Elisa Oyj Class A · OMXHEX:ELISA
Elisa Oyj Class A — Q2 2015 Earnings Presentation
29 slides from Elisa Oyj Class A's earnings presentation, 2015
Slide 1: 2nd quarter results
2nd quarter results
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 2015 financial and operational highlights • Segment review • Strategy execution • Outlook and guidance for 2015 3
Slide 4: Q2 2015 highlights
Q2 2015 highlights • Revenue grew 2%, clear result improvement • Mobile service revenue grew 6% • Mobile subscription base increased, churn down • Good profit growth in Consumer Customers segment • Strong mobile data growth continued, smartphone penetration 65% • Smartphones 87% of new sales, 81% 4G
Slide 5: Growth in revenue, clear profit improvement
Q2 2015 financial highlights Growth in revenue, clear profit improvement Revenue, €m and YoY change, % • Revenue €390m (384) -2,8% -3,9% -0,4% 1,7% • EBITDA €131m (127) 395 401 390 382 384 384 386 381 • Earnings per share €0.38 (0.35) • Net debt / EBITDA 2.0 (2.1) Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14
Slide 6: Strong data growth continues, churn down
Q2 2015 operational highlights Strong data growth continues, churn down • Increase in mobile subscription base Mobile subs, millions and churn*, % 4,76 4,71 4,71 4,72 • Growth in both segments 4,69 4,70 4,68 4,70 • Finland +23,400, Estonia +1,800 subs 18,0% 17,6% 17,7% 17,2% 16,9% 16,6% • Fixed broa
Slide 7: Business segments
Business segments NK
Slide 8: Q2 2015 Consumer Customers: Revenue grew and profitability improved
Q2 2015 Consumer Customers Revenue grew and profitability improved • Revenue €243m (239) Revenue, €m and YoY change, % -1,9% -1,8% 0,9% 1,5% • Growth in mobile service revenue • Decrease in interconnection and roaming revenue • New services growing 247 244 239 242 239 243 233 236 Q3/13 Q4/13 Q1/14 Q
Slide 9: Q2 2015 Corporate Customers: Slight growth in revenue
Q2 2015 Corporate Customers Slight growth in revenue • Revenue €147m (144) Revenue, €m and YoY change, % -4,2% -7,1% -2,6% 2,0% • Growth in mobile service revenue, ICT business and equipment sales • Traditional fixed network revenues down 157 • Decrease in interconnection and roaming revenue 148 149
Slide 10: Strategy execution
Strategy execution Build value on data Accelerate new service businesses Improve performance with customer intimacy and operational excellence 10
Slide 11: Smartphone base and data growth continues
Smartphone base and data growth continues • 65% of customers use a smartphone Smartphone penetration 1), %. Elisa’s network in Finland 63% 65% 60% • 52% of smartphones are 4G-capable (48% in Q1) 52% 54% 57% 48% 40% • Of all models sold in Q2 • 87% were smartphones, 81% were 4G-capable (95% and 79%,
Slide 12: 4G network coverage obligation reached ahead of time
4G network coverage obligation reached ahead of time • Elisa has met the 800 MHz licence conditions well before the deadline • Population coverage 97% • More than 290 localities • Rural areas in focus • Widest coverage in Finland • Extension of the 4G network continues 12
Slide 13: New content to Elisa Viihde IPTV service
New content to Elisa Viihde IPTV service • Entertainment • In-house drama production by Finnish front-line actors released later in 2015 • New series by Ismo Leikola, world champion stand-up comedian • Netflix as a first in IPTV service package • Sports • Live regular season and playoffs basketball
Slide 14: Elisa Kassa cash service for easy mobile commerce
Elisa Kassa cash service for easy mobile commerce • Mobile sale transactions available, for example, with tablet • Replaces old cash systems • Easy mobile commerce with device including network connection and browser • Monthly-fee service, integration to most common e-commerce systems • Product and
Slide 15: Outlook and guidance for 2015
Outlook and guidance for 2015 Macroeconomic environment still weak in 2015, competition remains challenging • Revenue at the previous year’s level • EBITDA excluding one-offs at the previous year’s level • CAPEX maximum 12% of revenue 15
Slide 16: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 17: EBITDA grew by 3%, EPS 10% in Q2
EBITDA grew by 3%, EPS 10% in Q2 € million Q215 Q214 Δ 1) Δ% H115 H114 Δ 1) Δ% 2014 • Revenue growth 2% Revenue 390 384 6 2 771 766 5 1 1,535 • EBITDA improved Other operating income 1 4 1 5 8 Operating expenses -259 -261 -511 -518 -1,024 • Mobile service revenue growth 6% EBITDA 131 127 4 3 260 253
Slide 18: Strong growth in mobile service revenue
Strong growth in mobile service revenue • Consumer Customers Revenue change, €m • Growth in mobile and new services • Decrease in fixed voice 6 -9 • Corporate Customers 3 • Growth in mobile and ICT services 7 • Decrease in fixed voice 390 384 • Growth in equipment sales, lower MTR and roaming revenu
Slide 19: Clear profitability improvement in Estonia
Clear profitability improvement in Estonia Revenue, €m and YoY change, % • Revenue €23.3m (23.8) -1,2% -2,4% -2,7% -2,1% • Growth in mobile service revenue and in equipment sales • Decrease in interconnection 25,4 24,5 23,8 25,1 23,9 23,3 22,3 21,7 • Increase in post-paid and decrease in pre-paid su
Slide 20: Total expenses decreasing
Total expenses decreasing • OPEX decreasing Material and services (blue), employee (yellow) and other expenses (orange), €m, YoY change (black line) • Interconnection and roaming -5,8% -6,0% -1,6% -0,5% 42 • Continuous productivity improvements and synergies 38 42 44 39 45 41 43 62 78 63 65 65 54 67
Slide 21: Lower YoY CAPEX
Lower YoY CAPEX • Q2 CAPEX €49m (52) Consumer (blue), Corporate (yellow), shares (orange) and licences (green), CAPEX/sales (black line) • Consumer €27m (28) • Corporate €21m (24) 14% 14% 14% • CAPEX / sales 12% of revenue 13% 13% 12% 33 12% • Full year CAPEX / sales guidance 12% 11% • Major CAPEX a
Slide 22: Continuous improvement in cash flow
Continuous improvement in cash flow • Cash flow growth 9% Cash flow change, €m 1 1 • Excluding share purchases 22% -8 -2 10 • EBITDA improved through service revenue 4 growth and productivity improvements 70 64 • Interest payments down due to lower rates Q2/14 EBITDA NWC Financials Capex Shares Adju
Slide 23: Solid liquidity position
Solid liquidity position Bonds and bank loan maturities 30 June 2015 • Cash and undrawn committed credit Bonds (blue), loans (green) and RCF (orange), €m facilities €270m (281) • Revolving credit facilities €90m in use 130 • Commercial paper programme • €219m in use as of 30 June 2015 • S&P upgraded
Slide 24: Return ratios improved
Return ratios improved • Net debt at target level Net debt (blue, €m), Net debt /EBITDA (orange line) 2,1 • Net debt / EBITDA 2.0x 2,0 2,0 2,0 1,9 2,0 1,8 1,8 • Gearing 136%, equity ratio 35% • Dividend of €211m was paid in Q2 • Target setting 995 971 933 1 075 1 043 1 001 934 1 075 • Net debt / EBI
Slide 25: Competitive remuneration continues
Competitive remuneration continues • €1.32 per share dividend paid in April Dividend (blue), buy-backs (yellow) and pay-out ratio 149% 135% • Total amount €211m 126% 101% 98% 104% • Pay-out ratio 94% 88% 94% • Strong commitment to competitive 1,80 1,42 1,32 shareholder remuneration 1,00 1,30 1,30 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 Q2/15 Q2/14 Δ1) Δ% H1/15 H1/14 Δ1) Δ% 2014 EBITDA 131 127 4 3 260 253 7 3 520 Change in receivables 15 -14 10 -14 -5 Change in inventories -2 1 3 2 -2 Change in payables -3 12 9 5 -14 Change in NWC 9 -1 10 22 -7 -20 Financials (net) -1 -2 -11 -14 -24 Taxes
Slide 28: Cash flow by quarters
APPENDIX Cash flow by quarters € million Q2/15 Q1/15 Q4/14 Q3/14 Q2/14 Q1/14 Q4/13 Q3/13 EBITDA 131 129 125 142 127 126 122 138 Change in receivables 15 -5 9 0 -14 0 -17 -8 Change in inventories -2 5 -4 0 1 2 1 1 Change in payables -3 12 4 -22 12 -8 12 -3 Change in NWC 9 13 8 -22 -1 -6 -4 -9 Financi
Slide 29: Debt structure
APPENDIX Debt structure € million 30 Jun 15 31 Mar 15 31 Dec 14 30 Sep 14 30 Jun 14 31 Mar 14 31 Dec 13 30 Sep 13 Bonds and notes 592 591 591 590 590 589 750 750 Commercial Papers 219 169 210 200 217 152 101 192 Loans from financial institutions 205 205 211 211 216 216 223 224 Financial leases 30 30