Slide 1: Third Quarter Results 21 October 2011
THIRD QUARTER RESULTS 21 OCTOBER 2011 siind on ideaa.
Slide 2: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO 2
Slide 3: CEO’s review
CEO’s review • Q3 2011 financial and operational highlights • Segment review • Execution of the strategy • Progress of new services and smartphone market development • Outlook for 2011 3
Slide 4: 4% 135M 135% > 4,000,000 > 100,000
4% 135M 135% > 4,000,000 > 100,000
Slide 5: Q3 2011 financial highlights: Solid revenue growth, record high EBITDA
Q3 2011 financial highlights Solid revenue growth, record high EBITDA • Revenue € 378m € (363) 36 % 36 % 35 % • EBITDA € 135m (127), 36% of revenue 33 % 33 % 33 % 32 % 32 % 31 % • CAPEX € 45m (42), 12% of revenue 383 378 378 • Net debt € 793m (725) 365 364 363 374 360 353 – Cash flow € 56m (29) – Ne
Slide 6: Four million mobile milestone in subscriptions
Q3 2011 operative highlights Four million mobile milestone in subscriptions • More than 100,000 new mobile subs 4 094 3 991 – Growth in both customer segments 3 797 3 898 3 652 3 550 – Strongest growth again in mobile 3 329 3 432 3 218 broadband – Estonia +14,000 subscriptions • Fixed broadband grow
Slide 7: Growth in usage, steady mobile churn
Q3 2011 operative highlights Growth in usage, steady mobile churn • Growth in mobile usage in Q3 – Outgoing minutes 1.75bn, 3% YoY growth – 512m SMS, 6% YoY growth 18,1 % 15,9 % 15,4 % • Mobile churn 12.7% (18.1) 14,5 % 14,7 % 15,0 % 14,3 % 1 754 1 768 – Churn at normal level 1 749 1 739 1 719 1 707
Slide 8: Business Segments
Business Segments 8
Slide 9: Q3 2011 Consumer Customers: Growth in Online services and mobile data
Q3 2011 Consumer Customers Growth in Online services and mobile data • Revenue € 234m (225) 37 % 35 % – Growth in mobile usage, smartphone 33 % 34 % 34 % 32 % sales and Online services 31 % 31 % 30 % – Growth in Estonia – Decrease in fixed telephony business and mobile interconnection revenue • EBIT
Slide 10: Q3 2011 Corporate Customers: ICT services continued to grow
Q3 2011 Corporate Customers Corporate Customers’ ICT services continued to grow • Revenue € 144m (139) 36 % 36 % 37 % 34 % – Growth in ICT services and equipment 34 % 34 % 34 % 32 % sales 31 % – Decrease in fixed network business and mobile interconnection revenue • EBITDA € 54m (50), 37% of revenue
Slide 11: Strategy execution
Strategy execution New services and new markets Strengthening market position in core markets Integration of One Elisa 11
Slide 12: Strong growth in mobile broadband
Strong growth in mobile broadband Penetrations in Elisa’s network in Finland • Steady growth in smartphones • Smartphones top the list of most sold 29,0 % phones in September 2011 26,0 % 1. Nokia C2-01 (feature phone) 23,5 % 22,0 % 2. Nokia C6-01 19,5 % 3. ZTE Blade 17,0 % 4. iPhone 4 5. Nokia E7-00
Slide 13: Company subscription for personal use
Company subscription for personal use • Elisa My Invoice (Oma Lasku) service can be used for personal purchases and mobile services – Separate invoice for personal usage • Advantages – Clear cost savings to the companies from the invoices which do not belong to them – Enables personal use and access
Slide 14: New content for Online services
New content for Online services • Elisa Viihde IPTV — Karaoke — Wide collection of Universal Music songs — The movie ‘Trust’ premiered simultaneously in theatres and Elisa Viihde – a first in Finland • Elisa Book — Popular comic books now in Elisa Book service
Slide 15: Elisa recognized for its customer service
Elisa recognized for its customer service • Best practices reward — Best in class in the 2011 customer service contest • The reward is based on — Exploitation of customer feedback — Support of customer service personnel Source: www.vuodenparhaat.fi
Slide 16: Outlook for 2011
Outlook for 2011 • Uncertainties in the general economy have also affected Finland • Competition remains challenging • Slight increase in revenue • EBITDA excluding one-offs to improve slightly • CAPEX maximum 12 per cent of revenue 16
Slide 17: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO 17
Slide 18: Strong earnings growth in Q3
Strong earnings growth in Q3 EURm Q3/11 Q3/10 Δ Δ% 1-9/11 1-9/10 Δ Δ% 2010 Revenue 378 363 14 4% 1 129 1 081 49 5% 1 463 Other operating income 1 1 4 3 5 Operating expenses -243 -237 -7 -759 -722 -38 -984 EBITDA 1) 135 127 8 6% 374 362 12 3% 485 EBITDA-% 36 % 35 % 33 % 33 % 33 % Depreciation and amo
Slide 19: YoY revenue growth in both segments
YoY revenue growth in both segments 378 3 3 10 363 + Mobile + ICT services + Online Services + M&A -2 + Estonia +/- Estonia + Fixed broadband - Mobile + Smartphones + Cable TV - PSTN - MTR reduction - PSTN Q3 2010 Interconnection Equipment sales Consumer Corporate Q3 2011 and roaming customers custo
Slide 20: Equipment sales and acquisitions increased OPEX YoY
Equipment sales and acquisitions increased OPEX YoY Q3 Q4 Q1 Q2 Q3 • OPEX decreases EURm 10 10 11 11 11 – Interconnections and roaming Materials and 148 163 158 159 156 services – Productivity improvements, e.g. Employee – IT benefit 46 55 58 57 49 – General and admin. expense expenses – Sales and s
Slide 21: CAPEX/Sales in line with guidance
CAPEX/Sales in line with guidance • Total CAPEX in Q3 € 44m (46) 17% 20% 15% – CAPEX/Sales 12% (11%) 13% 12% 15% 11% 11% 11% 20 11% 12% • Q3/11 by segments 10% – Consumer € 27m (26) 11 – Corporate € 17m (16) 28 5% 4 25 • Major CAPEX areas 0% 20 19 17 – Fixed access and backbone networks 19 15 16 18
Slide 22: Cash flow
Cash flow EURm Q3/11 Q3/10 Δ 1-9/11 1-9/10 Δ 2010 EBITDA 135 127 8 374 362 12 485 Change in receivables -21 -17 -4 -9 4 -13 2 Change in inventories -3 -4 2 -6 -3 -3 -6 Change in payables 13 -6 19 -20 -12 -8 11 Change in NWC -10 -27 16 -35 -11 -24 7 Finance income and expenses -12 -11 -1 -30 -27 -3 -
Slide 23: Revenue growth continued in Estonia
Revenue growth continued in Estonia • Revenue € 27m (23), growth 11% 36% 35% – Growth in subscriptions 32% 32% 30% 30% 30% – + 74,900 YoY 28% – + 14,000 QoQ 26% • EBITDA € 8m (7) 23% • CAPEX € 2m (3) 26 27 – 3G coverage 23 23 23 21 21 21 21 21 EURm Q311 Q3/10 2010 Revenue 27 23 90 EBITDA 8 7 25 EBIT
Slide 24: Liquidity position is good
Liquidity position is good Bond and Bank loan maturities, EURm • Cash and undrawn committed facilities € 249m (300) 10 • Revolving Credit Facilities – € 130m maturing Nov 2014 – € 170m maturing Jun 2016 • Commercial Paper Program 300 – € 160m in use • New 5 year bank loan € 120m drawn in 130 Septemb
Slide 25: Capital structure in line with targets
Capital structure in line with targets • Capital structure – Net debt / EBITDA 1.6 – Gearing 94%, Equity ratio 43% 1,7 1,7 1,6 1,6 1,6 1,5 1,5 1,5 1,5 1,5 • Target setting – Net debt / EBITDA 1.5 – 2x – Equity ratio >35% 817 845 793 773 729 719 752 725 776 752 45% 48% 46% 40% 42% 45% 43% 43% 38% 40%
Slide 26: Extraordinary dividend of € 0.40
Extraordinary dividend of € 0.40 302% • € 0.40 per share 86 – Total amount € 62m 149% – Ex-date 24 October 2011 43 126% 135% 110% – Payment 2 November 2011 402 88% 77% • Based on the AGM authorisation 39% 79 285 221 202 123 156 • After the payment 9 116 – Payout ratio 135% 2001 2002 2003 2004 2005 2
Slide 27: Third Quarter Results October 2011
THIRD QUARTER RESULTS 21 OCTOBER 2011 siind on ideaa.
Slide 28: Consolidated Cash flow statement
APPENDIX SLIDE Consolidated Cash flow statement EUR million Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Cash flow from operating activities Profit before tax 74 61 58 66 68 53 10 56 70 Adjustments to profit before tax 61 61 59 56 60 67 106 64 60 Change in working capital
Slide 29: Financial situation
APPENDIX SLIDE Financial situation EUR Million 30 Sep 11 30 Jun 11 31 Mar 11 31 Dec 210 30 Sep 10 30 Jun 10 31 Mar 10 31 Dec 09 30 Sep 09 Interest-bearing debt Bonds and notes 375 600 600 599 598 598 597 572 572 Commercial Papers 160 160 120 102 68 110 118 74 62 Loans from financial institutions 171