Slide 1: 1st quarter results
| Ist quarter results Ww ‘ _ va =< 4 Ss
Slide 2: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 3: CEO's review
CEO’s review • Q1 2015 financial and operational highlights • Segment review • Strategy execution • Outlook and guidance for 2015 3
Slide 4: Q1 2015 highlights
Q1 2015 highlights • Revenue at the last year’s level, clear result improvement • Mobile service revenue growth 4% • Mobile subscription base decreased due to non-active subs terminations and decrease in prepaid base • Good profit growth in Consumer Customers segment • Strong mobile data growth cont
Slide 5: Flat revenue, clear profit improvement
Q1 2015 financial highlights Flat revenue, clear profit improvement Revenue, €m and YoY change, % • Revenue €381m (382) -1,7% -2,8% -3,9% -0,4% • EBITDA €129m (126) 390 395 401 382 384 384 386 381 • Earnings per share €0.37 (0.32) • Net debt / EBITDA 1.8 (1.8) Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/
Slide 6: Strong data growth, churn slightly up
Q1 2015 operational highlights Strong data growth, churn slightly up • Decrease in subscription base Mobile subs, millions and churn*, % 4,76 4,71 4,71 4,72 • Decrease in non-active and prepaid subscriptions. 4,69 4,70 4,68 4,66 Growth in Corporate segment, Estonia -3,000 subs 17,7% 18,0% 17,6% 17,7
Slide 7: Business segments
Business segments NK
Slide 8: Q1 2015 Consumer Customers: EBITDA up, profitability improved
Q1 2015 Consumer Customers EBITDA up, profitability improved • Revenue €236m (233) Revenue, €m and YoY cahnge, % 0,3% -1,9% -1,8% 0,9% • Growth in mobile service revenue • Decrease in interconnection revenue • New services growing 247 244 239 239 242 239 233 236 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q
Slide 9: Q1 2015 Corporate Customers: Lower revenue affected result
Q1 2015 Corporate Customers Lower revenue affected result • Revenue €145m (149) Revenue, €m and YoY change, % -4,7% -4,2% -7,1% -2,6% • Growth in mobile service revenue • Interconnection, ICT business and traditional fixed network revenues down 151 157 • Divestment affected revenue 148 149 144 142 1
Slide 10: Strategy execution
Strategy execution Build value on data Accelerate new services businesses Improve performance with customer intimacy and operational excellence 10
Slide 11: Smartphone base and data growth continues
Smartphone base and data growth continues • 63% of customers use smartphone Smartphone penetration 1), %. Elisa’s network in Finland 60% 63% • 48% of smartphones are 4G-capable 52% 54% 57% 48% 38% 40% • Of all models sold in Q1 • 95% were smartphones, 79% were 4G-capable Q2/13 Q3/13 Q4/13 Q1/14 Q2/1
Slide 12: New double-speed 4G network − first in Finland
New double-speed 4G network − first in Finland • New subscription for consumers, up to 300 Mbps speed • Available in 12 city areas • Majority of new smartphones support LTE CAT-6 technique • Speeds are based on Carrier Aggregation technique. Network capacity is also increased. • Will be available al
Slide 13: Elisa brings corporates to Internet of Things (IoT) era
Elisa brings corporates to Internet of Things (IoT) era • Service concept to create IoT applications and services • Easy start without traditional software development • Open platform and tools for swift software development, data storage and visualisation • All data in Elisa’s servers in Finland •
Slide 14: Outlook and guidance for 2015
Outlook and guidance for 2015 Macroeconomic environment still weak in 2015, competition remains challenging • Revenue at the previous year’s level • EBITDA excluding one-offs at the previous year’s level • CAPEX maximum 12% of revenue 14
Slide 15: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 16: EBITDA up by 2%, EPS by 14%
EBITDA up by 2%, EPS by 14% • EBITDA improved € million Q1/15 Q1/14 Δ 1) Δ% 2014 Revenue 381 382 -2 0 1,535 • Service revenue growth Other operating income 0 1 8 • Productivity improvements Operating expenses -252 -257 -5 -2 -1,024 EBITDA 129 126 3 2 520 • Financial expenses down due to EBITDA-% 34
Slide 17: Good growth in mobile service revenue
Good growth in mobile service revenue • Consumer Customers Revenue change, €m • Growth in mobile services and online services • Decrease in fixed voice and broadband 7 -8 3 -3 • Corporate Customers • Divestment and decrease in ICT services 382 381 • Growth in mobile services Q1/14 Consumer Corporate
Slide 18: Clear profitability improvement in Estonia
Clear profitability improvement in Estonia • Revenue €21.7m (22.3) Revenue, €m and YoY change, % 0,4% -1,2% -2,4% -2,7% • Growth in mobile service revenue • Decrease in equipment sales and interconnection • Increase in post-paid and decrease in pre-paid 25,4 25,1 23,7 24,5 23,8 23,9 subscriptions 22
Slide 19: Total expenses decreasing
Total expenses decreasing • OPEX decreasing Material and services (blue), employee (yellow) and other expenses (orange), €m, YoY change (black line) • Productivity improvements and synergies -3,3% -5,8% -6,0% -1,6% 42 • Interconnection and roaming 48 38 42 44 39 45 41 66 62 78 63 65 65 54 67 • OPEX
Slide 20: CAPEX slightly higher in Q1
CAPEX slightly higher in Q1 • Q1 CAPEX €52m (48) Consumer (blue), Corporate (yellow), shares (orange) and licences (green), CAPEX/sales (black line) • Consumer €29m (25) • Corporate €22m (23) 14% 14% 14% • CAPEX / sales 14% of revenue, seasonality 13% 13% 12% 12% • Full year CAPEX / sales guidance 1
Slide 21: Clear improvement in cash flow
Clear improvement in cash flow • EBITDA Cash flow change, €m 4 • Service revenue growth and productivity 3 improvements 19 3 68 • NWC 39 • Positive effect in payables due to seasonality Q1/14 EBITDA NWC Financials Taxes Capex Adjust- Q1/15 • Lower inventories ments • Financials Cash flow by quarters
Slide 22: Solid liquidity position
Solid liquidity position Bonds and bank loan maturities 31 Mar 2015 • Cash and undrawn committed credit Bonds (blue), loans (green) and RCF (orange), €m facilities €361m (438) • Revolving credit facilities fully undrawn 130 • Commercial paper programme • €169m in use as of 31 March 2015 • S&P upgrad
Slide 23: Return ratios improved
Return ratios improved • Net debt at target level Net debt (blue, €m), Net debt /EBITDA (orange line) 2,1 2,1 2,0 2,0 2,0 • Net debt / EBITDA 1.8x 1,9 1,8 1,8 • Gearing 129%, equity ratio 32% due to timing of dividend decision 1 075 • Target setting 1 042 995 971 933 1 043 1 001 934 • Net debt / EBI
Slide 24: Tender offer for Anvia shares
Tender offer for Anvia shares • Offer for all Anvia shareholders 15 April – 8 May 2015 • Up to 62,500 shares, 40,000 shareholders • Price EUR 2,000 per share, same as in Autumn 2014 • Elisa’s current ownership is 26.8 per cent • Approval from the Competition Authority in April 24
Slide 25: Competitive remuneration continues
Competitive remuneration continues • €1.32 per share dividend paid in April Dividend (blue), buy-backs (yellow) and pay-out ratio 149% 135% • Total amount €211m 126% 101% 98% 104% • Pay-out ratio 94% 88% 94% • Strong commitment to competitive 1,80 1,42 1,32 shareholder remuneration 1,00 1,30 1,30 1,
Slide 26: Contacts
Contacts: Mr. Vesa Sahivirta vesa.sahivirta@elisa.fi Download the Elisa IR App +358 102 623 036
Slide 27: Cash flow YoY comparison
APPENDIX Cash flow YoY comparison EUR million Q1/15 Q1/14 Δ1) Δ% 2014 EBITDA 129 126 3 2% 520 Change in receivables -5 0 -5 -5 Change in inventories 5 2 3 -2 Change in payables 12 -8 20 -14 Change in NWC 13 -6 19 -20 Financials (net) -9 -12 3 -24 Taxes for the year -12 -13 1 -51 Taxes for the previo
Slide 28: Cash flow by quarters
APPENDIX Cash flow by quarters € million Q1/15 Q4/14 Q3/14 Q2/14 Q1/14 Q4/13 Q3/13 Q2/13 EBITDA 129 125 142 127 126 122 138 122 Change in receivables -5 9 0 -14 0 -17 -8 3 Change in inventories 5 -4 0 1 2 1 1 3 Change in payables 12 4 -22 12 -8 12 -3 -7 Change in NWC 13 8 -22 -1 -6 -4 -9 0 Financial
Slide 29: Debt structure
APPENDIX Debt structure € million 31 Mar 15 31 Dec 14 30 Sep 14 30 Jun 14 31 Mar 14 31 Dec 13 30 Sep 13 30 Jun 13 Bonds and notes 591 591 590 590 589 750 750 451 Commercial Papers 169 210 200 217 152 101 192 204 Loans from financial institutions 205 211 211 216 216 223 224 229 Financial leases 30 31