Slide 1: 3rd quarter results
3rd quarter results 2@|5 elise
Slide 2: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 3: CEO's review
CEO’s review • Q3 2015 financial and operational highlights • Segment review • Strategy execution • Outlook and guidance for 2015 3
Slide 4: Q3 2015 highlights
Q3 2015 highlights • Revenue grew 3%, clear EBITDA improvement • Mobile service revenue up by 8% • Mobile subscription base increased, decrease in fixed broadband • Good profit growth in Consumer Customers segment • Strong mobile data growth continued, smartphone penetration 66% • Smartphones 92% of
Slide 5: Growth in revenue, clear EBITDA improvement
Q3 2015 financial highlights Growth in revenue, clear EBITDA improvement Revenue, €m and YoY change, % 2,8 % • Revenue €394m (384) -3,9 % -0,4 % 1,7 % • EBITDA €145m (142) 401 390 394 382 384 384 386 • Earnings per share €0.43 (0.43) 381 • Net debt / EBITDA 1.9 (2.0) Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1
Slide 6: Strong data growth continues
Q3 2015 operational highlights Strong data growth continues • Increase in mobile subscription base Mobile subs, millions and churn*, % 4,76 4,75 4,71 4,72 • Growth in both segments 4,69 4,70 4,68 4,70 • Finland +43,000, Estonia +3,900 17,6% 17,7% 17,2% 16,9% 16,6% 16,1% • Fixed broadband down by 8,9
Slide 7: Business segments
Business segments NK
Slide 8: Consumer Customers: Revenue and EBITDA increased
Q3 2015 Consumer Customers Revenue and EBITDA increased • Revenue €251m (242) Revenue, €m and YoY change, % 0,9 % 1,5 % 3,6 % -1,8 % • Solid growth in mobile service revenue • Decrease in interconnection and roaming revenue • New services growing 251 244 242 243 239 239 236 233 Q4/13 Q1/14 Q2/14 Q3/
Slide 9: Corporate Customers: Slight growth in revenue
Q3 2015 Corporate Customers Slight growth in revenue • Revenue €144m (142) Revenue, €m and YoY change, % 2,0 % 1,4 % -2,6 % • Growth in mobile service revenue, ICT business and -7,1 % equipment sales • Traditional fixed network revenues down 157 • Decrease in interconnection and roaming revenue 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 strong data growth continues
Smartphone base and strong data growth continues • 66% of customers use a smartphone Smartphone penetration 1), %. Elisa’s network in Finland 63% 65% 66% 60% • 58% of smartphones are 4G-capable (52% in Q2) 52% 54% 57% 48% • Of all models sold in Q3 • 92% were smartphones, 80% were 4G-capable (87% an
Slide 12: New content in Elisa Viihde service
New content in Elisa Viihde service • Domestic movie and TV productions • Almost one million Finns now use mobile services weekly to watch TV shows • Mobile device users are more satisfied with their offerings • In particular, sports content is interesting and customers are willing to pay for it 12
Slide 13: Elisa Lompakko wallet service has more than 100,000 registered users
Elisa Lompakko wallet service has more than 100,000 registered users • Elisa Lompakko is used most in net shopping and in student canteens • Families with children are using Elisa Lompakko more and more • On the net Elisa Lompakko is used most for monthly billed services 13
Slide 14: Outlook and guidance for 2015
Outlook and guidance for 2015 Guidance for 2015 has been updated Macroeconomic environment still weak in 2015, competition remains challenging • Revenue at the same level or slightly higher than in 2014 • EBITDA excluding one-offs at the same level or slightly higher than in 2014 • CAPEX maximum 12%
Slide 15: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 16: Growth in revenue and EBITDA
Growth in revenue and EBITDA € million Q315 Q314 Δ 1) Δ% 1-9/15 1-9/14 Δ 1) Δ% 2014 • Revenue growth 3% Revenue 394 384 11 3 1,165 1,150 16 1 1,535 • EBITDA improved Other operating income 1 1 2 6 8 Operating expenses -251 -243 -762 -760 -1,024 • Mobile service revenue growth EBITDA 145 142 3 2 405
Slide 17: Strong growth in mobile service revenue continues
Strong growth in mobile service revenue continues • Consumer Customers Revenue change, €m • Growth in mobile and online services • Decrease in fixed voice 6 -7 • Corporate Customers 2 • Growth in mobile and ICT services 9 394 • Decrease in fixed voice • Growth in equipment sales, decrease in MTR 384
Slide 18: Growth in revenue and EBITDA in Estonia
Growth in revenue and EBITDA in Estonia • Revenue €25.4m (25.1) Revenue, €m and YoY change, % -1,2% 1,2% • Growth in mobile service revenue and equipment -2,4% -2,7% -2,1% sales • MTR cut to € 0.01 (-10%) 1 July 2015 24,5 23,8 25,1 23,9 25,4 • Increase in post- and pre-paid subscriptions 22,3 21,7 2
Slide 19: Total expenses increased
Total expenses increased • OPEX increased Material and services (blue), employee (yellow) and other expenses (orange), €m, YoY change (black line) • Equipment purchases 3,4% -5,6% -6,0% -1,6% -0,5% • Sales expenses and number of personnel 42 42 44 45 43 39 41 39 • Inventory write-down 78 65 63 54 65
Slide 20: Stable CAPEX level
Stable CAPEX level • Q3 CAPEX €46m (43) Consumer (blue), Corporate (yellow), shares (orange) and licences (green), CAPEX/sales (black line) • Consumer €26m (24) • Corporate €20m (19) 14% 14% 14% • CAPEX / sales 12% 13% 12% 12% 12% 11% 33 • Full-year CAPEX / sales guidance 12% • Major CAPEX areas • 4
Slide 21: Strong growth in cash flow
Strong growth in cash flow • Cash flow growth €46m, 117% Cash flow change, €m • Excluding share purchases €27m, 44% 1 2 -2 19 • EBITDA improved through service revenue growth and productivity improvements 22 85 3 • Net interest payments lower 39 Q3/14 EBITDA NWC Financials Capex Sha res Adju st- Q3/
Slide 22: Solid liquidity position
Solid liquidity position Bonds and bank loan maturities 30 September 2015 • Cash and undrawn committed credit Bonds (blue), loans (green), RCF (orange) and EIB loan (red) €m facilities €359m (290) • Revolving credit facilities fully undrawn • €150m loan commitment signed in October 130 • Commercial
Slide 23: Capital structure in target and return ratios improved
Capital structure in target and return ratios improved • Net debt at target level Net debt (blue, €m), Net debt /EBITDA (orange line) 2,1 2,0 2,0 2,0 • Net debt / EBITDA 1.9x 1,9 1,9 1,8 1,8 • Gearing 115%, equity ratio 38% • Target setting 1 075 1 075 971 933 1 043 1 001 934 991 • Net debt / EBITDA
Slide 24: Contacts
Contacts: Mr. Vesa Sahivirta vesa.sahivirta@elisa.fi Download the Elisa IR App +358 102 623 036
Slide 25: Cash flow YoY comparison
APPENDIX Cash flow YoY comparison EUR million Q3/15 Q3/14 Δ1) Δ% 1-9/15 1-9/14 Δ1) Δ% 2014 EBITDA 145 142 3 2 405 395 10 3 520 Change in receivables -22 0 -12 -13 -5 Change in inventories 4 0 7 2 -2 Change in payables 18 -22 27 -18 -14 Change in NWC 0 -22 22 22 -29 51 -20 Financials (net) 1 -2 2 -10
Slide 26: Cash flow by quarters
APPENDIX Cash flow by quarters € million Q3/15 Q2/15 Q1/15 Q4/14 Q3/14 Q2/14 Q1/14 Q4/13 EBITDA 145 131 129 125 142 127 126 122 Change in receivables -22 15 -5 9 0 -14 0 -17 Change in inventories 4 -2 5 -4 0 1 2 1 Change in payables 18 -3 12 4 -22 12 -8 12 Change in NWC 0 9 13 8 -22 -1 -6 -4 Financi
Slide 27: Debt structure
APPENDIX Debt structure € million 30 Sep 15 30 Jun 15 31 Mar 15 31 Dec 14 30 Sep 14 30 Jun 14 31 Mar 14 31 Dec 13 Bonds and notes 592 592 591 591 590 590 589 750 Commercial papers 229 219 169 210 200 217 152 101 Loans from financial institutions 200 205 205 211 211 216 216 223 Financial leases 29 30