Slide 1: Elisa Q4 2011 results, February 2012
elisa Ss ~~ siind on ideaa. 4 FEBRUARY 2012
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 • 2011 overview • Q4 2011 financial and operational highlights • Segment review • Strategy execution • Progress of new services and smartphone market • Outlook for 2012 3
Slide 4: 2011 highlights
2011 highlights • Revenue growth exceeded the industry average • Good growth in Estonia • Profitability maintained, EBITDA grew by 4% and EBIT 10% • 2011 dividend payment € 1.30 per share, yield above 8% • Elisa Viihde IPTV success continued • ICT service offering extended, growth continued • Mobile
Slide 5: 2011 financial highlights
2011 financial highlights Solid result Change in 2011 2011 Revenue € 1 530m +4.6% EBITDA € 506m +4.4% Earnings per share * € 1.29 +12.2% CAPEX * € 190m +3.2% Cash flow * € 207m -2.0% Net debt € 788m +1.5% * Excluding one-off items 5
Slide 6: 2011 operational highlights
2011 operational highlights Use of services increased Change in Change in 2011 2011 Q4/2011 Mobile subscriptions 4,157,800 +360,900 +64,100 Fixed broadband subs. 486,400 +19,200 +4,000 Mobile ARPU 1) € 19.1 €-2.5 €-0.3 4) Mobile churn 2) 13.1% -3,0%-unit +0.3%-unit4) Mobile usage, min 3) 7,051m +223
Slide 7: Q4 2011 highlights
Q4 2011 highlights • Strong revenue growth – Christmas season boosted smartphone market – New service businesses developed favourably • Good profitability level, cost efficiency measures and revenue increase affected EBITDA positively • Number of mobile and fixed broadband subscriptions continued to
Slide 8: Q4 2011 financial highlights
Q4 2011 financial highlights Solid revenue and EBITDA growth • Revenue € 401m (383) • EBITDA € 133m (123) 36 % 35 % – 33% of revenue (32) 33 % 33 % 33 % 32 % 32 % 33 % 31 % • EBIT € 79m (69) • CAPEX € 58m (56) – 14% of revenue 401 – Full year CAPEX according to target, 383 378 378 12% of revenue 365
Slide 9: Q4 2011 operational highlights: subscription growth continued
Q4 2011 operational highlights Subscription growth continued • More than 64,000 new mobile subs 4 094 4 158 3 991 – Growth in both customer segments 3 797 3 898 3 652 3 550 – Strongest growth again in mobile 3 329 3 432 broadband – Estonia +22,600 subscriptions • Fixed broadband growth continued – N
Slide 10: Growth in usage, churn at the normal level
Q4 2011 operational highlights Growth in usage, churn at the normal level • Good growth in mobile usage – Outgoing minutes +1.79bn, 2% YoY growth – 534m SMS, YoY growth 8% 18,1 % 15,9 % 1 790 15,4 % • Mobile churn 13.4% (15.0) 14,7 % 15,0 % 14,3 % 1 754 – At the normal level 1 749 1 768 1 739 13,4 %
Slide 11: Business Segments
Business Segments 11
Slide 12: Q4 2011 Consumer Customers
Q4 2011 Consumer Customers Growth in new services and mobile revenue • Revenue € 245m (229) 35 % – Growth in mobile usage, smartphone 33 % 34 % 34 % 33 % 32 % sales and online services 31 % 31 % 30 % – Growth in Estonia – Decrease in fixed telephony business and mobile interconnection revenue • EBIT
Slide 13: Q4 2011 Corporate Customers
Q4 2011 Corporate Customers ICT service business continued to increase • Revenue € 156m (154) 36 % 37 % 34 % – Growth in ICT services and equipment 34 % 34 % 34 % 33 % 32 % sales 31 % – Decrease in fixed network business and mobile interconnection revenue • EBITDA € 52m (52), – 33% of revenue (34) 1
Slide 14: Strategy execution
Strategy execution New services and new markets Strengthening market position in core markets Integration of One Elisa 14
Slide 15: Christmas season boosted smartphone sales
Christmas season boosted smartphone sales Penetrations in Elisa’s network in Finland • Strong growth in mobile broadband 36,5 % continues 33,5 % • Smartphones top the list of most sold 30,0 % phones in 2011 26,0 % 1. iPhone 4 / 4S 23,0 % 2. Nokia C2-01 (feature phone) 19,5 % 3. ZTE Blade 17,0 % 4. S
Slide 16: Increasing number of uses for mobile connections
Increasing number of uses for mobile connections • All portable PlayStation® Vita game consoles are powered by Elisa’s mobile broadband network in Finland • PS Vita 3G/Wi-Fi is the first location independent game console in the world (earlier only Wi-Fi)
Slide 17: New ways to enjoy Elisa Viihde IPTV service
New ways to enjoy Elisa Viihde IPTV service • Applications to Android and iPad tablets first in Finland • Combination of new age TV service and recordings – View recordings with tablet – TV program browsing – Video store browsing
Slide 18: Personal service for corporate customers
Personal service for corporate customers • New eService using web – For customers of businesses and public sector organisations • Customer service with video connection creates competitive advantage – Customer examples: travel agencies, bank and insurance companies and public sector organisations
Slide 19: 4G speed available via 3G network
4G speed available via 3G network • 3G: Finland’s fastest network with the widest coverage now provides 4G speed • Over 100 locations by the end of 2011 • 4G takes wireless to a new level – facilitates e.g. surfing and gaming – mobile video conferencing
Slide 20: Outlook for 2012
Outlook for 2012 • Uncertainties in the general economy have also affected Finland. The risk of an even less favourable general economic development creates uncertainty. • Competition remains challenging • Revenue at the same level as last year • EBITDA excluding one-offs at the same level and EBIT
Slide 21: Agenda
Agenda CEO’s review Veli-Matti Mattila, CEO Financial review Jari Kinnunen, CFO 21
Slide 22: Revenue and EBITDA growth continued in Q4
Revenue and EBITDA growth continued in Q4 EUR million Q4/11 Q4/10 Δ Δ% 2011 2010 Δ Δ% Revenue 401 383 18 4.7% 1 530 1 463 67 4.6% Other operating income 2 2 6 5 Operating expenses -270 -262 -1 030 -984 EBITDA 1) 133 123 9 7.6% 506 485 22 4.4% EBITDA-% 33% 32% 33% 33% Depreciation and amortisation -5
Slide 23: Revenue growth clearly above industry average
Revenue growth clearly above industry average Change Q4/11 vs Q4/10 + ICT services + Mobile + M&A + Online services +/- Estonia + Estonia - Mobile - MTR reduction + Smartphones + Fixed broadband - PSTN - Cable TV - PSTN Change 2011 vs 2010 Q1-Q3/2011 YoY industry average revenue decline >3% 23
Slide 24: Improved profitability through OPEX control
Improved profitability through OPEX control • OPEX decreased in Q4 Q4 Q1 Q2 Q3 Q4 EURm 10 11 11 11 11 – Interconnection and roaming Materials and – Productivity improvements, e.g. 163 158 159 156 170 services – IT, General and admin. expense Employee benefit – Sales costs 55 58 57 49 59 expenses • O
Slide 25: CAPEX/Sales in line with guidance
CAPEX/Sales in line with guidance 20 % • CAPEX in Q4 EUR 58m (56) 17 % 15 % 14 % – CAPEX/Sales 14% (15%) 13 % 12 % 12 % 15 % 11 % 11 % 20 11 % • CAPEX in 2011 EUR 190m (184) 1) 10 % – CAPEX/Sales 12% (12%) 11 5% • Q4/11 by segments 28 21 4 25 – Consumer EUR 37m (31) 0% 20 19 17 – Corporate EUR 21m (
Slide 26: Solid cash flow continued
Solid cash flow continued EUR million Q4/11 Q4/10 Δ 2011 2010 Δ EBITDA 133 123 9 506 485 22 Change in receivables -10 -2 -8 -19 2 -21 Change in inventories 5 -3 8 -2 -6 5 Change in payables 10 23 -13 -11 11 -22 Change in NWC 4 18 -13 -31 7 -38 Finance income and expenses -1 -1 -31 -28 -3 CDO Guarant
Slide 27: Strong revenue growth in Estonia
Strong revenue growth in Estonia • Revenue grew in Q4 by 13% 32 % – Strong growth in mobile subs continued 32 % 30 % 30 % 30 % – + 61,000 YoY, + 22,600 QoQ 28 % 27 % – Mobile broadband growing 26 % 23 % • EBITDA increased in Q4 by 34% • CAPEX EUR 5m in Q4 26 27 26 – 3G Coverage 23 23 23 21 21 21 EUR
Slide 28: Liquidity position is good
Liquidity position is good Bond and Bank loan maturities • Cash and undrawn committed facilities EUR 334m (300m) • Revolving Credit Facilities (RCF) 130 – EUR 170m maturing Jun 2016 – EUR 130m maturing Nov 2014 10 – EUR 25m drawn Q4/11 • Commercial Paper Program 170 – EUR 189m in use in Q4/11 • New
Slide 29: Capital structure in line with targets
Capital structure in line with targets • Capital structure – Net debt / EBITDA 1.6 1,7 1,7 1,6 1,6 1,6 – Gearing 94%, Equity ratio 42% 1,5 1,5 1,5 1,5 845 817 793 776 788 752 752 • Target setting 719 725 – Net debt / EBITDA 1.5 – 2x – Equity ratio >35% 46 % 45 % 43 % 43 % 42 % 40 % 42 % 38 % 40 % Q4
Slide 30: Competitive remuneration to shareholders continues
Competitive remuneration to shareholders continues 302% • EUR € 1.30 per share 86 – Total amount € 203m – Pro Forma Net Debt/EBITDA after payment 149% 43 2.0 126%135% 110% 101% 88% – Payment date 18.4.2012 77% 402 79 285 – Record date 11.4.2012 39% 221 202 203 123 116 156 • Dividend yield 8.1% 1) 9
Slide 31: Elisa
elisa Ss ~~ siind on ideaa. 4 FEBRUARY 2012
Slide 32: Consolidated Cash flow statement
APPENDIX SLIDE Consolidated Cash flow statement EUR million Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Cash flow from operating activities Profit before tax 72 74 61 58 66 68 53 10 56 Adjustments to profit before tax 58 61 61 59 56 60 67 106 64 Change in working capital
Slide 33: Financial situation
APPENDIX SLIDE Financial situation EUR Million 31 Dec 11 30 Sep 11 30 Jun 11 31 Mar 11 31 Dec 10 30 Sep 10 30 Jun 10 31 Mar 10 31 Dec 09 Interest-bearing debt Bonds and notes 375 375 600 600 599 598 598 597 572 Commercial Papers 189 160 160 120 102 68 110 118 74 Loans from financial institutions 222