2010-02-12 07:30:00 CET
2010-02-12 08:19:44 CET
REGULATED INFORMATION
Elisa - Company Announcement
ELISA'S FINANCIAL STATEMENTS 2009
ELISA STOCK EXCHANGE RELEASE 12 FEBRUARY 2010 AT 8:30 am
Year 2009
* Revenue was EUR 1,430 million (1,485)
* EBITDA improved to EUR 484 million (472), EBIT was EUR 267 million (264)
* Profit before tax amounted to EUR 235 million (228)
* Earnings per share was EUR 1.13 (1.12)
* Cash flow after investments was EUR 252 million (260)
* Net debt / EBITDA was 1.5 (1.7) and gearing 80 per cent (93)
* The Board of Directors proposes a profit distribution of EUR 0.92 per share
Fourth quarter 2009
* Revenue was EUR 365 million (372)
* EBITDA was EUR 121 million (129), EBIT EUR 64 million (77)
* Cash flow after investments was EUR 74 million (84)
* Revenue per subscription (ARPU) in the mobile business was EUR 22.9 (23.2 in
the third quarter)
* Churn was 14.7 per cent (14.5 in the third quarter)
* The number of Elisa's mobile subscriptions increased by 111,300 during the
quarter, due in particular to the new 3G and 2G customers, as well as mobile
broadband customers
* The number of fixed broadband subscriptions decreased by 8,500 on the
previous quarter
Key indicators:
EUR million 10-12/2009 10-12/2008 1-12/2009 1-12/2008
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Revenue 365 372 1,430 1,485
EBITDA 121 129 484 472
EBITDA excluding non-
recurring items 121 129 484 478
EBIT 64 77 267 264
Profit before tax 56 70 235 228
Earnings per share, EUR 0.26 0.34 1.13 1.12
Capital expenditures 61 64 171 184
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Financial position and cash flow:
EUR million 31.12.2009 31.12.2008
--------------------------------------------
Net debt 719 812
Net debt / EBITDA 1) 1.5 1.7
Gearing ratio, % 79.8 92.8
Equity ratio, % 46.1 43.3
--------------------------------------------
EUR million 10-12/2009 10-12/2008 1-12/2009 1-12/2008
-----------------------------------------------------------
Cash flow after
investments 74 84 252 260
-----------------------------------------------------------
1) (interest-bearing debt - financial assets) / (4 previous quarters' EBITDA
exclusive of non-recurring items)
The Board of Directors proposes to the General Meeting as profit distribution a
capital repayment of EUR 0.92 per share, of which EUR 0.68 is an ordinary profit
distribution and EUR 0.24 anextraordinary distribution. The Board of Directors
also proposes an authorisation to distribute funds out of the retained earnings
account or the reserve for invested non-restricted equity to a maximum of EUR
100 million. Furthermore, The Board of Directors decided to propose to the
General Meeting an authorisation to acquire maximum 10 million treasury shares,
which corresponds to 6 per cent of the entire share capital.
Additional information regarding the Key Performance Indicators is available on
www.elisa.com/investors <http://www.elisa.com/investors>, in the section:
Financial info, Financial Statements & Interim Reports: Elisa Quarterly Data.
CEO Veli-Matti Mattila:"New service launches taking off well
Elisa's profitability and result developed favorably in 2009. The steep decline
in the Finnish economy had some impact on the use of communications services.
The recession was mostly reflected in corporate customer operations, equipment
sales and roaming revenue. In Estonia, the recession had a stronger impact on
business operations than in Finland.
Financial results developed favorably, which together with a strong cash flow
and balance sheet, guarantee an excellent capacity for profit distribution. The
competitive environment was keen but stable in 2009. Despite the challenging
situation, we managed to strengthen our competitiveness and market position.
In 2009, Elisa exceeded the threshold of three million mobile subscriptions. A
significant number of the new subscriptions consisted of 3G subscriptions.
During the fourth quarter, new subscriptions increased by more than 110,000. The
number of traditional fixed network subscriptions decreased in line with
previous years. The fixed broadband market has matured, while the strong growth
in mobile broadband subscriptions has continued.
We were able to offer more to our customers than traditional network services.
The brand new IPTV service, Elisa Viihde, offered to our consumer customers, and
the Internet-based security service, Elisa Vahti, succeeded well. Corporate and
public sector customers welcomed our productivity-improving ICT services,
including outsourcing of customer services, field work control and virtual
meeting services.
We continued to invest in the 3G network in order to enhance its coverage and
speed. Elisa's 3G network now covers almost 300 locations and more than 90 per
cent of Finland's population, delivering a maximum mobile broadband speed up to
10 Mbps in all locations. As confirmed by Finland's Market Court, Elisa provides
the widest 3G coverage in the country.
Although there have been some signs of recovery, uncertainties still exist in
the development of the general economy. Competition in the Finnish
telecommunications market also continues to be challenging. In 2010, we will
determinedly continue to develop our operations to improve customer satisfaction
and productivity even further. An expanding service offering and our capability
to invest create a good base for the future."
ELISA CORPORATION
Vesa Sahivirta
Director, IR and Financial Communications
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:
NASDAQ OMX Helsinki
Principal media
www.elisa.com <http://www.elisa.com/>
FINANCIAL STATEMENTS 2009
The Financial Statements have been prepared in accordance with the IFRS
recognition and measurement principles but not all of the IAS 34 requirements
have been observed.
Market situation
The general economic downturn has had only a marginal impact on the telecom
operator business. The impact has been felt mainly in equipment sales, roaming
revenues and corporate customer business. Elisa's Estonian business has also
suffered more than the Finnish business. Although there have been some positive
signs in the general economic environment, future development still includes
uncertainty. For example, the unemployment rate is expected to increase and the
corporate business environment may deteriorate further, both of which could have
a negative impact on the telecom sector.
The competitive environment has been keen but stable in Finland. The number of
mobile 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 data services made available through 3G subscriptions
has also increased. Another factor contributing to the growth has been the use
of multiple terminals for different purposes and especially mobile broadband
services. Churn in mobile subscriptions has been at a normal level, and
competition has been mainly in services and campaigning.
The number and usage of traditional fixed network subscriptions decreased at the
same rate as the previous year. The fixed broadband market has matured, while
the strong subscription growth in mobile broadband continued.
Revenue, earnings and financial position
Revenue and earnings:
EUR million 2009 2008 2007
----------------------------------------------------------
Revenue 1,430 1,485 1,568
EBITDA 484 472 499
EBITDA-% 33.8 31.8 31.8
EBITDA excluding non-recurring items 484 478 491
EBITDA-% excluding non-recurring items 33.8 32.2 31.3
EBIT 267 264 302
EBIT-% 18.7 17.8 19.3
Return on equity, % 19.9 18.5 18.8
Equity ratio, % 46.1 43.3 47.9
----------------------------------------------------------
January-December 2009
Revenue decreased by 4 per cent on last year mainly due to lower equipment
sales volumes, lower interconnection fees both in Finland and Estonia, and a
decrease in traditional fixed business.
EBITDA improved by 3 per cent and EBITDA excluding non-recurring items by 1 per
cent on the previous year. EBITDA margin improved from 31.8 per cent to 33.8 per
cent. The improvement was mainly due to efficiency improvement measures.
Additionally, in 2008 extra implementation costs of the billing and CRM system,
as well as revenue correction affected EBITDA negatively.
Financial income and expenses totalled EUR -33 million (-37). The decrease in
financial expenses was mainly attributed to a decrease in net debt and lower
interest rates. Income taxes in the income statement amounted to EUR -58 million
(-51). Elisa's earnings after taxes were EUR 177 million (177). The Group's
earnings per share (EPS) amounted to EUR 1.13 (1.12).
Fourth quarter 2009
Revenue decreased by 2 per cent from EUR 372 million to EUR 365 million mainly
for the same reasons as in January - December.
EBITDA decreased by 6 per cent from EUR 129 million to EUR 121 million. This was
mainly due to lower revenue and increased market activities during the fourth
quarter, such as sales and marketing costs, and new service launches.
Financial income and expenses totalled EUR -8 million (-7). Income taxes in the
income statement amounted to EUR -15 million (-17). Elisa's earnings after taxes
were EUR 41 million (54). The Group's earnings per share (EPS) amounted to EUR
0.26 (0.34).
Financial position:
EUR million 31.12.2009 31.12.2008 31.12.2007
-------------------------------------------------------
Net debt 719 812 738
Net debt / EBITDA 1) 1.5 1.7 1.5
Gearing ratio, % 79.8 92.8 71.3
Equity ratio, % 46.1 43.3 47.9
-------------------------------------------------------
EUR million 2009 2008 2007
-------------------------------------------------------
Cash flow after
investments 252 260 114
-------------------------------------------------------
1) (interest-bearing debt - financial assets) / (4 previous quarters' EBITDA
exclusive of non-recurring items)
January-December 2009
Net debt contracted by 11 per cent due to positive cash flow. Cash flow after
investments remained at about the same level as the previous year.
Fourth quarter 2009
Elisa's financial position and liquidity remained good. October - December cash
flow after investments was EUR 74 million (84). The decline was mainly due to
lower EBITDA and change in net working capital.
Changes in corporate structure
January-December 2009
In February, Elisa acquired the entire share capital of Xenetic Oy. Xenetic is a
hosting service company, the business of which consists of data centres,
monitoring, data communications and data security services and equipment, and
application leasing among other things. In February, Elisa also acquired the
business operations of Trackway Oy, which provides e.g., solutions for asset
tracking.
There were no changes in the corporate structure in the fourth quarter 2009.
Consumer Customer business
EUR million 10-12/2009 10-12/2008 1-12/2009 1-12/2008
-------------------------------------------------------
Revenue 217 217 848 882
EBITDA 71 72 284 267
EBITDA-% 32.8 33.4 33.5 30.3
EBIT 39 43 161 149
CAPEX 33 36 92 102
-------------------------------------------------------
January-December 2009
Revenue decreased by 4 per cent. The decrease was mainly a result of lower
equipment sales volumes, lower interconnection fees both in Finland and Estonia,
and a decline in the traditional fixed voice business. EBITDA grew by 6 per
cent. It was positively affected by productivity improvement measures and
decreased interconnection costs. The decrease in the Estonian business due to
the general economic downturn had a negative effect on EBITDA.
Fourth quarter 2009
Both revenue and EBITDA remained at the previous year's level. Revenue was
impacted by lower equipment sales volumes, lower interconnection fees both in
Finland and Estonia and a decline in the traditional fixed voice business. On
the other hand, the growth in subscriptions and usage affected revenue
positively. EBITDA was negatively affected by increased market activities, but
compensated for by productivity improvement measures. The decrease in the
Estonian business due to the general economic downturn had also a negative
effect on EBITDA.
Corporate Customer business
EUR million 10-12/2009 10-12/2008 1-12/2009 1-12/2008
-------------------------------------------------------
Revenue 148 155 583 603
EBITDA 50 57 200 204
EBITDA-% 33.9 36.6 34.3 33.9
EBIT 25 34 107 116
CAPEX 28 28 79 82
-------------------------------------------------------
January-December 2009
Revenue fell by 3 per cent and EBITDA by 2 per cent. The fall in revenue was
mainly due to lower interconnection fees, decreased equipment sales volumes and
a decline in the traditional fixed business. Growth in ICT services increased
revenue. The decrease in EBITDA was mainly attributable to lower revenue.
Fourth quarter 2009
Revenue fell by 5 per cent and EBITDA by 12 per cent. The fall in revenue was
mainly due to lower interconnection and roaming revenues, a decrease in mobile
usage and a decline in the traditional fixed business. Growth in ICT services
increased revenue. EBITDA was negatively affected by decreased revenue in
particular.
Personnel
In January-December, the average number of personnel at Elisa was 3,216 (2008
average 2,946 people, 2007 average 3,299 people). Employee benefit expenses in
2009 totalled EUR 189 million (2008 EUR 162 million and 2007 EUR 181 million).
Personnel at the end of 2009 were 3,331 (3,017). Personnel by segment at the end
of the period:
31.12.2009 31.12.2008
-------------------------------------------
Consumer Customers 1,975 1,522
Corporate Customers 1,356 1,495
Total 3,331 3,017
-------------------------------------------
In 2009, the number of personnel grew from the corresponding period last year
mainly as a result of increased staffing needs in call centres to meet the
growing demands in the customer service business.
In 2008, Elisa's Board of Directors decided on a new share-based incentive plan
for the Elisa Group key personnel. The detailed terms and conditions of the plan
can be found in Elisa's 2009 Annual Report. The plan includes three earning
periods, which are the calendar years 2009, 2010 and 2011.
On 16 December, Elisa's Board of Directors decided that the potential reward
from the earning period 2010 will be based on the Elisa Group's earnings per
share and revenue in 2010. The plan is directed to approximately 50 people. The
maximum reward payable in the earning period 2010 on the basis of the plan is
766,000 Elisa shares.
Investments
EUR million 10-12/2009 10-12/2008 1-12/2009 1-12/2008
--------------------------------------------------------------------------
Capital expenditures, of which 61 64 171 184
- Consumer Customers 33 36 92 102
- Corporate Customers 28 28 79 82
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Shares 0 2 6 15
--------------------------------------------------------------------------
Total 61 66 178 199
--------------------------------------------------------------------------
In 2009, the main capital expenditures relate to the mobile network, especially
3G, the fixed network including broadband and corporate networks, and IT
investments.
Financing arrangements and ratings
Valid financing arrangements:
EUR million Maximum amount In use on 31.12.2009
------------------------------------------------------------------
Committed credit limits 300 0
Commercial paper program ¹) 250 74
EMTN program ²) 1,000 600
------------------------------------------------------------------
1) The program is not committed
2) European Medium Term Note program, not committed
Long-term credit ratings:
Credit rating agency Rating Outlook
------------------------------------------
Moody's Investor Services Baa2 Stable
Standard & Poor's BBB Stable
------------------------------------------
The Group's cash and undrawn committed credit lines totalled EUR 331 million at
31 December 2009 (EUR 258 million at the end of 2008). There are no major
refinancing needs expected before the year 2011.
In connection to the counterparty risk hedging, Elisa provided a maximum USD 60
million guarantee for a credit derivative portfolio (CDO) in 2007. The risk of
the guarantee being called increased due to the credit crisis in 2008 and
further during 2009. A detailed description is provided in the "Financial risks"
section.
Share
Trading of shares 10-12/2009 10-12/2008 1-12/2009 1-12/2008
-------------------------------------------------------------------
Shares traded, millions 35.6 76.1 180.6 338.8
Volume, EUR million 508.6 881.4 2,170.0 5,041.1
% of shares 21.4 45.8 116.1 217.7
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Shares and market values 31.12.2009 31.12.2008
------------------------------------------------------------
Total number of shares 166,307,586 166,307,586
Treasury shares 10,688,629 10,688,629
Outstanding shares 155,618,957 155,618,957
Closing price, EUR 15.96 12.30
Market capitalisation, EUR million 2,484 1,914
Treasury shares, % 6.4 6.4
------------------------------------------------------------
At the end of the year, Elisa's total number of the shares was 166,307,586
(166,307,586), all within one share series.
In March, Elisa distributed a ordinary dividend of 0.60 euro per share,
totalling EUR 93.4 million, in accordance with the decision of the Annual
General Meeting.
In June, the Government of Finland transferred its Elisa shares to its
fully-owned company Solidium Oy. Following this transfer, the Government of
Finland has no direct ownership in Elisa. The number of shares transferred to
Solidium Oy was 16,006,000, representing 9.62 per cent of the share capital and
votes.
In June, Solidium Oy announced that it has exceeded 10 per cent ownership in
Elisa. Solidium Oy's ownership increased to 16,631,000 shares, or 10.00 per cent
of the share capital and votes.
On 28 September 2009, Elisa was notified of a change in the company's ownership
as follows: DNA Oy, Lännen Teletieto Oy and Oulun Puhelin Holding Oyj sold all
their Elisa shares, and PHP Liiketoiminta Oyj´s, KPY Sijoitus Oy´s, Kuopion
Puhelin Oy´s aggregate ownership in Elisa shares and votes decreases below 5 per
cent.
On 23 October, Elisa's Board of Directors decided on the extraordinary
distribution of a capital repayment per share of EUR 0.40. This decision was
based on the favourable development of the company's result and financial
position as well as maintaining the company's capital structure in line with the
set financial targets.
Capital repayment also affected the Elisa 2007 stock options by reducing the
strike price of the series 2007A stock options to EUR 18.04 and series 2007B
stock options to EUR 10.89.
The listing of the Elisa 2007A stock options on the NASDAQ OMX Helsinki Ltd
started on 1 December 2009. The total number of outstanding 2007A stock options
is 850,000. Each 2007A stock option entitles its holder to subscribe for one
Elisa share. A total of 372,150 2007A stock options are in the possession of
Elisa's subsidiary, which is not permitted to subscribe for shares with the
stock options.
The present share subscription price of the 2007A stock option is EUR 18.04 per
share. Future dividends and capital repayments will be deducted from the
subscription price upon payment. The share subscription period for 2007A stock
options began on 1 December 2009 and end on 31 May 2011.
On 9 December 2009, Elisa was notified, in accordance with Chapter 2, Section 9
of the Finnish Securities Market Act that BlackRock Inc.'s proportion of the
total number of Elisa shares and voting rights has exceeded 5 per cent (6.64 per
cent).
Elisa's Board of Directors decided to distribute 2007C stock options to Elisa
Group's key personnel. The maximum number of 2007C stock options is 850,000 and
of that, 471,500 have been distributed to the Elisa's key personnel. The strike
price for series 2007C stock options is EUR 13.99 per share and the subscription
period is 1 December 2011 - 31 May 2013.
Research and development
The Group invested EUR 10 million, of which EUR 2.8 million has been capitalised
in research and development in 2009 (EUR 11 million in 2008 and EUR 8 million in
2007), corresponding to 0.7 per cent of revenue (0.7 per cent in 2008 and 0.5
per cent in 2007).
The Annual General Meeting
On 18 March 2009, and in accordance with the proposal of the Board of Directors,
Elisa's Annual General Meeting decided on a dividend to shareholders in the
amount of EUR 0.60 per share on the basis of the 31 December 2008 balance sheet
approved by the Annual General Meeting.
The Annual General Meeting adopted the financial statements for the period in
question. The members of the Board of Directors and the CEO were discharged from
liability for 2008.
The number of the members of the Board of Directors was confirmed at six (6).
The following members were re-elected to the Board of Directors: Mr Risto
Siilasmaa, Mr Ossi Virolainen, Mr Pertti Korhonen and Ms Eira Palin-Lehtinen. Mr
Ari Lehtoranta (Executive Vice President, Kone Corporation) and Raimo Lind
(Executive Vice President, CFO and Deputy to the President, Wärtsilä
Corporation) were elected as new members.
KPMG Oy Ab, authorised public accountants was appointed the company's auditor.
APA Pekka Pajamo is the responsible auditor.
The Annual General Meeting accepted the proposal to amend the Operations of the
Company in the articles of association. The main change was the addition of ICT
services to the Operations of the Company.
The Board of Directors' authorisations
The Annual General Meeting accepted the proposal to authorize the Board of
Directors to decide on the distribution of funds from the unrestricted equity to
a maximum of EUR 150,000,000. The authorization is effective until the beginning
of the following Annual General Meeting.
The Annual General Meeting decided on the authorization to repurchase or accept
as pledge the company's own shares. The repurchase may be directed. The maximum
amount of shares under this authorization is 15,000,000. The authorization is
effective until June 30, 2010.
The Annual General Meeting approved the proposal of the Board of Directors on
the issuance of shares as well as the issuance of special rights entitling to
shares. The issue may be directed. The authorization is effective until June
30, 2013. A maximum aggregate of 50.0 million of the company's shares can be
issued under the authorization.
Regulatory issues
On April 2009, Elisa was handed a decision made by the Finnish Communications
Regulatory Authority, that Elisa was allocated more frequencies in both the
1,800 MHz and 2,100 MHz spectrums. In the 1,800 MHz spectrum, the radio license
is valid until November 2017 and in the 2,100 MHz spectrum, the licence is valid
to March 2019. The 1,800 MHz spectrum can be used for the LTE (Long Term
Evolution technology, i.e. the fourth generation, 4G mobile network). LTE
enables faster than current mobile broadband connections. LTE can be utilized
either in the auctioned 2.6 GHz or in the lower 1800 MHz spectrum.
The auction for the LTE 2.6 GHz spectrum ended on 23 November 2009. Elisa won
the competitive 50 MHz spectrum. The fee for the license is EUR 834,700 and it
is valid until 2029.
The Finnish Communications Regulatory Authority has, in its decision on 23
December 2009, appointed Elisa to provide universal service obligation services
for internet connection covering the area of 25 named municipalities in Finland.
The universal service obligation constitutes a provision of internet connection
with a 1 Mbps speed in the named area from 1 July 2010 onwards.
Significant legal issues
Elisa and TeliaSonera reached a settlement on the disagreement relating to the
claim of unjust enrichment due to miscoding of traffic.
On 28 May 2009, The Helsinki Court of Appeal rendered its verdict in the
proceedings concerning the stock exchange disclosures of the Jippii Group in
2001. Jippii is Saunalahti Group's predecessor, which Elisa acquired in 2005.
The Court has ordered Elisa to pay a corporate fine of EUR 200,000 and a
forfeiture of EUR 85,000 concerning the events of 2001. The decision is under
appeal.
The Finnish Competition Authority has made a decision to remove the matter
concerning the pricing of Elisa's broadband from the agenda.
The arbitration processes between Elisa and IBM on disputes relating to the
implementation and maintenance of Elisa´s billing and CRM system has ended in
December 2009.
The Estonian Communications Authority has, in 2007, issued a decision on the
level of interconnection fees. Elisa has appealed against the decision and the
proceedings are still pending. Elion Ettevõtted AS has presented a claim for
refunding the excess fees of approximately EUR 1.8 million. Elisa disputes the
refunding obligation.
Substantial risks and uncertainties 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, accidental
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
businesses 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, and growth in subscriptions is thus 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.
The deterioration of the economic environment may impact the demand for Elisa's
services and products, and therefore growth prospects. However, a good demand
for communication services is expected to continue also during a recession.
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 loans and investments are
diversified in fixed- and variable-rate instruments. Interest rate swaps are
used to manage interest rate risk.
As most of Elisa Group's cash flow is denominated in Euros, the exchange rate
risk is minor. Elisa's Estonian business, which is approximately 6 per cent of
the consolidated revenue is denominated in Estonian crowns.
The objective of liquidity risk management is to ensure the Group's financing in
all circumstances. The Group's cash and undrawn committed credit lines totalled
EUR 331 million at 31 December 2009 (EUR 258 million at the end of 2008). Elisa
has cash reserves, committed credit facilities and a sustainable cash flow to
cover its foreseeable financing needs.
Liquid assets are invested within confirmed limits to investment targets with a
good credit rating. Credit risk concentrations in accounts receivable are minor
as the customer base is wide.
In connection to the counterparty risk hedging, Elisa provided a maximum USD 60
millionguarantee for a credit derivative portfolio (CDO) in 2007. The risk of
the guarantee being called increased due to the credit crisis in 2008 and
further during 2009. Possible further credit default events in the portfolio may
result in partial or full demands being made under the guarantee already in
2010. There is a dispute between Elisa and the arranger bank as to the extent
and scope of Elisa's obligations under the guarantee and legal proceedings have
been commenced to resolve the dispute. At the year end, no guarantee liability
was realised nor expenses accounted. Possible guarantee liability expense
realisation is evaluated constantly and booked if materialised. The guarantee is
valid until 15 December 2012. The maximum liability of USD 60 million, if
realised, would mean cash payments of USD 33 million in 2011 and USD 27 million
in 2012.
A detailed description of the financial risk management can be found in note 34
of the Annual Report.
Environmental issues
Elisa carries out high-quality and environmentally responsible
telecommunications services. The utilisation of these services reduces the need
to transport people and goods, which leads to a reduction in traffic.
Elisa monitors the environmental impact of its operations and continuously
strives to improve their environmental friendliness. Elisa evaluates suppliers
and subcontractors according to their environmental criteria, and improves the
awareness of environmental issues among the personnel by openly and regularly
providing information on their effects.
Elisa's environment group collected data on the environmental load (energy,
water and fuel consumption, waste), followed the development in environmental
legislation as well as other areas, and increased environmental awareness among
the personnel by directing the operations that contribute to the environmental
load.
The design and implementation of a standardized environmental management system
continued in 2009. Other measures included further development of the
environmental load data reporting system and improving waste sorting in business
premises. Consumption of office supplies and paper was reduced to an excellent
level. The switchover to multi-space solutions in business premises helped cut
back electricity consumption considerably.
2009 Annual Report and corporate governance statement
Elisa will publish the 2009 Annual Report, which contains the report by Board of
Directors and the financial statements for 2009, and a separate Corporate
Governance Statement on week 8 on its website at www.elisa.com.
Events after the financial period
There are no major events after the financial period.
Outlook for 2010
There have been some positive signs in the general economic environment.
However, the unemployment rate is expected to increase and the corporate
business environment may deteriorate further. These factors could continue to
have a negative impact on the telecom sector. Competition in the Finnish
telecommunications market remains challenging.
The general economic downturn has so far mainly impacted Elisa's Estonian
business and the Corporate Customer segment. The main risks still relate to the
development of the Estonian economy and the corporate customer business.
Full year revenue is estimated to be at the same level as last year. The use of
mobile communications and mobile broadband products is continuing to rise. Full
year EBITDA, excluding non-recurring items, is expected to be at the same level
as last year. Full-year capital expenditure is expected to be 10 to 12 per cent
of revenue.
The ICT and on-line service industry is in a dynamic development phase. In
addition to its strong position as a network service provider, Elisa is
transforming itself to be able to provide its customers with exciting and
relevant new services. Among the factors contributing to long-term growth and
profitability improvement is 3G market growth. Elisa continues determinedly to
employ its efficiency measures. Elisa's financial position and liquidity are
good. There are no major refinancing needs expected before the year 2011.
Profit distribution
The Board of Directors proposes to the General Meeting as profit distribution a
capital repayment of EUR 0.92 per share, of which EUR 0.68 is an ordinary profit
distribution and EUR 0.24 as extraordinary profit distribution. The payment
corresponds to 81 per cent of the financial period's earnings.
Shareholders who are listed in the company's register of shareholders maintained
by the Finnish Central Securities Depository Ltd on 23 March 2010 are entitled
to funds distributed by the General Meeting. The Board of Directors proposes
that the payment date be 31 March 2010. The profit for the period shall be added
to accrued earnings.
The Board of Directors also decided to propose to the General Meeting that the
Board of Directors be authorised to distribute funds out of the retained
earnings account or the reserve for invested non-restricted equity to a maximum
of EUR 100 million.
Furthermore, the Board of Directors decided to propose to the General Meeting
that the Board of Directors be authorised to acquire a maximum of 10 million
treasury shares, which corresponds to 6 per cent of the entire stock.
The parent company's distributable funds at year-end amounted to EUR 339
million.
BOARD OF DIRECTORS
Elisa Corporation
1.1. - 31.12.2009
The annual financial statements
figures presented in this release
are based on the company's
audited financial statements.
The auditor's report was
issued on 11 February 2010.
CONSOLIDATED INCOME STATEMENT
--------------------------------------------------------------------
10-12 10-12 1-12 1-12
EUR million Note 2009 2008 2009 2008
--------------------------------------------------------------------
Revenue 1 364,9 372,1 1430,4 1485,0
Other operating income 2,0 3,0 4,2 6,5
Materials and services -144,0 -159,0 -576,3 -652,4
Employee benefit expenses -51,3 -43,2 -188,8 -162,5
Other operating expenses -50,3 -43,6 -185,6 -205,0
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EBITDA 1 121,3 129,3 483,9 471,6
Depreciation and
amortisation -56,8 -52,1 -216,4 -207,1
--------------------------------------------------------------------
EBIT 1 64,5 77,2 267,5 264,5
Financial income 2,3 7,2 10,5 17,1
Financial expense -10,6 -14,1 -43,1 -54,0
Share of associated
companies' profit -0,1 0,0 0,0 0,0
--------------------------------------------------------------------
Profit before tax 56,1 70,3 234,9 227,6
Income taxes -15,2 -16,6 -57,9 -50,6
--------------------------------------------------------------------
Profit for the period 40,9 53,7 177,0 177,0
Attributable to:
Owners of the parent 40,7 53,3 176,3 176,3
Non-controlling interests 0,2 0,4 0,7 0,7
--------------------------------------------------------------------
40,9 53,7 177,0 177,0
Earnings per share (EUR)
Basic 0,26 0,34 1,13 1,12
Diluted 0,26 0,34 1,13 1,12
Average number of
outstanding shares
(1000 shares)
Basic 155 619 155 619 155 619 157 450
Diluted 155 809 155 619 155 809 157 450
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
--------------------------------------------------------------------
Profit for the period 40,9 53,7 177,0 177,0
Other comprehensive
income, net of tax:
Available-for-sale
investments -0,5 -8,0 1,2 -10,4
--------------------------------------------------------------------
Total comprehensive income 40,4 45,7 178,2 166,6
Total comprehensive income
attributable to:
Owners of the parent 40,2 45,3 177,5 165,9
Non-controlling interests 0,2 0,4 0,7 0,7
--------------------------------------------------------------------
40,4 45,7 178,2 166,6
Elisa Corporation
1.1. - 31.12.2009
The annual financial statements
figures presented in this release
are based on the company's
audited financial statements.
The auditor's report was
issued on 11 February 2010.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
---------------------------------------------------------------
31.12. 31.12.
EUR million 2009 2008
---------------------------------------------------------------
Non-current assets
Property, plant and equipment 617,9 630,5
Goodwill 782,0 778,6
Other intangible assets 148,2 177,5
Investments in associated companies 0,1 0,1
Available-for-sale investments 30,7 29,0
Receivables 19,4 12,4
Deferred tax assets 25,7 28,3
---------------------------------------------------------------
1624,0 1656,4
Current assets
Inventories 31,2 21,7
Trade and other receivables 278,4 319,4
Cash and cash equivalents 31,0 33,0
---------------------------------------------------------------
340,6 374,1
Total assets 1964,6 2030,5
Equity attributable to owners of the parent 899,2 873,4
Non-controlling interests 0,8 1,6
---------------------------------------------------------------
Total equity 900,0 875,0
Non-current liabilities
Deferred tax liabilities 26,6 30,9
Provisions 4,5 5,6
Interest-bearing debt 592,3 672,3
Other non-current liabilities 13,4 14,0
---------------------------------------------------------------
636,8 722,8
Current liabilities
Trade and other payables 263,3 255,5
Tax liabilities 6,4 3,4
Provisions 0,9 1,5
Interest-bearing debt 157,2 172,3
---------------------------------------------------------------
427,8 432,7
Total equity and liabilities 1964,6 2030,5
Elisa Corporation
1.1. - 31.12.2009
The annual financial statements
figures presented in this release
are based on the company's
audited financial statements.
The auditor's report was
issued on 11 February 2010.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
--------------------------------------------------------------
1-12 1-12
EUR million 2009 2008
--------------------------------------------------------------
Cash flow from operating activities
Profit before tax 234,9 227,6
Adjustments
Depreciation and amortisation 216,4 205,8
Other adjustments 29,5 32,1
--------------------------------------------------------------
245,9 237,9
Change in working capital
Change in trade and other receivables 36,3 132,5
Change in inventories -9,4 6,7
Change in trade and other payables 10,1 -56,2
--------------------------------------------------------------
37,0 83,0
Financial items, net -29,6 -38,8
Taxes paid -57,2 -59,5
--------------------------------------------------------------
Net cash flow from operating activities 431,0 450,2
Cash flow from investing activities
Capital expenditure -170,3 -179,2
Purchase of shares -9,7 -11,6
Proceeds from asset disposal 0,9 0,8
--------------------------------------------------------------
Net cash used in investing activities -179,1 -190,0
Cash flow before financing activities 251,9 260,2
Cash flow from financing activities
Purchase of treasury shares -43,3
Proceeds from long-term borrowings 80,0
Repayment of long-term borrowings -36,1 -30,0
Change in short-term borrowings -56,6 38,6
Repayment of finance lease liabilities -4,5 -4,0
Dividends paid and capital repayment -156,7 -285,4
--------------------------------------------------------------
Net cash used in financing activities -253,9 -244,1
Change in cash and cash equivalents -2,0 16,1
Cash and cash equivalents at beginning of
period 33,0 16,9
--------------------------------------------------------------
Cash and cash equivalents at end of period 31,0 33,0
Elisa
Corporation
1.1. -
31.12.2009
The annual financial statements
figures presented in this release
are based on the company's
audited financial statements.
The auditor's report was
issued on 11 February 2010.
STATEMENT OF CHANGES
IN EQUITY
--------------------------------------------------------------------------------
Reserve
for
invested
non-
Share Treasury Other restricted Retained Minority Total
EUR million capital shares reserves equity earnings interest equity
--------------------------------------------------------------------------------
Balance at
January 1,
2008 83,0 -165,8 403,9 535,7 176,6 2,0 1035,4
--------------------------------------------------------------------------------
Capital
repayment -284,9 -284,9
Dividends -1,1 -1,1
Purchase of
treasury
shares -43,3 -43,3
Share-based
compensation 7,1 -4,8 2,3
Total
comprehensive
income -10,4 176,3 0,7 166,6
--------------------------------------------------------------------------------
Balance at
December 31,
2008 83,0 -202,0 393,5 250,8 348,1 1,6 875,0
EUR million
--------------------------------------------------------------------------------
Balance at
January 1,
2009 83,0 -202,0 393,5 250,8 348,1 1,6 875,0
--------------------------------------------------------------------------------
Capital
repayment -62,2 -0,7 -62,9
Dividends
and capital
repayment -92,7 -0,8 -93,5
Share-based
compensation 3,2 3,2
Total
comprehensive
income 1,2 176,3 0,7 178,2
--------------------------------------------------------------------------------
Balance at
December 31,
2009 83,0 -202,0 394,7 188,6 434,9 0,8 900,0
--------------------------------------------------------------------------------
Elisa Corporation
1.1. - 31.12.2009
The annual financial statements
figures presented in this release
are based on the company's
audited financial statements.
The auditor's report
was issued on 11
February 2010
NOTES
ACCOUNTING PRINCIPLES
The financial statements bulletin has
been prepared in accordance with the
IFRS recognition and measurement
principles, although all requirements
of IAS 34 standard have not been
followed.
The information has been
prepared in accordance
with International Financial
Reporting Standards
effective at the time of
preparing and adopted for
use by European Union.
Apart from the changes in
accounting principles stated
below, the financial statements
have been prepared following
the accounting principles of
the 31 December 2008
financial statements.
Changes in the
accounting principles
As of 1 January 2009, the Group has
applied the following new or revised
standards and new interpretations:
- IFRS 8 Operating Segments. The standard
requires that segment information be
presented on the basis of internal reporting
submitted to the management. Elisa's
organizational and management structure
is based on a customer-oriented operating
model. The segment structures and reports
presented as a result of the introduction of
the standard have been renewed in full. The
new operating segments to be presented are
Consumer Customers and Corporate Customers.
The amendment has also affected the impairment
testing of goodwill, as goodwill has been re-
allocated to the reported operating segments.
The operating segments comprise the lowest
unit level producing cash flow at which the
company management monitors goodwill. The
accounting principles for the new segment reporting
system and the 2008 reference information have
been published in a stock exchange release on
17.4.2009.
- Amendment to IAS 1 Presentation of Financial
Statements. The amendments have affected
the presentation of the income statement and
equity in the consolidated financial statements.
- Amendment to IFRS 7 Financial Instruments:
Disclosures. The amendment has affected
the presentation of the consolidated notes.
Items recognized at current value are
categorized in the notes using a three
level hierarchy for current values.
The following revised or amended standards
and new interpretations that have been introduced
have not had an impact on the information
contained in the consolidated financial
statements:
- Annual improvements
to IFRS standards
- Amendment to IFRS 2 Share-based Payment.
The amendment applies to the vesting conditions
and cancellations of rights.
- Amendment to IAS 32 Financial
Instruments: Presentation and IAS 1
Presentation of Financial Statements.
The amendments applies to financial
instruments with a mandatory redemption
feature and obligations created when
dissolving a community.
- Amendment to IAS 23 Borrowing
Costs. According to the amended
standard, borrowing costs that are
directly related to the acquisition,
creation or production of a property
item that takes a significantly long
time to set it to an operating or
or selling condition can no longer
be recognized directly as expenses.
As of the closing date, Elisa has not
had any activated borrowing costs
that meet these conditions.
- IFRIC 12 Service Concession Arrangements.
The interpretation applies to service concession
arrangements from a public to a private party
in the maintaining party's accounting.
- IFRIC 13 Customer Loyalty
Programs. The application of
the interpretation has not changed
the Group's recognition practices.
- IFRIC 15 Agreements
for the Construction
of Real Estate.
- IFRIC 16 Hedges of a Net Investment
in a Foreign Operation. The interpretation
provides guidelines for the hedging
calculation of a net investment in
a foreign operating unit.
Elisa Corporation
1.1. - 31.12.2009
The annual financial statements
figures presented in this release
are based on the company's
audited financial statements.
The auditor's report was
issued on 11 February 2010.
1. SEGMENT INFORMATION
10-12/2009
Consumer Corporate Unallocated Group
EUR million Customers Customers Items Total
------------------------------------------------------------------------------
Revenue 217,1 147,8 364,9
EBITDA 71,2 50,1 121,3
Depreciation and amortisation -32,0 -24,8 -56,8
EBIT 39,2 25,3 64,5
Financial income 2,3 2,3
Financial expense -10,6 -10,6
Share of associated companies' profit -0,1 -0,1
Profit before tax 56,1
Investments 33,2 27,7 60,9
10-12/2008
Consumer Corporate Unallocated Group
EUR million Customers Customers Items Total
------------------------------------------------------------------------------
Revenue 216,9 155,2 372,1
EBITDA 72,5 56,8 129,3
Depreciation and amortisation -29,8 -22,3 -52,1
EBIT 42,7 34,5 77,2
Financial income 7,2 7,2
Financial expense -14,1 -14,1
Share of associated companies' profit 0,0 0,0
Profit before tax 70,3
Investments 35,7 28,0 63,7
1-12/2009
Consumer Corporate Unallocated Group
EUR million Customers Customers Items Total
------------------------------------------------------------------------------
Revenue 847,8 582,7 1430,5
EBITDA 283,8 200,1 483,9
Depreciation and amortisation -123,1 -93,3 -216,4
EBIT 160,7 106,8 267,5
Financial income 10,5 10,5
Financial expense -43,1 -43,1
Share of associated companies' profit 0,0 0,0
Profit before tax 234,9
Total assets 1059,5 766,3 138,8 1964,6
Investments 91,9 79,5 171,4
1-12/2008
Consumer Corporate Unallocated Group
EUR million Customers Customers Items Total
------------------------------------------------------------------------------
Revenue 881,5 603,5 1485,0
EBITDA 267,3 204,3 471,6
Depreciation and amortisation -118,7 -88,4 -207,1
EBIT 148,6 115,9 264,5
Financial income 17,1 17,1
Financial expense -54,0 -54,0
Share of associated companies' profit 0,0 0,0
Profit before tax 227,6
Total assets 1143,3 780,8 106,4 2030,5
Investments 101,8 82,1 183,9
Elisa Corporation
1.1. - 31.12.2009
The annual financial statements
figures presented in this release
are based on the company's
audited financial statements.
The auditor's report was
issued on 11 February 2010.
2. OPERATING LEASE COMMITMENTS
31.12. 31.12.
EUR million 2009 2008
------------------------------------------------------------------
Due within 1 year 19,2 22,2
Due after 1 year but within 5 years 34,8 36,8
Due after 5 years 13,5 15,2
------------------------------------------------------------------
Total 67,5 74,2
3. CONTINGENT LIABILITIES
31.12. 31.12.
EUR million 2009 2008
------------------------------------------------------------------
Mortgages
For own and group companies 0,4
Pledges given
Pledges given as surety 0,7 0,8
Guarantees given
For others (* 42,4 44,3
------------------------------------------------------------------
Mortgages, pledges and guarantees total 43,1 45,5
Other commitments
Repurchase commitments 0,0 0,1
*) EUR 41.6 million is related to the guarantee
given on a CDO portfolio.
4. DERIVATIVE INSTRUMENTS
31.12. 31.12.
EUR million 2009 2008
------------------------------------------------------------------
Interest rate swaps
Nominal value 150,0 150,0
Fair value recognised in the balance sheet 1,5 1,0
Credit default swaps (*
Nominal value 44,0 47,4
------------------------------------------------------------------
*) CDS is related to hedging of the guarantor bank
in the QTE-arrangement. In 2008 Elisa wrote down t
he fair value of the CDS agreement.
Elisa Corporation
1.1. - 31.12.2009
The annual financial statements
figures presented in this release
are based on the company's
audited financial statements.
The auditor's report was
issued on 11 February 2010.
KEY FIGURES
---------------------------------------------------------------
1-12 1-12
EUR million 2009 2008
---------------------------------------------------------------
Shareholders' equity per share, EUR 5,78 5,61
Interest bearing net debt 718,5 811,6
Gearing 79,8% 92,8%
Equity ratio 46,1% 43,3%
Return on investment (ROI) *) 16,0% 15,6%
Gross investments in fixed assets 171,4 183,9
of which finance lease investments 1,1 4,7
Gross investments as % of revenue 11,9% 12,4%
Investments in shares 6,3 14,8
Average number of employees 3216 2946
*) 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 the end of period
Earnings/share
Profit for the period attributable to
equity holders of parent
----------------------------------------------
Average number of
outstanding shares
[HUG#1383821]
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