2008-08-01 07:30:00 CEST
2008-08-01 07:31:01 CEST
REGULATED INFORMATION
Elisa - Half Year financial report
ELISA'S INTERIM REPORT JANUARY-JUNE 2008
Second quarter 2008
Revenue was EUR 372 million (393)
EBITDA excluding non-recurring items was EUR 109 million (116), EBIT
EUR 57 million (67)
Due to implementation of the new billing and CRM system EBITDA was
affected negatively by the unexpected revenue adjusting item of EUR 4
million and expected decreasing implementation costs of EUR 4
million. These temporary implementation related items are not booked
as non-recurring.
Better than expected growth in mobile subscriptions affected EBITDA
negatively by EUR 4 million
Profit before tax amounted to EUR 38 million (67)
Earnings per share was EUR 0.20 (0.31)
Cash flow after investments grew by 59 per cent to EUR 59 million
(37)
Profitability from the second half of the year is expected to improve
on the first half. The full year outlook is reiterated.
Revenue per subscription (ARPU) in the mobile business improved from
the previous quarter's EUR 25.9 to EUR 26.8
Churn decreased to 13.3 per cent (15.6)
The number of Elisa's mobile subscriptions increased by 77,700 during
the quarter, of which 70,400 in Finland, due in particular to the new
3G customers, mobile broadband and prepaid subscriptions
The number of fixed broadband subscriptions decreased by 3,000 on the
previous quarter
Net debt / EBITDA was 2.1x (1.5x at the end of 2007) and gearing 109%
(71 at the end of 2007)
January-June 2008
Revenue was EUR 739 million (772)
EBITDA was EUR 213 million (241), EBIT EUR 110 million (146)
EBITDA excluding non-recurring items was EUR 220 million (231), EBIT
EUR 117 million (135)
Cash flow after investments was EUR 125 million (55)
Extra implementation costs of the new billing and CRM system and
revenue adjusting items affected EBITDA negatively by EUR 20 million
Key indicators:
EUR million 4-6/2008 4-6/2007 1-6/2008 1-6/2007
Revenue 372 393 739 772
EBITDA 105 127 213 241
EBITDA excluding
non-recurring items 109 116 220 231
EBIT 53 77 110 146
Profit before tax 38 67 90 131
Earnings per share, EUR 0.20 0.31 0.45 0.61
Capital expenditures 41 49 78 93
Financial position and cash flow:
EUR million 30.6.2008 30.6.2007 31.12.2007
Net debt 898 651 738
Net debt / EBITDA 1) 2.1 1.4 1.5
Gearing ratio, % 109.3 59.7 71.3
Equity ratio, % 40.4 51.9 47.9
+---------------------------------------------------------------+
| EUR million | 4-6/2008 | 4-6/2007 | 1-6/2008 | 1-6/2007 |
|-------------------+----------+----------+----------+----------|
| Cash flow | | | | |
| after investments | 59 | 37 | 125 | 55 |
+---------------------------------------------------------------+
1) (interest-bearing debt - financial assets) / (EBITDA exclusive of
non-recurring items x 4)
CEO Veli-Matti Mattila:"Elisa's mobile subscriptions grew by nearly 80,000 -
fuelled by our extensive 3G network and growing demand for mobile
broadband
The 3G market continues to enjoy dynamic growth, and mobile broadband
especially is gaining more popularity. Despite the continued fierce
competition, we believe in a more positive market development than
previously predicted. Thus, we increase our estimate that there will
be up to 1.6 million people using 3G services in Finland by the end
of the year.
Bundling of 3G handset and subscription has been a popular way for
consumers to efficiently use new mobile services. We believe that if
legislation allowing 3G bundling will be made permanent, the
significant positive impact to the development of the Finnish
information society will continue.
Elisa's share of the 3G market continues to be about 50 per cent. By
the end of this year, Elisa's 3G network will cover 250 locations and
85 per cent of the population, and most of the 3G network will have a
speed of 5Mb/s.
We continue our long-term investments in the quality of service and
customer satisfaction. The use of our new billing and CRM system is
back to normal. We have initiated several actions to improve customer
service, for example hiring more customer service employees. These
measures resulted in shorter customer service queuing time and thus
improved customer satisfaction. Customer churn decreased, and we
gained almost 80,000 more mobile subscriptions.
Revenue and EBITDA developed as expected during the second quarter
but temporary expenses increased. We also made decisions on
additional measurers in our savings programs, and the outlook is
reiterated. We are determined to continue developing one Elisa and to
improve our profitability according to our strategy."
ELISA CORPORATION
Vesa Sahivirta
Director, IR and Financial Communications
tel. +358 50 520 5555
Additional information:
Mr Veli-Matti Mattila, CEO, tel. +358 10 262 2635
Mr Jari Kinnunen, CFO, tel. +358 10 262 9510
Mr Vesa Sahivirta, Director, IR and Financial Communications,
tel. +358 50 520 5555
Distribution:
Helsinki Stock Exchange
Principal media
www.elisa.com
INTERIM REPORT JANUARY-JUNE 2008
The interim report has been prepared in accordance with the IAS 34
standard, "Interim reports". The information presented in this
interim report is unaudited.
Market situation
The base of mobile communications subscriptions and the use of data
services have evolved favourably in Finland with 3G subscriptions
comprising a significant proportion of new subscriptions. The use of
services made available through 3G subscriptions has also increased.
Another factor contributing to the growth has been the use of
multiple terminal devices for different purposes, mobile broadband
services and prepaid subscriptions. Churn has been at a normal level
in relation to the market situation, and competition has been seen in
services and in campaigning.
In the fixed network business the number and usage of traditional
subscriptions continued to decrease at the same pace as in the
previous quarters. The fixed broadband market is declining slightly,
while the subscription growth is now in mobile broadband.
Revenue, earnings and financial position
Revenue:
EUR million 4-6/2008 4-6/2007 1-6/2008 1-6/2007
Mobile communications 229 246 452 475
Fixed network 155 160 311 323
Inter-segment sales -12 -13 -24 -26
Total 372 393 739 772
Second quarter 2008
Revenue decreased by 5 per cent mainly due to lower mobile
interconnection fees as of the beginning of the year and lower
roaming fees as of September 2007. Lower fees reduced revenue by EUR
14 million. Terminal equipment sales were also at a lower level. The
extra revenue adjusting items in the second quarter also affected
revenue negatively by approximately EUR 4 million.
The new fees affected the Mobile segment's revenue, which decreased
by 7 per cent. The Fixed network segment's revenue decreased by 3 per
cent driven by lower volumes in the traditional analogue network.
Customers invoicing continued to grow and it compensated for the
lower interconnection and roaming revenues. The growth in customer
invoicing was based on increasing usage of services, especially in 3G
services and mobile broadband services.
January-June 2008
Elisa's revenue decreased by 4 per cent on last year mainly due to
lower mobile interconnection and roaming fees, which reduced revenue
by EUR 27 million. The Mobile segment's revenue decreased by 5
percent and Fixed network segment's by 4 per cent.
The revenue adjusting items in January-June affected revenue
negatively by approximately EUR 11 million.
Earnings:
+-------------------------------------------------------------------+
| EUR million | 4-6/2008 | 4-6/2007 | 1-6/2008 | 1-6/2007 |
|-----------------------+----------+----------+----------+----------|
| Mobile communications | | | | |
| EBITDA | 59 | 72 | 118 | 140 |
| EBITDA-% | 26 | 29 | 26 | 29 |
| EBITDA excl, | | | | |
| non-recurring items | 61 | 72 | 122 | 140 |
| EBITDA-%, excl, | | | | |
| non-recurring items | 27 | 29 | 27 | 29 |
| EBIT | 30 | 46 | 61 | 90 |
|-----------------------+----------+----------+----------+----------|
| Fixed network | | | | |
| EBITDA | 47 | 56 | 97 | 105 |
| EBITDA-% | 30 | 35 | 31 | 33 |
| EBITDA excl, | | | | |
| non-recurring items | 49 | 45 | 100 | 95 |
| EBITDA-%, excl, | | | | |
| non-recurring items | 32 | 28 | 32 | 29 |
| EBIT | 24 | 33 | 52 | 59 |
|-----------------------+----------+----------+----------+----------|
| Corporate functions | | | | |
| EBITDA | -1 | -2 | -2 | -3 |
| EBIT | -1 | -2 | -2 | -3 |
|-----------------------+----------+----------+----------+----------|
| Total | | | | |
| EBITDA | 105 | 127 | 213 | 241 |
| EBITDA-% | 28 | 32 | 29 | 31 |
| EBITDA excl, | | | | |
| non-recurring items | 109 | 116 | 220 | 231 |
| EBITDA-%, excl, | | | | |
| non-recurring items | 29 | 30 | 30 | 30 |
| EBIT | 53 | 77 | 110 | 146 |
+-------------------------------------------------------------------+
Second quarter 2008
Elisa's EBITDA declined by 17 per cent on the previous year. EBITDA
excluding non-recurring items declined EUR 7 million or by 6 per
cent. EBITDA was affected negatively by extra revenue adjusting item
of EUR 4 million, which was related to implementation of the new
billing and CRM system. Extra implementation costs of the new billing
and CRM system continued and affected EBITDA negatively by
approximately EUR 4 million. Due to stronger than expected growth in
mobile subscriptions, sales related costs were EUR 4 million higher
than expected.
Financial income and expenses totalled EUR -15 million (-11). Income
taxes in the income statement amounted to EUR -6 million (-18).
Elisa's April-June earnings after taxes were EUR 32 million (49). The
Group's earnings per share (EPS) amounted to EUR 0.20 (0.31). At the
end of June, the Group's equity per share was EUR 5.17 (6.53 at the
end of 2007).
January-June 2008
EBITDA declined by 12 per cent on the previous year. EBITDA excluding
non-recurring items declined EUR 11 million or by 5 per cent.
Implementation of the new billing and CRM system and revenue
adjusting items affected EBITDA negatively by approximately EUR 20
million.
Financial position:
EUR million 30.6.2008 30.6.2007 31.12.2007
Net debt 898 651 738
Net debt / EBITDA 1) 2.1 1.4 1.5
Gearing ratio, % 109.3 59.7 71.3
Equity ratio, % 40.4 51.9 47.9
+---------------------------------------------------------------+
| EUR million | 4-6/2008 | 4-6/2007 | 1-6/2008 | 1-6/2007 |
|-------------------+----------+----------+----------+----------|
| Cash flow | | | | |
| after investments | 59 | 37 | 125 | 55 |
+---------------------------------------------------------------+
1) (interest-bearing debt - financial assets) / (EBITDA exclusive of
non-recurring items x 4)
Second quarter
Elisa's financial position and liquidity remained good. Elisa's net
debt increased from EUR 651 million to EUR 898 million mainly due to
the extra dividend payment of EUR 158 million in October 2007 and
capital repayment of EUR 284 million in March 2008. The April-June
cash flow after investments increased by 59 per cent to EUR 59
million. The increase was contributed mainly by the change in net
working capital.
January-June 2008
Cash flow after investments increased by 127 per cent to EUR 125
million (55) on the previous year mainly due to the change in net
working capital.
Changes in corporate structure
In June, Elisa acquired the business operations of Electur. Electur's
core business consists of identity management, one-off registration
and entry management. Elisa will develop new solutions for its
corporate customers' e-businesses by combining Electur's products and
Elisa's ICT-services.
Mobile communication business
+-----------------------------------------------------------------+
| Number of subscriptions | 30.6.2008 | 30.6.2007 | 31.12.2007 |
|----------------------------+-----------+-----------+------------|
| Total number of | | | |
| subscriptions | 2,772,600 | 2,564,800 | 2,657,400 |
|----------------------------+-----------+-----------+------------|
| - Subscriptions in Finland | 2,437,900 | 2,257,300 | 2,334,600 |
|----------------------------+-----------+-----------+------------|
| - Subscriptions in Estonia | 334,700 | 307,500 | 322,800 |
+-----------------------------------------------------------------+
+-------------------------------------------------------------------+
| User-specific indicators 1) | 4-6/2008 | 4-6/2007 | 1-12/2007 |
|---------------------------------+----------+----------+-----------|
| Average revenue/subscription, | | | |
| €/month | 26.8 | 30.2 | 30.0 |
|---------------------------------+----------+----------+-----------|
| Annualised churn, % | 13.3 | 11.4 | 12.2 |
|---------------------------------+----------+----------+-----------|
| Outgoing calls, | | | |
| min/subscription/month | 225 | 222 | 218 |
|---------------------------------+----------+----------+-----------|
| SMS, message/subscription/month | 56 | 51 | 53 |
|---------------------------------+----------+----------+-----------|
| Non-voice services/revenue, % | 19 | 19 | 19 |
+-------------------------------------------------------------------+
+-------------------------------------------------------------------+
| Indicators on network usage 2) | 4-6/2008 | 4-6/2007 | 1-12/2007 |
|---------------------------------+----------+----------+-----------|
| Outgoing calls, million minutes | 1,540 | 1,425 | 5,661 |
|---------------------------------+----------+----------+-----------|
| SMS, million messages | 393 | 372 | 1,550 |
+-------------------------------------------------------------------+
1) Elisa's service operators in Finland
(excluding prepaid subscriptions)
2) Elisa's network operator in Finland
Elisa's network operator in Finland increased the number of its
subscriptions by approximately 180,700 from a year ago. The increase
was markedly due to the success of 3G service bundles, mobile
broadband and prepaid subscriptions. The increase in subscriptions in
the second quarter was approximately 70,400. The total number of
subscriptions at the end of June was 2.4 million.
In the second quarter, the call minutes per subscription of Elisa's
own service operators increased by 1 per cent to 225 (222) and the
number of SMS messages increased by 10 per cent to 56 (51) on the
corresponding period last year. Due to the increase in the number of
subscriptions of Elisa's service operators, the total call minutes in
the network grew by 8 per cent and the number of SMS messages
increased by 6 per cent.
Mobile communication revenues decreased by 7 per cent given the lower
interconnection fees and equipment sales. Revenue per subscription
declined 11 per cent on the previous year to EUR 26.8 due to lower
interconnection fees as of the beginning of the year and lower
roaming fees as of September 2007.
In May 2008, Elisa decreased the mobile data roaming fee by
approximately 30-50 per cent. The fee reduction concerns internet,
MMS and WAP connections.
Elisa and other Finnish mobile operators have agreed on new
interconnection fees for 1 January 2009 - 30 November 2009. The
agreement is based on a deal made by the mobile operators on 19
February 2007. According to the deal the interconnection fees of the
operators will be gradually equalised during 2007-2009 with the fees
being equal effective 1 December 2009.
From 1 January 2009 - 30 November 2009, Elisa's interconnection fee
for the mobile network will be 4.9 cents per minute, in 2008 the fee
is 5.1 cents per minute. The equal interconnection fee enforced by
the operators as of 1 December 2009 will be agreed separately later.
The mobile communication business of Elisa's Estonian subsidiary has
been negatively affected by lower interconnection fees since November
2007. Revenue declined to EUR 26.4 million (29.4). However EBIT
increased to EUR 7.3 million (6.4) and EBITDA to EUR 10.4 million
(9.1), and the number of subscriptions increased by 27,200 to 334,700
(307,500). In the second quarter the growth was 7,300 subscriptions.
Fixed network business
Number of subscriptions 30.6.2008 30.6.2007 31.12.2007
Broadband subscriptions 523,000 513,900 521,800
ISDN channels 50,500 70,900 70,800
Cable TV subscriptions 241,000 231,200 237,100
Analogue and other subscriptions 462,900 499,400 471,500
Total number of subscriptions 1,277,400 1,315,400 1,301,300
Elisa continued as the Finnish broadband market leader. Broadband
growth has been taken by the Mobile business, which together with
seasonality affected the amount of fixed broadband subscriptions in
the second quarter. Year-on-year growth was 9,100, or 2 per cent.
The number of traditional subscriptions continued to decrease as
voice calls shifted to the mobile communication network and data
transfers to broadband subscriptions.
Cisco granted Elisa the "Service Provider Partner of the Year" prize.
Elisa is one of Cisco's biggest partners in Finland and is devoted to
the development of innovative communication solutions together with
Cisco.
Personnel
In January-June the average number of personnel at Elisa was
2,970 (3,396).
Personnel by segments:
30.6.2008 30.6.2007 31.12.2007
Mobile communications 1,268 1,345 1,252
Fixed network 1,550 1,980 1,727
Corporate functions 36 39 36
Total 2,854 3,364 3,015
As of 1 June 2008, Elisa outsourced a part of the planning and
documentation of Elisa's fixed network and material delivery to
Eltel, Empower and Relacom. Due to the outsourcing, 47 employees
transferred to the partners as established employees.
Investments
EUR million 4-6/2008 4-6/2007 1-12/2007
Capital expenditures, of which 41 49 206
- mobile communication business 22 22 91
- GSM leasing liability buy-backs 0 0 2
- fixed network business 19 27 113
Shares 11 0 12
- of which achieved through an
exchange of shares 5
Total 52 49 218
In May, Elisa acquired 3.5 per cent of the share capital of the
regional telephone company, Vaasan Läänin Puhelin (VLP).
Financing arrangements and ratings
Valid financing arrangements:
Maximum amount In use on 30.6.2008
EUR million
Committed credit limits 300 95
Commercial paper programme ¹) 250 107
EMTN programme ²) 1,000 636
1) The programme is not committed.
2) European Medium Term Note programme, not committed.
Long-term credit ratings:
Credit rating agency Rating Outlook
Moody's Investor Services Baa2 Stable
Standard & Poor's BBB Stable
Share
Trading of shares 4-6/2008 4-6/2007 1-6/2008 1-6/2007
Shares traded, millions 94.4 78.3 177.2 171.0
Volume, EUR million 1 372 1 684 2 984 3 735
% of shares 57 47 107 103
Shares and market values 30.6.2008 30.6.2007 31.12.2007
Total number of shares 166,307,586 166,066,016 166,307,586
Treasury shares 7,688,629 8,049,976 8,049,976
Outstanding shares 158,618,957 158,016,040 158,257,610
Closing price, EUR 13.33 20.22 21.00
Market capitalisation,
EUR million 2,114 3,195 3,323
Treasury shares, % 4.6 4.8 4.8
On 2 May, 2008, based on the Board of Directors' decision, Elisa
transferred 361,347 shares to persons involved in the 2006 incentive
program.
The Board of Directors' authorisations
The Board of Directors has authorisation to decide on the
distribution of funds out of distributable equity up to a maximum of
EUR 250,000,000. The authorization is valid until the commencement of
the next Annual General Meeting.
The Board of Directors has authorisation to issue shares and special
rights. The authorisation is valid until 31 March 2010. A maximum
aggregate of 50.0 million of the company's shares can be issued under
the authorization. A total of 361,347 shares were issued on 2 May
2008.
The Board of Directors has authorisation to acquire treasury shares.
The amount of shares that may be purchased under the authorisation is
maximum 15,000,000. The authorisation is valid until August 31, 2009.
Significant legal issues
TeliaSonera's claim for refund of benefit by unjust enrichment due to
price difference based on TeliaSonera's own miscoding of the traffic
which has risen to approximately EUR 4 million will be settled in
arbitration. Elisa has disputed TeliaSonera's claim in its entirety.
There has been arbitration proceedings initiated to resolve the
disputes between Elisa and IBM. The disputes relate to the
implementation and maintenance of Elisa's billing and CRM system.
Substantial risks associated with Elisa's operations
Risk management is part of Elisa's internal control system. It aims
to ensure that risks affecting the company's business are identified,
influenced and monitored. The company classifies risks into
strategic, operational, insurable and financial risks.
Strategic and operational risks:
The telecommunications industry is under intense competition in
Elisa's main market areas, which may have an impact on Elisa's
business. The telecommunications industry is subject to heavy
regulation. Elisa and its business are monitored and regulated by
several public authorities. This regulation also affects the price
level of some products and services offered by Elisa.
The rapid developments in telecommunications technology may have a
significant impact on Elisa's business.
Elisa's main market is Finland, where the number of mobile phones per
inhabitant is among the highest in the world, which means that growth
in subscriptions is limited. Furthermore, the volume of phone traffic
in Elisa's fixed network has decreased in the past few years. These
factors may limit the opportunities for growth.
Accident risks:
The company's core operations are covered by insurance against damage
and interruptions caused by accidents. Accident risks also include
litigations and claims.
Financial risks:
In order to manage interest rate risk, the Group's borrowing and
investments are diversified in fixed- and variable-rate instruments.
Interest rate derivatives were used to manage interest rate risk.
Most of Elisa Group's cash flow is denominated in euros, which means
that the exchange rate risk is minor.
The objective of liquidity risk management is to ensure the Group's
financing in all circumstances. The Group's liquid assets, committed
credit limits and investments totalled EUR 220 million at the end of
June 2008 (EUR 317 million at the end of 2007 ).
Liquid assets are invested within confirmed limits to investment
targets with a good credit rating. The business units are liable for
credit risk associated with accounts receivable. Credit risk
concentrations in accounts receivable are minor as the customer base
is wide. The company used credit derivatives to manage counterparty
risks.
Events after the financial period
There have been no significant events after the reporting period.
Outlook for 2008
Competition in the Finnish telecommunications market remains
challenging. The market is focusing increasingly on services. The use
of mobile communications and mobile broadband products is continuing
to rise. Elisa's aim is to further reinforce its position as the
service leader.
Elisa's revenue, EBITDA and EBIT excluding non-recurring items are
expected to be at the same level as in 2007. Profitability for the
second half of the year is expected to be better than in the first
half. The extra implementation costs of the billing and CRM system
are expected to decrease and additional cost efficiency measures will
be executed in the second half of the year. Strong growth in mobile
subscriptions in the first half of the year and seasonality also
contribute positively to profitability.
The contributory factors for long-term growth and profitability
improvement include the 3G market growth and efficiency measures,
which are continuing as expected.
Full-year capital expenditure is expected to be 10 to 12 per cent of
revenue, and cash flow will substantially improve on the previous
year due to factors such as change in net working capital.
BOARD OF DIRECTORS
Elisa Corporation
1.1. - 30.6.2008
Unaudited
CONSOLIDATED INCOME STATEMENT
4-6 4-6 1-6 1-6 1-12
EUR million Note 2008 2007 2008 2007 2007
Revenue 1 371,5 393,4 738,5 771,8 1568,4
Other operating income 1,1 13,7 2,0 14,9 21,0
Materials and services -169,2 -179,7 -327,7 -354,3 -707,0
Employee expenses 7 -41,7 -48,2 -87,0 -92,2 -181,2
Other operating
expenses -57,0 -52,5 -112,9 -98,8 -201,8
EBITDA 1 104,7 126,7 212,9 241,4 499,4
Depreciation and
amortisation 3 -51,5 -49,4 -102,5 -95,6 -197,4
EBIT 1 53,2 77,3 110,4 145,8 302,0
Financial income 1,9 4,4 8,7 7,7 27,9
Financial expense -17,3 -15,1 -28,9 -23,0 -44,7
Share of associated
companies' profit 0,0 0,1 0,0 0,1 0,0
Profit before tax 37,8 66,7 90,2 130,6 285,2
Income taxes -6,0 -17,9 -18,2 -32,7 -64,9
Profit for the period 31,8 48,8 72,0 97,9 220,3
Attributable to:
Equity holders of
the parent 31,7 48,5 71,7 97,3 219,8
Minority interest 0,1 0,3 0,3 0,6 0,5
31,8 48,8 72,0 97,9 220,3
Earnings per share
(EUR)
Basic 0,20 0,31 0,45 0,61 1,38
Diluted 0,20 0,31 0,45 0,61 1,38
Average number of outstanding
shares (1000 shares)
Basic 158 492 159 510 158 375 160 719 159 417
Diluted 158 492 159 510 158 375 160 719 159 417
Elisa Corporation
1.1. - 30.6.2008
Unaudited
CONSOLIDATED BALANCE SHEET
30.6. 31.12.
EUR million 2008 2007
Non-current assets
Property, plant and equipment 618,3 637,3
Goodwill 776,2 773,6
Other intangible assets 188,8 194,5
Investments in associated companies 0,1 0,1
Available-for-sale investments 37,2 30,9
Receivables 10,0 7,3
Deferred tax assets 30,6 31,7
1661,2 1675,4
Current assets
Inventories 24,8 28,5
Trade and other receivables 345,5 454,8
Cash and cash equivalents 14,9 16,9
385,2 500,2
Total assets 2046,4 2175,6
Equity attributable to equity holders of the parent 819,7 1033,4
Minority interest 1,7 2,0
Total equity 821,4 1035,4
Non-current liabilities
Deferred tax liabilities 31,5 34,9
Provisions 6,7 7,3
Interest-bearing debt 671,5 627,3
Other non-current liabilities 21,2 24,6
730,9 694,1
Current liabilities
Trade and other payables 246,3 303,2
Tax liabilities 0,9 10,8
Provisions 5,3 4,1
Interest-bearing debt 241,6 128,0
494,1 446,1
Total equity and liabilities 2046,4 2175,6
Elisa Corporation
1.1. - 30.6.2008
Unaudited
CONDENSED CONSOLIDATED
CASH FLOW STATEMENT
1-6 1-6 1-12
EUR million 2008 2007 2007
Cash flow from operating activities
Profit before tax 90,2 130,6 285,2
Adjustments
Depreciation and amortisation 102,5 95,6 197,4
Other adjustments 20,3 1,3 3,6
122,8 96,9 201,0
Change in working capital
Change in trade and other receivables 110,0 -19,6 -116,0
Change in inventories 3,6 9,7 10,0
Change in trade and other payables -61,2 -49,9 6,5
52,4 -59,8 -99,5
Financial items, net -19,8 -2,6 -18,9
Taxes paid -33,6 -36,9 -82,2
Net cash flow from operating activities 212,0 128,2 285,6
Cash flow from investing activities
Capital expenditure -77,4 -90,5 -203,7
Purchase of shares -10,0 -4,3 -6,2
Proceeds from asset disposal 0,4 21,9 38,2
Net cash used in investing activities -87,0 -72,9 -171,7
Cash flow before financing activities 125,0 55,3 113,9
Cash flow from financing activities
Purchase of treasury shares -85,6 -85,6
Proceeds from treasury shares 1,7 1,7
Proceeds from long-term borrowings 80,0 350,0 350,0
Repayment of long-term borrowings -30,0 -44,2 -44,2
Change in short-term borrowings 109,9 -25,0 67,0
Repayment of finance lease liabilities -2,0 -3,7 -6,7
Dividends paid and capital repayment -284,9 -243,0 -401,4
Net cash used in financing activities -127,0 -49,8 -119,2
Change in cash and cash equivalents -2,0 5,5 -5,3
Cash and cash equivalents at beginning of
period 16,9 22,2 22,2
Cash and cash equivalents at end of period 14,9 27,7 16,9
Elisa Corporation
1.1. - 30.6.2008
Unaudited
STATEMENT OF CHANGES
IN EQUITY
Reserve
for
Trea- invested Retai- Mino-
Share sury non- ned rity
Share pre- sha- Other restricted ear- inte- Total
EUR million capital mium res reserves equity nings rest equity
Balance at
January 1,
2007 83,0 530,4 -81,3 422,1 353,4 4,7 1312,3
Available-
for-sale
investments 4,7 4,7
Items
recognised
directly in
equity 4,7 4,7
Profit for
the period 97,3 0,6 97,9
Total
recognised
income and
expense for
the period 4,7 97,3 0,6 102,6
Dividends -242,9 -0,4 -243,3
Purchase of
treasury
shares -85,6 -85,6
Sales of
treasury
shares 1,2 0,2 0,2 1,6
Share-based
compensation 1,4 1,4
Balance at
June 30,
2007 83,0 530,4 -165,7 426,8 209,4 5,1 1089,0
Balance at
January 1,
2008 83,0 -165,8 403,9 535,7 176,6 2,0 1035,4
Available-
for-sale
investments -1,8 -1,8
Items
recognised
directly
in equity -1,8 -1,8
Profit for
the period 71,7 0,3 72,0
Total
recognised
income and
expense for
the period -1,8 71,7 0,3 70,2
Capital
repayment -284,9 -284,9
Dividends -0,6 -0,6
Share-based
compensation 7,0 -5,7 1,3
Balance at
June 30,
2008 83,0 -158,8 402,1 250,8 242,6 1,7 821,4
Elisa Corporation
1.1. - 30.6.2008
Unaudited
NOTES
BASIS OF PREPARATION
The Interim consolidated financial statements are in
compliance with IAS 34 "Interim Financial Reporting".
The Interim consolidated financial statements have
been prepared in accordance with International
Financial Reporting Standards (IFRS) effective at the
time of preparing and adopted for use by European
Union. The accounting principles applied in the
Interim report are the same as those applied in the
Consolidated financial statements at 31 December
2007. This Interim consolidated financial statements
should be read in conjunction with the 2007 Consolidated
financial statements.
1. BUSINESS SEGMENT INFORMATION
4-6/2008 Fixed Unallocated Group
EUR million Mobile Network items Eliminations Total
External
sales 225,1 146,4 371,5
Inter-segment
sales 4,0 8,5 -12,5 0,0
Revenue 229,1 154,9 -12,5 371,5
EBITDA 58,7 46,5 -0,5 104,7
EBIT 29,8 23,9 -0,5 53,2
Financial
income and
expense -15,4 -15,4
Share of
associated companies'
profit 0,0 0,0
Profit before
tax 37,8
Investments 21,7 19,0 40,7
4-6/2007 Fixed Unallocated Group
EUR million Mobile Network items Eliminations Total
External
sales 241,7 151,7 393,4
Inter-segment
sales 4,4 8,5 -12,9 0,0
Revenue 246,1 160,2 -12,9 393,4
EBITDA 72,4 55,9 -1,6 126,7
EBIT 46,0 32,8 -1,5 77,3
Financial
income and
expense -10,7 -10,7
Share of
associated companies'
profit 0,1 0,1
Profit before
tax 66,7
Investments 21,8 26,8 48,6
Elisa Corporation
1.1. - 30.6.2008
Unaudited
1-6/2008 Fixed Unallocated Group
EUR million Mobile Network items Eliminations Total
External
sales 444,3 294,2 738,5
Inter-segment
sales 7,7 16,9 -24,6 0,0
Revenue 452,0 311,1 -24,6 738,5
EBITDA 118,4 96,7 -2,2 212,9
EBIT 60,8 51,8 -2,2 110,4
Financial
income and
expense -20,2 -20,2
Share of
associated
companies'
profit 0,0 0,0
Profit before
tax 90,2
Total assets 1 408,1 542,5 95,8 2 046,4
Total liabilities 137,4 135,1 952,5 1 225,0
Investments 42,5 35,8 78,3
1-6/2007 Fixed Unallocated Group
EUR million Mobile Network items Eliminations Total
External
sales 465,9 305,9 771,8
Inter-segment
sales 9,2 16,9 -26,1 0,0
Revenue 475,1 322,8 -26,1 771,8
EBITDA 139,5 105,1 -3,2 241,4
EBIT 89,7 59,2 -3,1 145,8
Financial
income and
expense -15,3 -15,3
Share of
associated
companies'
profit 0,1 0,1
Profit before
tax 130,6
Total assets 1 394,3 592,4 121,1 2 107,8
Total liabilities 145,2 153,6 720,0 1 018,8
Investments 41,6 51,8 93,4
1-12/2007 Fixed Unallocated Group
EUR million Mobile Network items Eliminations Total
External
sales 959,7 608,7 1 568,4
Inter-segment
sales 20,2 33,5 -53,7 0,0
Revenue 979,9 642,2 -53,7 1 568,4
EBITDA 299,5 206,0 -6,1 499,4
EBIT 194,8 113,4 -6,2 302,0
Financial
income and
expense -16,8 -16,8
Share of
associated
companies'
profit 0,0 0,0
Profit before
tax 285,2
Total assets 1 516,6 571,9 87,1 2 175,6
Total liabilities 174,9 162,3 803,0 1 140,2
Investments 92,8 113,6 206,4
Elisa Corporation
1.1. - 30.6.2008
Unaudited
2. ACQUISITIONS
Elisa acquired 51 per cent of the shares of Kuntokompassi Oy
on February 29, 2008. Kuntokompassi offers corporate
and personal training services. Kuntokompassi was
consolidated with the Group since March 2008. If the
acquisition had been made as of the beginning of the
financial period 2008, it would not have had any major
impact in Group's revenue or earnings for the period.
Elisa acquired all shares of Electur Oy on June 6, 2008.
Electur's core business consists of identity management,
one-off registration and entry management. The result of
Electur will be consolidated with the Group since July 2008.
If the acquisition had been made as of the beginning of the
financial period 2008, it would not have had any major impact
in Group's revenue or earnings for the period.
The total acquisition cost was EUR 4.3 million, of which
EUR 1.2 million effected in cash flow. The business combinations
resulted in goodwill EUR 2.6 million.
3. PROPERTY, PLANT AND EQUIPMENT
AND INTANGIBLE ASSETS
Property Other
plant and intangible
EUR million equipment Goodwill assets
Cost, 1 January 2008 2 171,8 773,6 353,1
Additions 65,9 2,6 14,2
Disposals -4,7
Reclassifications
30 June 2008 2 233,0 776,2 367,3
Accumulated
depreciation/amortisation,
1 January 2008 1 534,5 158,6
Depreciation for the period 82,6 19,9
Disposals and reclassifications -2,4
30 June 2008 1 614,7 178,5
Net carrying amounts:
1 January 2008 637,3 773,6 194,5
30 June 2008 618,3 776,2 188,8
Commitments to purchase property, plant
and equipment and intangible assets
amounts to EUR 18.4 million as at
30 June 2008.
4. INVENTORIES
Write-downs of inventories amounting to
EUR 1.5 million were recognised at
30 June, 2008 (EUR 1.5 million,
31 December, 2007)
Elisa Corporation
1.1. - 30.6.2008
Unaudited
5. EQUITY
Treasury shares
Holding,
% of
shares
Shares Nominal and
pcs value EUR votes
Held by the Group,
31 December 2007 8 049 976
Payment of incentive
plan A 2006 -361 347
Treasury shares
held by the Group,
30 June 2008 7 688 629 3 838 730 4,62 %
Capital repayment
On 18 March, 2008 Elisa's Annual General Meeting
decided of a capital repayment of EUR 1.80 per
share. The total capital repayment amounts to
EUR 284.9 million and payment started on
31 March, 2008.
6. ISSUANCES AND REPAYMENTS
OF BONDS
No bonds have been issued
during the first half of
2008.
Repayments of
Bonds
Interest
rate
Nominal Maturity Book
EUR million value Nominal Effective date value
EMTN programme 2001
/ EUR 1 000 million
3-month
euribor +
IV/2002 30,0 0,93% 5,773 % 8.4.2008 30,0
Total of
repayments 30,0 30,0
The unused amount of EUR 1 000 million
EMTN program is EUR 364 million
as at 30 June 2008.
7. RELATED PARTY
TRANSACTIONS
Related party transactions
with associated companies 1-6/2008
Sales 0,0
Purchases 0,2
Elisa Corporation
1.1. - 30.6.2008
Unaudited
8. OPERATING LEASE COMMITMENTS
30.6. 31.12.
EUR million 2008 2007
Due within 1 year 20,6 20,6
Due after 1 year but within 5 years 39,4 42,6
Due after 5 years 18,4 21,1
Total 78,4 84,3
9. CONTINGENT LIABILITIES
30.6. 31.12.
EUR million 2008 2007
Pledges given
Pledges given as surety 0,8 1,3
Guarantees given
For others (* 39,4 42,3
Pledges and guarantees given, total 40,2 43,6
Other commitments
Repurchase commitments 0,1 0,2
Contingent liabilities in QTE-arrangement
Lease-leaseback agreement (QTE facility)
Total value of the arrangement 128,8 137,9
Termination risk 11,4 14,5
*) EUR 38.1 million is related to hedging of
the guarantor bank in the QTE-arrangement
10. DERIVATIVE INSTRUMENTS
30.6. 31.12.
EUR million 2008 2007
Interest rate swaps
Nominal value 150,0 150,0
Fair value recognised in the balance sheet -6,3 -3,0
Credit default swaps (*
Nominal value 41,9 45,6
Fair value recognised in the balance sheet 2,9 1,0
*) CDS is related to hedging of the guarantor bank
in the QTE-arrangement
11. EVENTS AFTER THE BALANCE SHEET
DATE
No significant events have taken place after
the balance sheet date.
Elisa
Corporation
1.1. - 30.6.2008
Unaudited
KEY FIGURES
1-6 1-6 1-12
EUR million 2008 2007 2007
Shareholders' equity/share, EUR 5,17 6,86 6,53
Interest bearing net debt 898,1 650,6 738,4
Gearing 109,3% 59,7% 71,3%
Equity ratio 40,4% 51,9% 47,9%
Return on investment (ROI) *) 16,3% 17,0% 18,3%
Gross investments in fixed assets 78,3 93,4 206,4
of which finance lease investments 0,9 2,2 2,7
Gross investments as % of revenue 10,6% 12,1% 13,2%
Investments in shares, 12,6 5,1 12,4
Average number of employees 2970 3396 3299
*) rolling 12 months profit preceding
the reporting date
Formulae for financial indicators
Gearing %
Interest-bearing debt -
cash and cash equivalents
------------------------------------ x 100
Total equity
Equity ratio %
Total equity
-------------------------------x 100
Balance sheet total -
advances received
Return on investment % (ROI)
Profit before taxes +
interest and other
financial expenses
-----------------------------------------x 100
Total equity +
interest bearing liabilities (average)
Net debt
Interest-bearing debt - cash and cash equivalents
Shareholders' equity per share
Equity attributable to equity holders
of the parent
------------------------------------------------
Number of shares outstanding
at end of period
Earnings/share
Profit for the period attributable to
equity holders of parent
---------------------------------------------------
Average number of outstanding shares
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