Elisa Oyj Class A · OMXHEX:ELISA
Elisa Oyj Class A — Investor Day (October 2016)
20 slides from Elisa Oyj Class A's investor day presentation, October 2016
Slide 1: CMD
CMD
Slide 2: Financial overview
Financial overview Jari Kinnunen CFO
Slide 3: Financial performance, capital management, cost allocation change, CFO priorities
1 Financial performance 2 Capital management 3 Cost allocation change 4 CFO priorities
Slide 4: Revenue growth continues, 2/3 with mid-single digits…
Financial performance Revenue growth continues, 2/3 with mid-single digits… CAGR 14 – LTM Revenue share Total revenue 2.6% 100% Mobile service revenue 7.0% 47% Digital services 5.1% 15% Fixed services excl. PSTN and operator sales -2.1% 15% Equipment sales 8.5% 12% Interconnection and roaming -19.3%
Slide 5: …operational excellence leveraging on EPS…
Financial performance …operational excellence leveraging on EPS… CAGR 2014 LTM Revenue 2.6% EBITDA 4.0% EBIT 6.7% PTP 8.2% EPS 8.1% Comparable figures 5
Slide 6: …and strong drivers to continue improvement
Financial performance …and strong drivers to continue improvement Comparable EBITDA-margin LTM 34.7% Upselling higher speeds Mobile service revenue growth Scaling services: proven business model Digital services improvement Lowering burn-rate: services still finding traction Productivity improvement
Slide 7: Anvia synergies
Financial performance Anvia synergies • EBITDA synergy • New cross-selling City network areas estimates opportunities for Elisa Anvia’s area – 4Q16e negative EUR1–2m – 2017e EUR5–8m • Expected EPS effect – Neutral in 2016, accretive – 2018e EUR5–8m on 2017 onwards • Synergy sources • No negative imp
Slide 8: Best-in-class ROCE and cash flow growth…
Financial performance Best-in-class ROCE and cash flow growth… ROCE 2015 Operative Cash Flow1) Elisa 25.6% CAGR OTE +6.2% BT Group TDC 365 328 340 Swisscom Orange Belgium Telenor 2014 2015 LTM Sunrise 1) EBITDA-CAPEX Telekom Austria Telefonica Operative cash flow/sales Proximus 24% KPN Orange 20% Mi
Slide 9: …with customer- and value-driven CAPEX policy…
Capital management …with customer- and value-driven CAPEX policy… Worlds largest data usage Below average CAPEX • CAPEX/sales target 12% 20% reiterated Finland 6.7 7.7 Peer Estonia 18% group • Lean pragmatic strategy Korea 16% focused on customer and Sweden Denmark 14% market demands USA 12% Japan 1
Slide 10: .. and disciplined M&A policy…
Capital management .. and disciplined M&A policy… Focus on core markets Value creating acquisition criteria • Domestic telecom services • Supports strategy • Digital services • Financially accretive – Bolt-on • Distribution intact or improved – Small and medium sized acquisitions • Solid capital str
Slide 11: …results in best cash conversion
Capital management …results in best cash conversion 20151) 2014 – LTM1) 70% Elisa 63.5% BT 62.4% 65% TDC 53.7% Orange 47.8% Deutsche Telekom 47.5% 60% Telekom Austria 47.1% Telenor 45.5% 55% KPN 44.1% Telia 43.5% 50% Proximus 42.3% Swisscom 41.2% 45% Tele2 30.3% Telecom Italia 25.8% 40% Telefonica 1
Slide 12: Excellent funding efficiency
Capital management Excellent funding efficiency Nominal value, EURm Average maturity 4.0 yrs Average interest1) Bonds Bonds 600 3Q16 refinancing 130 Bank reduces financial Bank loans 218 loans expenses in 2017 ~EUR2.5m Commercial Undrawn 201 170 300 300 2.1% paper RCF 9 150 1.8% 59 RCF in use 0 17 1
Slide 13: Solid capital structure gives good prospects for growth and profit distribution
Capital management Solid capital structure gives good prospects for growth and profit distribution • Efficient capital structure Net Debt / EBITDA • Mid term target reiterated 2.0x 1.9 1.8 1.8 – Net debt / EBITDA 1.5–2.0x 1.5x • Flexibility for capital allocation – Remuneration – Acquisitions 2014 2
Slide 14: Strong shareholder remuneration
Capital management Strong shareholder remuneration • Distribution policy reiterated CAGR • Commitment to high profit distribution +3.8% 1.40 – Policy: payout ratio 80–100% 1.32 • Capability for competitive remuneration 1.30 going forward • EPS: €1.59 LTM (2015: 1.52) 104% 94% 92% 2014 2015 2016 DPS,
Slide 15: Liquidity of Elisa shares has increased
Capital management Liquidity of Elisa shares has increased Elisa shares are traded on the Nasdaq Trade volumes Helsinki and in over 20 alternative Alternative venues, EURm Helsinki, EURm marketplaces Annual share turnover Share of trading 1 Oct 2015 – 30 Sep 2016 1.8x 1.7x 1) 2) Exchange Lit t
Slide 16: Cost allocation changes in segment reporting
Cost allocation change Cost allocation changes in segment reporting Consumer Customers EURm Current Current Current New New New Segment allocation 1Q16 2Q16 3Q16 1Q16 2Q16 3Q16 changes starting Revenue 243.7 245.7 268.1 243.7 245.7 268.1 1Q17 EBITDA 89.0 88.2 100.8 85.5 85.5 97.1 Changes in operativ
Slide 17: Elisa investment highlights
Summary Elisa investment highlights • Revenue growth above industry average Total shareholder return 27% p.a. since 1 Jan 20141) • EBITDA improvement continues 40 • High return on capital employed 35 • Industry-leading cash conversion • Low risk profile 30 • Strong shareholder remuneration 25 20 15
Slide 18: CFO priorities
CFO priorities CFO priorities Build value on data CAPEX efficiency | Growth in return on capital employed Accelerate digital service business Disciplined M&A | Growth and profitability improvement Improve performance through customer intimacy and operational excellence Productivity improvement | Eff
Slide 19: Thank you
— Wise CMD THANK YOU
Slide 20: Forward looking statements
Elisa CMD 27 October 2016 Forward looking statements Statements made in this document relating to the future, including future performance and other trend projections, are forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to e