Slide 1: Slide 1
Slide 2: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Vesa Sahivirta, IR Director
Slide 3: CEO's review
CEO’s review • Q3 2017 financial and operational highlights • Segment review • Strategy execution • Outlook and guidance for 2017 3
Slide 4: Q3 2017 highlights
Q3 2017 highlights • Revenue grew by 8.4% and comparable EBITDA by 6.6% • Organic revenue growth was 4% • Mobile service revenue grew by 6.4% despite higher churn • Revenue growth and profit improvement continued in both customer segments • New EU Premium subscription sales have been very good • Unl
Slide 5: Record quarter again – growth in revenue and EBITDA
Q3 2017 financial highlights Record quarter again – growth in revenue and EBITDA • Revenue €454m (419) Revenue, €m and YoY change, % 13,3 % • EBITDA €165m (154, comparable 155) 4,8 % 6,2 % 7,3 % 6,6 % 8,4 % 2,5 % 0,8 % • EBIT €109m (98, comparable 100) 445 454 434 • Earnings per share €0.53 (0.47, 4
Slide 6: Good growth in mobile service revenue – boosted by new Premium subscriptions
Q3 2017 operational highlights Good growth in mobile service revenue – boosted by new Premium subscriptions • Mobile service revenue grew by 6.4% Mobile service revenue, €m and YoY change, % • Up-selling to higher speeds 11,3% 9,1% 6,9% 4,7% 3,4% 5,5% 5,6% 6,4% • Good demand for Premium subscription
Slide 7: Business segments
Business segments
Slide 8: Q3 2017 Consumer Customers
Q3 2017 Consumer Customers Record quarter, growth in revenue and EBITDA continued • Revenue €292m (268) Revenue, €m and YoY change, % • Growth in mobile service revenue 13,0 % 8,7 % • Recent acquisitions, mobile and digital services as well as 6,1 % 7,0 % 7,0 % 7,2 % 3,5 % equipment sales increased
Slide 9: Q3 2017 Corporate Customers
Q3 2017 Corporate Customers Growth in revenue, profit improvement continued • Revenue €162m (151) 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 % 7,8 % 4,7 % 5,7 % equipment sales increased revenue 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 • 78% of customers use a smartphone 3G and 4G smartphone penetration 1), % • 90% of smartphones are 4G-capable 78% 74% 75% 77% 70% 71% 73% 66% 68% • 91% of all mobile phones sold were 3G 4G-capable smartphones • 92% in Q2/17 4G Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q
Slide 12: First in Finland – 5G readiness for mobile network
First in Finland – 5G readiness for mobile network • Modernised network is part of the Smart Tampere programme • Covers the entire city and its surroundings • The first city with the cutting-edge network on this scale • Significantly higher data speeds, lower latency and functionalities required by
Slide 13: Elisa Viihde entertainment selection increases
Elisa Viihde entertainment selection increases • Three new original series and new seasons to hit series • International thriller Bullets • Domestic comedy series Kolmistaan and Jättekiva • The original series Konttori went into its second season • Elisa Viihde Sport channel offering is expanding •
Slide 14: Renewed Elisa Turvapaketti secures online safety for children
Renewed Elisa Turvapaketti secures online safety for children • Helps parents guide children’s online usage • Protects from over-usage • Locates missing phone, remote locking if needed • Provides help to guide children's screen time and browser protection • Easy to manage in OmaElisa service 14
Slide 15: Elisa and VTT bring Industrial Internet to SMEs
Elisa and VTT* bring Industrial Internet to SMEs • VTT and Elisa help SMEs in digitalising their operations with IoT solutions • Objective is to develop processes, products and international growth of manufacturing industry • VTT will develop new sensor, device and technology solutions • Elisa helps
Slide 16: Outlook and guidance for 2017
Outlook and guidance for 2017 Macroeconomic environment has improved, but long-term structural challenges still remain. 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 16
Slide 17: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Vesa Sahivirta, IR Director
Slide 18: Strong revenue and earnings growth continues
Strong revenue and earnings growth continues EUR million, • Revenue growth 8% excluding one-offs Q3/17 Q3/16 Δ 1) 1-9/17 1-9/16 Δ 1) 2016 Revenue 454 419 35 1,315 1,202 113 1 636 EBITDA 165 155 10 460 425 34 564 • EBITDA growth 7% EBITDA-% 36.4 37.0 35.0 35.4 34.5 • Revenue growth Depreciation -57 -
Slide 19: Strong growth boosted by acquisitions
Strong growth boosted by acquisitions • Competiveness intact – strong organic Revenue YoY growth growth • Acquisitions boosted revenue 4,4% 8,4% 4,0% Organic Starman and Santa Monica Total • Good development in both segments Revenue change Q3 YoY, €35m • Starman and Santa Monica Networks acquisition
Slide 20: Estonian business benefiting from acquisitions
Estonian business benefiting from acquisitions • Revenue €39.6m (26.3) Revenue, €m and YoY change, % • Starman and Santa Monica Networks (SMN) acquisitions 59,3 % 50,3 % • Growth in mobile service revenue and equipment sales 4,6 % 5,5 % 4,3 % 3,7 % 3,2 % 4,1 % • EBITDA €12.7m (8.9) 39,6 38,7 • Mobil
Slide 21: Expenses in line with revenue growth
Expenses in line with revenue growth • OPEX increased Material and services (blue), employee (yellow) and • Acquired companies other expenses (orange), €m, YoY change (black line) • Equipment purchases 6,2 % 0,7 % 0,2 % 6,4 % 6,1 % 7,5 % 14,8 % 8,8 % • Long-term incentive plans 44 47 49 43 43 43 44
Slide 22: CAPEX according to guidance
CAPEX according to guidance • CAPEX €58m (42) Consumer (blue), Corporate (yellow), shares 2) (orange) licence (green) €m, CAPEX/sales 3) (black line), % • Consumer €39m (27) • Corporate €19m (15) 14% 14% 13% 13% 12% • Includes licence fee €1.6m 12% 11% 10% 4 • CAPEX / sales 12%3) • According to full
Slide 23: Solid cash flow continuing
Solid cash flow continuing • Stable cash flow €113m (47) Cash flow change, €m -2 • Loan repayment of €45m 45 -1 -16 6 0 • Excluding acquisitions, licence fees and loan arrangements 11 22 113 €72m (72) 47 Quarterly net working capital change, €m 21 12 Cash flow by quarter, €m 0 3 0 -4 -20 72* -22 -26
Slide 24: Strong liquidity position
Strong liquidity position Bonds and bank loan maturities, 30 Sep 2017 * • Cash and undrawn committed credit Bonds (blue), loans (green), RCF (orange), €m facilities €391m (333) • €300m credit facilities fully undrawn 130 • Commercial paper programme • €207m in use as of 30 Sep 2017 • Credit ratings
Slide 25: Capital structure
Capital structure • Net debt / EBITDA in line with target Net debt (blue, €m), Net debt / EBITDA (orange line) 2,1 2,0 • Gearing 116%, equity ratio 38% 1,9 1,9 1,9 1,8 1,8 1,7 • Target setting • Net debt / EBITDA 1.5–2× 1 054 1 007 1 124 1 062 1 231 1 120 962 899 • Equity ratio >35% Q4/15 Q1/16 Q2/1
Slide 26: Contacts
Contacts: Mr. Vesa Sahivirta vesa.sahivirta@elisa.fi Download the Elisa IR App +358 102 623 036
Slide 27: Cash flow YoY comparison
APPENDIX Cash flow YoY comparison € million Q3/17 Q3/16 Δ1) 1-9/17 1-9/16 Δ1) 2016 EBITDA 165 154 11 457 424 32 563 Change in receivables -15 -30 -27 -9 -3 Change in inventories 0 -7 -6 3 1 Change in payables -4 11 9 4 12 Change in NWC -20 -26 6 -24 -3 -21 9 Financials (net) -1 -1 -10 -9 -16 Taxes f
Slide 28: Cash flow by quarters
APPENDIX Cash flow by quarters € million Q3/17 Q2/17 Q1/17 Q4/16 Q3/16 Q2/16 Q1/16 Q4/15 EBITDA 165 148 144 139 154 134 137 128 Change in receivables -15 -23 12 6 -30 19 2 10 Change in inventories 0 -8 3 -2 -7 3 6 -12 Change in payables -4 28 -15 8 11 -2 -6 -20 Change in NWC -20 -4 0 12 -26 21 3 -22
Slide 29: Debt structure
APPENDIX Debt structure € million, at the end of the quarter Q3/17 Q2/17 Q1/17 Q4/16 Q3/16 Q2/16 Q1/16 Q4/15 Q3/15 Bonds and notes 766 766 765 594 594 593 593 592 592 Commercial papers 207 258 193 199 201 215 146 171 229 Loans from financial institutions 211 216 215 218 219 195 195 200 200 Financial