Slide 1: Elisa Financial Statement
Elisa Financial Statement 1 January – 31 December 2003
Slide 2: Contents
Contents • Q4 2003 Report −President and CEO Veli-Matti Mattila • Key Figures and Financial Statement −CFO Tuija Soanjärvi Elisa Corporation Financial Statement 2003 2 2 February 2004
Slide 3: Q4 2003 Report
Q4 2003 Report President and CEO Veli-Matti Mattila
Slide 4: Elisa Q4 2003
Elisa Q4 2003 • Financial Highlights • Market Review and Highlights per Segment • Strategic Selections • Future Outlook Elisa Corporation Financial Statement 2003 4 2 February 2004
Slide 5: Market Review 2003
Market Review 2003 • Slow market growth • Competition has increased • New players in the market Elisa Corporation Financial Statement 2003 5 2 February 2004
Slide 6: Favorable Progress in Q4
Favorable Progress in Q4 • Operative result improved further • Market share sustained −Strong commitment of personnel • Restructuring of operations proceeded as planned Elisa Corporation Financial Statement 2003 6 2 February 2004
Slide 7: Q4 2003 Highlights
Q4 2003 Highlights • Revenue EUR 391m (385) • EBITDA EUR 118m (88) • Pre-tax profit EUR 23m (-3) −Mobile business’ profitability improved −Profitability will improve further Figures without one-off items Elisa Corporation Financial Statement 2003 7 2 February 2004
Slide 8: Q4 2003 Highlights
Q4 2003 Highlights • Cash flow EUR 69m (41) • Net debt EUR 654m (757) • Operative CAPEX 14 % of revenue Elisa Corporation Financial Statement 2003 8 2 February 2004
Slide 9: Mobile Market Review
Mobile Market Review • Growth in usage and number of subscriptions • Price erosion due to competition • Churn jumped after the launch of MNP Elisa Corporation Financial Statement 2003 9 2 February 2004
Slide 10: Mobile Q4/03
Mobile Q4/03 • Revenue up 10% to EUR 203m (185) • EBITDA margin 33% (20) • Number of subscriptions grew by 2% and was 1,374,000 −Song and MTV3 new service operators −Own service operators’ number of subscriptions increased Elisa Corporation Financial Statement 2003 10 2 February 2004
Slide 11: Fixed Network Market Review
Fixed Network Market Review • Strong demand in broadband • Number of analog lines decreased • Growth in call center outsourcing • Data communications created demand for ICT services Elisa Corporation Financial Statement 2003 11 2 February 2004
Slide 12: Fixed Network Q4/03
Fixed Network Q4/03 • Revenue EUR 169m (174) • EBITDA margin 31% (32) • Broadband channels up 77% to 127,400 (71,900) Elisa Corporation Financial Statement 2003 12 2 February 2004
Slide 13: Germany Q4/03
Germany Q4/03 • Revenue EUR 33m (32) • EBITDA EUR 2m (-1) • EBIT EUR -9m (-10) • Number of corporate customers grew further (42%) Elisa Corporation Financial Statement 2003 13 2 February 2004
Slide 14: Q4 and Year 2003
Q4 and Year 2003 Elisa Excluding one-off items EURm Q4/03 Q4/02 change 2003 2002 change Revenue 391 385 1% 1538 1563 -2 % EBITDA 118 88 34 % 407 342 19 % EBIT 33 10 221 % 83 32 159 % Pre-tax profit 23 -3 - 43 -23 - Reported figures EURm Q4/03 Q4/02 change 2003 2002 change Net result -47 35 - -17 -71
Slide 15: Strategic Selections
Strategic Selections • Finland is the main market • Carefully selected international markets − Estonia − International scope through partnerships − Structural changes in Germany Elisa Corporation Financial Statement 2003 15 2 February 2004
Slide 16: German Strategy
German Strategy • Germany non-core business − Limited synergy benefits − No economies of scale without notable investments • Negotiations for selling the business have commenced • Write-down EUR 94m, tax benefit EUR 48m Elisa Corporation Financial Statement 2003 16 2 February 2004
Slide 17: Customer Oriented Offering
Customer Oriented Offering • Full range of telecom services • ICT solutions − Comprehensive solutions: LAN, security services, mobile connectivity, call center services, VoIP • Call center outsourcing − Elisa no. 1 in Finland − Annual market growth estimate 20% Elisa Corporation Financial Statement
Slide 18: Operational priorities
Operational priorities 1. Customer orientation – “One stop shopping” – Strengthening of contact centers 2. Simplification of structure – 1 July 2004 ”one company” (New Elisa) – New operational model 3. Significant profitability improvement – Merging of billing and customer systems – Centralisation o
Slide 19: Future Outlook
Future Outlook • Revenue at 2003 level • Profitability will improve • Effect of cost saving program from Q2/04 onwards • Operative CAPEX below 15% of revenue • Cash flow positive Elisa Corporation Financial Statement 2003 19 2 February 2004
Slide 20: Key Figures and Financial Position
Key Figures and Financial Position CFO Tuija Soanjärvi
Slide 21: Elisa's Q4 and 2003 P&L
Elisa’s Q4 and 2003 P&L Elisa Excluding one-off items Interim report EURm Q4/03 Q4/02 2003 2002 Q4/03 Q4/02 2003 2002 Revenue 391 385 1538 1563 391 385 1538 1563 Other operating income 13 9 34 18 13 37 34 92 EBITDA 118 88 407 342 96 118 385 333 EBITDA margin 30 % 23 % 26 % 22 % 25 % 31 % 25 % 21 % D
Slide 22: One-off Items Q4/03
One-off Items Q4/03 Clean Reported EURm Q4/2003 Q4/2003 Revenue 391 391 Other operating income 13 13 Restructuring cost provision -17 Increase in pension provision -5 Opex -286 -286 EBITDA 118 96 Depreciation -70 -70 Goodwill depreciation -15 -15 Write-down from German goodwill -88 Write-down from G
Slide 23: Write-downs and Depreciations
Write-downs and Depreciations 180 160 140 120 EUR million 94 100 48 38 1 16 0 0 0 80 6 17 3 11 14 16 14 12 14 14 14 15 60 2 11 11 12 40 64 66 65 66 67 70 58 66 60 64 20 44 45 0 Q1/01 Q2/01 Q3/01 Q4/01 Q1/02 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 One-off write-down Depreciation of goodwill Depreci
Slide 24: Operative CAPEX 14% of Revenue
Operative CAPEX 14% of Revenue 250 200 EUR million 141 21 150 42 100 38 5 2 31 4 2 12 4 5 5 22 4 109 20 21 1 2 50 4 76 8 3 8 73 72 70 9 48 49 46 42 55 30 39 0 Q1/01 Q2/01 Q3/01 Q4/01 Q1/02 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 Investments in shares GSM network buy-backs Investments in fixed asse
Slide 25: Net Debt Decreased
Net Debt Decreased Consolidation of Tropolys; chage in Sale of directory 900 debt reserving businesses Sale of Instalia 850 Sale of Direktia Seasonality effect 800 Positive cash flow due to low EUR million 750 investment level 700 and improved result 650 2003: net debt/ EBITDA 1.7 600 550 500 Q1/01
Slide 26: Elisa Financial Statement
Elisa Financial Statement 1 January – 31 December 2003
Slide 27: Key Figures of Mobile Business
Key Figures of Mobile Business Mobile business' key figures, EURm Q4/03 Q4/02 % 2003 Revenue 203 185 10 % 762 Clean EBITDA 66 37 77 % 215 Clean EBITDA-% 33 % 20 % 28 % Leasing adj. EBITDA 70 43 63 % 237 Leasing adj. EBITDA-% 34 % 23 % 31 % CAPEX 34 54 -37 % 103 CAPEX excl. network buy-backs 26 50 -4
Slide 28: Key Figures of Elisa Group
Key Figures of Elisa Group Elisa Group Q4/03 Q3/03 Q2/03 Q1/03 Q4/02 Q3/02 Q2/02 Q1/02 Q4/01 EURm Revenue 391 385 391 371 385 388 406 384 386 EBITDA 96 107 97 85 118 51 86 78 183 EBITDA-% 25 % 28 % 25 % 23 % 31 % 13 % 21 % 20 % 47 % Clean EBITDA 118 107 97 85 88 84 86 86 97 Clean EBITDA-% 30 % 28 %
Slide 29: Key Figures of Elisa Group (cont.)
Key Figures of Elisa Group (cont.) Segments Q4/03 Q3/03 Q2/03 Q1/03 Q4/02 Q3/02 Q2/02 Q1/02 Q4/01 Mobile Revenue 203 195 190 175 185 188 192 174 180 ARPU, EUR 43,7 42,5 41,7 38,5 41,3 43,0 43,5 41,4 42,7 Churn, % 22,9 24,2 13,4 14,4 21,2 14,0 12,7 18,2 14,4 Subscriptions 1 374 146 1 374 847 1 356 88
Slide 30: Q4 2003 Key Figures per Segment
Q4 2003 Key Figures per Segment Mobile Revenue EBITDA EBIT Clean EBITDA Clean EBIT Service- and Q4/03 Q4/02 Q4/03 Q4/02 Q4/03 Q4/02 Q4/03 Q4/02 Q4/03 Q4/02 network operators 203 185 64 37 38 13 66 37 40 13 Intra-SBA sales Group bookings -9 -9 -9 -9 Total 203 185 64 37 29 4 66 37 31 4 Fixed network S
Slide 31: Fixed Assets and Goodwill by Segments
Fixed Assets and Goodwill by Segments Fixed Depreci- One-off Depr. from Goodwill Goodwill Depr. assets ations depr. fixed assets Goodwill depr. depr. time, EURm Dec 2003 2003 2003 total Dec 2003 2003 est. 2004 years Mobile 363 103 0 103 424 38 38 15 Fixed network 385 120 0 120 30 2 2 15 Germany 135