Slide 1: 1st Quarter Results 2014
Slide 2: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 3: CEO's review
CEO’s review • Q1 2014 financial and operational highlights • Segment review • Strategy execution • Outlook and guidance for 2014 3
Slide 4: Q1 2014 highlights
Q1 2014 highlights • Growth in revenue and result • Competition was keen • Mobile subscription base continued to grow • Strong mobile data growth, boosted by 4G services • Smartphone penetration above 50% • Building of the new 800 MHz LTE network started • Success in New Services continued • €1.30 d
Slide 5: Growth in revenue and profits
Q1 2014 financial highlights Growth in revenue and profits • Revenue €382m (361) • EBITDA €126m (109), 33% of revenue (30) 32% 35% 35% 33% 31% 31% 31% • EPS €0.32 (0.26) 30% 30% • CAPEX €48m (47), 13% of revenue • Net debt €933m (807) 401 • Cash flow €39m (37) 389 396 390 395 387 382 382 • Net debt
Slide 6: Growth in mobile subscriptions
Q1 2014 operational highlights Growth in mobile subscriptions • 21,400 new subscriptions in Q1 4535 4557 4427 4446 4470 4490 4497 • Growth in corporate segment, decrease in consumer 4244 4337 segment due to churn of non-active subscriptions • Estonia -1,200 subscriptions, decrease in prepaid • Fixed
Slide 7: Growth in data, churn came down
Q1 2014 operational highlights Growth in data, churn came down • Mobile data YoY growth +64% 1 804 1 797 1 755 1 747 1 741 • 27.3bn megabytes (16.6) 1 707 1 695 1 688 1 638 • Outgoing minutes 1.6bn, slight decrease 19% 20% 17% 18% 18% 18% 17% • 539m SMS, YoY growth 9% 15% 14% • Churn* decreased to 1
Slide 8: Business Segments
Business Segments
Slide 9: Q1 2014 Consumer Customers: Growth in revenue and profitability
Q1 2014 Consumer Customers Growth in revenue and profitability • Revenue €233m (220) • Growth through new services, PPO acquisition and 34% 34% 33% mobile services 32% 31% 31% 31% 30% • Decrease in equipment sales and interconnection 29% revenue • EBITDA €76m (63), 33% of revenue (29) 239 244 247 23
Slide 10: Q1 2014 Corporate Customers: Revenue and EBITDA growth
Q1 2014 Corporate Customers Revenue and EBITDA growth • Revenue €149m (142) 36% 36% • Growth through ICT services and PPO acquisition 33% 32% 32% 32% 32% 32% • Decrease in traditional fixed voice and roaming revenue 31% • EBITDA €50m (46), 33% of revenue (32) • Revenue growth and improved efficiency
Slide 11: Strategy execution
Strategy execution Build value on data Accelerate new services businesses Improve performance with customer intimacy and operational excellence 11
Slide 12: Strong growth in smartphone base
Strong growth in smartphone base Penetration in Elisa’s network in Finland • More than half of customers use 59,5 % 61,0 % smartphone 55,0 % 57,0 % 58,0 % 52,5 % 52,0 % • 11% of total phone base are LTE-capable 50,0 % 48,0 % • 42% of voice subs are data bundles 43,5 % 46,0 % • Most sold phones in Ma
Slide 13: Cloud service 'Saunalahti Pilvilinna'
Cloud service ’Saunalahti Pilvilinna’ • Domestic cloud service for photos, videos and other files • Supports all major operating systems • Files are encrypted, virus scanned and backed up automatically • Available from the beginning of April 13
Slide 14: The use of Elisa Wallet expands
The use of Elisa Wallet expands • Elisa Wallet can be used already in 3,000 payment locations • Available in major retail chains • Several new chains coming in the and of April • Elisa Wallet is independent of bank or telecom operator 14
Slide 15: Productivity for public administration
Productivity for public administration • Productivity survey with city of Turku • Possibility to save tens of millions of euros • Digitization of services, like online doctor’s appointments and virtual meetings • Interpreter service for disabled customers using video connection • Distance service to
Slide 16: Strong growth in demand and availability of 4G services
Strong growth in demand and availability of 4G services • Elisa first in Finland to open 4G LTE 800 MHz spectrum to its customers • Increasing coverage for high speed mobile broadband • Improved indoor coverage • 4G population coverage 89% with DC and LTE technologies • 4G is about one third of mobi
Slide 17: Outlook and guidance for 2014
Outlook and guidance for 2014 • Macroeconomic environment still weak in 2014 • Competition remains challenging • Revenue at the previous year’s level, or slightly above • EBITDA excluding one-offs at the same level as last year, or slightly higher • CAPEX maximum 12 per cent of revenue 17
Slide 18: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO
Slide 19: Clear growth in revenue and earnings
Clear growth in revenue and earnings EUR million Q1/14 Q1/13 Δ 1) Δ% 2013 Revenue 382 361 21 6 1,547 Other operating income 1 0 4 Operating expenses -257 -253 -1,061 EBITDA 126 109 17 16 491 EBITDA-% 33 30 32 EBITDA excl. one-offs 126 111 16 14 508 EBITDA-% excl. one-offs 33 31 33 Depreciation and a
Slide 20: Revenue change, €m
Revenue change, €m 382 9 + ICT services + PSTN 17 + Estonia 361 - Mobile -3 -2 - MTR reduction in Estonia + Online services - Roaming + Estonia + Mobile +/- Cable TV + Fixed broadband + PSTN Q1/13 Interconnection Equipment sales Consumer Corporate Q1/14 and roaming Customers Customers 20 Changes are
Slide 21: Efficiency measures decreased OPEX
Efficiency measures decreased OPEX Q1 Q2 Q3 Q4 Q1 • OPEX decreases in Q1/14 EURm 13 13 13 13 14 Productivity improvements Materials and • 146 155 157 161 150 services • Interconnection and roaming • Equipment purchase costs Employee benefit 64 66 62 78 65 expenses 1) • OPEX increases in Q1/14 Other
Slide 22: CAPEX same level as previous year
CAPEX same level as previous year • Q1 CAPEX €48m (47) 20% 14% • Consumer €25m (27) 13% 13% 13% 13% 12% 13% 13% 15% 11% • Corporate €23m (20) 10% • Major CAPEX areas 5% 39 • 4G/LTE and 3G coverage and upgrade 103 0% • Fixed access and backbone networks 33 -5% • IT systems 2 Customer equipment 5 • 6
Slide 23: Cash flow
Cash flow EUR million Q1/14 Q1/13 Δ1) 2013 EBITDA 126 109 17 491 Change in receivables 0 8 -7 -13 Change in inventories 2 1 0 6 Change in payables -8 0 -8 2 Change in NWC -6 9 -15 -5 Financials (net) -12 -11 -0 -25 Taxes -13 -15 2 -65 CAPEX -50 -49 -1 -201 800 MHz licences 2) -12 Investments in shar
Slide 24: Growth in Estonian revenue and EBITDA
Growth in Estonian revenue and EBITDA 28% • Revenue €22m (21) 27% 27% 27% 26% 25% 26% 25% • Decrease in MTRs 23% • Growth in mobile data • EBITDA €6m (5) • CAPEX €2m (3) • 4G/LTE, 3G Coverage 30 29 28 • Change in mobile subs: -1,200 QoQ 25 24 25 25 22 21 • Decrease in prepaid subs Q1 Q1 Estonian MTR
Slide 25: Solid liquidity position
Solid liquidity position Bond and bank loan maturities 31.3.2014 • Cash and undrawn committed facilities €359m (383) • Revolving Credit Facilities €300m fully undrawn • Commercial paper programme • €152m in use as of 31 March 2014 • Solid credit ratings since 2003 300 300 170 • S&P revised outlook f
Slide 26: Capital structure at target level
Capital structure at target level 2,1 2,0 2,0 • Target setting 1,8 1,7 1,7 1,7 1,8 1,5 • Net debt / EBITDA 1.5–2x • Equity ratio >35% 1 042 995 971 933 909 874 839 807 754 • Capital structure 45% 38% 41% 42% 33% 36% 35% 37% 41% • Net debt / EBITDA 1.8x Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13
Slide 27: Competitive remuneration continues
Competitive remuneration continues 149% 135% 126% 1,4 • EUR €1.30 per share paid in April 101% 98% 104% 88% 0,9 • Dividend yield 6.7% 1) 1,80 • Payout ratio 104% 1,42 0,4 1,30 1,30 1,30 1,30 1,00 • Strong commitment to competitive -0,1 2008 2009 2010 2011 2012 2013 2014 shareholder remuneration Divi
Slide 28: Elisa IR App
Investor contacts: Mr. Vesa Sahivirta Download the vesa.sahivirta@elisa.fi +358 102 623 036 Elisa IR App
Slide 29: Consolidated cash flow statement
APPENDIX SLIDE Consolidated cash flow statement EUR million Q1 2014 Q4 2013 Q3 2013 Q2 2013 Q1 2013 Q4 2012 Q3 2012 Q2 2012 Q1 2012 Cash flow from operating activities Profit before tax 64 60 78 63 53 64 78 66 61 Adjustments to profit before tax 56 59 60 54 55 58 54 55 59 Change in working capital -
Slide 30: Financial situation
APPENDIX SLIDE Financial situation EUR million 31 Mar 14 31 Dec 13 30 Sep 13 30 Jun 13 31 Mar 13 31 Dec 12 30 Sep 12 30 Jun 12 31 Mar 12 Interest-bearing debt Bonds and notes 589 750 750 451 450 525 375 375 375 Commercial Papers 152 101 192 204 179 96 170 198 184 Loans from financial institutions 21