Slide 1: Third Quarter Results 2009
"S~*S elisa Third Quarter Results 2009 23 October 2009
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 2009 highlights • Segment review – Consumer Customers – Corporate Customers • Progress of 3G services • Execution of the strategy • Outlook for 2009 3
Slide 4: Q3 2009 highlights
Q3 2009 highlights • 2009 EBITDA guidance upgraded • Additional profit distribution decided • Strong growth in mobile net adds continues • IPTV Elisa Viihde expanded to 2 new cities • Demand for virtual meeting services increased • 3G success continued 4
Slide 5: Q3 2009 financial highlights
Q3 2009 financial highlights • Revenue € 360m (374) – Lower equipment sales volumes, approx. € -6m – Decrease in traditional fixed business revenue, approx. € -6m – Lower interconnection fees and roaming revenues, approx. € -2m • EBITDA € 131m (129), EBITDA margin 36% (35) – Improved efficiency • EP
Slide 6: Q3 2009 operational highlights
Q3 2009 operational highlights Change in Q3 2009 Q3 2009 Mobile subscriptions 3,271,700 +65,100 Fixed broadband 475,700 -6,000 Mobile ARPU * € 23.2 € -0.8 Mobile Churn ** 14.5% -0.2 %-units Mobile usage, min *** 1,586m -3m Active 3G data users 636,000 +67,000 * Revenue per subscription ** Annualised
Slide 7: Q3 2009 Consumer Customers
Q3 2009 Consumer Customers • Revenue € 220m (225) Revenue and EBITDA-% 225 – Lower equipment sales 217 220 209 202 – Lower interconnection fees – Growth in customer billing – QoQ revenue growth • EBITDA € 81m (72), 37% of revenue (32) 32 % 33 % 32 % 33 % 37 % – Cost efficiency, lower OPEX – Lower SA
Slide 8: Mobile subscription KPIs
Mobile subscription KPIs ARPU Churn Usage 50 ARPU (€) and annualised churn (%) Outgoing traffic (million minutes) 1 800 45 1 600 40 35 1 400 30 1 200 25 1 000 20 15 800 10 600 5 0 400 8
Slide 9: Q3 2009 Corporate Customers
Q3 2009 Corporate Customers • Revenue € 139m (149) Revenue and EBITDA-% – Lower usage both in PSTN and 155 mobile 149 150 146 139 – Decrease in equipment sales – Lower roaming revenues – Growth in ICT services 39 % • EBITDA € 50m (57), 36% of 37 % 34 % 33 % 36 % revenue (39) – Decrease in revenue •
Slide 10: Strategy execution
Strategy execution New services and new markets 2005 – Strengthening market position in core markets 2003 – Integration of One Elisa 10
Slide 11: Strategy execution
Strategy execution Productivity improvements in Q3 2009: • Regional IT system consolidation is finalised – One national network IT system – Centralised fixed network billing and CRM systems • Multi-supplier model has decreased IT expenses • Corporate customer unit was granted a quality certificate –
Slide 12: Growth in 3G data users continued
Growth in 3G data users continued Active 3G users Active GPRS users Number of active mobile data users in Elisa’s network, thousands 1245 914 937 843 790 789 740 703 701 668 627 636 595 569 526 523 490 496 398 425 374 326 282 249 173 198 153 112 72 19 Q1/06 Q2/06 Q3/06 Q4/06 Q1/07 Q2/07 Q3/07 Q4/07
Slide 13: Mobile broadband penetration
Mobile broadband penetration Mobile broadband penetration 31 December 2008 Austria Finland Portugal Sweden Ireland Denmark Penetration growth in Slovakia H1/2009 Lithuania Italy EU average Poland Czech Republic Spain Germany Slovenia France Romania Malta Belgium Luxembourg Bulgaria Cyprus Latvia 0,0
Slide 14: IPTV services: Elisa Viihde expands to new cities with new features
IPTV services: Elisa Viihde expands to new cities with new features • New cities: Tampere and Riihimäki • New content – HD sports programs – More channels, e.g. Music TV – Finnish Ice-hockey games – Exclusive Big Brother channel • Customisable channel packages 14
Slide 15: New services in corporate customers
New services in corporate customers • Demand for virtual conference to new customers increased – e.g. Restel in Telepresence services – e.g. Glaston in Webex services • Field force automation service launch to the market – Improved control of deliveries, resources and field processes through real ti
Slide 16: Outlook for 2009
Outlook for 2009 • Current economic environment creates uncertainty – The main risks relate to the development of the Estonian economy and the corporate customer business • Competition remains challenging • Revenue at the same or slightly lower level than in 2008 • EBITDA excluding one-offs at the s
Slide 17: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO 17
Slide 18: Profitability improved in Q3 2009
Profitability improved in Q3 2009 EUR million Q3/09 Q3/08 Δ 1-9/09 1-9/08 Δ 2008 Revenue 360 374 -15 1 066 1 113 -47 1,485 Other operating income 0 2 2 4 7 Operating expenses -229 -247 18 -705 -774 69 -1 020 EBITDA 131 129 2 363 342 21 472 EBITDA excluding one-offs 131 129 2 363 349 14 478 EBITDA-%
Slide 19: Revenue change y-o-y
Revenue change y-o-y EUR million -2 -6 1 -8 + Mobile + ICT services - PSTN - Mobile 374 - Estonia - PSTN +/- Cable TV - Estonia +/- Broadband 360 3Q/08 Interconnection Equipment sales Consumer Corporates 3Q/09 19
Slide 20: Total expenses continued to decrease y-o-y
Total expenses continued to decrease y-o-y • Total OPEX decrease EUR 18m Q3 Q4 Q1 Q2 Q3 EURm 08 08 09 09 09 • OPEX decreases Materials 166 159 146 144 143 – Equipment purchase costs and services – Interconnection and roaming Employee benefit 32 43 47 48 43 – Efficiency programs expenses • OPEX incre
Slide 21: CAPEX decreased by 5% y-o-y
CAPEX decreased by 5% y-o-y • Total CAPEX EUR 40m (42) CAPEX, EURm 2 – CAPEX/Sales 11% (11%) – In line with guidance: max 12% 28 • Q3 2009 by segments 1 – Consumer EUR 21m (23) 5 1 – Corporate EUR 19m (19) 19 17 % 19 17 • Major CAPEX areas 11 % 16 11 % 10 % 10 % – 3G networks and services 36 23 – Br
Slide 22: Strong Cash Flow continued
Strong Cash Flow continued EUR million Q3/09 Q3/08 Δ 1-9/09 1-9/08 Δ 2008 EBITDA 132 129 2 363 342 20 472 Change in receivables -25 -5 26 105 132 Change in inventories -2 0 -3 4 7 Change in payables 4 3 -12 -58 -56 Change in NWC -23 -3 -20 11 50 -39 83 Financials (net) -12 -15 3 -29 -35 6 -39 Taxes
Slide 23: Recession affects Estonian business
Recession affects Estonian business • Revenue decreased – Customer billing – Termination fee and roaming 39,0 % revenue 37,0 % 36,0 % 36,0 % 34,5 % – Equipment sales • Growth in mobile subscriptions – 12,000 y-o-y 354 – 8,400 q-o-q 342 338 338 346 EUR million Q3/09 Q3/08 2008 Revenue 21 25 98 EBITDA
Slide 24: Capital structure within target range
Capital structure within target range • Capital structure Balance sheet KPIs – Net debt / EBITDA 1.5 – Gearing 79%, Equity ratio 48% 1,8 • Target setting 1,9 1,6 1,7 1,5 – Net debt / EBITDA 1.5 – 2x – Equity ratio >35% • Focus on cash generation – CAPEX control 891 854 729 812 – Net Working Capital
Slide 25: Liquidity position is good
Liquidity position is good • Cash and undrawn committed Bond and Bank loan maturities 500 facilities EUR 309m (220m) • Revolving Credit Facilities 400 – EUR 170m maturing Jun 2012 10 – EUR 130m maturing Nov 2014 300 – Fully undrawn Q3/09 200 • Commercial Paper Program 300 – EUR 62m in use, back up w
Slide 26: Decision on additional EUR 62m distribution
Decision on additional EUR 62m distribution • EUR 0.40 per share 302 % – Total amount EUR 62.2 m • Based on the AGM EUR 150m 86 authorisation – Capital repayment 149 % 43 • Payment 6 November 2009 110 % – Ex-date 26 October, record date 402 88 % 77 % 28 October 79 285 62 39 % • After the payment 123
Slide 27: Updated distribution policy
Updated distribution policy • Ordinary profit distribution 40-60 per cent of the profit for the financial period • Distribution of profit includes – Dividend payment – Capital repayment – Purchase of treasury shares • In addition, possible excess capital can be distributed to shareholders • When mak
Slide 28: Third Quarter Results 2009
"S~*S elisa Third Quarter Results 2009 23 October 2009
Slide 29: Consolidated Cash flow statement
APPENDIX SLIDE Consolidated Cash flow statement EUR million Q3 2009 Q2 2009 Q1 2009 Q4 2008 Q3 2008 Q2 2008 Q1 2008 Q4 2007 Q3 2007 Cash flow from operating activities Profit before tax 70 56 53 70 67 38 52 65 89 Adjustments to profit before tax 60 60 61 57 59 67 56 63 41 Change in working capital -
Slide 30: Financial situation
APPENDIX SLIDE Financial situation EUR Million 30 Sep 2009 30 Jun 2009 31 Mar 2009 31 Dec 2008 30 Sep 2008 Interest-bearing debt Bonds and notes 572 570 606 606 604 Commercial Paper 62 119 101 56 81 Loans from financial institutions 80 80 80 80 80 Financial leases 24 27 27 27 26 Committed credit lin