Elisa - Interim report (Q1 and Q3)

Elisa's Interim Report January – September 2014

ELISA'S INTERIM REPORT JANUARY - SEPTEMBER 2014

ELISA INTERIM REPORT RELEASE 17 OCTOBER 2014 AT 8:30 A.M.

Third quarter 2014

  -- Revenue amounted to EUR 384 million (395)
  -- EBITDA was EUR 142 million (138) and EBIT was EUR 89 million (84)
  -- Profit before taxes amounted to EUR 83 million (78) 
  -- Earnings per share were EUR 0.43 (0.38)
  -- Cash flow after investments was EUR 39 million (51)

  -- Mobile ARPU was EUR 15.9 (16.2 in previous quarter)
  -- Mobile churn was 16.9 per cent (15.7 in previous quarter)
  -- The number of Elisa's mobile subscriptions increased by 33,600 during the
     quarter
  -- The number of fixed broadband subscriptions decreased by 3,600 on the
     previous quarter
  -- Net debt / EBITDA was 2.0 (2.0 end 2013) and gearing 126 per cent (113 end
     2013)

January-September 2014

  -- Revenue was EUR 1,150 million (1,146)
  -- EBITDA was EUR 395 million (369) and EBIT was EUR 234 million (212) 
  -- Earnings per share grew to 1.10 (0.93)
  -- Cash flow after investments was EUR 143 million (58), excluding investments
     in shares EUR 166 million (146)

Key indicators

-----------------------------------------------------
                            3rd Quarter  Year-to-date
EUR million                  2014  2013   2014   2013
-----------------------------------------------------
-----------------------------------------------------
Revenue                       384   395  1,150  1,146
EBITDA                        142   138    395    369
EBIT 1)                        89    84    234    212
Profit before tax 1)           83    78    214    195
Earnings per share, EUR 1)   0.43  0.38   1.10   0.93
Capital expenditure            43    57    144    150
-----------------------------------------------------

1) Excluding non-recurring items: Q3/2013: EBITDA EUR 142m, EBIT EUR 87m,
profit before tax EUR 81m and EPS EUR 0.40. 1-9/2013: EBITDA EUR 374m, EBIT EUR
217m, profit before tax EUR 200m and EPS EUR 0.96. 

Financial position and cash flow

EUR million           30.9.2014  30.9.2013  End 2013
----------------------------------------------------
----------------------------------------------------
Net debt                  1,043        995       971
Net debt / EBITDA 1)        2.0        2.0       2.0
Gearing ratio, %          126.1      121.1     112.6
Equity ratio, %            37.2       35.5      37.3
----------------------------------------------------



-------------------------------------------
                 3rd Quarter   Year-to-date
EUR million       2014  2013    2014   2013
-------------------------------------------
Cash flow after  39 2)    51  143 2)  58 2)
investments                                
-------------------------------------------

1) (interest-bearing debt - financial assets) / (four previous quarters' EBITDA
exclusive of non-recurring items) 

2) Excluding investments in shares Q3/14 EUR 61m, 1-9/2014 EUR 166m and
1-9/2013 EUR 146m 

Additional information regarding the Key Performance Indicators is available
at: www.elisa.com/investors (Elisa Operational Data.xls) 

CEO Veli-Matti Mattila:
Strong earnings thanks to comprehensive improvement of competitiveness

The overall uncertainty of the general economic situation continued. Earnings
grew year-on-year in the third quarter. Revenue fell slightly, but the
improvement of Elisa's competitiveness continued successfully. The demand for
4G subscriptions continued to be brisk, which is a sign of customers' readiness
to pay more for faster connections. We actively built the most comprehensive
LTE network in Finland, with almost 3,000 4G LTE base stations. According the
independent research company European Communications Engineering Oy, Elisa's 4G
LTE network has the widest coverage in Finland. 

A record amount of data moved through Elisa's network during the period. The
use of mobile data services increased by 80 per cent since last year among both
consumers and corporate customers. We lowered mobile roaming prices, which
fuelled mobile data growth abroad as well. An example of this is the 15-fold
increase in the United States during the vacation season. Our mobile
subscription base grew by 33,600 during the third quarter. The number of fixed
network broadband subscriptions fell by approximately 3,600 but the number of
cable TV subscriptions grew by 3,400. 

The popularity of Elisa Viihde IPTV is based on its continuously developing
content. In the third quarter we introduced a variety of different content to
Elisa Viihde. The new content covers, for example, sports, tourism, and crime
drama. The position of the Elisa Kirja e-book service as the leading publisher
of Finnish language e-books strengthened further when the sales of e-books
almost doubled compared with last summer. 

We invested in cybersecurity services offered to corporations. In the future,
our customers will be able to obtain the most comprehensive data security
solutions on the market as managed services from one operator. Elisa Videra was
the first corporation in Finland to be awarded the CMSP certificate by Cisco
for its highest level video conferencing services. 

Elisa's 4G network already covers 95 per cent of Finns. 4G LTE speeds are
available to 90 per cent of Finns. The EUR 200 million that we annually invest
in Finland enables even smoother connections for modern data transfer needs. 

Elisa has expanded strongly into new business areas. Our new brand strategy and
corporate identity, launched on 15 October, covers our multifaceted business.
From now on our services for both consumer and corporate customers are known
under one, unified brand. Our renewed brand communicates more clearly Elisa's
broad offering of services and products, and also brings efficiency in
marketing. 

We will continue our determined work to improve both customer satisfaction and
our operational productivity. Improving our productivity, developing new
services for our customers, and maintaining our strong investment ability
create a solid foundation for competitive operations in the future. 

Outlook and guidance for 2014

The macroeconomic environment in Finland is still expected to be weak in 2014.
Competition in the Finnish telecommunications market also remains challenging. 

Full-year revenue is estimated to be at the same level or slightly higher than
in 2013. Mobile data, ICT and new online services as well as completed
acquisitions are expected to increase revenue. Full-year EBITDA, excluding
non-recurring items, is anticipated to be slightly higher than in 2013.
Full-year capital expenditure is expected to be a maximum of 12 per cent of
revenue. Elisa's financial position and liquidity are good. 

Elisa is continuing its cost efficiency measures, for example by streamlining
the product portfolio and IT systems and operations. Additionally, Elisa is
continuing to increase customer service and sales efficiency, as well as to
reduce general administration costs. 

Elisa's transformation into a provider of exciting, new and relevant services
for its customers is continuing. Long-term growth and profitability improvement
will derive from mobile data market growth, as well as new online and ICT
services. 

Disclosure procedure

Elisa is adopting the disclosure procedure enabled by the Standard 5.2b
published by the Finnish Financial Supervision Authority. This is a summary of
Elisa's Q3 2014 Interim Report and the complete report is attached as a
pdf-file to this release and is also available on our website at
www.elisa.com/investors. 

ELISA CORPORATION

Additional information:

Mr. Veli-Matti Mattila, CEO, tel. +358 10 262 2635
Mr. Jari Kinnunen, CFO, tel. +358 10 262 9510
Mr. Vesa Sahivirta, IR Director, tel. +358 10 262 3036

Distribution:

NASDAQ OMX Helsinki
Principal media
www.elisa.com

Attachments:

INTERIM REPORT Q3 2014.pdf