Slide 1: Elisa Corporation Interim Report
Elisa Corporation Interim Report 1 July 2003 – 30 September 2003
Slide 2: Contents
Contents • Q3 2003 Report −President and CEO Veli-Matti Mattila • Key Figures and Financial Position −IR Director Vesa Sahivirta Elisa Corporation Q3 Interim Report 2 28 October 2003
Slide 3: Q3 2003 Report
Q3 2003 Report President and CEO Veli-Matti Mattila
Slide 4: Elisa Q3 2003
Elisa Q3 2003 • Financial Highlights • Highlights per Business Area • Strategic Selections & Operational Priorities • Outlook for Rest of the Year Elisa Corporation Q3 Interim Report 4 28 October 2003
Slide 5: Q3 2003 Highlights
Q3 2003 Highlights • Revenue stable EUR 385m (388), • EBITDA up EUR 107m (84) • Pre-tax profit improved EUR 17m (-7), −core business profitability stable Figures without one-off items Elisa Corporation Q3 Interim Report 5 28 October 2003
Slide 6: Q3 2003 Highlights
Q3 2003 Highlights • Stable financial position −Net debt decreased to EUR 722m −profitability improved from Q2 but still not at a satisfactory level • Operative CAPEX 11% of revenue Elisa Corporation Q3 Interim Report 6 28 October 2003
Slide 7: Elisa Mobile
Elisa Mobile • Revenue increased slightly • Profitability improved • Number of subscriptions increased 6% to 1,375,000 −Net addition 18,000 subscriptions in Q3 Elisa Corporation Q3 Interim Report 7 28 October 2003
Slide 8: Fixed Network
Fixed Network • Revenue and profit down slightly • Number of Broadband channels almost doubled at 107,900 • Cable-TV subscriptions grew 9% to 179,900 Elisa Corporation Q3 Interim Report 8 28 October 2003
Slide 9: Germany
Germany • Business is according to plan • Losses have narrowed −Personnel have decreased to 472 (674 in January 2003) • Strong growth in corporate customer segment Elisa Corporation Q3 Interim Report 9 28 October 2003
Slide 10: Strategic Selections
Strategic Selections Geographical Markets • Finland is the main market − All segments • Carefully selected international markets − Estonia − Germany, fixed services for corporates (strategy review by the end of 2003) − International scope through partnerships Elisa Corporation Q3 Interim Report 10 2
Slide 11: Strategic Selections
Strategic Selections Customer oriented offering in Finland • Full range of telecom services • Call center outsourcing • ICT solutions • Nordic telecommunication solutions and international mobile solutions Elisa Corporation Q3 Interim Report 11 28 October 2003
Slide 12: Operational Priorities
Operational Priorities 1. Significant profitability improvement – Capitalising the investments on domestic consolidation 2. Customer orientation 3. Simplification of structure and operations – One Company Elisa Corporation Q3 Interim Report 12 28 October 2003
Slide 13: Significant Profitability Improvement
Significant Profitability Improvement • Executed − Restructuring of corporate staff functions − Headquarters to less expensive facilities − Increased cost efficiency • Actions started/ongoing − Restructuring of operations Elisa Corporation Q3 Interim Report 13 28 October 2003
Slide 14: Restructuring of Operations
Restructuring of Operations • EUR 80m reduction in annual cost base by the end of 2005, − of which EUR 40m by the end of 2004 • Estimated reduction of headcount 900 • Restructuring is comprehensive (3800 persons), excluding corporate staff and Contact Centers • Restructuring cost in 2003 EUR 17m • P
Slide 15: Customer Orientation
Customer Orientation • Executed − Key account sales integrated − Telenor preferred partner agreement Oct 21st − Further development of Vodafone partnership − New customers in public and industrial sector • Actions started/ongoing − Creating consumer and business customer segments in sales − Strength
Slide 16: Simplification of Structure and Operations
Simplification of Structure and Operations • Executed − Strong management teams established − Implementation of shared service centers − Non-core asset divestment continued − Comptel and Estera as financial assets • Actions started/ongoing − Development towards one company − Reduction of number of b
Slide 17: Outlook 2003
Outlook 2003 • Revenue slightly less than 2002 • Clean EBITDA and result improving • Operative CAPEX below 15% of revenue in Q4 2003 • EBITDA of Germany-based business is estimated to be positive in 2003 Elisa Corporation Q3 Interim Report 17 28 October 2003
Slide 18: Key Figures and Financial Position
Key Figures and Financial Position IR Director Vesa Sahivirta
Slide 19: Elisa Group's Q3 2003 P&L
Elisa Group’s Q3 2003 P&L Elisa Group Excl. one-off items* Interim report EURm Q3/03 Q3/02 2002 Q3/03 Q3/02 2002 Revenue 385 388 1563 385 388 1563 Other income from operations 8 2 18 8 46 92 EBITDA 107 84 342 107 51 333 EBITDA margin 28 % 22 % 22 % 28 % 13 % 21 % Depreciation -67 -64 -255 -67 -64 -2
Slide 20: Operative CAPEX of Sales was 11%
Operative CAPEX of Sales was 11% 250 200 EUR million 141 21 150 42 100 38 5 2 31 4 2 12 4 5 5 2 22 109 20 21 1 50 4 76 8 3 73 72 70 49 9 48 46 30 39 42 0 Q1/01 Q3/01 Q1/02 Q3/02 Q1/03 Q3/03 Investments in shares GSM network buy-backs Investments in Fixed Assets Elisa Corporation Q3 Interim Report 20
Slide 21: Write-Downs and Depreciations
Write-Downs and Depreciations 120 100 48 38 1 0 0 0 EUR million 6 17 16 80 11 14 16 14 12 14 14 14 3 60 2 11 11 12 40 66 65 66 67 58 66 60 64 64 20 44 45 0 Q1/01 Q3/01 Q1/02 Q3/02 Q1/03 Q3/03 One-off write-down Depreciation of goodwill Depreciation of fixed assets Elisa Corporation Q3 Interim Report
Slide 22: Operative Cash Flow was EUR 56m
Operative Cash Flow was EUR 56m 70 50 EUR million 30 10 -10 -30 -50 Q1/01 Q2/01 Q3/01 Q4/01 2001 Q1/02 Q2/02 Q3/02 Q4/02 2002 Q1/03 Q2/03 Q3/03 Operative Cash flow = clean EBITDA – net financial items – CAPEX (excl. GSM network buy-backs) Elisa Corporation Q3 Interim Report 22 28 October 2003
Slide 23: Positive Cash Flow Lowered Net Debt
Positive Cash Flow Lowered Net Debt Consolidation of Sale of 900 Tropolys; change Sale of Elisa directory in debt reserving Instalia businesses 850 Sale of Direktia Seasonality effect 800 EUR million Positive cash flow due to low 750 investment level 700 650 600 Q1/01 Q2/01 Q3/01 Q4/01 Q1/02 Q2/02 Q
Slide 24: Elisa Corporation Interim Report
Elisa Corporation Interim Report 1 July 2003 – 30 September 2003
Slide 25: Operative Cash Flow Versus Consolidated Cash Flow Jan-Sep 2003
Appendix: Operative Cash Flow Versus Consolidated Cash Flow Jan-Sep 2003 200 180 160 140 3 22 120 25 100 80 18 148 20 60 40 25 20 36 0 GSM Buy Shares paym ents O perative Provision O ther NW C Consolidated Billing due cashflow Interest Backs cash flow GSM dates item s Elisa’s interest payments Other
Slide 26: Elisa Mobile's Key Figures
Elisa Mobile’s Key Figures Elisa Mobile's key figures, EURm Q3/03 Q3/02 % 2002 Revenue 195 188 3% 739 Clean EBITDA 58 50 -17 % 194 Clean EBITDA-% 30 % 27 % 26 % Leasing adj. EBITDA 64 57 12 % 229 Leasing adj. EBITDA-% 33 % 31 % 31 % CAPEX 22 16 42 % 145 CAPEX excl. network buy-backs 19 10 87 % 96 Op
Slide 27: Key Figures of Elisa Group
Key Figures of Elisa Group Elisa Group Q3/03 Q2/03 Q1/03 Q4/02 Q3/02 Q2/02 Q1/02 Q4/01 Q3/01 EURm Revenue 385 391 371 385 388 406 384 386 389 EBITDA 107 97 85 118 51 86 78 183 91 EBITDA-% 28 % 25 % 23 % 31 % 13 % 21 % 20 % 47 % 23 % Clean EBITDA 107 97 85 88 84 86 86 97 91 Clean EBITDA-% 28 % 25 % 2
Slide 28: Key Figures of Elisa Group (cont.)
Key Figures of Elisa Group (cont.) Business Areas Q3/03 Q2/03 Q1/03 Q4/02 Q3/02 Q2/02 Q1/02 Q4/01 Q3/01 Elisa Mobile Revenue 195 190 175 185 188 192 174 180 185 ARPU, EUR 42,5 41,7 38,5 41,3 43,0 43,5 41,4 42,7 44,2 Churn, % 24,2 13,4 14,4 21,2 14,0 12,7 18,2 14,4 15,5 Subscriptions 1 374 847 1 356
Slide 29: Q3 2003 Key Figures per Business Area
Q3 2003 Key Figures per Business Area Elisa Mobile Revenue EBITDA EBIT Clean EBITDA Clean EBIT Service- and Q3/03 Q3/02 Q3/03 Q3/02 Q3/03 Q3/02 Q3/03 Q3/02 Q3/03 Q3/02 network operators 195 188 58 -27 35 -64 58 50 35 25 Intra-SBA sales Group bookings -10 -10 -10 -10 Total 195 188 58 -27 25 -74 58 50