth in EBITDA, slight decrease in revenue EUR million 1) Q2/19 Q2/18 Change % Q2 2019 revenue change YoY, €-6m Revenue 452 458 -5.9 -1.3 % 2 -2 2 Other operating income 1 1 0.5 100.0 % -4 Materials and services -169 -176 7.7 -4.4 % Employee expenses -78 -77 -1.2 1.6 % -4 Ot
Slide 12: Solid performance in Estonia
INTERIM REPORT Q2 2019 Solid performance in Estonia • Revenue and EBITDA improved Revenue Revenue, €m YoY change, % – Mobile and fixed services growing 7,8% 6,0% – Post-paid voice churn 7.9% (7.7 in Q1) 5,2% 1,2% – Mobile post-paid base +1,700, pre-paid -3,200 -3,2% 41,7 41,7 44,6 40,4 42,2 Q2/18 Q3
Slide 13: CAPEX in line with guidance
INTERIM REPORT Q2 2019 CAPEX in line with guidance • CAPEX €61m, excl. IFRS 16 change CAPEX1) €55m (61) CAPEX / sales1) % 13% 11% 14% 12% 12% – Consumer €41m (41) – Corporate €20m (20) 61 66 49 51 55 • Main CAPEX areas Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 – 4G capacity and coverage increases Shares, licenc
Slide 14: Strong growth in comparable cash flow
INTERIM REPORT Q2 2019 Strong growth in comparable cash flow • Cash flow €37m (81), comparable Cash flow and comparable cash flow, €m €102 (87) 102 87 85 – Comparable cash flow growth +17% 58 – Positive change in NWC, lower CAPEX 81 87 52 68 – IFRS 16 impact +€4m 37 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 • C
Slide 15: Efficient capital structure and good returns
INTERIM REPORT Q2 2019 Efficient capital structure and good returns • Capital structure according to target Net debt Net debt, €m Net debt / EBITDA – Net debt / EBITDA 2.0x (target 1.5–2x) 1,8 2,0 1,8 1,7 2,0 – Equity ratio 35.3% (target >35%) 1 319 1 124 1 073 1 068 962 – IFRS 16 impact on assets a
Slide 16: Polystar complementary to Elisa Automate offering
INTERIM REPORT Q2 2019 Polystar complementary to Elisa Automate offering Acquisition Polystar OSIX Group – Purchase price (EV) EUR 70m – Headquarters in Stockholm • Additional purchase price max. EUR 5m if – >100 customers in 50 countries growth targets are achieved – Revenue EUR 38m – 200 employees
Slide 17: Q&A
Q&A
Slide 18: P&L by quarter
APPENDIX P&L by quarter EUR million Q2/19 Q1/19 Q4/18 Q3/18 Q2/18 Q1/18 Q4/17 Q3/17 Revenue 451.6 439.7 470.6 453.9 457.5 449.6 472.5 453.9 YoY growth -1.3 % -2.2 % -0.4 % 0.0 % 2.8 % 8.1 % 8.9 % 8.4 % Other operating income 1.1 0.7 0.9 1.8 6.0 1.1 2.6 1.5 Materials and services -168.8 -160.5 -185.1
Slide 19: Cash flow YoY comparison
APPENDIX Cash flow YoY comparison 1) EUR million Q2/19 Q2/18 Change 2018 EBITDA 159 160 -1 640 Change in receivables 5 19 -14 6 Change in inventories -1 1 -2 3 Change in payables 5 -5 10 -30 Change in NWC 10 15 -5 -21 Financials (net) 0 0 0 -17 Taxes for the year -17 -15 -1 -69 Taxes for the previou
Slide 20: Cash flow by quarter
APPENDIX Cash flow by quarter EUR million Q2/19 Q1/19 Q4/18 Q3/18 Q2/18 Q1/18 Q4/17 Q3/17 EBITDA 159 155 158 169 160 153 151 165 Change in receivables 5 9 4 -23 19 7 -33 -15 Change in inventories -1 6 -7 2 1 7 -5 0 Change in payables 5 -7 -1 2 -5 -26 36 -4 Change in NWC 10 8 -4 -20 15 -12 -1 -20 Fin
Slide 21: Debt structure
APPENDIX Debt structure EUR million at the end of the quarter Q2/19 Q1/19 Q4/18 Q3/18 Q2/18 Q1/18 Q4/17 Q3/17 Bonds and notes 941 939 767 766 764 763 767 766 Commercial papers 80 10 107 179 267 151 115 207 Loans from financial institutions 290 250 250 200 205 205 209 210 Financial leases 1) 93 90 25
Slide 22: 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 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