Slide 1: Q2 Results 19 July 2011
= se i Negion OWARTER RESULTS 19 JULY 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 • Q2 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: Q2 2011 highlights
Q2 2011 highlights • Strong revenue growth continued • Profitability was at a good level • Mobile subscription base and usage continued to grow • Smartphone market and 3G data services continued strong growth trend • New data roaming service – predictable cost and excellent coverage across Europe •
Slide 5: New services and smartphones boosted revenue
Q2 2011 financial highlights New services and smartphones boosted revenue • Revenue € 378m (364) – Growth in equipment sales, mobile, 36 % online and ICT services 33 % 33 % 33 % 33 % 35 % 32 % 32 % 31 % – Decrease in fixed telephony business and MTR • EBITDA € 121m (119) • CAPEX € 54m (47), 14% of r
Slide 6: Strong growth in mobile subscriptions continued
Q2 2011 operative highlights Strong growth in mobile subscriptions continued • Mobile net adds 92,500 in Q2/11 3 991 3 898 – Growth in both customer segments 3 652 3 797 3 550 – Strongest growth in mobile broadband 3 329 3 432 3 153 3 218 – Estonia +14,600 subscriptions • Slight decrease in fixed br
Slide 7: Mobile churn decrease continued
Q2 2011 operative highlights Mobile churn decrease continued • Growth in mobile services – Outgoing minutes growth +3% YoY – SMS growth +9% YoY 18,1 % • Mobile churn 11.9% (15.9) 15,4 % 15,9 % 14,7 % 14,5 % 14,7 % 15,0 % 14,3 % 1 768 – Both voice and mobile broadband 11,9 % churns decreased 1 719 1
Slide 8: Business Segments
Business Segments 8
Slide 9: Q2 2011 Consumer Customers
Q2 2011 Consumer Customers Growth in online services and equipment sales • Revenue € 227m (217) 37 % 34 % 34 % – Growth in mobile usage, smartphone 33 % 33 % 32 % 31 % sales and online services 31 % 30 % – Decrease in fixed telephony business and mobile interconnection revenue • EBITDA € 72m (68), 3
Slide 10: Q2 2011 Corporate Customers
Q2 2011 Corporate Customers Growth in corporate customers’ ICT services • Revenue € 150m (147) 36 % 36 % 34 % – Growth in ICT services and equipment 33 % 34 % 34 % 34 % 32 % sales 31 % – Decrease in fixed network business and mobile interconnection revenue • EBITDA € 49m (51), 32% of revenue – Inves
Slide 11: Strategy execution
Strategy execution New services and new markets Strengthening market position in core markets Integration of One Elisa 11
Slide 12: Mobile broadband and smartphones growth continues
Mobile broadband and smartphones growth continues Penetrations in Elisa’s network in Finland • Broad assortment of smartphones 26,0 % 23,5 % • Smartphones top the list of most sold 22,0 % phones in June 2011 19,5 % 1. iPhone 4 17,0 % 2. Nokia C2-01 (feature phone) 3. Samsung Galaxy Gio 11,5 % 4. Nok
Slide 13: Best 3G coverage in Finland
Best 3G coverage in Finland • Elisa’s investments in 3G network guarantee high quality user experience • Research of European Communications Engineering, spring 2011 – Best 3G coverage – Most 3G base stations – Lowest interference levels
Slide 14: Bringio – new video conferencing service for corporate
Bringio – new video conferencing service for corporate • World’s first multiparty and multidevice HD video conferencing • Video conferencing between – mobile phones – tablets – laptops – video conference rooms
Slide 15: Transparency for data roaming: Elisa Daily Traveller
Transparency for data roaming: Elisa Daily Traveller • Predictable pricing for data usage abroad – mobile devices – laptops • Excellent coverage through cooperation with Vodafone and Telenor In the EU area Globally €1/MB €4/MB up to 5 MB up to 5 MB €15/50 MB €50/50 MB
Slide 16: Outlook for 2011
Outlook for 2011 • Positive trends of the Finnish economy have continued • 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: Revenue and earnings continued to grow
Revenue and earnings continued to grow EUR million Q2/11 Q2/10 Δ 1H/11 1H/110 Δ 2010 Revenue 378 364 13 752 717 35 1463 Other operating income 2 1 3 2 5 Operating expenses -259 -247 -12 -516 -485 -31 -984 EBITDA 1) 121 119 2 239 234 5 485 EBITDA-% 32 % 33 % 32 % 33 % 33 % Depreciation and amortisati
Slide 19: Revenue change YoY
Revenue change YoY 378 2 2 13 364 -4 + Mobile + ICT services + Online Services + M&A + Estonia +/- Estonia - Fixed broadband - Mobile + Smartphones - Cable TV - PSTN - MTR reduction - PSTN Q2 2010 Interconnection Equipment sales Consumer Corporate Q2 2011 and roaming customers customers 19
Slide 20: Equipment sales and acquisitions increased OPEX
Equipment sales and acquisitions increased OPEX • OPEX decreases Q2 Q3 Q4 Q1 Q2 EURm 10 10 10 11 11 – Interconnections and roaming Materials and 148 148 163 158 159 – Productivity improvements services – Network operating expenses Employee benefit 52 46 55 58 57 – e.g. marketing and administration e
Slide 21: CAPEX/Sales in line with guidance
CAPEX/Sales in line with guidance • Total CAPEX in Q2 EUR 54m (47), 17 % 20 % 15 % excl. new long term lease EUR 47m 13 % 12 % 15 % 11 % 11 % 11 % 20 11 % – CAPEX/Sales 12% (13%) 1) 10 % 10 % – Long-term data center infrastructure 11 lease agreement classified as CAPEX 5% 28 in IFRS 4 25 0% • Q2/11
Slide 22: Cash flow
Cash flow EUR million Q2/11 Q2/10 Δ H1/11 H1/10 Δ 2010 EBITDA 121 119 2 239 234 5 485 Change in receivables 9 16 -7 12 21 -9 2 Change in inventories 1 -2 3 -4 1 -5 -6 Change in payables -21 6 -27 -33 -6 -27 11 Change in NWC -11 20 -31 -25 16 -41 7 Finance income and expenses -1 0 -1 -18 -15 -3 -28 C
Slide 23: Subscription growth continued in Estonia
Subscription growth continued in Estonia • Revenue EUR 26m (23), growth 11% 36 % 35 % – Growth in subscriptions 32 % 32 % 30 % 30 % – + 84,900 YoY 28 % – + 14,600 QoQ 26 % – Equipment sales 23 % – Improved economical situation in Estonia • EBITDA EUR 7m (6), growth 5% 26 23 23 23 • CAPEX EUR 3m (3)
Slide 24: Liquidity position is good, RCF EUR 170m extended
Liquidity position is good, RCF EUR 170m extended Bond and Bank loan maturities • Cash and undrawn committed facilities EUR 302m (300) 10 • Revolving Credit Facilities – EUR 130m maturing Nov 2014 – EUR 170m maturing Jun 2016, re- arranged in June 2011 • Commercial Paper Program 300 – EUR 160m in us
Slide 25: Capital structure in line with targets
Capital structure in line with targets • Capital structure – Net debt / EBITDA 1.7 – Gearing 108%, Equity ratio 40% 1,7 1,7 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% 817 845 773 729 719 752 725 776 752 45 % 48 % 46 % 40 % 42 % 45 % 43 % 38 % 40 % Q
Slide 26: New MTRs agreed until November 2014
New MTRs agreed until November 2014 • Decreases mobile revenue and costs • Neutral for EBITDA • No direct impact on end user prices Mobile Termination Price per minute, euro cents Operator 1 Dec 2010 1 Dec 2011 1 Dec 2012- 30 Nov 2014 Elisa 4.4 3.82 2.8 TeliaSonera 4.4 3.82 2.8 DNA 4.4 3.82 2.8 26
Slide 27: Competitive profit distribution
Competitive profit distribution • Distribution capabilities maintained 302 % • Capital structure targets unchanged • Cash Flow generation in focus 86 – Net debt/EBITDA and gearing expected to decrease 43 136% • Authorisation max EUR 70m dividend or 149 % max 5 million shares buy back 110 %402 126 %
Slide 28: Q2 Results July 2011
= se i Negion OWARTER RESULTS 19 JULY 2011 siind on ideaa.
Slide 29: Consolidated Cash flow statement
APPENDIX SLIDE Consolidated Cash flow statement EUR million Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Cash flow from operating activities Profit before tax 61 58 66 68 53 10 56 70 56 Adjustments to profit before tax 61 59 56 60 67 106 64 60 60 Change in working capital
Slide 30: Financial situation
APPENDIX SLIDE Financial situation EUR Million 30 Jun 11 31 Mar 11 31 Dec 210 30 Sep 10 30 Jun 10 31 Mar 10 31 Dec 09 30 Sep 09 30 Jun 09 Interest-bearing debt Bonds and notes 600 600 599 598 598 597 572 572 570 Commercial Papers 160 120 102 68 110 118 74 62 119 Loans from financial institutions 51