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2008-04-25 07:30:00 CEST 2008-04-25 07:34:32 CEST REGULATED INFORMATION Elisa - Interim report (Q1 and Q3)ELISA'S INTERIM REPORT JANUARY-MARCH 2008Revenue was EUR 367 million (378) Revenue was negatively affected by 2007 revenue adjustment of mobile segment, approximately EUR 7 million. This was due to correction of 2007 revenue estimate of delayed customer billing New mobile interconnection fees as of 1st of January lowered revenue by approximately EUR 14 million compared to the previous quarter EBITDA exclusive of non-recurring items of EUR 3 million was EUR 111 million (115) and EBIT EUR 57 million (68) Revenue adjustment and implementation costs of the new billing and CRM system affected negatively on EBITDA and EBIT by approximately EUR 12 million, which is not booked as a non-recurring item Profit before tax amounted to EUR 52 million (64) Earnings per share was EUR 0.25 (0.30) Cash flow after investments more than tripled to EUR 66 million Revenue per subscription (ARPU) in the mobile business decreased from the previous quarter's EUR 29.9 to EUR 25.9. Effect of revenue correction on ARPU was approximately EUR 1.0 and lower interconnection fee EUR 2.2. Churn was 15.6 per cent (12.6) The number of mobile subscriptions in Finland increased by 33,000 during the quarter, due in particular to the new 3G customers, mobile broadband and prepaid subscriptions The number of broadband subscriptions increased by 4,600 on the previous quarter Net debt / EBITDA was 2.2x (1.5x at the end of 2007) and gearing 121% (71 at the end of 2007) Elisa's 2008 revenue, EBITDA and EBIT exclusive non-recurring items are expected to be at the same level as in 2007 Key indicators: +-----------------------------------------------------------+ | Income statement | 1-3/2008 | 1-3/2007 | 1-12/2007 | | EUR million | | | | |-------------------------+----------+----------+-----------| | Revenue | 367 | 378 | 1 568 | |-------------------------+----------+----------+-----------| | EBITDA | 108 1) | 115 | 499 2) | |-------------------------+----------+----------+-----------| | EBIT | 57 | 68 | 302 | |-------------------------+----------+----------+-----------| | Profit before tax | 52 | 64 | 285 | |-------------------------+----------+----------+-----------| | Earnings per share, EUR | 0.25 | 0.30 | 1.38 | |-------------------------+----------+----------+-----------| | Capital expenditures | 38 | 45 | 206 | +-----------------------------------------------------------+ EBITDA excluding non-recurring items: 1) EUR 111 million, 2) EUR 491 million. Figures describing the financial position and cash flow: +----------------------------------------------------------------+ | Financial position | 31 Mar 2008 | 31 Mar 2007 | 31 Dec 2007 | |----------------------+-------------+-------------+-------------| | Net debt | 955 | 578 | 738 | |----------------------+-------------+-------------+-------------| | Net debt / EBITDA 1) | 2.2 | 1.3 | 1.5 | |----------------------+-------------+-------------+-------------| | Gearing ratio, % | 120.6 | 51.6 | 71.3 | |----------------------+-------------+-------------+-------------| | Equity ratio, % | 37.7 | 51.0 | 47.9 | |----------------------+-------------+-------------+-------------| | Cash flow statement | 1-3/2008 | 1-3/2007 | 1-12/2007 | | Cash flow after | | | | | investments | 66 | 18 | 114 | +----------------------------------------------------------------+ 1) (interest-bearing debt - financial assets) / (EBITDA exclusive of non-recurring items x 4) CEO Veli-Matti Mattila: "The best network coverage and quality are the engine of Elisa's 3G success The 3G market continues to grow strongly and Elisa still dominates half of it thanks to, according to studies, the best network in terms of coverage, among other things. At the moment, over 1.1 million Finnish 3G customers can utilise mobile access when using their e-mail, googling information or surfing the Internet like via the usual fixed broadband. We estimate that by the end of the year there will be up to 1.4 million people using 3G services. The fast development of the 3G market has been made possible especially by the service bundles that consumers have been able to choose since the ban on bundling was terminated. To ensure the positive development of the Finnish information society it is very important to make sure that consumers continue to have this choice in purchasing. For our customers it is important that we can offer similar choices than in other industries. In spite of higher than expected implementation costs of the billing and CRM system, the renewal project proceeds as previously communicated. By the end of March we managed to catch up with our invoicing as promised to our customers. The queuing time in phone services shortened significantly and customer satisfaction has also improved. The profitability of the first quarter was lower than we anticipated due to revenue adjustment and the additional temporary implementation costs of the new billing and CRM system. We are determined to continue developing one Elisa and to improve our profitability according to our strategy. We will strengthen growth by introducing new services to our wide range of customers." 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-MARCH 2008 The interim report has 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 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 new services made available through 3G subscriptions has also increased. Another factor contributing to the increase has been the use of multiple terminal devices for different purposes and prepaid subscriptions. Churn has been at a normal level in relation to the market situation, and competition has been more focused on services. The fixed network business continued its earlier trend: the number of broadband subscriptions continued to grow, while the number and usage of traditional subscriptions decreased. The broadband market has continued to grow slightly. Development of revenue, earnings and financial position Revenue by segments: +---------------------------------------------------------+ | EUR million | 1-3/2008 | 1-3/2007 | Change, % | |-----------------------+----------+----------+-----------| | Mobile communications | 223 | 229 | -3 | |-----------------------+----------+----------+-----------| | Fixed network | 156 | 163 | -4 | |-----------------------+----------+----------+-----------| | Inter-segment sales | -12 | -13 | 8 | |-----------------------+----------+----------+-----------| | Total | 367 | 378 | -3 | +---------------------------------------------------------+ Elisa's revenue for January-March decreased by 3 per cent on last year, primarily due to the 2007 revenue adjustment of EUR 7 million, which is booked to the mobile segment. The adjustment served to correct the 2007 revenue estimate affected by the delayed customer billing. Revenue was also hampered by lower interconnection, EUR 14 million, and roaming fees and declined equipment sales, as well as decreases in the number of traditional fixed network subscriptions. Earnings by segments: +---------------------------------------------------------+ | EUR million | 1-3/2008 | 1-3/2007 | Change, % | |-----------------------+----------+----------+-----------| | Mobile communications | | | | | EBITDA | 60 | 67 | -10 | | EBITDA, % | 27 | 29 | | | EBIT | 31 | 44 | -30 | |-----------------------+----------+----------+-----------| | Fixed network | | | | | EBITDA | 50 | 49 | 2 | | EBITDA, % | 32 | 30 | | | EBIT | 28 | 26 | 8 | |-----------------------+----------+----------+-----------| | Corporate functions | | | | | EBITDA | -2 | -1 | | | EBIT | -2 | -1 | | |-----------------------+----------+----------+-----------| | Total | | | | | EBITDA | 108 | 115 | -6 | | EBITDA, % | 29 | 30 | | | EBIT | 57 | 68 | -16 | +---------------------------------------------------------+ Elisa's EBITDA declined by 6 per cent on the previous year. The EBITDA decrease was mainly due to the 2007 revenue adjustment of EUR 7 million and implementation costs of the new billing and CRM system, together approximately EUR 12 million. On the other hand, new services in the mobile communication business, as well as efficiency measures improved EBITDA. The improved profitability of the fixed network was driven by the increased number of broadband subscriptions, and improved cost efficiency. Financial income and expenses totalled EUR -5 million (-5). Income taxes in the income statement amounted to EUR -12 million (-15). Elisa's January-March earnings after taxes were EUR 40 million (49). The Group's earnings per share (EPS) amounted to EUR 0.25 (0.30). At the end of March, the Group's equity per share was EUR 4.99 (6.53 at the end of 2007). Changes in corporate structure There were no major changes in Elisa's corporate structure in January-March 2008. At the end of February Elisa acquired 51 per cent of Kuntokompassi Oy. This acquisition has no material impact on Elisa's profit or balance sheet. Mobile communication business +--------------------------------------------------------------+ | | 31 Mar 2008 | 31 Mar 2007 | 31 Dec 2007 | |--------------------+-------------+-------------+-------------| | Total number of | | | | | subscriptions | 2,695,000 | 2,534,600 | 2,657,400 | |--------------------+-------------+-------------+-------------| | - Network operator | | | | | in Finland | 2,367,600 | 2,235,100 | 2,334,600 | |--------------------+-------------+-------------+-------------| | - Subscriptions | | | | | in Estonia | 327,400 | 299,500 | 322,800 | +--------------------------------------------------------------+ +-----------------------------------------------------------------+ | User-specific indicators 1) | 1-3/2008 | 1-3/2007 | 1-12/2007 | |-------------------------------+----------+----------+-----------| | Average revenue/subscription, | | | | | €/month | 25.9 | 29.7 | 30.0 | |-------------------------------+----------+----------+-----------| | Annual churn, % | 15.6 | 14.2 | 12.2 | |-------------------------------+----------+----------+-----------| | Outgoing calls, min/ | | | | | subscription/month | 218 | 216 | 218 | |-------------------------------+----------+----------+-----------| | SMS, msg/subscription/month | 54 | 51 | 53 | |-------------------------------+----------+----------+-----------| | Non-voice services/revenue, % | 19 | 19 | 19 | +-----------------------------------------------------------------+ +-------------------------------------------------------------------+ | Indicators on network use 2) | 1-3/2008 | 1-3/2007 | 1-12/2007 | |---------------------------------+----------+----------+-----------| | Outgoing calls, million minutes | 1,465 | 1,361 | 5,661 | |---------------------------------+----------+----------+-----------| | SMS, million msg | 375 | 323 | 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 some 132,500 from a year ago. The increase was markedly due to the success of 3G service bundles, mobile broadband and prepaid subscriptions. The increase in subscription in the first quarter was approximately 33,000. The total number of subscriptions at the end of March was approximately 2.7 million. In January-March, the call minutes per subscription of Elisa's own service operators were at last year's level and the number of SMS messages increased by approximately 8 per cent 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 16 per cent. Mobile communication revenues decreased by 3 per cent given the 2007 revenue adjustment, lower interconnection fees and equipment sales. Revenue per subscription declined 13 per cent on the previous year to EUR 25.9 due to the 2007 revenue adjustment as well as lower interconnection fees as of the beginning of the year and lower roaming fees as of September 2007. The effect of the revenue correction on ARPU was approximately EUR 1.0 and the lower interconnection fee EUR 2.2 compared to the previous quarter's ARPU of EUR 30.1. As of 1 February 2008 the fee for calling from mobile telephone to 010 Company Number decreased to 8.21 cent/call + 16.90 cent/minute. The new lower fee also includes 020 or 030 Company Numbers that were transferred to Elisa. The mobile communication business of Elisa's Estonian subsidiary has been hampered by lower interconnection fees since December 2007. Revenue declined to EUR 24.2 million (26.0) and EBIT to EUR 5.4 million (5.7). However, EBITDA increased to EUR 8.6 million (8.3), and the number of subscriptions increased by 27,900 to 327,400 (299,500). Fixed network business +-----------------------------------------------------------------+ | Number of subscriptions | 31Mar 2008 | 31Mar 2007 | 31 Dec 2007 | |-------------------------+------------+------------+-------------| | Broadband subscriptions | 526,000 | 513,400 | 521,800 | |-------------------------+------------+------------+-------------| | ISDN channels | 52,100 | 72,400 | 70,800 | |-------------------------+------------+------------+-------------| | Cable TV subscriptions | 239,300 | 228,100 | 237,100 | |-------------------------+------------+------------+-------------| | Analogue and other | | | | | subscriptions | 474,700 | 516,000 | 471,500 | |-------------------------+------------+------------+-------------| | Subscriptions, total | 1,292,100 | 1,329,800 | 1,301,300 | +-----------------------------------------------------------------+ The growth of Elisa's broadband subscriptions continued in January-March 2008, representing an increase of approximately 13,000 subscriptions or 2.5 per cent on the previous year. The first quarter increase in broadband was approximately 4,200 subscriptions. Elisa continued as the Finnish broadband market leader. The number of traditional subscriptions continued to decrease as voice calls shifted to the mobile communication network and data transfers to broadband subscriptions. A portion of the ISDN subscriptions were reallocated to broadband subscriptions. On 1 February 2008, wholesale prices levied by telecommunications companies on each other declined by approximately one-third of the previous level on 1 February 2008. Elisa launched a full triple-play service called Kotitotaali, under Saunalahti brand, which offers customers high-speed broadband, television and fixed line telephony services with one single monthly fee. The World Wide Wippies community established in the spring of 2007 by the Finnish online community Wippies, expanded at a high rate. At the end of March, Wippies had over 10,000 World Wide Wippies networks in Finland and Sweden. Wippies also operates in Estonia and will expand to other countries. Personnel Elisa employed 3,008 people on average during January-March 2008 (3,435). Personnel by segments: +-----------------------------------------------------------------+ | | 31 Mar 2008 | 31 Mar 2007 | 31 Dec 2007 | |-----------------------+-------------+-------------+-------------| | Mobile communications | 1,257 | 1,325 | 1,252 | |-----------------------+-------------+-------------+-------------| | Fixed network | 1,678 | 1,995 | 1,727 | |-----------------------+-------------+-------------+-------------| | Corporate functions | 36 | 38 | 36 | |-----------------------+-------------+-------------+-------------| | Total | 2,971 | 3,358 | 3,015 | +-----------------------------------------------------------------+ Investments +-------------------------------------------------------------------+ | EUR million | 1-3/2008 | 1-3/2007 | 1-12/2007 | |---------------------------------+----------+----------+-----------| | Capital expenditures, of which | 38 | 45 | 206 | | - mobile communication business | 19 | 20 | 91 | | - GSM leasing liability | | | | | buy-backs | 2 | 0 | 2 | | - fixed network business | 17 | 25 | 113 | |---------------------------------+----------+----------+-----------| | Shares | 1 | 5 | 12 | | - of which achieved through an | | | | | exchange of shares | | | 5 | |---------------------------------+----------+----------+-----------| | Total | 39 | 49 | 218 | +-------------------------------------------------------------------+ The ADSL network upgrade was completed during the first quarter, which lowered the amount of investments in the fixed network business. Financial position Elisa's financial position and liquidity remained good. The January-March cash flow after investments amounted to EUR 66 million (18). A capital repayment of EUR 285 million was paid out in March, which is the key reason for changes in Elisa's financial indicators. Elisa drew down committed credit lines totalling EUR 220 million and increased outstanding commercial paper by EUR 26 million to finance the capital repayment. Financial key indicators: +--------------------------------------------------------------+ | EUR million | 31 Mar 2008 | 31 Mar 2007 | 31 Dec 2007 | |-------------------+-------------+-------------+--------------| | Net debt | 955 | 578 | 738 | |-------------------+-------------+-------------+--------------| | Gearing, % | 120.6 | 51.6 | 71.3 | |-------------------+-------------+-------------+--------------| | Equity ratio, % | 37.7 | 51.0 | 47.9 | |-------------------+-------------+-------------+--------------| | | | | | |-------------------+-------------+-------------+--------------| | | 1-3/2008 | 1-3/2007 | 1-12/2007 | |-------------------+-------------+-------------+--------------| | Cash flow | | | | | after investments | 66 | 18 | 114 | +--------------------------------------------------------------+ Valid financing arrangements: +-------------------------------------------------------------+ | EUR million | Maximum amount | In use on | | | | 31Mar 2008 | |-------------------------------+----------------+------------| | Committed credit limits | 300 | 220 | |-------------------------------+----------------+------------| | Commercial paper programme 1) | 250 | 118 | |-------------------------------+----------------+------------| | EMTN programme 2) | 1,000 | 666 | +-------------------------------------------------------------+ 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 At the end March 2008, Elisa's total number of shares was 166,307,586, all within one share series. The closing price was EUR 15.82 (21.69), representing a decline of 27.1 per cent in the first quarter 2008. Elisa's market capitalisation at the end of March 2008 was EUR 2,504 million (3,513). In March Elisa distributed a capital repayment of EUR 285 million or EUR 1.80 per share in accordance with the decision of the AGM. In January-March 2008, a total of 82.8 million Elisa shares (92.7) were traded on the Helsinki Stock Exchange for an aggregate of EUR 1,612 million (2,052). The trading volume was 49.8 per cent of the number of shares on the market (57.2). At the end of March 2008, Elisa held 8,049,976 shares (8,049,976 at the end of 2007), having a counter value of EUR 4.02 million and representing 4.84 per cent of the share capital and votes. Elisa's Annual General Meeting of shareholders On 18 March 2008, and in accordance with the proposal of the Board of Directors, Elisa's Annual General Meeting decided on the capital repayment to shareholders in the amount of EUR 1,80 per share on the basis of the 31 December 2007 balance sheet approved by the General Meeting. The Annual General Meeting confirmed the financial statements for the period in question. The members of the Board of Directors and the CEO were discharged from liability for 2007. The number of the members of the Board of Directors was confirmed at six (6), and members Risto Siilasmaa and Ossi Virolainen were re-elected to the Board of Directors and Mr Tomas Otto Hansson (Director, Novator), Mr Orri Hauksson (Director, Novator Finland), Mr Pertti Korhonen (CEO Elektrobit Corporation) and Ms Eira Palin-Lehtinen (prev. Director in Nordea Bank) were elected as new members. KPMG Oy Ab, authorised public accountants, with APA Pekka Pajamo as the responsible auditor, was appointed the company's auditor. The Board of Directors' authorisations The Annual General Meeting accepted the proposal to authorise the Board of Directors 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 Annual General Meeting approved the proposal of the Board of Directors to authorise the Board of Directors 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. The Annual General Meeting decided on the authorisation to acquire treasury shares. The amount of shares that may be purchased under the authorisation is maximum 15,000,000 treasury shares. The authorisation is valid until August 31, 2009. Elisa's Extraordinary General Meeting of shareholders on 21 January 2008 Elisa's Extraordinary General Meeting was concluded on 22 November 2007 at the request of Novator Finland Oy and held on 21 January 2008. The General Meeting turned down Novator's proposal of releasing the members of Elisa's Board of Directors from office. Significant legal issues Elisa has received from TeliaSonera a claim for refund of benefit by unjust enrichment of over EUR 3 million due to price difference based on TeliaSonera's own miscoding of the traffic. Substantial risks associated with Elisa's operations Risk management is part of Elisa's internal auditing system. It aims at ensuring 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 flows are 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 123 million at the end of March 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 Elisa will adjust its data roaming prices in foreign countries as of 1 May 2008. The mobile data connection prices will decrease 30-50 per cent depending on the area zone. The price cut applies to Internet, MSS and WAP connections. Outlook for 2008 Competition in the Finnish telecommunications market remains challenging, while the focus is increasingly on services. The use of mobile communications and 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. The extra implementation costs of the billing and CRM system will continue until the end of the year. This factor combined with the more challenging overall market situation is expected to effect the 2008 EBITDA and EBIT. However, 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 expenditures are 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. - 31.3.2008 Unaudited CONSOLIDATED INCOME STATEMENT 1-3 1-3 1-12 EUR million Note 2008 2007 2007 Revenue 1 367,0 378,4 1 568,4 Other operating income 0,9 1,2 21,0 Materials and services -158,5 -174,6 -707,0 Employee expenses -45,3 -44,0 -181,2 Other operating expenses -55,9 -46,3 -201,8 EBITDA 1 108,2 114,7 499,4 Depreciation and amortisation -51,0 -46,2 -197,4 EBIT 1 57,2 68,5 302,0 Financial income 6,8 3,3 27,9 Financial expense -11,6 -7,9 -44,7 Share of associated companies' profit 0,0 0,0 0,0 Profit before tax 52,4 63,9 285,2 Income taxes -12,2 -14,8 -64,9 Profit for the period 40,2 49,1 220,3 Attributable to: Equity holders of the parent 40,0 48,8 219,8 Minority interest 0,2 0,3 0,5 40,2 49,1 220,3 Earnings per share (EUR) Basic 0,25 0,30 1,38 Diluted 0,25 0,30 1,38 Average number of outstanding shares (1000 shares) Basic 158 258 161 941 159 417 Diluted 158 258 161 941 159 417 Elisa Corporation 1.1. - 31.3.2008 Unaudited CONSOLIDATED BALANCE SHEET 31.3. 31.12.EUR million 2008 2007 Non-current assets Property, plant and equipment 625,8 637,3 Goodwill 774,6 773,6 Other intangible assets 190,6 194,5 Investments in associated companies 0,1 0,1 Available-for-sale investments 31,4 30,9 Receivables 8,7 7,3 Deferred tax assets 30,4 31,7 1 661,6 1 675,4 Current assets Inventories 24,8 28,5 Trade and other receivables 383,2 454,8 Cash and cash equivalents 43,3 16,9 451,3 500,2 Total assets 2 112,9 2 175,6 Equity attributable to equity holders of the parent 789,9 1 033,4 Minority interest 2,2 2,0 Total equity 792,1 1 035,4 Non-current liabilities Deferred tax liabilities 32,6 34,9 Provisions 7,5 7,3 Interest-bearing debt 627,2 627,3 Other non-current liabilities 13,7 24,6 681,0 694,1 Current liabilities Trade and other payables 252,5 303,2 Tax liabilities 12,1 10,8 Provisions 4,1 4,1 Interest-bearing debt 371,1 128,0 639,8 446,1 Total equity and liabilities 2 112,9 2 175,6 Elisa Corporation 1.1. - 31.3.2008 Unaudited CONDENSED CONSOLIDATED CASH FLOW STATEMENT 1-3 1-3 1-12 EUR million 2008 2007 2007 Cash flow from operating activities Profit before tax 52,4 63,9 285,2 Adjustments Depreciation and amortisation 51,0 46,3 197,4 Other adjustments 4,8 3,2 3,6 55,8 49,5 201,0 Change in working capital Change in trade and other receivables 67,2 2,3 -116,0 Change in inventories 3,7 11,2 10,0 Change in trade and other payables -48,7 -57,9 6,5 22,2 -44,4 -99,5 Financial items, net -14,1 -0,3 -18,9 Taxes paid -11,8 -4,0 -82,2 Net cash flow from operating activities 104,5 64,7 285,6 Cash flow from investing activities Capital expenditure -37,4 -44,4 -203,7 Purchase of shares -0,9 -2,6 -6,2 Proceeds from asset disposal 0,1 0,8 38,2 Net cash used in investing activities -38,2 -46,2 -171,7 Cash flow before financing activities 66,3 18,5 113,9 Cash flow from financing activities Purchase of treasury shares -85,6 Proceeds from treasury shares 1,7 Proceeds from long-term borrowings 350,0 350,0 Repayment of long-term borrowings -44,2 Change in short-term borrowings 245,5 -25,0 67,0 Repayment of finance lease liabilities -1,2 -1,8 -6,7 Dividends paid and capital repayment -284,2 -220,3 -401,4 Net cash used in financing activities -39,9 102,9 -119,2 Change in cash and cash equivalents 26,4 121,4 -5,3 Cash and cash equivalents at beginning of period 16,9 22,2 22,2 Cash and cash equivalents at end of period 43,3 143,6 16,9 Elisa Corporation 1.1. - 31.3.2008 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 capital mium res reserves equity nings rest equity EUR million Balance at January 1, 2007 83,0 530,4 -81,3 422,1 353,4 4,7 1312,3 Available- for-sale investments 1,1 1,1 Items recognised directly in equity 1,1 1,1 Profit for the period 48,8 0,3 49,1 Total recognised income and expense for the period 1,1 48,8 0,3 50,2 Acquisitions of subsidiaries -0,1 -0,1 Dividends -242,9 -242,9 Share-based compensation 0,8 0,8 Balance at March 31, 2007 83,0 530,4 -81,3 423,2 160,1 4,9 1120,3 Balance at January 1, 2008 83,0 -165,8 403,9 535,7 176,6 2,0 1035,4 Available- for-sale investments 0,5 0,5 Items recognised directly in equity 0,5 0,5 Profit for the period 40,0 0,2 40,2 Total recognised income and expense for the period 0,5 40,0 0,2 40,7 Capital repayment -284,9 -284,9 Share-based compensation 0,9 0,9 Balance at March 31, 2008 83,0 -165,8 404,4 250,8 217,5 2,2 792,1 Elisa Corporation 1.1. - 31.3.2008 Unaudited NOTES BASIS OF PREPARATION The Interim report has been prepared in accordance with the IFRS recognition and measurement principles, although all requirements of IAS 34 standard have not been followed. 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 December 31, 2007. This Interim consolidated financial statements should be read in conjunction with the 2007 Consolidated financial statements. 1. BUSINESS SEGMENT INFORMATION 1-3/2008 Fixed Unallocated Group EUR million Mobile Network items Eliminations Total External sales 219,3 147,7 367,0 Inter-segment sales 3,7 8,4 -12,1 0,0 Revenue 223,0 156,1 -12,1 367,0 EBITDA 59,7 50,2 -1,7 108,2 EBIT 31,0 27,9 -1,7 57,2 Financial income and expense -4,8 -4,8 Share of associated companies' profit 0,0 0,0 Profit before tax 52,4 Investments 20,8 16,8 37,6 1-3/2007 Fixed Unallocated Group EUR million Mobile Network items Eliminations Total External sales 224,2 154,2 378,4 Inter-segment sales 4,8 8,5 -13,3 0,0 Revenue 229,0 162,7 -13,3 378,4 EBITDA 67,2 49,2 -1,7 114,7 EBIT 43,7 26,4 -1,6 68,5 Financial income and expense -4,6 -4,6 Share of associated companies' profit 0,0 0,0 Profit before tax 63,9 Investments 19,8 25,0 44,8 Elisa Corporation 1.1. - 31.3.2008 Unaudited 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 Investments 92,8 113,6 206,4 Elisa Corporation 1.1. - 31.3.2008 Unaudited 2. OPERATING LEASE COMMITMENTS 31.3. 31.12. EUR million 2008 2007 Due within 1 year 19,8 20,6 Due after 1 year but within 5 years 39,9 42,6 Due after 5 years 20,1 21,1 Total 79,8 84,3 3. CONTINGENT LIABILITIES 31.3. 31.12. EUR million 2008 2007 Pledges given Pledges given as surety 1,2 1,3 Guarantees given For others (* 39,4 42,3 Pledges and guarantees given, total 40,6 43,6 Other commitments Repurchase commitments 0,2 0,2 Contingent liabilities in QTE-arrangement Lease-leaseback agreement (QTE facility) Total value of the arrangement 128,4 137,9 Termination risk 11,4 14,5 *) 37,9 milj. euros is related to hedging of the guarantor bank in the QTE-arrangement 4. DERIVATIVE INSTRUMENTS 31.3. 31.12. EUR million 2008 2007 Interest rate swaps Nominal value 150,0 150,0 Fair value recognised in the balance sheet -0,6 -3,0 Credit default swaps (* Nominal value 41,7 45,6 Fair value recognised in the balance sheet 2,4 1,0 *) CDS is related to hedging of the guarantor bank in the QTE-arrangement Elisa Corporation 1.1. - 31.3.2008 Unaudited KEY FIGURES 1-3 1-3 1-12 EUR million 2008 2007 2007 Shareholders' equity per share, EUR 4,99 6,89 6,53 Interest bearing net debt 955,1 578,4 738,4 Gearing 120,6% 51,6% 71,3% Equity ratio 37,7% 51,0% 47,9% Return on investment (ROI) *) 17,2% 14,9% 18,3% Gross investments in fixed assets 37,6 44,8 206,4 of which finance lease investments 0,2 0,3 2,7 Gross investments as % of revenue 10,2% 11,8% 13,2% Investments in shares, 1,1 4,6 12,4 Average number of employees 3008 3435 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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