2010-07-16 07:30:00 CEST
2010-07-16 07:31:10 CEST
SÄÄNNELTY TIETO
Elisa - Interim report (Q1 and Q3)
ELISA'S INTERIM REPORT JANUARY - JUNE 2010
ELISA STOCK EXCHANGE RELEASE 16 JULY 2010 AT 8:30 am
Second quarter 2010
* Revenue was EUR 364 million (355)
* EBITDA was EUR 119 million (116), EBIT EUR 65 million (64)
* Profit before tax amounted to EUR 53 million (56)
* Earnings per share was EUR 0.26 (0.27)
* Cash flow after investments was EUR 70 million (89)
* The full year outlook is reiterated
* Revenue per subscription (ARPU) in the mobile business increased slightly to
EUR 22.4 (22.0 in the first quarter)
* Churn was 15.9 per cent (15.4 in the first quarter)
* The number of Elisa's mobile subscriptions increased by 118,000 during the
quarter, due, in particular, to the new 3G and 2G customers, as well as
mobile broadband
* The number of fixed broadband subscriptions decreased by 200 during the
previous quarter
* Net debt / EBITDA was 1.5 (1.5 at the end of 2009) and gearing 93 per cent
(80 at the end of 2009)
January - June 2010
* Revenue was EUR 717 million (706)
* EBITDA was EUR 234 million (231), EBIT EUR 126 million (126)
* Cash flow after investments was EUR 115 million (135)
Key indicators:
EUR million 4-6/2010 4-6/2009 1-6/2010 1-6/2009
--------------------------------------------------------------------------------
Revenue 364 355 717 706
EBITDA 119 116 234 231
EBIT 65 64 126 126
Profit before tax 53 56 63 109
Profit before tax excl. non-recurring items* 107
Earnings per share, EUR 0.26 0.27 0.31 0.53
EPS excl. non-recurring items, EUR* 0.52
Capital expenditures 47 36 86 70
--------------------------------------------------------------------------------
* Provision for possible guarantee expense
Financial position and cash flow:
EUR million 30.6.2010 30.6.2009 31.12.2009
--------------------------------------------------
Net debt 752 773 719
Net debt / EBITDA1) 1.5 1.6 1.5
Gearing ratio, % 93.2 89.2 79.8
Equity ratio, % 42.0 44.6 46.1
--------------------------------------------------
EUR million 4-6/2010 4-6/2009 1-6/2010 1-6/2009
---------------------------------------------------
Cash flow after
investments 70 89 115 135
---------------------------------------------------
1) (interest-bearing debt - financial assets) /
(four previous quarters' EBITDA exclusive of non-recurring items)
Additional information regarding the Key Performance Indicators is available at
www.elisa.com/investors, in the section: Financial info, Financial Statements &
Interim Reports: Elisa Quarterly Data.
CEO Veli-Matti Mattila:"New services continued to enjoy solid success, corporate customer business
improved
Elisa's revenue developed favourably during the second quarter. In the Consumer
Customer business, growth was mainly due to demand for new services and
increased mobile business. Decline in Corporate Customer business revenue ended,
which is a clear change compared to the previous quarters. EBITDA and cash flow
were strong.
The competitive situation continued to be challenging but remained stable. We
increased our total number of mobile subscriptions by 118,000 during the second
quarter. The mobile broadband market continued to show strong growth, while the
decrease in the number of fixed network broadband subscriptions remained steady.
The Consumer Customer business continued to grow with new services. Elisa Viihde
was expanded to 12 new locations. Its popularity was boosted by high-definition
TV broadcasts of the FIFA World Cup. We also rolled out the Elisa Kirja service,
which allows users to easily download audio books to a computer or phone, for
example.
Elisa continued implementing its strategy and purchased a majority stake in
Videra Oy, a leading video conferencing company in the Nordic countries. As a
result of the transaction, the market position of the Corporate Customer
business unit was strengthened as a supplier of ICT services. Collaboration
solutions provided by Elisa have proven to be successful in situations where
customers are searching for alternatives to improve productivity of operations
and flexibility at work.
During the second quarter, we continued to invest in the construction of the 3G
network, which enables mobile broadband, in nearly 100 new areas. We also
invested in user experience, and according to the most recent measurements,
Elisa's 3G network has the best field strengths, highest data speeds and least
disturbances. We were also the first to adopt new technology, the 4G network,
for pre-commercial use in Helsinki.
We continued serving our customers through predictive communications about the
functioning of the mobile phone network. In addition to the first real-time
service map in Finland, our customers can now choose to be notified by SMS of
the status of the network in their area.
Competition in the Finnish telecommunications market remains challenging. We are
determined to continue developing our operations to improve customer
satisfaction and productivity. In addition to operational improvement, a
broadening service offering and the capability to invest provide a good basis
for the future."
CEO Veli-Matti Mattila
ELISA
Vesa Sahivirta
Director, IR and Financial Communications
tel. +358 10 262 3035
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
INTERIM REPORT JANUARY - JUNE 2010
The interim report has been prepared in accordance with the IAS 34 standard,"Interim reports". The information presented in this interim report is
unaudited.
Market situation
Positive trends in the general economy have continued favourably, and the bottom
of the recession seems behind. However, general business activity has not yet
recovered to the level before the recession.
The competitive environment has been keen but stable in Finland. The mobile
subscription base and the use of data services have evolved favourably. The use
of services made available through 3G subscriptions has increased. Another
factor contributing to the growth has been the use of multiple terminal devices
for different purposes, mobile broadband services and prepaid subscriptions.
Churn in mobile subscriptions has increased slightly, and competition has been
mainly in services and campaigning.
The number and usage of traditional fixed network subscriptions decreased at the
same pace as in the previous quarters. 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 4 - 6/2010 4 - 6/2009 1 - 6/2010 1 - 6/2009
-------------------------------------------------------
Revenue 364 355 717 706
EBITDA* 119 116 234 231
EBITDA-% 32.6 32.8 32.7 32.8
EBIT* 65 64 126 126
EBIT-% 17.8 18.0 17.6 17.8
-------------------------------------------------------
* There were no non-recurring items in EBITDA or EBIT
Second quarter 2010
Revenue increased by 3 per cent on the previous year. Revenue grew in the
Consumer Customers mobile services and equipment sales, as well as in Corporate
Customers mobile and ICT services. Consumer Customers online services also
contributed positively to revenue growth. Development of traditional fixed
telecom services in both segments affected revenue negatively.
EBITDA increased slightly on the previous year. The increase in personnel costs
was compensated by efficiency measures in other operating expenses.
Financial income and expenses totalled EUR -12 million (-8). Financial expenses
increased due to a foreign exchange rate change related to USD denominated
provision of possible guarantee expense made in the first quarter 2010. Income
taxes in the income statement amounted to EUR -13 million (-14). Elisa's
earnings after taxes were EUR 40 million (42). The Group's earnings per share
(EPS) amounted to EUR 0.26 (0.27).
January - June 2010
Revenue increased by 2 per cent on last year mainly due to the same reasons as
in the second quarter.
EBITDA improved by 1 per cent on the previous year. The improvement was mainly
due to improved efficiency measures. During the first half of 2010, sales costs
increased due the strong growth in mobile subscriptions, but acquisition cost
per subscriber (SAC) remained at the same level.
Financial income and expenses totalled EUR -63 million (-16). Financial expenses
increased due to a EUR 45 million (USD 60 million) provision of possible
guarantee expense made in the first quarter 2010 and foreign exchange rate
change relating to it. Income taxes in the income statement amounted to EUR -15
million (-26). The tax decrease was mainly due to a tax asset of EUR 13 million
related to the above mentioned provision. Elisa's earnings after taxes were EUR
48 million (84). The Group's earnings per share (EPS) amounted to EUR 0.31
(0.53).
Financial position:
EUR million 30.6.2010 30.6.2009 31.12.2009
--------------------------------------------------
Net debt 752 773 719
Net debt / EBITDA1) 1.5 1.6 1.5
Gearing ratio, % 93.2 89.2 79.8
Equity ratio, % 42.0 44.6 46.1
--------------------------------------------------
EUR million 4 - 6/2010 4 - 6/2009 1 - 6/2010 1 - 6/2009
-----------------------------------------------------------
Cash flow after
investments 70 89 115 135
-----------------------------------------------------------
1) (interest-bearing debt - financial assets) /
(four previous quarters' EBITDA exclusive of non-recurring items)
Second quarter 2010
April-June cash flow after investments was EUR 70 million (89). The change was
mainly due to the smaller decrease in net working capital than in the previous
year and growth in capital expenditure. During the quarter, net debt decreased
from EUR 817 million to EUR 752 million.
January - June 2010
Cash flow after investments was EUR 115 million (135). The change was mainly due
to the smaller decrease in net working capital than in the previous year and
growth in capital expenditure.
Elisa's financial position and liquidity remained good. During the first half
2010, net debt increased to EUR 752 million mainly due to capital repayment of
EUR 143 million in March 2010. Cash and undrawn committed credit lines totalled
EUR 332 million at the end of the first half, and there are no major refinancing
needs expected before September 2011.
Changes in corporate structure
January - June 2010
In May, Elisa strengthened its position as an ICT player by acquiring a majority
holding in Videra Oy, a leading video conferencing company in the Nordic
countries. Videra became part of the Elisa Group through an arrangement where by
Elisa's holding will be 68.8 per cent. Videra continues its operations as
Elisa's subsidiary. Videra's annual revenue is approximately EUR 14 million, and
the acquisition price is a maximum EUR 13 million.
Consumer Customer business
EUR million 4 - 6/2010 4 - 6/2009 1 - 6/2010 1 - 6/2009
-------------------------------------------------------
Revenue 217 209 431 410
EBITDA 68 68 141 132
EBITDA-% 31.3 32.5 32.7 32.1
EBIT 37 38 79 71
CAPEX 27 19 51 37
-------------------------------------------------------
Second quarter 2010
Consumer Customer business revenue increased by 4 per cent, and EBITDA was at
the previous year's level. Revenue growth was strong in mobile services as a
result of good growth in subscriptions and equipment sales. There was also
growth in online services. Revenue development was negative in the fixed network
services. EBITDA was positively affected by revenue growth and efficiency
measures and negatively by increased sales costs and new service launches. Also,
due to the general economic situation, the Estonian business affected negatively
EBITDA.
January - June 2010
Revenue increased by 5 per cent and EBITDA by 7 per cent. The growth in revenue
was mainly attributable to the same reasons as in the second quarter. EBITDA was
positively affected by revenue growth and efficiency measures and negatively by
increased sales costs and new service launches. Also, the decrease in the
Estonian business due to the general economic situation had a negative effect on
EBITDA.
Corporate Customer business
EUR million 4 - 6/2010 4 - 6/2009 1 - 6/2010 1 - 6/2009
-------------------------------------------------------
Revenue 147 146 286 296
EBITDA 51 48 93 100
EBITDA-% 34.4 33,2 32.6 33,7
EBIT 28 26 47 54
CAPEX 20 17 35 33
-------------------------------------------------------
Second quarter 2010
Revenue increased by 1 per cent and EBITDA by 4 per cent. Usage of mobile
services and increased number of subscription increased revenue. ICT services
experienced also growth. Traditional fixed telecom services revenue was lower
than a year ago. The increase in EBITDA was attributable to the revenue growth
and efficiency measures.
January - June 2010
Revenue decreased by 3 per cent and EBITDA by 7 per cent. Usage of mobile
services and increased number of subscription increased revenue. ICT services
grew also. Traditional fixed telecom services revenue was lower than a year ago.
Decrease in EBITDA was attributable mainly to the decline in revenue.
Personnel
In January - June the average number of personnel at Elisa was 3,394 (3,143).
Personnel by segment at the end of the period:
30.6.2010 30.6.2009 31.12.2009
-----------------------------------------------------
Consumer Customers 2,157 1,596 1,975
Corporate Customers 1,381 1,725 1,356
Total 3,538 3,321 3,331
-----------------------------------------------------
Compared to the corresponding period last year, personnel growth mainly occurred
in call centres as a result of an increase in the customer service business, as
well as the Videra acquisition. The call centre headcount varies flexibly
according to customer demand and business activity.
Investments
EUR million 4 - 6/2010 4 - 6/2009 1 - 6/2010 1 - 6/2009
--------------------------------------------------------------------------
Capital expenditures, of which 47 36 86 70
- Consumer Customers 27 19 51 37
- Corporate Customers 20 17 35 33
--------------------------------------------------------------------------
Shares 11 1 11 6
--------------------------------------------------------------------------
Total 58 37 96 76
--------------------------------------------------------------------------
The main capital expenditures arose from the capacity and coverage increase of
the 3G network, as well as from customer equipment.
Financing arrangements and ratings
Valid financing arrangements:
Maximum amount In use on 30.6.2010
EUR million
---------------------------------------------------------------
Committed credit limits 300 0
Commercial paper programme¹) 250 110
EMTN programme²) 1,000 625
---------------------------------------------------------------
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
----------------------------------------
The Group's cash and undrawn committed credit lines totalled EUR 332 million at
30 June 2010 (EUR 331 million at the end of 2009). There are no major
refinancing needs expected before the year 2011.
Share
Trading of shares 4 - 6/2010 4 - 6/2009 1 - 6/2010 1 - 6/2009
-------------------------------------------------------------------
Shares traded, millions 34.4 57.2 72.7 106.4
Volume, EUR million 488.3 602.3 1,091.9 1,156.6
% of shares 21 34 44 64
-------------------------------------------------------------------
Shares and market values 30.6.2010 30.6.2009 31.12.2009
------------------------------------------------------------
Total number of shares 166,307,586 166,307,586 166,307,586
Treasury shares 10,534,506 10,688,629 10,688,629
Outstanding shares 155,773,080 155,618,957 155,618,957
Closing price, EUR 14.22 11.73 15.96
Market capitalisation,
EUR million 2,215 1,825 2,484
Treasury shares, % 6.33 6.43 6.43
------------------------------------------------------------
In March, Elisa distributed a capital repayment of EUR 0.92 per share, totalling
EUR 143 million, in accordance with the decision of the shareholders at the
Annual General Meeting.
Elisa transferred on 1 March 2010 156,633 Elisa shares to persons involved in
the 2009 - 2011 share-based incentive plan. On 1 June 2010, 2,510 shares given
under the share-based incentive plan were returned to company.
On 21 May 2010, Elisa received a notice that BlackRock Inc.'s proportion of the
total number of Elisa shares and voting rights has decreased below 5 per cent
(1/20) and was 4.94 per cent (8.2 million shares).
The Board of Directors' authorisations
On 18 March 2010, the shareholders at the Annual General Meeting authorised the
Board of Directors to donate a maximum of EUR 700,000 to support activities of
Finnish universities and colleges during 2010.
The shareholders at the Annual General Meeting accepted the proposal of the
Board of Directors to resolve to distribute funds from the unrestricted equity
to the maximum amount of EUR 100 million. The authorisation is effective until
the beginning of the following Annual General Meeting.
The shareholders at the Annual General Meeting decided on the authorisation to
repurchase or accept as pledge the company's own shares. The repurchase may be
directed. The amount of shares under this authorisation is 10 million shares at
maximum. The authorisation is effective until 30 June 2011.
The shareholders at 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 entitled to shares. The issue may be directed. The authorisation is
effective until 30 June 2014. A maximum aggregate of 15 million of the company's
shares can be issued under the authorisation.
Significant legal issues
In May, the Finnish Communications Regulatory Authority (FICORA) has issued a
decision on pricing local loop access. Ficora decided that the monthly pricing
for local loop and switching charges are not in accordance with the
Communications Market Act. Elisa must reduce its pricing to a level based on
Ficora's decision within three months. Elisa has appealed against the Ficora's
decision and has looked for interruption of the enforcement from the Supreme
Administrative Court.
Elisa made in the first quarter 2010 a one-off provision relating to guarantee
given by Elisa to the arranger bank on a CDO portfolio in 2007. The extent and
scope of Elisa's obligations and liability to the arranger bank under the
guarantee and related transaction documents are presently in dispute and the
subject of contested court proceedings.
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, good demand for
communication services is expected to continue also during the 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 can be
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. Estonia will join
the European monetary union as of 1 January 2011 with the current exchange rate,
which removes this exchange risk.
The provision for possible guarantee expense, USD 60 million, is denominated in
US Dollars, carrying exchange rate risk.
The objective of liquidity risk management is to ensure the Group's financing in
all circumstances. 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.
A detailed description of the financial risk management can be found in note 34
of Elisa's 2009 Consolidated Financial Statements.
Events after the financial period
There have not been any significant events following the reporting period.
Outlook for 2010
Positive trends of the general economy have continued favourably, and the bottom
of the recession seems behind. However, the general business activity has not
yet recovered to the level before the recession. This positive development is
expected to continue further. Risks are related to nervousness of the financial
markets and its possible impacts on the general economic development.
Competition in the Finnish telecommunications market remains challenging.
Outlook for revenue, EBITDA and capital expenditure is reiterated. 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.
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.
BOARD OF DIRECTORS
Elisa Corporation
1.1. - 30.6.2010
Unaudited
CONSOLIDATED INCOME STATEMENT
--------------------------------------------------------------------------
4-6 4-6 1-6 1-6 1-12
EUR million Note 2010 2009 2010 2009 2009
--------------------------------------------------------------------------
Revenue 1 364,3 354,9 717,3 705,9 1430,4
Other operating income 1,0 1,1 1,8 2,0 4,2
Materials and services -148,3 -143,6 -288,5 -289,3 -576,3
Employee expenses -52,3 -47,6 -107,1 -94,5 -188,8
Other operating expenses -46,2 -48,4 -89,3 -92,8 -185,6
--------------------------------------------------------------------------
EBITDA 1 118,5 116,4 234,2 231,3 483,9
Depreciation and
amortisation 3 -53,8 -52,5 -108,2 -105,7 -216,4
--------------------------------------------------------------------------
EBIT 1 64,7 63,9 126,0 125,6 267,5
Financial income 2,9 2,7 5,2 6,1 10,5
Financial expense -14,7 -10,8 -68,6 -22,5 -43,1
Share of associated
companies' profit 0,0 0,0 0,0 0,0 0,0
--------------------------------------------------------------------------
Profit before tax 52,9 55,8 62,6 109,2 234,9
Income taxes -13,3 -13,5 -14,7 -25,7 -57,9
--------------------------------------------------------------------------
Profit for the period 39,6 42,3 47,9 83,5 177,0
Attributable to:
Owners of the parent 39,5 42,1 47,6 83,1 176,3
Non-controlling
interests 0,1 0,2 0,3 0,4 0,7
--------------------------------------------------------------------------
39,6 42,3 47,9 83,5 177,0
Earnings per share (EUR)
Basic 0,26 0,27 0,31 0,53 1,13
Diluted 0,26 0,27 0,31 0,53 1,13
Average number of
outstanding shares
(1000 shares)
Basic 155 775 155 619 155 723 155 619 155 619
Diluted 156 005 155 619 155 953 155 619 155 809
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
--------------------------------------------------------------------------
Profit for the period 39,6 42,3 47,9 83,5 177,0
Other comprehensive
income, net of tax:
Available-for-sale
investments -1,9 1,0 -0,6 -0,1 1,2
--------------------------------------------------------------------------
Total comprehensive
income 37,7 43,3 47,3 83,4 178,2
Total comprehensive income
attributable to:
Owners of the parent 37,6 43,1 47,0 83,0 177,5
Non-controlling
interests 0,1 0,2 0,3 0,4 0,7
--------------------------------------------------------------------------
37,7 43,3 47,3 83,4 178,2
Elisa Corporation
1.1. - 30.6.2010
Unaudited
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
----------------------------------------------------------------
30.6. 31.12.
EUR million Note 2010 2009
----------------------------------------------------------------
Non-current assets
Property, plant and equipment 3 608,4 617,9
Goodwill 3 787,8 782,0
Other intangible assets 3 130,8 148,2
Investments in associated companies 0,1 0,1
Available-for-sale investments 30,1 30,7
Receivables 19,0 19,4
Deferred tax assets 34,0 25,7
----------------------------------------------------------------
1610,2 1624,0
Current assets
Inventories 4 31,0 31,2
Trade and other receivables 262,4 278,4
Cash and cash equivalents 31,6 31,0
----------------------------------------------------------------
325,0 340,6
Total assets 1935,2 1964,6
Equity attributable to owners of the parent 5 804,2 899,2
Non-controlling interests 3,3 0,8
----------------------------------------------------------------
Total equity 807,5 900,0
Non-current liabilities
Deferred tax liabilities 23,3 26,6
Pension obligations 0,7 0,8
Provisions 7 32,7 3,7
Interest-bearing debt 6 669,2 592,3
Other non-current liabilities 13,0 13,4
----------------------------------------------------------------
738,9 636,8
Current liabilities
Trade and other payables 250,8 263,3
Tax liabilities 2,1 6,4
Provisions 7 21,0 0,9
Interest-bearing debt 6 114,9 157,2
----------------------------------------------------------------
388,8 427,8
Total equity and liabilities 1935,2 1964,6
Elisa Corporation
1.1. - 30.6.2010
Unaudited
CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS
-----------------------------------------------------------------
1-6 1-6 1-12
EUR million 2010 2009 2009
-----------------------------------------------------------------
Cash flow from operating activities
Profit before tax 62,6 109,2 234,9
Adjustments
Depreciation and amortisation 108,2 105,7 216,4
Other adjustments 64,5 15,5 29,5
-----------------------------------------------------------------
172,7 121,2 245,9
Change in working capital
Change in trade and other receivables 20,9 51,0 36,3
Change in inventories 1,3 -0,5 -9,4
Change in trade and other payables -6,3 -16,3 10,1
-----------------------------------------------------------------
15,9 34,2 37,0
Financial items, net -15,3 -17,0 -29,6
Taxes paid -31,3 -34,5 -57,2
-----------------------------------------------------------------
Net cash flow from operating activities 204,6 213,1 431,0
Cash flow from investing activities
Capital expenditure -84,7 -69,6 -170,3
Purchase of shares -5,2 -9,3 -9,7
Proceeds from asset disposal 0,5 0,8 0,9
-----------------------------------------------------------------
Net cash used in investing activities -89,4 -78,1 -179,1
Cash flow before financing activities 115,2 135,0 251,9
Cash flow from financing activities
Proceeds from long-term borrowings 75,0
Repayment of long-term borrowings -80,2 -36,0 -36,1
Change in short-term borrowings 35,9 -6,9 -56,6
Repayment of finance lease liabilities -1,8 -2,4 -4,5
Dividends paid and capital repayment -143,5 -93,9 -156,7
-----------------------------------------------------------------
Net cash used in financing activities -114,6 -139,2 -253,9
Change in cash and cash equivalents 0,6 -4,2 -2,0
Cash and cash equivalents at beginning of
period 31,0 33,0 33,0
-----------------------------------------------------------------
Cash and cash equivalents at end of period 31,6 28,8 31,0
Elisa
Corporation
1.1. -
30.6.2010
Unaudited
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,
2009 83,0 -202,0 393,5 250,8 348,1 1,6 875,0
--------------------------------------------------------------------------------
Dividends -93,4 -0,8 -94,2
Share-based
compensation 1,8 1,8
Total
comprehensive
income -0,1 83,1 0,4 83,4
--------------------------------------------------------------------------------
Balance at
June 30,
2009 83,0 -202,0 393,4 250,8 339,6 1,2 866,0
EUR million
--------------------------------------------------------------------------------
Balance at
January 1,
2010 83,0 -202,0 394,7 188,6 434,9 0,8 900,0
--------------------------------------------------------------------------------
Dividends and
capital
repayment -143,3 -0,5 -143,8
Share-based
compensation 3,1 -0,7 2,4
Other changes -1,1 2,7 1,6
Total
comprehensive
income -0,6 47,6 0,3 47,3
--------------------------------------------------------------------------------
Balance at
June 30,
2010 83,0 -198,9 394,1 45,3 480,7 3,3 807,5
Elisa Corporation
1.1. - 30.6.2010
Unaudited
NOTES
ACCOUNTING PRINCIPLES
The Interim consolidated
financial statements are
in compliance with IAS 34"Interim Financial
Reporting". The information
has been prepared in
accordance with
International Financial
Reporting Standards (IFRS)
effective at the time of
preparation and adopted for
use by European Union. Apart
from the changes in
accounting principles stated
below, the accounting
principles applied in the
interim report are the
same as in the financial
statements at December
31, 2009.
Changes in the accounting
principles
The Group adopted the
following standards,
amendments to standards
and interpretations as from
1 January 2010 onward:
- Revised IFRS 3 Business Combinations. The revision enables
valuation of minority interest and goodwill at fair value. The
method to be used is selected on a case-by-case basis. In
case of successive acquisitions, the previously acquired share
of ownership is revaluated at the fair value on the acquisition date,
and this influences the recognized goodwill. Changes in contingent
purchase price and cost related to the acquisition are recognized
through profit or loss.
- Revised IAS 27 Consolidated and Separate Financial Statements.
The manner in which increases and decreases in the shares of
ownership of the Group's subsidiaries are handled is changed. Losses
of the subsidiaries are allocated as minority interest, including the
share exceeding the investment made by the subsidiary in question.
Following newly adopted standards and interpretations have not
had any effect on interim financial statements:
- Revised IFRS 2 Share-based
Payment
- Revised IAS 39 Financial
Instruments: Recognition and
Measurement
- IFRIC 17 Distributions of
Non-cash Assets to Owners
- IFRIC 18 Transfers of
Assets from customers
1. SEGMENT INFORMATION
4-6/2010
Consumer Corporate Unallocated Group
EUR million Customers Customers Items Total
--------------------------------------------------------------------------------
Revenue 217,2 147,1 364,3
EBITDA 67,9 50,6 118,5
Depreciation and amortisation -31,1 -22,7 -53,8
EBIT 36,8 27,9 64,7
Financial income 2,9 2,9
Financial expense -14,7 -14,7
Share of associated
companies' profit 0,0 0,0
Profit before tax 52,9
Investments 27,2 18,8 46,0
4-6/2009
Consumer Unallocated Group
EUR million Customers Corporate Customers Items Total
--------------------------------------------------------------------------------
Revenue 208,7 146,2 354,9
EBITDA 67,9 48,5 116,4
Depreciation and amortisation -30,1 -22,4 -52,5
EBIT 37,8 26,1 63,9
Financial income 2,7 2,7
Financial expense -10,8 -10,8
Share of associated
companies' profit 0,0 0,0
Profit before tax 55,8
Investments 18,9 17,4 36,3
Elisa Corporation
1.1. - 30.6.2010
Unaudited
1-6/2010
Consumer Corporate Unallocated Group
EUR million Customers Customers Items Total
----------------------------------------------------------------------------
Revenue 431,5 285,8 717,3
EBITDA 141,2 93,0 234,2
Depreciation and amortisation -62,0 -46,2 -108,2
EBIT 79,2 46,8 126,0
Financial income 5,2 5,2
Financial expense -68,6 -68,6
Share of associated
companies' profit 0,0 0,0
Profit before tax 62,6
Investments 50,7 34,0 84,7
1-6/2009
Consumer Corporate Unallocated Group
EUR million Customers Customers Items Total
----------------------------------------------------------------------------
Revenue 410,2 295,7 705,9
EBITDA 131,7 99,6 231,3
Depreciation and amortisation -60,5 -45,2 -105,7
EBIT 71,2 54,4 125,6
Financial income 6,1 6,1
Financial expense -22,5 -22,5
Share of associated
companies' profit 0,0 0,0
Profit before tax 109,2
Investments 37,2 33,0 70,2
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
Elisa Corporation
1.1. - 30.6.2010
Unaudited
2. ACQUISITIONS
Acquisition of Videra Oy and Arediv Oy 2010
Elisa acquired on 13 April 2010 a total of 68.8 per cent
of Videra Oy's share capital through a directed share
issue, purchase of shares from management and
by acquiring 62 per cent of Arediv Oy's share capital.
According Preliminary Purchase Price Allocation, given
the purchase price of EUR 10.7 million, intangible
assets allocated to customer relationships is
EUR 3.8 million. This is amortised in four years.
Goodwill is EUR 4.2 million. Elisa executed its
strategy of strengthening its position in the ICT
services by buying a majority share in a leading
Nordic video-conference operator Videra.
Combining the two strong players creates
opportunities to take advantage of interactive
communication solutions, among others, to
develop customer service in both the private and
public sectors in new ways.
Videra has been consolidated starting 1.6.2010. Acquisition
has no material impact on the company's financial year
revenue, and therefore no separate pro forma figures are
are given.
Purchase price allocation
EUR million
---------------------------------------------------------
Total cost of acquisition 10,7
Fair value of net assets acquired 6,5
---------------------------------------------------------
Goodwill 4,2
Book values
Recognised before
Analysis of net assets acquired fair values consolidation
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Intangible assets 3,8 0,0
Tangible assets 0,2 0,2
Inventories 0,8 0,8
Receivables 5,2 5,2
Cash and cash equivalents 4,2 4,2
Liabilities -7,6 -6,6
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Net assets acquired 6,5 3,7
Effects of acquisitions
on cash flow
Cash paid -10,7
Cash and cash equivalents
of the acquired subsidiary 6,1
---------------------------------------------------------
Cash flow -4,6
Other acquisitions
Additional purchase price relating to previous year's acquisitions
resulted in goodwill of EUR 1,5 million.
Elisa Corporation
1.1. - 30.6.2010
Unaudited
3. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS
Property Other
plant and intangible
EUR million equipment Goodwill assets
---------------------------------------------------------------------------
Cost, 1 January 2010 2464,4 782,0 404,3
Additions 71,8 1,5 12,3
Acquisitions of subsidiaries 0,3 4,2 3,8
Disposals -4,6 -6,6
Reclassifications 0,3 -0,3
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30 June 2010 2532,2 787,8 413,5
Accumulated depreciation/
amortisation, 1 January 2010 1846,5 256,1
Depreciation for the period 81,6 26,6
Disposals and reclassifications -4,4
---------------------------------------------------------------------------
30 June 2010 1923,7 282,7
Net carrying amounts:
1 January 2010 617,9 782,0 148,2
30 June 2010 608,4 787,8 130,8
---------------------------------------------------------------------------
Commitments to purchase property, plant and equipment
and intangible assets amounts to EUR 49,4 million as at
30 June 2010.
4. INVENTORIES
Write-downs of inventories amounting to EUR 0,8 million
were recognised at 30 June, 2010 (EUR 0,8 million,
31 December, 2009)
5. EQUITY
Treasury shares
Shares Nominal Holding, % of
pcs value EUR shares and votes
---------------------------------------------------------------------------
Held by the Group, 31 December 2009 10 688 629
Payment of incentive plan 2009 -156 633
Repayment of incentive plan 2009 2 510
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Treasury shares held by the Group,
30 June 2010 10 534 506 5 259 602 6,33 %
Capital repayment
On 18 March, 2010 Elisa's Annual General Meeting
decided of a dividend of 0,92 euros per share.
The total dividend amounts to EUR 143,3 million and
payment started on 31 March, 2010.
Elisa Corporation
1.1. - 30.6.2010
Unaudited
6. ISSUANCES AND REPAYMENTS OF
DEBT
Bonds Issued
Nominal
Nominal Book interest Effective Maturity
EUR million value value rate interest date
--------------------------------------------------------------------------------
EMTN -program
2001/ EUR 1,000
million
I/2010 75,0 75,0 fixed 3,000
% 3,006 % 22.3.2013
Repayments of Bonds
Nominal
Nominal Book interest Effective Maturit
EUR million value value rate interest date
--------------------------------------------------------------------------------
EMTN programme
2001/EUR 1,000
million
I/2007 50,0 50,0 3-month
euribor +
0,22% 0,940 % 3.3.2010
--------------------------------------------------------------------------------
Total of repayments 50,0 50,0
--------------------------------------------------------------------------------
The unused amount of EUR 1,000 million
EMTN program is EUR 375 million as at
30 June 2010.
7. PROVISIONS
Guarantee
Restructuring provision
EUR million provision Other (CDO) Total
-----------------------------------------------------------------------
1 January 2010 1,6 3,0 4,6
Increase in
provisions 0,9 0,1 48,9 49,9
Used provisions -0,4 -0,4 -0,8
-----------------------------------------------------------------------
30 June 2010 2,1 2,7 48,9 53,7
8. RELATED PARTY
TRANSACTIONS
Elisa Group's related parties include subsidiaries,
associates and key management. Key management
consists of Elisa's Board of Directors, the CEO and
the Executive Board.
Changes in subsidiary relationships during the
period are as follows:
Arediv Oy aquired 62 %
Videra Oy aquired 69 %
Related party transactions with
associated companies 1-6/2010
------------------------------------------------
Sales 0,0
Purchases 0,3
------------------------------------------------
Management remuneration will be announced in
Annual financial statements.
Elisa Corporation
1.1. - 30.6.2010
Unaudited
9. OPERATING LEASE COMMITMENTS
30.6. 31.12.
EUR million 2010 2009
-------------------------------------------------------------------------------
Due within 1 year 19,9 19,2
Due after 1 year but within 5 years 34,2 34,8
Due after 5 years 11,0 13,5
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Total 65,1 67,5
10. CONTINGENT LIABILITIES
30.6. 31.12.
EUR million 2010 2009
-------------------------------------------------------------------------------
Pledges given
Pledges given as surety 0,8 0,7
Guarantees given
For others (* 0,5 42,4
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Mortgages, pledges and guarantees total 1,3 43,1
*) 31.12.2009 EUR 41.6 million was related to the guarantee given
on a CDO portfolio. The guarantee was posted to Balance Sheet as
a provision at 31.3.2010 and the provision amounted EUR 48.9
million at 30.6.2010.
11. DERIVATIVE INSTRUMENTS
30.6. 31.12.
EUR million 2010 2009
-------------------------------------------------------------------------------
Interest rate swaps
Nominal value 150,0 150,0
Fair value recognised in the balance
sheet 1,3 1,5
Credit default swaps (*
Nominal value 51,2 44,0
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*) CDS is related to hedging of the guarantor bank
in the QTE-arrangement. In 2008 Elisa wrote down
the fair value of the CDS agreement.
12. EVENTS AFTER THE BALANCE SHEET
DATE
No significant events have taken place
after the balance sheet date.
Elisa Corporation
1.1. - 30.6.2010
Unaudited
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KEY FIGURES
-----------------------------------------------------------------------
1-6 1-6 1-12
EUR million 2010 2009 2009
-----------------------------------------------------------------------
Shareholders' equity per share, EUR 5,16 5,56 5,78
Interest bearing net debt 752,4 772,6 718,5
Gearing 93,2% 89,2% 79,8%
Equity ratio 42,0% 44,6% 46,1%
Return on investment (ROI) *) 12,6% 17,0% 16,0 %
Gross investments in fixed assets 85,6 70,2 171,4
of which finance lease investments 0,9 0,6 1,1
Gross investments as % of revenue 11,9% 10,0% 11,9%
Investments in shares 10,8 6,2 6,3
Average number of employees 3 394 3143 3 216
*) 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
[HUG#1432181]
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