Slide 1: Financial Statement 2004
1 January 2004 – 31 December 2004 Elisa Corporation Financial Statement 2004 10 February 2005 1
Slide 2: Contents
Contents • Q4 2004 Report −President and CEO Veli-Matti Mattila • Key Figures and Financial Statement −CFO Tuija Soanjärvi Elisa Corporation Financial Statement 2004 10 February 2005 2
Slide 3: Q4 2004 Report
Q4 2004 Report President and CEO Veli-Matti Mattila
Slide 4: Elisa Q4 2004
Elisa Q4 2004 • Financial Highlights • Market Review of Mobile and Fixed Network Businesses • Development of Operations • Future Outlook • Distribution from 2004 Elisa Corporation Financial Statement 2004 10 February 2005 4
Slide 5: Elisa Q4 2004 Highlights
Financial highlights Elisa Q4 2004 Highlights • Keen competition continued, Elisa succeeded well • Profitability in line with the given outlook • Growth in mobile subscriptions and usage • Strong growth in broadband continued • High churn and price erosion in the mobile business continued Elisa Corp
Slide 6: Q4 Result in Line with the Given Outlook
Financial highlights Q4 Result in Line with the Given Outlook • Revenue EUR 351m (391, excluding Germany 351) • EBITDA EUR 114m (96) − Excluding one-offs EUR 96m (116) • EBIT EUR 55m (-83) • Pre-tax profit EUR 51m (-93) Elisa Corporation Financial Statement 2004 10 February 2005 6
Slide 7: 2004 Net Result More than Doubled
Financial highlights 2004 Net Result More than Doubled Comparable figures* EURm Q4/04 Q4/03 change 2004 2003 change Revenue 351 351 0% 1356 1382 -2 % EBITDA 96 116 -18 % 414 403 3% EBIT 37 41 -12 % 175 122 43 % Pre-tax profit 33 32 3% 148 86 72 % Net result 23 22 4% 94 46 105 % Reported figures EURm
Slide 8: Financial Position Strengthened in Q4
Financial highlights Financial Position Strengthened in Q4 • Cash flow EUR 53m (69) • Net debt EUR 410m (654) • Operative CAPEX 15% of revenue (16) • Equity ratio 51% (40) Elisa Corporation Financial Statement 2004 10 February 2005 8
Slide 9: Successful Quarter for Mobile Business
Review of mobile business Successful Quarter for Mobile Business • Keen competition continued − Churn 38.9% (Christmas season) − Price erosion continued, ARPU €37 − Subscription net adds 15,000 (excluding MVNO subscriptions) • Usage growth driven by targeted segment offerings − MOU up 9%, SMS 27% •
Slide 10: Mobile: Growth in Subscriptions Despite of High Churn
Review of mobile business Mobile: Growth in Subscriptions Despite of High Churn Domestic Mobile subs. base, ’000 (Q1/03-Q4/04) Churn & net adds (Q1/03-Q4/04) 50 47 1 384 1 348 1 357 1 375 1 374 1 319 1 331 1 369 45 40 39 35 29 30 40,4 24 39,5 40,6 38,6 38,2 25 23 36,4 37,5 37,0 22 20 14 13 15 10 6 9
Slide 11: Accelerated Competition Decreased Mobile Profitability
Review of mobile business Accelerated Competition Decreased Mobile Profitability Net sales and EBITDA-margin Q4 Financial Performance Alignment in revenue booking principle • Revenue EUR 180m (201) 194 201 − Change in revenue booking 188 procedure 179 175 179 180 − Increased usage compensated 174 fo
Slide 12: Fixed Network: Very Strong Growth in Broadband
Review of fixed network business Fixed Network: Very Strong Growth in Broadband • Elisa’s ADSL broadband access coverage nationwide • ADSL subscriber growth up 75% yoy, 37,000 in Q4 • Voice traffic continued its migration to mobile and data to broadband • Number of analogue lines decreased by 5% Eli
Slide 13: Broadband Compensates Decline in Traditional Subscriptions
Review of fixed network business Broadband Compensates Decline in Traditional Subscriptions Fixed subscriber base, ’000 (1Q03-4Q04) Broadband subscriber base (1Q03-4Q04) 222 307 1 000 185 136 800 160 502 148 270 127 400 600 107 900 93 500 81 000 400 37171 200 24634 19500 20870 12232 9100 12500 14400
Slide 14: Fixed Network Profitability Improved
Review of fixed network business Fixed Network Profitability Improved Net sales and EBITDA-margin Q4 Financial Performance Alignment of revenue recognition policy 172 177 171 • Revenue EUR 162m (171) 166 164 166 162 161 • EBITDA EUR 42m (29*), 26% of revenue (17*) • EBIT EUR 15m (-5**), 9% of revenu
Slide 15: Operational Priorities
Development of operations Operational Priorities 1. Significant profitability improvement − Efficiency development continues – Outsourcing of application management to IBM 2. Customer orientation – 3G services for commercial use – Cooperation with Fujitsu 3. Simplification of structure − Yomi’s tele
Slide 16: Outlook for 2005
Outlook for 2005 • Keen competition will continue • Elisa aims to strengthen its market position • Revenue slightly higher than in 2004 • Comparable EBITDA and EBIT in H1/05 at the same level as in Q4/04 • CAPEX maximum 15% of revenue, cash flow clearly positive Elisa Corporation Financial Statement
Slide 17: Distribution from 2004
Distribution from 2004 • The board will propose a dividend of EUR 0,40 per share − Dividend payment EUR 57 million • Authorization of share buy-backs − Max 5% of outstanding shares Elisa Corporation Financial Statement 2004 10 February 2005 17
Slide 18: Financial Performance
Financial Performance CFO Tuija Soanjärvi
Slide 19: Elisa's Q4 and 2004 P&L
Elisa’s Q4 and 2004 P&L Comparable figures* Interim report EURm Q4/04 Q4/03 2004 2003 Q4/04 Q4/03 2004 2003 Revenue 351 351 1356 1382 351 391 1356 1538 Other operating income 5 8 18 21 18 13 31 34 EBITDA 96 116 414 403 114 96 432 385 EBITDA margin 27 % 33 % 31 % 29 % 32 % 25 % 32 % 25 % Depreciation
Slide 20: Progress by Quarters
Progress by Quarters EURm Q4/04* Q3/04 Q2/04 Q1/04 Q4/03* Q3/03 Q2/03 Q1/03 Revenue 351 333 339 333 391 385 391 371 Other operating income 5 2 4 7 13 8 9 4 EBITDA 96 105 95 119 118 107 97 85 EBITDA margin 27 % 32 % 28 % 36 % 30 % 28 % 25 % 23 % Depreciation -48 -49 -49 -49 -70 -67 -66 -65 Goodwill d
Slide 21: Operative CAPEX 15% of Revenue
Operative CAPEX 15% of Revenue 120 100 5 51 80 5 EUR million 4 2 4 60 5 22 20 21 8 2 1 4 1 8 40 8 3 76 9 19 1 48 49 46 55 54 20 39 42 41 30 23 32 0 Q1/02 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 Q3/04 Q4/04 Investments in shares GSM network buy-backs Investments in fixed assets Elisa Co
Slide 22: Net Debt and Net Debt / EBITDA
Net Debt and Net Debt / EBITDA 900 825 850 817 3,0 757 767 742 722 750 654 2,5 587 Net Debt, EUR million Net Debt / EBITDA 600 513 2,0 461 450 410 1,5 300 1,0 150 0,5 0 0,0 Q1/02 Q2/02 Q3/02 Q4/02 Q1/03 Q2/03 Q3/03 Q4/03 Q1/04 Q2/04 Q3/04 Q4/04 Elisa Corporation Financial Statement 2004 10 February
Slide 23: Cash Flow by Quarters
Cash Flow by Quarters CONSOLIDATED CASH FLOW STATEMENT Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 EUR million 2004 2004 2004 2004 2003 2003 2003 2003 Cash inflow from operating activities Profit before extraordinary items 51 36 28 51 -94 17 8 -5 Adjustments: Depreciation and value adjustments 59 61 59 60 179 80 80 79
Slide 24: Stronger Financial Position
Stronger Financial Position • Gearing 46% (88) • Equity ratio 51% (40) • Net debt / EBITDA* 1.0 x (1.7 x) • EBITDA / financial expenses 21.9 x (9.6 x) Elisa Corporation Financial Statement 2004 10 February 2005 24
Slide 25: Financial Statement January 2004 – December 2004
Financial Statement 1 January 2004 – 31 December 2004 Elisa Corporation Financial Statement 2004 10 February 2005 25
Slide 26: Mobile Business' Key Figures
Mobile Business’ Key Figures Q4/04 Q4/03 % 2004 2003 % Revenue, EURm 180 201 -10 % 713 762 -6 % Clean EBITDA, EURm 52 64 -19 % 219 215 2% EBITDA-% 29 % 32 % 31 % 28 % CAPEX, EURm 19 34 -44 % 83 103 -19 % CAPEX excl. netw. buy-backs, EURm 19 26 -27 % 63 75 -16 % Oper CAPEX / sales 11 % 13 % 9% 10 % N
Slide 27: Cash Flow
Cash Flow EURm Q1-Q4 / 2004 Q1-Q4 / 2003 Profit before extraordinary items 166 -74 Depreciation and value adjustments 239 418 Other adjustments -18 31 Cash inflow before working capital 387 376 Change in working capital 5 -16 Cash inflow before taxes and financials 392 360 Interests and dividends -4
Slide 28: Elisa's Quarterly Reported Key Figures (1/2)
Elisa’s Quarterly Reported Key Figures (1/2) Elisa Group EURm Q4/04 Q3/04 Q2/04 Q1/04 Q4/03 Q3/03 Q2/03 Q1/03 Q4/02 Revenue 351 333 339 333 391 385 391 371 385 EBITDA 114 105 95 119 96 107 97 85 118 EBITDA-% 32 % 32 % 28 % 36 % 25 % 28 % 25 % 23 % 31 % Clean EBITDA 96 105 95 119 118 107 97 85 88 Cle
Slide 29: Key Figures (2/2)
Key Figures (2/2) Segments Mobile Q4/04 Q3/04 Q2/04 Q1/04 Q4/03 Q3/03 Q2/03 Q1/03 Q4/02 Revenue 180 179 175 179 203 195 190 175 185 ARPU, EUR 37,0 37,5 38,2 38,6 43,7 42,5 41,7 38,5 41,3 Churn, % 38,9 21,6 29,4 47,4 22,9 24,2 13,4 14,4 21,2 Subscriptions 1 383 515 1 368 515 1 330 901 1 319 007 1 374