Elisa Oyj Class A · OMXHEX:ELISA
Elisa Oyj Class A — Investor Day (October 2016)
25 slides from Elisa Oyj Class A's investor day presentation, October 2016
Slide 1: CMD
CMD
Slide 2: Group overview
Group overview Veli-Matti Mattila CEO
Slide 3: Performance update, Market environment, Strategy execution, Mid-term targets
1 Performance update 2 Market environment 3 Strategy execution 4 Mid-term targets and CEO priorities
Slide 4: Revenue has grown above European telecom operator average
Performance update Revenue has grown above European telecom operator average1)… Revenue, EURm CAGR +2.6% 1,606 1,569 1,535 2014 2015 LTM LTM = Last twelve months, 10/2015–9/2016 1) Goldman Sachs, European integrated telecom operators, CAGR 1.9% 2014–LTM 4
Slide 5: …and EBITDA has continued to improve…
Performance update …and EBITDA has continued to improve… EURm % 600 36% 557 550 536 35% 520 34,7% 500 34,2% 34% 33,9% 450 33% 400 32% 350 31% 2014 2015 LTM EBITDA (Comparable) EBITDA-% (Comparable) 5
Slide 6: …leading to growing returns
Performance update …leading to growing returns 2,0 CAGR +7.1% 1,5 CAGR +3.8% 1,0 0,5 0,0 2014 2015 LTM EPS Dividend paid during the year 6
Slide 7: Mid-term targets on track
Performance update Mid-term targets on track Parameter Target by end of 2017 Revenue growth Above industry1) average EBITDA margin Above 36% CAPEX-to-sales ≤12% Capital structure Net debt / EBITDA 1.5–2x Equity ratio >35% Performance by 3Q2016 = Below track = On track 1) European telecom operators 7
Slide 8: Strong market drivers and developed domestic markets…
Market environment Strong market drivers and developed domestic markets… Global industry demand drivers Developed domestic markets • Mobile video annual growth 55%1) Finland • 50% of industries digitally • GDP/capita 8% above EU28 average, transformed by 20202) below 1% growth5) • European leader in
Slide 9: …and a regulated industry we are used to operating in…
Market environment …and a regulated industry we are used to operating in… EU roaming wholesale pricing Different ways to adapt to and fair use policy still not settled the final regulation EU data protection regulations Privacy and security issues strengthen customers’ rights high on companies’ agen
Slide 10: …are a good basis for attractive target markets
Market environment …are a good basis for attractive target markets Consumer customers Corporate customers Telecom services Digital services Telecom services Digital services >1% >10% ~0% >10% Market growth forecasts, sources: Gartner, PWC, GoTech, GFK, company reports, Elisa analysis 10
Slide 11: Demand for fast and high-quality broadband will continue…
Market environment Demand for fast and high-quality broadband will continue… Drivers 1. Video consumption • Video everywhere • High quality video • Camera development • Social media distribution 2. Augmented and virtual reality 3. Internet of Things • Connected things • Mission critical applications
Slide 12: …and drive the most user-friendly mobile market in the world further…
Market environment …and drive the most user-friendly mobile market in the world further… Lowest prices with unlimited mobile data High mobile data time share & highest usage in the world Finland % of time used on mobile network2) Estonia 65% Denmark Estonia 60% France Finland Sweden 55% France UK 50
Slide 13: …while enabling strong value capture
Market environment …while enabling strong value capture Mobile service revenue growth1) 1H2015 to 1H2016 Elisa FIN 8.4% Elisa EST Orange BEL DT AUT DNA FIN Vod POR Telenor SWE Average Telia FIN -1.0% TI ITA Telia NOR Telia SWE Vod GER SCMN SUI TEF UK Tele2 SWE DT GER Proximus BEL TKA AUT EE UK Telen
Slide 14: Elisa is unique…
Strategy execution Elisa is unique… Unique set of choices Best-in-class performance • Unlimited mobile data pricing • Revenue growth exceeds industry average • Long-term, systematic way to improve • EBITDA growth productivity exceeds industry average • Disciplined M&A policy and uncomplicated Unique
Slide 15: …and our strategic focus areas have significant further potential
Strategy execution …and our strategic focus areas have significant further potential Build value on data Accelerate digital service business Improve performance through customer intimacy and operational excellence 15
Slide 16: We continue to increase mobile service revenues by upselling…
Strategy execution We continue to increase mobile service revenues by upselling… Share of voice subscription types 60% 50% 40% 30% 20% 10% 0% 2G 3G 4G 4G 4G+ 4G++ (<21M) (Max 21M) (Max 50M) (Max 100M) (Max 300M) (Max 450M) Mobile network connectivity suits to Pokémon GO type 3Q14 3Q15 3Q16 of applic
Slide 17: …while cutting-edge network operation is a key enabler for unlimited mobile data…
Strategy execution …while cutting-edge network operation is a key enabler for unlimited mobile data… 1. Own innovations in Mobile data traffic in Elisa network, million GB/year 450 • Network design and implementation • End-to-end mobile data capacity 300 management 150 • Automation 0 2. Customer and
Slide 18: …and FTTx delivers great value to customers and opens upgrade opportunities
Strategy execution …and FTTx delivers great value to customers and opens upgrade opportunities NPS ADSL Cable modem FTTx FTTx = fibre to the house/building/curb NPS = Net Promoter Score 18
Slide 19: Developing digital service businesses further provides additional potential
Strategy execution Developing digital service businesses further provides additional potential Scaling Finding traction Entertaining video services with International 300,000+ paying customers, on Elisa consumer top of 430,000+ traditional TV eBook video services, and high NPS International Cloud-ba
Slide 20: And our systematic way to develop operations…
Strategy execution And our systematic way to develop operations… Incidents (index) Customer satisfaction (NPS)1) 100 87 72 Online entertainment Internet banking Mobile network OPEX per base station (index) 100 89 80 18 Competitors’ average Order handling automation rate (index) 123 133 Electricity 1
Slide 21: …in a recognised sustainable manner continues to improve productivity
Strategy execution …in a recognised sustainable manner continues to improve productivity Carbon emission reductions Energy efficiency in (tCO2) data transfer (GB/kWh) The 9th most value 153,699 adding company in 3.3 Finnish economy1) 81,946 1.7 50,496 1.3 2014 2015 LTM 2014 2015 LTM 1) The Research
Slide 22: Mid-term targets updated
Mid-term targets and CEO priorities Mid-term targets updated Parameter Target by end of 2019 Revenue growth Above industry1) average EBITDA margin Above 37% CAPEX-to-sales ≤12% Capital structure Net debt / EBITDA 1.5-2x Equity ratio >35% 1) European telecom operators 22
Slide 23: CEO priorities
Mid-term targets and CEO priorities CEO priorities Build value on data Accelerate digital service business Improve performance through customer intimacy and operational excellence 23
Slide 24: Thank you
— Wise CMD THANK YOU
Slide 25: Forward looking statements
Elisa CMD 27 October 2016 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 e