Slide 1: First Quarter Results 2009
First Quarter Results 2009 24 April 2009
Slide 2: Agenda
Agenda CEO’s review Financial review Veli-Matti Mattila, Jari Kinnunen, CEO CFO 2 24.4.2009 First Quarter Results 2009
Slide 3: CEO's review
CEO’s review Financial and operational highlights Review of the Consumer Customer and Corporate Customer businesses Execution of the strategy Progress of 3G services Outlook for 2009 3 24.4.2009 First Quarter Results 2009
Slide 4: Q1 2009 financial highlights
Q1 2009 financial highlights Revenue and EBITDA as expected Revenue € 351m (367) Lower interconnection fees and roaming revenues, approx. € -3 Lower equipment sales volumes, approx. € -11 EBITDA € 115m (111*), EBITDA margin 33% (30*) Increase in sales costs due to strong growth in mobile subscriptio
Slide 5: Q1 2009 operational highlights
Q1 2009 operational highlights Record high growth in mobile subscriptions Change in Q1 2009 Q1 2009 Mobile subscriptions 3,025,600 146,000 Fixed broadband 495,300 -6,200 Mobile ARPU * € 24.1 € -2.3 Mobile Churn ** 14.0% +2 %-units Mobile usage, min *** 1,525m -2m Active 3G data users 523,000 27,000
Slide 6: Q1 2009 Consumer Customers
Q1 2009 Consumer Customers Revenue affected by interconnection and equipment sales Revenue € 202m (221) Revenue and EBITDA-% Lower equipment sales 221 218 225 217 Decrease in traditional fixed lines 202 Lower interconnection fees in Finland and Estonia EBITDA € 64m (68*), 32% of revenue (31*) Cost e
Slide 7: Mobile subscription KPIs
Mobile subscription KPIs Lower interconnection fee, increase in Churn ARPU Churn Usage 50 ARPU (€) and annualised churn (%) Outgoing traffic (million minutes) 1 600 45 1 400 40 35 1 200 30 25 1 000 20 800 15 10 600 5 0 400 Q 02 Q 02 Q 02 Q 02 Q 03 Q 03 Q 03 Q 03 Q 04 Q 04 Q 04 Q 04 Q 05 Q 05 Q 05 Q
Slide 8: Q1 2009 Corporate Customers
Q1 2009 Corporate Customers Solid performance in challenging environment Revenue € 150m (146) Revenue and EBITDA-% Growth in mobile data services Decrease in equipment sales 153 155 149 150 Lower interconnection fees and roaming 146 revenues EBITDA € 51m (43*), 34% of revenue (30*) Cost efficiency 3
Slide 9: Strategy execution
Strategy execution Elisa’s strategy New services and new markets 2005 – Strengthening market position in core markets 2003 – Integration of One Elisa 9 24.4.2009 First Quarter Results 2009
Slide 10: Strategy execution
Strategy execution Operational excellence Productivity improvements in Q1 2009: Clearly shortened delivery times E.g. fixed broadband delivery time from 15-20 days to 48 hours Faster repair times E.g. 50% reduction in fixed broadband repair time Increase in the degree of automation and self-service
Slide 11: Ease and productivity through self-service
Ease and productivity through self-service Consumers appreciate Oma Elisa (Own Elisa) service More than 50% of the Consumer Customer contacts are handled through Oma Elisa Number of Oma Elisa users growing steadily Corporate customers also benefiting from Oma Elisa Clear increase in utilisation and
Slide 12: Elisa harnesses wind power in towers
Elisa harnesses wind power in towers First wind power pilot in the mobile network in Finland Elisa Estonia is also piloting in its mobile network Efficient use of energy Environment friendly Cost-effective 12 24.4.2009 First Quarter Results 2009
Slide 13: Elisa has the best 3G coverage
Elisa has the best 3G coverage Coverage, best=100% Coverage for higher data speeds, best=100% % 3G voice 3G data % 1 Mbps 2 Mbps 100 100 90 90 80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0 Elisa Sonera DNA Elisa Sonera DNA Elisa Sonera DNA Elisa Sonera DNA Source: European Communications Engin
Slide 14: Growth in active 3G data users continues
Growth in active 3G data users continues Active 3G users Active GPRS users Number of active mobile data users in Elisa’s network, thousands 914 843 790 789 740 703 701 668 627 595 526 523 490 496 425 398 374 326 282 249 198 173 153 112 72 19 Q1/06 Q2/06 Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 Q4/07 Q1/08 Q2/0
Slide 15: Elisa leads the way in mobile marketing
Elisa leads the way in mobile marketing “Elisa Advantage Program” – the channel to the ad-based market The first national mobile marketing channel 15 24.4.2009 First Quarter Results 2009
Slide 16: ICT strategy execution with bolt-on acquisitions
ICT strategy execution with bolt-on acquisitions Xenetic Oy Finnish hosting service company On-demand service development and SaaS (Software as a Service) offering Trackway Solutions for logistics and asset tracking In addition to RFID, also other location and asset tracking technologies, like senso
Slide 17: Outlook for 2009
Outlook for 2009 Current economic environment creates uncertainty Elisa is not immune to the negative development of the economy The main risks relate to the development of the Estonian economy and the Corporate Customer segment Competition remains challenging Revenue at the same or slightly lower l
Slide 18: Agenda
Agenda CEO’s review Financial review Veli-Matti Mattila, Jari Kinnunen, CEO CFO 18 24.4.2009 First Quarter Results 2009
Slide 19: Profitability improved in Q1 2009
Profitability improved in Q1 2009 EUR million Q1/09 Q1/08 ∆ 2008 Revenue 351 367 -16 1,485 Other operating income 1 1 7 Operating expenses -237 -260 23 -1 020 EBITDA 115 108 7 472 EBITDA excluding one-offs 115 111 4 478 EBITDA-% 32.7 29.5 31.8 EBITDA-% excluding one-offs 32.7 30.2 32.2 Depreciation
Slide 20: Revenue change in 2009
Revenue change in 2009 EUR million -2 - 10 -4 4 -4 367 351 Q1/08 Interconnection Equipment Fixed Finland Mobile Finland Estonia Q1/09 and roaming sales Finland Finland 20 24.4.2009 First Quarter Results 2009
Slide 21: Total expenses continued to decrease
Total expenses continued to decrease Other operating expenses Employee benefit expenses Materials and services Q1 Q2 Q3 Q4 FY Q1 EURm 08 08 08 08 08 09 Total expenses Materials 159 169 166 159 652 146 and services 22 % 21 % 20 % 18 % 19 % Employee benefit 45 42 32 43 163 47 13 % 18 % expenses 17 % 1
Slide 22: Solid Cash Flow
Solid Cash Flow EUR million Q1/2009 Q1/2008 ∆ 2008 EBITDA 115 108 7 472 Change in receivables 12 67 132 Change in inventories 2 4 7 Change in payables -10 -49 -56 Change in NWC 4 22 -18 83 Financials (net) -15 -14 -1 -39 Taxes for the year -17 -12 -5 -50 Taxes for the previous year -10 Taxes -17 -12
Slide 23: CAPEX decreased by 11% y-o-y
CAPEX decreased by 11% y-o-y Total CAPEX EUR 34m (38) CAPEX, EURm CAPEX/Sales 10% (10%) 2 Q1 2009 by segments Consumer EUR 18m (21) 28 Corporate EUR 16m (17) 11 1 7 Major CAPEX areas 19 17 % 3G networks and services 19 17 Backbone and access networks 16 11 % 11 % IT systems 10 % 10 % 36 21 22 23 18
Slide 24: Recession affected the Estonian business
Recession affected the Estonian business Revenue decreased Termination fee and roaming 39 % revenue 36 % 36 % 35 % 35 % Equipment sales Subscriptions grew by 10,200 y-o-y EUR million Q1/09 Q1/08 2008 335 342 338 338 327 Revenue 20 24 99 EBITDA 7 9 37 EBITDA-% 35 % 36 % 37 % EBIT 4 5 26 EBIT-% 21 % 2
Slide 25: Capital structure within target range
Capital structure within target range Capital structure Balance sheet KPIs Net debt / EBITDA 1.8 2,2 Gearing 104% 2,1 1,8 1,7 1,7 Target setting Net debt / EBITDA 1.5 – 2x 121 % Gearing 50 – 100% 109 % 107 % 104 % Dividend 93 % Ordinary dividend EUR 0.60 EUR 86m was paid in Q1 2009 955 Withholding t
Slide 26: Liquidity position good
Liquidity position good Cash and undrawn committed Bond and Bank loan maturities facilities EUR 261m (123m) 500 Revolving Credit Facilities 400 EUR 170m maturing June 2012 EUR 130m maturing November 2014 EUR 70m in use Q1/09 300 10 Commercial Paper Program EUR 101m in use, back up with RCF 200 No ch
Slide 27: Focus on Cash flow in the current downturn
Focus on Cash flow in the current downturn Focus on cash generation CAPEX control Net Working Capital Contingency plans – Operative costs – CAPEX Productivity programs Improved lead times Process improvements Cost control Suppliers and subcontractors G&A cost Customer credit control 27 24.4.2009 Fir
Slide 28: Distribution possibilities have remained
Distribution possibilities have remained Capital structure targets unchanged Net debt / EBITDA 1.5 – 2x Cash flow generation in focus Net debt / EBITDA and gearing are expected to decrease Authorisation from the shareholders Special dividend or capital repayment up to EUR 150m Share buy-backs up to
Slide 29: First Quarter Results 2009
First Quarter Results 2009 24 April 2009
Slide 30: Consolidated Cash flow statement
APPENDIX SLIDE Consolidated Cash flow statement EUR million Q1 2009 Q4 2008 Q3 2008 Q2 2008 Q1 2008 Q4 2007 Q3 2007 Q2/2007 Q1/2007 Cash flow from operating activities Profit before tax 53 70 67 38 52 65 89 67 64 Adjustments to profit before tax 61 57 59 67 56 63 41 47 50 Change in working capital 4
Slide 31: Financial situation
APPENDIX SLIDE Financial situation EUR Million 31 Mar 2009 31 Dec 2008 30 Sep 2008 30 Jun 2008 31 Mar 2008 Interest-bearing debt Bonds and notes 606 606 604 604 634 Commercial Paper 101 56 81 107 118 Loans from financial institutions 80 80 80 80 0 Financial leases 27 27 26 26 26 Committed credit lin