Slide 1: Slide 1
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 2017 financial and operational highlights • Segment review • Strategy execution • Outlook and guidance for 2017 3
Slide 4: Q1 2017 highlights
Q1 2017 highlights • Q1 2017 was again best ever first quarter • Revenue increased by 7% and EBITDA by 5% • Two major acquisitions: Starman and Santa Monica Networks • Acquisitions were approved by competition authorities in Finland and Estonia • The companies are expected to be consolidated into El
Slide 5: Again solid quarter, growth in revenue and EBITDA
Q1 2017 financial highlights Again solid quarter, growth in revenue and EBITDA • Revenue €416m (390) Revenue, €m and YoY change, % 6,2 % 7,3 % 6,6 % • EBITDA €144m (137) 1,7 % 2,8 % 4,8 % 2,5 % 0,8 % • EBIT €89m (84) 419 434 404 416 • EPS €0.43 (0.39) 390 394 390 393 • Net debt / EBITDA 1.9 (1.7) Q2
Slide 6: Growth in mobile service revenue
Q1 2017 operational highlights Growth in mobile service revenue • Mobile service revenue grew by 5.5% Mobile service revenue, €m and YoY change, % • Up-selling to higher speeds 8,3% 11,3% 9,1% 6,9% 6,0% 4,7% 3,4% 5,5% • More smartphones and data bundle subscriptions • Product changes • Blended ARPU
Slide 7: Business segments
Business segments NK
Slide 8: Consumer Customers: revenue and EBITDA growth continued
Q1 2017 Consumer Customers Revenue and EBITDA growth continued • Revenue €261m (254) Revenue, €m and YoY change, % • Growth in mobile service revenue 6,1 % 7,0 % 7,0 % 7,2 % 3,6 % 3,5 % • Anvia consolidation, digital services and equipment sales 1,5 % 1,2 % increased revenue • Traditional fixed, int
Slide 9: Corporate Customers: growth in revenue, profit improvement continued
Q1 2017 Corporate Customers Growth in revenue, profit improvement continued • Revenue €155m (146) Revenue, €m and YoY change, % • Growth in mobile service revenue 8,0 % 8,0 % 4,7 % 5,7 % • Anvia consolidation, digital services and equipment sales 2,0 % 1,4 % 2,7 % 1,0 % increased revenue • Tradition
Slide 10: Strategy execution
Strategy execution Build value on data Accelerate digital service businesses Improve performance with customer intimacy and operational excellence 10
Slide 11: Growth in 4G subscriptions continuing
Growth in 4G subscriptions continuing • 75% of customers use a smartphone 3G and 4G smartphone penetration 1), % • 86% of smartphones are 4G-capable 71% 73% 74% 75% 68% 70% 63% 65% 66% 3G • Of all models sold in Q1 • 95% were smartphones, of which all were 4G-capable (94% and 100% respectively in Q4
Slide 12: Popular content in Elisa Viihde
Popular content in Elisa Viihde • Great start to the new original series Konttori (The Office) • More viewers during the first week than any other series or movie ever in Aitio programme library • Second season of Downshifters tripled it’s viewers from the first season • Most watched original series
Slide 13: The first commercial video call in the new 700 MHz 4G network in Nordics
The first commercial video call in the new 700 MHz 4G network in Nordics • New band enables continuous expansion of Elisa's 4G network and better indoor coverage • Elisa first in Finland to test technology taking base stations into the cloud • Cloud RAN technology enables virtual control of the base
Slide 14: Elisa one of Finland's best workplaces
Elisa one of Finland’s best workplaces • Elisa is the largest listed company ever awarded the best workplaces in Finland • Elisa came in 3rd in the list of large organisations • Focus for instance on daily management and coaching • 250 young people hired for summer jobs • Summer jobs available natio
Slide 15: Outlook and guidance for 2017
Outlook and guidance for 2017 Macroeconomic environment still weak in 2017, competition remains challenging • Revenue higher than in 2016 • Comparable EBITDA higher than in 2016 • CAPEX maximum 13% of revenue, mid-term target maximum 12% is still valid 15
Slide 16: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 17: Growth in revenue and earnings continuing
Growth in revenue and earnings continuing € million, excluding one-offs Q1/17 Q1/16 Δ 1) 2016 • Q1 revenue growth 7% Revenue 416 390 26 1,636 EBITDA 144 137 7 564 • Q1 EBITDA growth 5% EBITDA-% 34.6% 35.0% 34.5% Depreciation and amortisation -55 -53 -215 • Mobile service revenue growth 89 84 5 349 E
Slide 18: Revenue growth in both segments
Revenue growth in both segments • Consumer and Corporate Customers Revenue change Q1 YoY, €26m -4 • Growth through Anvia consolidation • Growth in mobile and digital services 5 • Decrease in traditional fixed services* 7 • Equipment sales 15 • Growth in smartphone sales • Interconnection and roaming
Slide 19: Revenue growth continued in Estonia
Revenue growth continued in Estonia • Revenue €23.8m (22.9) Revenue, €m and YoY change, % • Growth in mobile service revenue and equipment sales 1,2 % 4,6 % 5,5 % 4,3 % 3,7 % 3,2 % 4,1 % -2,1 % 25,4 25,0 26,3 25,8 23,3 22,9 24,3 23,8 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 • EBITDA €7.9m (7.
Slide 20: Higher expenses due to Anvia consolidation
Higher expenses due to Anvia consolidation • OPEX increased Material and services (blue), employee (yellow) and • Anvia consolidation Q3/16 onwards other expenses (orange), €m, YoY change (black line) • Equipment purchases -0,5 % 3,4 % 6,2 % 0,7 % 0,2 % 6,4 % 6,1 % 7,5 % • Personnel expenses 44 47 4
Slide 21: CAPEX according to guidance
CAPEX according to guidance • CAPEX €53m (44) Consumer (blue), Corporate (yellow), shares 2) (orange) licence (green) €m, CAPEX/sales 3) (black line), % • Consumer €35m (27) • Corporate €18m (17) 14% 14% 12% 13% 12% • CAPEX / sales 12.8%, in line with 12% 11% 10% guidance 22 85 30 15 13 3 1 9 21 18
Slide 22: Solid cash flow continuing
Solid cash flow continuing • Stable cash flow €63m (64) Cash flow change, €m 7 -3 -0 -1 -7 5 -4 3 64 63 Quarterly net working capital change, €m 21 12 9 0 3 0 -22 -26 Cash flow by quarter, €m Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 79* 88* 73* 83* 72* 53* 66* 30* 70 85 64 69 63 30 47 -115 Q2
Slide 23: Solid liquidity position
Solid liquidity position Bonds and bank loan maturities, 31 March 2017 • Cash and undrawn committed credit Bonds (blue), loans (green), RCF (orange), €m facilities €436m (511) • €220m undrawn from €300m credit facilities • €300m bond issue and €120m tender 130 • 7y bond at mid swap +53bps, 0.875% co
Slide 24: Capital structure in target range
Capital structure in target range • Net debt in target range Net debt (blue, €m), Net debt / EBITDA (orange line) • Net debt / EBITDA 1.9× 2,0 2,0 1,9 1,9 1,9 • Gearing 101%, equity ratio 39% 1,8 1,8 1,7 • Target setting 1 075 1 054 1 007 1 124 1 062 • Net debt / EBITDA 1.5–2× 991 962 899 • Equity r
Slide 25: Competitive remuneration continues
Competitive remuneration continues • Dividend €1.50 per share Dividend (blue), buy-backs (yellow) and pay-out ratio 104% • Dividend growth +7.1% 93% 98% • Total amount €240m 94% 92% • Paid 19 April 2017 1,50 • Authorisation for buyback of 5m shares 1,40 1,30 1,30 1,32 2013 2014 2015 2016 2017 • Divi
Slide 26: Integrated service operator in Estonia Q2/17 onwards
Integrated service operator in Estonia Q2/17 onwards • Starman is the leading pay TV and fixed broadband services provider in Estonia • Santa Monica Networks specialises in providing secure solutions for data networks and data centres in Finland and Estonia Elisa Estonia €m impact 2016 Pro Forma Mob
Slide 27: Acquisitions and disposal effects
Acquisitions and disposal effects Starman Comptel • 2016 revenue €40m, EBITDA €17m • Comptel shares sold to Nokia 6 April • EBITDA synergy estimate €4-6m by end-2019 • Non-taxable sale price €43.5m • Acquisition price €151m • Will be booked as one-off in financial items in Q2/17 • Included in net de
Slide 28: Contacts
Contacts: Mr. Vesa Sahivirta vesa.sahivirta@elisa.fi Download the Elisa IR App +358 102 623 036
Slide 29: Cash flow YoY comparison
APPENDIX Cash flow YoY comparison € million Q1/17 Q1/16 Δ1) Δ% 2016 EBITDA 144 137 7 5 % 563 Change in receivables 12 2 -3 Change in inventories 3 6 1 Change in payables -15 -6 12 Change in NWC 0 3 -3 9 Financials (net) -10 -10 0 2 % -16 Taxes for the year -14 -13 -65 Taxes for the previous year Tax
Slide 30: Cash flow by quarters
APPENDIX Cash flow by quarters € million Q1/17 Q4/16 Q3/16 Q2/16 Q1/16 Q4/15 Q3/15 Q2/15 EBITDA 144 139 154 134 137 128 145 131 Change in receivables 12 6 -30 19 2 10 -22 15 Change in inventories 3 -2 -7 3 6 -12 4 -2 Change in payables -15 8 11 -2 -6 -20 18 -3 Change in NWC 0 12 -26 21 3 -22 0 9 Fin
Slide 31: Debt structure
APPENDIX Debt structure € million, at the end of the quarter Q1/17 Q4/16 Q3/16 Q2/16 Q1/16 Q4/15 Q3/15 Q2/15 Bonds and notes 765 594 594 593 593 592 592 592 Commercial papers 193 199 201 215 146 171 229 219 Loans from financial institutions 215 218 219 195 195 200 200 205 Financial leases 25 26 25 2