Slide 1: Interim Report 1 July 2007 – 30 September 2007
Interim Report 1 July 2007 – 30 September 2007
Slide 2: Q3 2007 Report
Q3 2007 Report President and CEO Veli-Matti Mattila
Slide 3: Elisa Q3 2007
Elisa Q3 2007 Q3 2007 and financial highlights Review of the mobile and fixed network businesses Execution of the strategy Progress of mobile services and 3G Outlook for 2007 3 26 October 2007 Elisa, Interim Report July - September 2007
Slide 4: Elisa Q3 2007 highlights
Elisa Q3 2007 highlights Sales of 3G subscriptions progressed very well, growth in broadband subscriptions continued Mobile ARPU decreased slightly from the previous quarter and churn was at the same level Use of mobile data services increased clearly Delayed invoicing by the new customer care and b
Slide 5: Revenue up 2%, EBITDA 7%
Revenue up 2%, EBITDA* 7% Q3 2007 AND FINANCIAL HIGHLIGHTS Revenue and EBITDA-% Revenue EUR 394m (387) Growth from increased usage of mobile services and subscriptions 401 393 394 387 378 Decrease from lower interconnection and roaming fees, as well as lower amount and usage of traditional analogue
Slide 6: Capital structure target will be reached
Capital structure target will be reached Q3 2007 AND FINANCIAL HIGHLIGHTS Net debt and cash flow CAPEX EUR 44m (40), 11% of revenue (10) Cash flow EUR 6m (36) 651 646 Delays in invoicing 578 Net debt EUR 646m (336) After special dividend EUR 804m 377 336 Net debt / EBITDA 1.2 (0.7) After special div
Slide 7: Growth in customer base
Growth in customer base SEGMENT REVIEW, MOBILE BUSINESS ARPU* and non-voice services Very good progress in 3G subscriptions Elisa’s market share about 50% 30,5 30,8 30,2 29,9 29,7 Customer base increased by 53,000 ARPU EUR 29.9 (30.5) Lower interconnection price Lower roaming price MoU/sub of own se
Slide 8: Clear growth in mobile data usage
Clear growth in mobile data usage SEGMENT REVIEW, MOBILE BUSINESS Number of active mobile data users in Elisa’s network Active 3G users Active GPRS users 800 000 700 000 600 000 500 000 400 000 300 000 200 000 100 000 0 Q1/06 Q2/06 Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 8 26 October 2007 Elisa, Interim Repor
Slide 9: 3G services generated growth and profitability
3G services generated growth and profitability SEGMENT REVIEW, MOBILE BUSINESS Revenue and EBITDA-% Revenue EUR 252m (246) Increased usage of mobile services and amount of subscriptions 253 252 246 246 New interconnection and roaming fees, and 229 lower handset sales decreased revenue EBITDA EUR 80m
Slide 10: Growth in usage and ARPU stable
Growth in usage and ARPU stable SEGMENT REVIEW, MOBILE BUSINESS MoU (min/sub/month) ARPU (€) and annualised churn (%) outgoing traffic 40 240 35 220 30 200 25 180 20 160 15 140 10 120 5 100 0 80 Q2/05 Q3/05 Q4/05 Q1/06 Q2/06 Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 ARPU Churn Usage 10 26 October 2007 Elisa, In
Slide 11: Growth in broadband continued
Growth in broadband continued SEGMENT REVIEW, FIXED NETWORK BUSINESS Broadband subscriptions Growth in broadband subscriptions600 000 continued 513 400 513 900 518400 496 300 Net adds 4 500 in Q3 500 000 479 600 Elisa market leader 400 000 Decrease in analogue lines stable Analogue voice lines decre
Slide 12: Cost efficiency improves profitability
Cost efficiency improves profitability SEGMENT REVIEW, FIXED NETWORK BUSINESS Revenue and EBITDA-% Revenue EUR 157m (156) EBITDA EUR 54m (52), 34% of revenue (33) 162 163 160 Efficiency programs 156 157 Outsourcings EBIT EUR 31m (26), 20% of revenue (17) 33 % 34 % 30 % 27 % 28 % Q3 2006 Q4 2006 Q1 2
Slide 13: Stable subscription development
Stable subscription development SEGMENT REVIEW, FIXED NETWORK BUSINESS Thousands 1 600 1 400 1 200 1 000 800 600 400 200 0 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ 4/ 1/ 2/ 3/ Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Traditional analogue ISDN Cable TV Broadband 13 26 Octobe
Slide 14: Elisa strategy
Elisa strategy STRATEGY EXECUTION New services and new markets 2005– Strengthening market position in core markets 2003– Integration of One Elisa 14 26 October 2007 Elisa, Interim Report July - September 2007
Slide 15: Productivity improvement
Productivity improvement STRATEGY EXECUTION – INTEGRATION OF ONE ELISA Significant profitability • Outsourcing of PBX remote management improvement • Outsourcing of subscriber lines’ rental business • 100 Mbps broadband subscription • New Wippies service for WLAN usage Customer orientation • HDTV ch
Slide 16: 3G success story continued
3G success story continued STRATEGY EXECUTION – STRENGTHENING MARKET POSITION 3G subscriptions and services Sale of 3G service bundles 3G service bundle market continued well (cumulative, ‘000) 885 Significant amount of new subscriptions 3G subscription market are 3G service bundles (cumulative, '00
Slide 17: Strong commitment to 3G services continues
Strong commitment to 3G services continues STRATEGY EXECUTION – STRENGTHENING MARKET POSITION Elisa’s market share about 50% Elisa further strengthens its position as a leading 3G service provider In 2008 Elisa strongly continues the 3G network rollout and delivery of 3G services also to rural areas
Slide 18: Customer driven services for corporate clients strengthened
Customer driven services for corporate clients strengthened STRATEGY EXECUTION – STRENGTHENING MARKET POSITION Mobile working made easier HSUPA for all Mobile broadbands of Premium speed class, effectively enabling quadruple the amount of data transfer from work station to the network Wireless switc
Slide 19: Outlook for 2007
Outlook for 2007 Outlook for the rest of the year has not changed Challenging market Competition remains challenging Focus on services Result will improve from 2006 Revenue will grow EBITDA and EBIT excluding non-recurring items will improve H2 2007 EBITDA and EBIT will improve clearly from H1 2007,
Slide 20: Financial performance
Financial performance CFO Jari Kinnunen
Slide 21: Clear earnings improvement
Clear earnings improvement EUR million Q3 2007 Q3 2006 change 2006 Revenue 394 387 2% 1 518 Other operating income 5 3 9 Operating expenses -267 -267 0% -1 093 EBITDA 132 123 7% 434 1) EBITDA-% 33 % 32 % 29 % Depreciation and amortisation -50 -50 0% -209 EBIT 82 73 12 % 225 EBIT-% 21 % 19 % 15 % Pre
Slide 22: Mobile services increased revenue
Mobile services increased revenue Revenue, EURm Fixed network Increase 400 0,3 – Broadband subscriptions 6 Decrease 390 1 – Analogue lines Mobile 380 Increase – Usage 394 370 387 – Number of subscriptions Decrease 360 – Handset sales – Interconnection – Roaming 350 Q3 2006 Fixed Mobile Other and Q3
Slide 23: Operating expenses at the same level
Operating expenses at the same level Operating expenses, EURm Employee benefit expenses Number of personnel decreased by 432 y-o-y 280 Materials and services 270 9 Decrease in cost of handsets -3 -5 Decrease in interconnection charges 260 Increase in outsourcing Other expenses 250 267 267 Increase i
Slide 24: Profitability improved
Profitability improved Revenue EURm, EPS EUR Clear improvement in EPS y-o-y 450 0,60 Revenue growth 401 393 394 387 378 400 Cost efficiency 0,50 Lower number of outstanding shares 350 0,08 300 0,40 Financial items positive EUR +7m Sale of Comptel shares EUR +13m 250 32 % 33 % 0,30 Mark to market val
Slide 25: Capital structure improved further
Capital structure improved further Balance sheet KPIs 1 750 175 % Balance sheet structure improved 1,5 towards mid term targets 1,3 1,4 150 % 1 500 Net debt/EBITDA 1.2 1,2 125 % – 1.5 after extraordinary dividend 1 250 0,9 100 % Gearing 65% 0,8 81 % – 81% after extraordinary dividend 1 000 75 % 60 %
Slide 26: CAPEX to sales according to targets
CAPEX to sales according to targets CAPEX, EURm CAPEX includes 3G capacity and coverage increase 80 40 % New CRM and billing system 70 70 1 New network management system 32 % New broadband infrastructure 60 26 51 47 49 49 50 Investments in fixed assets 7 4 6 24 % Mobile EUR 21m same level as Q2/07 4
Slide 27: Cash flow
Cash flow Cash flow and operative cash flow, EURm Cash flow EUR 6m in Q3 100 Sale of Comptel shares EUR 13m 88 90 83 Increase in net working capital 80 70 70 EUR 59m q-o-q 70 Increase in receivables EUR 80m 60 – Delays in invoicing due to the new CRM 50 system 50 – On schedule in Q1/08 40 Increase i
Slide 28: Interim Report July 2007 –
Interim Report 1 July 2007 – 30 September 2007
Slide 29: Consolidated Cash flow statement
Consolidated Cash flow statement APPENDIX SLIDE EUR million Q3 07 Q2 07 Q1 07 Q4 06 Q3 06 Q2 06 Q1 06 Q4 05 Q3 05 Q2 05 Q1 05 Q4 04 Q3 04 Q2 04 Cash flow from operating activities Profit before tax 89 67 64 69 69 34 39 33 28 113 39 65 50 41 Adjustments to profit before tax 41 47 50 46 50 63 59 57 53
Slide 30: Financial situation
Financial situation APPENDIX SLIDE EUR Million 30 September 2007 30 June 2007 31 March 2007 31 December 2006 30 September 2006 Interest-bearing debt Bonds and notes 633 633 677 327 327 Commercial Paper 0 0 0 25 0 Loans from financial institutions 0 0 0 0 0 Financial leases 44 46 45 46 48 Committed c