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 • Q2 2017 financial and operational highlights • Segment review • Strategy execution • Outlook and guidance for 2017 3
Slide 4: Q2 2017 highlights
Q2 2017 highlights • Again best ever quarter • Revenue and comparable EBITDA grew by 13% • Organic revenue growth was 4% • Revenue growth and profit improvement continued in both customer segments • Starman and Santa Monica Networks acquisitions were completed • Consolidation started from the beginn
Slide 5: Record quarter again – growth in revenue and EBITDA
Q2 2017 financial highlights Record quarter again – growth in revenue and EBITDA • Revenue €445m (393) Revenue, €m and YoY change, % 13,3 % • EBITDA €148m (134) 4,8 % 6,2 % 7,3 % 6,6 % 2,8 % 2,5 % • Comparable EBITDA €151m (134) 0,8 % 434 445 • EBIT €88m (81) 394 404 390 393 419 416 • Comparable EBI
Slide 6: Growth in mobile service revenue continued
Q2 2017 operational highlights Growth in mobile service revenue continued • Mobile service revenue grew by 5.6% Mobile service revenue, €m and YoY change, % • Up-selling to higher speeds 8,3% 11,3% 9,1% 6,9% 4,7% 3,4% 5,5% 5,6% • Good demand for Premium subscriptions • Product changes • Blended ARPU
Slide 7: Business segments
Business segments NK
Slide 8: Strong growth in revenue and EBITDA
Q2 2017 Consumer Customers Strong growth in revenue and EBITDA • Revenue €278m (246) Revenue, €m and YoY change, % • Growth in mobile service revenue 13,0 % • Recent acquisitions, mobile and digital services as well as 6,1 % 7,0 % 7,0 % 7,2 % 3,6 % 3,5 % equipment sales increased revenue 1,2 % • Tra
Slide 9: Growth in revenue, profit improvement continued
Q2 2017 Corporate Customers Growth in revenue, profit improvement continued • Revenue €167m (147) Revenue, €m and YoY change, % • Growth in mobile service revenue 13,7 % • Recent acquisitions, mobile and digital services as well as 8,0 % 8,0 % 4,7 % 5,7 % equipment sales increased revenue 1,4 % 2,7
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 has continued
Growth in 4G subscriptions has continued • 77% of customers use a smartphone 3G and 4G smartphone penetration 1), % • 88% of smartphones are 4G capable 74% 75% 77% 70% 71% 73% 65% 66% 68% 3G • 92% of all mobile phones sold were 4G capable smartphones • 95% in Q1 4G Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/1
Slide 12: First international original series in Elisa Viihde
First international original series in Elisa Viihde • Arctic Circle, a Finnish-German drama series is the biggest original series in Elisa Viihde • In co-operation with one of the largest production companies in Europe • Shooting will begin in Lapland during 2017 • Pää edellä sitcom available in Aug
Slide 13: 5G technology testing continues
5G technology testing continues • Elisa and Nokia were the first in Europe to test 3.5 GHz band 5G technology • Data speeds reached 1.5 Gbps with the lowest latency at 1.5 milliseconds • First in Finland to test fibre network enabling 10 Gbps broadband speeds • Targeted at households • Pilot was exe
Slide 14: Elisa's IoT Smart Factory solution selected in international project
Elisa's IoT Smart Factory solution selected in international project • European 4.0 Transformation Center is a factory area of the future • Elisa’s solution is used to develop the production of e.GO electric car factory utilising artificial intelligence and 3D visualisation • Elisa Innovation Challe
Slide 15: Unlimited subscriptions available in the EU
Unlimited subscriptions available in the EU • Elisa will continue to offer unlimited mobile data subscriptions thanks to sustainability mechanism of the new EU roaming regulation • Great demand for new Premium subscriptions • Unlimited data usage in the Nordics and Baltics • 10 GB in other EU and EE
Slide 16: Recognition of Elisa's equality
Recognition of Elisa’s equality • The only Finnish company in the Gender Equality Global Report Top 10, (#9) • The first cross-sector ranking showing how the world's top public companies perform on gender equality • Equileap ranked over 3,000 listed companies from 23 countries • Ranking covers leade
Slide 17: Outlook and guidance for 2017
Outlook and guidance for 2017 Macroeconomic environment is improving but is still expected to stay behind historical average. 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 va
Slide 18: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 19: Strong revenue and earnings growth continues
Strong revenue and earnings growth continues EUR million, • Revenue growth 13% Q2/17 Q2/16 Δ 1) H1/17 H1/16 Δ 1) Δ % 2016 excluding one-offs Revenue 445 393 52 861 783 78 10 % 1 636 • EBITDA growth 13% EBITDA 151 134 17 294 270 24 9% 564 • Revenue growth • Productivity improvements EBITDA-% 33.8 34.
Slide 20: Revenue growth boosted by acquisitions
Revenue growth boosted by acquisitions • Competitiveness intact - good organic Revenue YoY growth growth 3% 6% 13% 4% Organic Acquisitions Finland Acquisitions Estonia Total • Good development in both segments Revenue change Q2 YoY, €52m • Anvia, Starman and Santa Monica Networks acquisitions -1 • M
Slide 21: Estonian business to a new level
Estonian business to a new level • Revenue €38.7m (24.3) Revenue, €m and YoY change, % 59,3 % • Starman and Santa Monica Networks (SMN) acquisitions • Growth in mobile service revenue and equipment sales 1,2 % 4,6 % 5,5 % 4,3 % 3,7 % 3,2 % 4,1 % • EBITDA €12.5 (7.7) 38,7 • Acquisitions 26,3 25,4 25,
Slide 22: Higher expenses due to consolidations
Higher expenses due to consolidations • OPEX increased Material and services (blue), employee (yellow) and • Acquired companies other expenses (orange), €m, YoY change (black line) • Equipment purchases 3,4 % 6,2 % 6,4 % 6,1 % 7,5 % 14,8 % 0,7 % 0,2 % • Personnel expenses 44 47 49 39 43 43 44 42 71
Slide 23: CAPEX according to guidance
CAPEX according to guidance • CAPEX €64m (56) Consumer (blue), Corporate (yellow), shares 2) (orange) licence (green) €m, CAPEX/sales 3) (black line), % • Consumer €43m (35) • Corporate €21m (21) 14% 14% 13% 12% 12% 11% 13% • Includes licence fee EUR 4m 10% 4 • CAPEX/sales 13% 102 22 85 30 15 1 9 3
Slide 24: Solid cash flow continuing
Solid cash flow continuing • Stable cash flow €76m (69) Cash flow change, €m -4 -2 14 -25 -1 3 -4 45 -18 69 76 Quarterly net working capital change, €m 21 12 9 0 3 0 -4 -22 -26 Cash flow by quarter, €m Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 88* 73* 83* 65* 72* 53* 66* 30* 85 64 69 63
Slide 25: Strong liquidity position
Strong liquidity position Bonds and bank loan maturities, 30 June 2017 * • Cash and undrawn committed credit Bonds (blue), loans (green), RCF (orange), €m facilities €335m (275) • €277m undrawn from €300m credit facilities 130 • Commercial paper programme • €258m in use as of 30 June 2017 • Increase
Slide 26: Capital structure
Capital structure • Net debt/EBITDA temporarily higher Net debt (blue, €m), Net debt / EBITDA (orange line) 2,1 • Dividend payment in April increased debt 2,0 1,9 1,9 1,9 • Gearing 140%, equity ratio 34% 1,8 1,8 1,7 • Target setting 1 124 1 231 991 962 1 054 1 007 1 062 • Net debt / EBITDA 1.5–2× 89
Slide 27: Competitive remuneration continues
Competitive remuneration continues • Dividend €1.50 per share Dividend (blue) and pay-out ratio • Dividend growth +7.1% 104% 98% 93% • Total amount €240m 94% 92% • Paid April 2017 1,50 • Authorisation for buyback of 5m 1,40 1,32 shares 1,30 1,30 2013 2014 2015 2016 2017 • Dividend yield 4.8%1) Divid
Slide 28: Contacts
Contacts: Download the Elisa IR App: Mr. Vesa Sahivirta vesa.sahivirta@elisa.fi +358 102 623 036
Slide 29: Cash flow YoY comparison
APPENDIX Cash flow YoY comparison € million Q2/17 Q2/16 Δ1) Δ% H1/17 H1/16 Δ1) Δ% 2016 EBITDA 148 134 14 10 % 291 270 21 8% 563 Change in receivables -23 19 -42 -11 21 -33 -3 Change in inventories -8 3 -12 -6 10 -15 1 Change in payables 28 -2 29 13 -7 20 12 Change in NWC -4 21 -25 -4 23 -28 9 Financ
Slide 30: Cash flow by quarters
APPENDIX Cash flow by quarters € million Q2/17 Q1/17 Q4/16 Q3/16 Q2/16 Q1/16 Q4/15 Q3/15 EBITDA 148 144 139 154 134 137 128 145 Change in receivables -23 12 6 -30 19 2 10 -22 Change in inventories -8 3 -2 -7 3 6 -12 4 Change in payables 28 -15 8 11 -2 -6 -20 18 Change in NWC -4 0 12 -26 21 3 -22 0 F
Slide 31: Debt structure
APPENDIX Debt structure € million, at the end of the quarter Q2/17 Q1/17 Q4/16 Q3/16 Q2/16 Q1/16 Q4/15 Q3/15 Bonds and notes 766 765 594 594 593 593 592 592 Commercial papers 258 193 199 201 215 146 171 229 Loans from financial institutions 216 215 218 219 195 195 200 200 Financial leases 26 25 26 2