Elisa Oyj Class A · OMXHEX:ELISA
Elisa Oyj Class A — Q2 2004 Earnings Presentation
28 slides from Elisa Oyj Class A's earnings presentation, Aug 5, 2004
Slide 1: Interim Report April 2004 – June 2004
Interim Report 1 April 2004 – 30 June 2004 Elisa Corporation Q2 Interim Report 5 August 2004 1
Slide 2: Contents
Contents • Q2 2004 Report −President and CEO Veli-Matti Mattila • Key Figures and Financial Position −CFO Tuija Soanjärvi Elisa Corporation Q2 Interim Report 5 August 2004 2
Slide 3: Q2 2004 Report
Q2 2004 Report President and CEO Veli-Matti Mattila
Slide 4: Elisa Q2 2004
Elisa Q2 2004 • Market Review and Financial Highlights • Development of Operations • Future Outlook Elisa Corporation Q2 Interim Report 5 August 2004 4
Slide 5: Q2 2004 Highlights
Q2 2004 Highlights • Growth in mobile subscriptions • Strong growth in broadband channels • Cost reduction program exceeded expectations • Financial position strengthened Elisa Corporation Q2 Interim Report 5 August 2004 5
Slide 6: Improved Result, Lower Revenue
Improved Result, Lower Revenue • Revenue EUR 339m (391) • EBITDA EUR 95m (97) • EBIT EUR 35m (17) • Pre-tax profit EUR 28m (7) Elisa Corporation Q2 Interim Report 5 August 2004 6
Slide 7: Financial Position Strengthened
Financial Position Strengthened • Cash flow EUR 67m (25) • Net debt EUR 513m (742) • Operative CAPEX 9% of revenue (10) • Equity ratio 46% (40) Elisa Corporation Q2 Interim Report 5 August 2004 7
Slide 8: Stronger Position in Mobile Market
Stronger Position in Mobile Market • Number of subscriptions up again • Churn decreased clearly • Growth in subscriber usage • Price erosion continued • Growth in Kolumbus subscriptions • Mobile broadband data services launched Elisa Corporation Q2 Interim Report 5 August 2004 8
Slide 9: Mobile's Result Improved
Mobile’s Result Improved • Revenue EUR 175m (188) − Change in revenue booking procedure − Increased usage compensated for price erosion • EBITDA EUR 44m (46), 25% of revenue (24) − Strategic market activities to improve Elisa’s market position and brand • EBIT EUR 15m (10), 9% of revenue (5) • Numbe
Slide 10: Fixed Network Market Stable
Fixed Network Market Stable • Strong demand in broadband channels continued • Number of analogue lines decreased • Broader service offering Elisa Corporation Q2 Interim Report 5 August 2004 10
Slide 11: Fixed Network Profitability Stable
Fixed Network Profitability Stable • Revenue EUR 166m (177) • EBITDA EUR 45m (47), 27% of revenue (27) − Investments in brand • EBIT EUR 19m (18), 11% of revenue (10) • Broadband subscriptions up 71% to 160,500 (93,700) Elisa Corporation Q2 Interim Report 5 August 2004 11
Slide 12: Cost Reduction Program for 2004 Exceeds the Target
Cost Reduction Program for 2004 Exceeds the Target • H1 2004 annualised cost base decreased by EUR 57m (target of the program EUR 40m) • Target of total cost reduction program for 2004/2005 (EUR 80m) will be clearly exceeded Elisa Corporation Q2 Interim Report 5 August 2004 12
Slide 13: Operational Priorities
Operational Priorities 1. Customer orientation – National offering of Elisa broadband services launched – Elisa the first registered CERT commercial enterprise 2. Simplification of structure – Successful launch of Elisa umbrella brand – Finnet International 100% owned company – Simplified legal stru
Slide 14: Outlook for 2004
Outlook for 2004 • Slow market growth and demanding competition environment • Comparable revenue slightly down from 2003 − Lower interconnection tariffs and price erosion • Operative EBIT and pre-tax profit will improve significantly • Q3 and Q4 EBITDA still at the same level than Q2 − Cost saving p
Slide 15: Key Figures and Financial Position
Key Figures and Financial Position CFO Tuija Soanjärvi
Slide 16: Elisa's Q2 2004 P&L
Elisa’s Q2 2004 P&L Elisa Comparable figures Interim report EURm Q2/04 Q2/03* 2003** Q2/04 Q2/03 2003 Revenue 339 351 1404 339 391 1538 Other operating income 4 6 21 4 9 34 EBITDA 95 96 403 95 97 385 EBITDA margin 28 % 27 % 29 % 28 % 25 % 25 % Depreciation -49 -58 -236 -49 -66 -267 Goodwill deprecia
Slide 17: Progress by Quarters
Progress by Quarters Elisa EURm Q2/04 Q1/04 Q4/03* Q3/03 Q2/03 Q1/03 Revenue 339 333 391 385 391 371 Other operating income 4 7 13 8 9 4 EBITDA 95 119 118 107 97 85 EBITDA margin 28 % 36 % 30 % 28 % 25 % 23 % Depreciation -49 -49 -70 -67 -66 -65 Goodwill depreciation -11 -11 -15 -14 -14 -14 EBIT 35
Slide 18: Operative CAPEX 9% of Revenue
Operative CAPEX 9% of Revenue 100 90 5 80 5 4 2 70 4 EUR million 60 5 22 20 21 8 50 2 1 4 1 8 40 8 3 76 9 30 19 1 48 49 55 20 46 39 42 30 32 10 23 0 Q1/02 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 Investments in shares GSM network buy-backs Investments in fixed assets Elisa Corporation Q
Slide 19: Net Debt Decreased
Net Debt Decreased 900 850 825 817 800 757 767 742 722 700 654 600 587 EUR million 513 500 400 300 200 100 0 Q1/02 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 Elisa Corporation Q2 Interim Report 5 August 2004 19
Slide 20: Cash Flow by Quarters
Cash Flow by Quarters CONSOLIDATED CASH FLOW STATEMENT, EURm 2Q/2004 1Q/2004 4Q/2003 3Q/2003 2Q/2003 1Q/2003 Cash inflow from operating activities Profit before extraordinary items 28 51 -94 17 8 -5 Adjustments: Depreciation and value adjustments 60 60 179 80 80 79 Other financial income and expense
Slide 21: Stronger Financial Position
Stronger Financial Position • Gearing 64% (91) • Equity ratio 46% (40) • Net debt / EBITDA* 1.2 x (2.0 x) • EBITDA / financial expenses* 14.0 x (8.9 x) * Calculated from last four quarters Elisa Corporation Q2 Interim Report 5 August 2004 21
Slide 22: Interim Report April 2004 – June 2004
Interim Report 1 April 2004 – 30 June 2004 Elisa Corporation Q2 Interim Report 5 August 2004 22
Slide 23: Change in Cost Structure
Change in Cost Structure • Target of the program: EUR 80m reduction in annual cost base by the end of 2005, EUR 40m by the end of 2004 • Cost structure decreased by EUR 57m on an annual basis annualised change on EUR million FY 2003 H1 2004 H1 2004 annual basis Elisa's costs excl. one-offs 1165 469
Slide 24: Mobile Business' Key Figures
Mobile Business’ Key Figures Mobile business, EURm Q2/04 Q2/03 % 2003 Revenue 175 188 -7 % 762 EBITDA 44 46 -4 % 215 EBITDA-% 25 % 24 % 28 % CAPEX 17 23 -26 % 103 CAPEX excl. network buy-backs 16 15 7% 75 Oper CAPEX / sales 9% 8% 10 % No. of Subscriptions in Finland * 1 330 901 1 356 881 -2 % 1 374
Slide 25: Cash Flow
Cash Flow EURm H1/04 H1/03 2003 Profit before extraordinary items 79 3 -74 Depreciation and value adjustments 120 159 418 Other adjustments -7 8 31 Cash inflow before working capital 192 170 376 Change in working capital 3 -20 -16 Cash inflow before taxes and financials 195 150 360 Interests and div
Slide 26: Elisa's Quarterly Reported Key Figures (1/2)
Elisa’s Quarterly Reported Key Figures (1/2) Elisa Group Q2/04 Q1/04 Q4/03 Q3/03 Q2/03 Q1/03 Q4/02 Q3/02 Q2/02 EURm Revenue 339 333 391 385 391 371 385 388 406 EBITDA 95 119 96 107 97 85 118 51 86 EBITDA-% 28 % 36 % 25 % 28 % 25 % 23 % 31 % 13 % 21 % Clean EBITDA 95 119 118 107 97 85 88 84 86 Clean
Slide 27: Elisa's Quarterly Reported Key Figures (2/2)
Elisa’s Quarterly Reported Key Figures (2/2) Segments Q2/04 Q1/04 Q4/03 Q3/03 Q2/03 Q1/03 Q4/02 Q3/02 Q2/02 Mobile Revenue 175 179 203 195 190 175 185 188 192 ARPU, EUR 38,2 38,6 43,7 42,5 41,7 38,5 41,3 43,0 43,5 Churn, % 29,4 47,4 22,9 24,2 13,4 14,4 21,2 14,0 12,7 Subscriptions 1 330 901 1 319 00
Slide 28: Q2/04 Key Figures Per Segment
Q2/04 Key Figures Per Segment Segments Revenue EBITDA EBIT EUR million Q2/04 Q2/03 Q2/04 Q2/03 Q2/04 Q2/03 Mobile 175 188 44 46 25 20 Group bookings -10 -10 Total 175 188 44 46 15 10 Fixed network 166 177 45 47 20 19 Group bookings -1 -1 Total 166 177 45 47 19 18 Germany - 35 - 1 - -5 Group bookings