Slide 1: Annual Results
ANNUAL R
Slide 2: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 3: CEO's review
CEO’s review • 2015 overview • Q4 2015 financial and operational highlights • Segment review • Strategy execution • Outlook and guidance for 2016 3
Slide 4: 2015 highlights
2015 highlights • Best ever result • Revenue increased by 2% and mobile service revenue by 7% • Comparable EBITDA grew by 3% and EPS by 9%* • Dividend payment in 2015 was €1.32 per share, total €211m • Mobile subscription base increased, fixed broadband slightly down • Strong demand for higher mobil
Slide 5: 2015 financial highlights
2015 financial highlights Growth in revenue and in all earnings lines Change in 2015 2015 Revenue €1,569m +2.2% Mobile service revenue €719m +7.3% EBITDA €536m +3.1% EBITDA-% 34.1% +0.3%-unit Earnings per share €1.54 +9.2% CAPEX €196m +2.2% Cash flow €266m +18.7% Net debt €962m -3.9% EBITDA and EPS
Slide 6: 2015 operational highlights
2015 operational highlights Growth in mobile data and subscriptions Muutos 2015 2015 Mobile subscriptions 4,740,300 +16,800 Fixed broadband subscriptions 533,900 -22,500 Cable TV subscriptions 330,300 +3,000 Mobile ARPU 1) €16.0 +€0.7 Mobile churn 16.1% -0.5%-unit Mobile usage, minutes 2) 6,433m -12
Slide 7: Q4 2015 highlights
Q4 2015 highlights • Revenue and comparable EBITDA both increased by 5% • Mobile service revenue grew by 11% • Mobile and fixed broadband subscriptions decreased slightly • Good profit growth in Consumer Customers segment, Corporate Customer segment’s profit at last year’s level • Demand for faster
Slide 8: Q4 2015 financial highlights
Q4 2015 financial highlights Growth in revenue, clear EBITDA improvement Revenue, €m and YoY change, % 2,8 % 4,8 % • Revenue €404m (386) -0,4 % 1,7 % • EBITDA €128m (125), excluding one- offs €131m (125) 382 384 384 386 381 390 394 404 • EPS €0.35 (0.31), excluding one-offs €0.37 (0.31) Q1/14 Q2/14
Slide 9: Q4 2015 operational highlights
Q4 2015 operational highlights Strong growth in mobile service revenue • Mobile service revenue grew by 11.3% Mobile service revenue, €m and YoY change, % 8,3% 11,3% • Up-selling to higher speeds 3,8% 6,0% • More smartphones and data bundle subscriptions • Price increases 188 183 178 168 169 169 171
Slide 10: Business segments
Business segments NK
Slide 11: Q4 2015 Consumer Customers
Q4 2015 Consumer Customers Revenue and EBITDA increased • Revenue €254m (239) Revenue, €m and YoY change, % 0,9 % 1,5 % 3,6 % 6,1 % • Strong growth in mobile service revenue • Growth in equipment sales and new services • Traditional fixed revenue, interconnection revenue and operator sales decreased
Slide 12: Q4 2015 Corporate Customers
Q4 2015 Corporate Customers Slight growth in revenue • Revenue €150m (146) Revenue, €m and YoY change, % 2,0 % 1,4 % 2,7 % • Growth in mobile service revenue, fixed revenue and -2,6 % equipment sales • Visual communication and operator sales decreased • Decrease in interconnection revenue 149 144 14
Slide 13: Strategy execution
Strategy execution Build value on data Accelerate new service businesses Improve performance with customer intimacy and operational excellence 13
Slide 14: Strong growth in 4G smartphones and mobile data
Strong growth in 4G smartphones and mobile data • 68% of customers use a smartphone 3G and 4G smartphone penetrations 1), % • 62% of smartphones are 4G-capable 63% 65% 66% 68% 57% 60% 52% 54% • Of all models sold in Q4 3G • 94% were smartphones, 85% were 4G-capable (92% and 80%, respectively in Q3)
Slide 15: Elisa Viihde – more diverse content
Elisa Viihde – more diverse content • Large domestic content • Elisa co-produced first original series, Downshifters • New sports content • Live regular season and playoffs basketball matches • All European Championship football and World Cup qualifiers played in Europe 15 SISÄINEN
Slide 16: Cyber security operations centre and IoT solutions for corporates
Cyber security operations centre and IoT solutions for corporates • Service centre for round-the-clock cyber threat detection and response • Observes, reports on and combats cyber-threats • Center offers also anomaly detection and proactive protection for the most advanced threats (APT) • Elisa IoT
Slide 17: Investments in 4G network continue
Investments in 4G network continue • Elisa extends its 4G network strongly: several extensions to the north of Finland • 98% of Finns live in Elisa’s 4G network area • More than 290 localities, rural areas in focus • Base on independent research house Elisa has the widest 4G network coverage in Finl
Slide 18: Outlook and guidance for 2016
Outlook and guidance for 2016 Macroeconomic environment still weak in 2016, competition remains challenging • Revenue at the same level as in 2015 • EBITDA excluding one-offs at the same level as in 2015 • CAPEX maximum 12% of revenue 18 SISÄINEN
Slide 19: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 20: Growth in revenue and earnings continue
Growth in revenue and earnings continue EUR million, excl. one-offs Q4/15 Q4/14 Δ 1) 2015 2014 Δ 1) • Q4 revenue growth 5% Revenue 404 386 19 1,569 1,535 34 • Q4 EBITDA growth 5% EBITDA 131 125 6 536 520 16 EBITDA-% 32% 32% 34% 34% excluding one-offs Depreciation and amortisation -60 -54 -220 -215 •
Slide 21: Growth in both business segments, MTR down
Growth in both business segments, MTR down • Q4: Consumer Customers Revenue change Q4 YoY, €m • Growth in mobile and online services • Decrease in fixed voice and operator sales 4 -3 5 • Corporate Customers 13 404 • Growth in mobile, fixed and ICT services • Decrease in visual communications and ope
Slide 22: Growth trends continue in Estonia
Growth trends continue in Estonia • Revenue €25.0m (23.9) Revenue, €m and YoY change, % • Growth in mobile service revenue and equipment 1,2% 3,6% -2,7% -2,1% sales • MTR cut to €0.01 (-10%) 1 July 2015 23,8 25,1 23,9 25,4 25,0 22,3 21,7 23,3 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 • EBITDA
Slide 23: Total expenses increased
Total expenses increased • OPEX increased Material and services (blue), employee (yellow) and • Equipment purchases other expenses (orange), €m, YoY change (black line) -1,6% -0,5% 3,4% 6,2% • Personnel expenses 45 44 42 44 41 43 39 • €3m restructuring one-off cost, collective labour 39 63 65 71 agr
Slide 24: CAPEX according to guidance
CAPEX according to guidance • Q4 CAPEX €50m (47) Consumer (blue), Corporate (yellow), shares (orange) and licences (green) €m, CAPEX/sales (black line) % * • Consumer €28m (27) 13% 14% 12% 14% 12% 12% 12% • Corporate €22m (20) 11% • Full-year CAPEX / sales 12%, in line with guidance 28 14 13 1 1 3 2
Slide 25: Cash flow affected by negative NWC change
Cash flow affected by negative NWC change • Q4 cash flow decreased by €12m, Cash flow change, €m excluding share purchases €27m 3 • Negative change in NWC -30 4 • Seasonal impacts (higher inventories and high 42 1 -2 14 payables in Q3/15) -2 30 • FY cash flow grew by €68m or 37%, Q4/14 EBITDA NWC Fi
Slide 26: Solid liquidity position remains
Solid liquidity position remains Bonds and bank loan maturities 31 December 2015 • Cash and undrawn committed credit Bonds (blue), loans (green), RCF (orange) and EIB loan (red), €m facilities €479m (341) • Revolving credit facilities fully undrawn • €150m loan commitment signed in October 130 • Net
Slide 27: Capital structure in target and return ratios improved
Capital structure in target and return ratios improved • Net debt at target level Net debt (blue, €m), Net debt /EBITDA (orange line) 2,1 • Net debt / EBITDA 1.8x 2,0 2,0 1,9 1,9 • Gearing 104%, equity ratio 41% 1,8 1,8 1,8 • Target setting 933 1 075 1 043 1 001 934 1 075 991 962 • Net debt / EBITDA
Slide 28: Competitive remuneration continues
Competitive remuneration continues • Dividend proposal of €1.40 per share Dividend (blue), buy-backs (yellow) and pay-out ratio • Dividend growth +6.1% 126% 135% • Total amount EUR 223m 101% 98% 104% 94% 92% 88% • Ex-dividend date 1 April 2016 1,42 1,32 1,40 • Payment 12 April 2016 1,30 1,30 1,30 1,
Slide 29: Contacts
Contacts: Mr. Vesa Sahivirta vesa.sahivirta@elisa.fi Download the Elisa IR App +358 102 623 036
Slide 30: Cash flow YoY comparison
APPENDIX Cash flow YoY comparison € million Q4/15 Q4/14 Δ1) Δ% 2015 2014 Δ1) Δ% EBITDA 128 125 3 2,3 % 532 520 13 2% Change in receivables 10 9 1 -2 -5 3 Change in inventories -12 -4 -9 -6 -2 -4 Change in payables -20 4 -23 7 -14 21 Change in NWC -22 8 -30 -0 -20 20 Financials (net) -8 -9 1 -18 -24
Slide 31: Cash flow by quarters
APPENDIX Cash flow by quarters € million Q4/15 Q3/15 Q2/15 Q1/15 Q4/14 Q3/14 Q2/14 Q1/14 EBITDA 128 145 131 129 125 142 127 126 Change in receivables 10 -22 15 -5 9 0 -14 0 Change in inventories -12 4 -2 5 -4 0 1 2 Change in payables -20 18 -3 12 4 -22 12 -8 Change in NWC -22 0 9 13 8 -22 -1 -6 Fina
Slide 32: Debt structure
APPENDIX Debt structure € million, at the end of the quarter Q4/15 Q3/15 Q2/15 Q1/15 Q4/14 Q3/14 Q2/14 Q1/14 Bonds and notes 592 592 592 591 591 590 590 589 Commercial papers 171 229 219 169 210 200 217 152 Loans from financial institutions 199 200 205 205 211 211 216 216 Financial leases 28 29 30 3