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2009-07-17 07:30:00 CEST 2009-07-17 07:31:52 CEST REGULATED INFORMATION Elisa - Interim report (Q1 and Q3)ELISA'S INTERIM REPORT JANUARY-JUNE 2009Second quarter 2009 Revenue was EUR 355 million (372) EBITDA excluding non-recurring items was EUR 116 million (109), EBIT EUR 64 million (57) Profit before tax amounted to EUR 56 million (38) Earnings per share was EUR 0.27 (0.20) Cash flow after investments was strong, EUR 89 million (59) The full year outlook is reiterated Revenue per subscription (ARPU) in the mobile business was at the previous quarter's level EUR 24.0 (24.1 in the first quarter) Churn was 14.7 per cent (14.0 in the first quarter) The number of Elisa's mobile subscriptions increased by 127 000 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 13,600 on the previous quarter Net debt / EBITDA was 1.6 (1.7 at the end of 2008) and gearing 89% (93 at the end of 2008) January-June 2009 Revenue was EUR 706 million (739) EBITDA was EUR 231 million (213), EBIT EUR 126 million (110) EBITDA excluding non-recurring items was EUR 231 million (220), EBIT EUR 126 million (117) Cash flow after investments was EUR 135 million (125) Key indicators: EUR million 4-6/2009 4-6/2008 1-6/2009 1-6/2008 Revenue 355 372 706 739 EBITDA 116 105 231 213 EBITDA excluding non-recurring items 116 109 231 220 EBIT 64 53 126 110 Profit before tax 56 38 109 90 Earnings per share, EUR 0.27 0.20 0.53 0.45 Capital expenditures 36 41 70 78 Financial position and cash flow: EUR million 30.6.2009 30.6.2008 31.12.2008 Net debt 773 898 812 Net debt / EBITDA 1) 1.6 1.9 1.7 Gearing ratio, % 89.2 109.3 92.8 Equity ratio, % 44.6 40.4 43.3 +-------------------------------------------------------------+ | EUR million | 4-6/2009 | 4-6/2008 | 1-6/2009 | 1-6/2008 | |-----------------+----------+----------+----------+----------| | Cash flow after | | | | | | investments | 89 | 59 | 135 | 125 | +-------------------------------------------------------------+ 1) (interest-bearing debt - financial assets) / (4 previous quarters' EBITDA exclusive of non-recurring items) Additional information regarding the Key Performance Indicators is available on www.elisa.com/investors, in the section: Financial info, Financial Statements & Interim Reports: Elisa Quarterly Data. CEO Veli-Matti Mattila:"Elisa's result good despite economic downturn Elisa's profitability continued to be strong. Continuous improvement of productivity and service quality have created prerequisites for a good result despite the general economic downturn. In the second quarter, cash flow also continued to be strong. Revenue fell slightly from the previous year, mainly as a result of lower equipment sales volume as well as decreased interconnection fees and roaming revenue. The competitive situation remained challenging. In the consumer business, we continued to develop an attractive service and product offering as well as to improve productivity. We launched the Elisa Viihde service - a modern, versatile digital IPTV service. Elisa was the first in Finland to launch a mobile broadband prepaid subscription, which has been well received. Elisa has also managed to strengthen its position in the corporate customer business. We continued to build our 3G network, which has the best coverage in Finland. The network currently covers an area of almost five million inhabitants. Through our cooperation partners we can also offer excellent global mobile coverage to our customers. Together with a strong growth in subscriptions, our mobile network consolidates our position as a 3G market leader. We continue determinedly to implement our strategy by developing the productivity of our operations and by offering our customers more services relevant to them. Our competitiveness in cost and investment efficiency, as well as good cash flow allows us to continue implementing this strategy. However, the general economic downturn will continue to affect our business to some extent. We believe that with firm improvement of productivity and expanding service offering, we can meet these challenges and that our business will continue to develop favourably in the years to come." ELISA 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: NASDAQ OMX Helsinki Principal media www.elisa.com INTERIM REPORT JANUARY-JUNE 2009 The interim report has been prepared in accordance with the IAS 34 standard, "Interim reports". The information presented in this interim report is unaudited. Market situation The general economic downturn has so far 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 to some extent. It is still uncertain how much the possible deterioration of the corporate business environment will impact 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 services made available through 3G subscriptions has also increased. Another factor contributing to the growth has been the use of multiple terminal devices for different purposes and 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 pace as in 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 4-6/2009 4-6/2008 1-6/2009 1-6/2008 Revenue 355 372 706 739 EBITDA 116 105 231 213 EBITDA-% 32.8 28.2 32.8 28.8 EBITDA excl. non-recurring items 116 109 231 220 EBITDA-% excl. non-recurring items 32.8 29.3 32.8 29.7 EBIT 64 53 126 110 EBIT excl. non-recurring items 64 57 126 117 EBIT-% excl. non-recurring items 18.0 15.4 17.8 15.9 Second quarter 2009 Revenue decreased by 4 per cent 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 11 per cent and EBITDA excluding non-recurring items by 7 per cent on the previous year. The improvement was mainly due to improved efficiency measures. The total OPEX decreased by EUR 28million. 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 -8 million (-15). The decrease in financial expenses was mainly due to mark-to-market valuation of the interest rate swap (negative effect in 2008), decrease in net debt and lower interest rates. Income taxes in the income statement amounted to EUR -14 million (-6). Elisa's earnings after taxes were EUR 42 million (32). The Group's earnings per share (EPS) amounted to EUR 0.27 (0.20). January-June 2009 Elisa's revenue decreased by 4 per cent on last year mainly given the same reasons as in the second quarter. EBITDA improved by 9 per cent and EBITDA excluding non-recurring items by 5 per cent on the previous year. The improvement was mainly due to improved efficiency measures. The total OPEX decreased by EUR 51 million. In 2008, extra implementation costs of the billing and CRM system, as well as revenue correction affected EBITDA negatively. During the first half of 2009, sales costs increased due the strong growth in mobile subscriptions. Financial income and expenses totalled EUR -16 million (-20). The decrease in financial expenses was mainly attributed to mark-to-market valuation of the interest rate swap (negative effect in 2008), a decrease in net debt and lower interest rates. Income taxes in the income statement amounted to EUR -26 million (-18). Elisa's earnings after taxes were EUR 84 million (72). The Group's earnings per share (EPS) amounted to EUR 0.53 (0.45). Financial position: EUR million 30.6.2009 30.6.2008 31.12.2008 Net debt 773 898 812 Net debt / EBITDA 1) 1.6 1.9 1.7 Gearing ratio, % 89.2 109.3 92.8 Equity ratio, % 44.6 40.4 43.3 +-------------------------------------------------------------+ | EUR million | 4-6/2009 | 4-6/2008 | 1-6/2009 | 1-6/2008 | |-----------------+----------+----------+----------+----------| | Cash flow after | | | | | | investments | 89 | 59 | 135 | 125 | +-------------------------------------------------------------+ 1) (interest-bearing debt - financial assets) / (4 previous quarters' EBITDA exclusive of non-recurring items) Second quarter 2009 Elisa's financial position and liquidity remained good. Elisa's net debt decreased from EUR 898 million to EUR 773 million. April - June cash flow after investments increased by 51 per cent to EUR 89 million mainly due to the improved result, the decrease in capital expenditure and investment in shares. January-June 2009 Cash flow after investments increased by 8 per cent to EUR 135 million (125) on the previous year mainly due to the improved result and the decrease in capital expenditure. Changes in corporate structure January-June 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 major changes in the corporate structure in the second quarter 2009. Consumer Customer business EUR million 4-6/2009 4-6/2008 1-6/2009 1-6/2008 Revenue 209 218 410 439 EBITDA 68 56 132 123 EBITDA-% 32.5 25.8 32.1 28.0 EBIT 38 27 71 64 CAPEX 19 22 37 43 Second quarter 2009 The Consumer Customer business revenue was EUR 209 million (218) and EBITDA EUR 68 million (56). The decrease in revenue was mainly a result of lower equipment sales volumes, lower interconnection fees both in Finland and Estonia and a decrease in the traditional fixed business. EBITDA was positively affected by productivity improvement measures. Total OPEX decreased by EUR 22 million. The decrease in the Estonian business due to the general economic downturn had a negative effect on EBITDA. January-June 2009 The Consumer Customer business revenue was EUR 410 million (439) and EBITDA EUR 132 million (123). The decrease in revenue was mainly attributable to the to same reasons as in the second quarter. EBITDA was positively affected by productivity improvement measures and interconnection costs. Total OPEX decreased by EUR 38 million. The decrease in the Estonian business due to the general economic downturn had a negative effect on EBITDA. Corporate Customer business EUR million 4-6/2009 4-6/2008 1-6/2009 1-6/2008 Revenue 146 153 296 299 EBITDA 48 48 100 90 EBITDA-% 33,2 31,6 33,7 30,1 EBIT 26 26 54 47 CAPEX 17 19 33 35 Second quarter 2009 Corporate Customers business revenue was EUR 146 million (153) and EBITDA EUR 48 million (48). The decrease in revenue was mainly due to lower interconnection fees, a decrease in mobile revenue and a decrease in the traditional fixed business. Growth in ICT services increased revenue. EBITDA was positively affected by productivity improvement measures and negatively by decreased revenue. Total OPEX decreased by EUR 7 million. January-June 2009 Corporate Customers business revenue was EUR 296 million (299) and EBITDA EUR 100 million (90). The decrease in revenue was mainly due to lower interconnection fees, decrease in equipment sales volumes and decrease in the traditional fixed business. Growth in ICT services increased revenue. Increase in EBITDA was mainly due to productivity improvement. Total OPEX decreased by EUR 13 million. Personnel In January-June the average number of personnel at Elisa was 3,143 (2,970). Personnel by segment at the end of the period: 30.6.2009 30.6.2008 31.12.2008 Consumer Customers 1,596 1,545 1,522 Corporate Customers 1,725 1,309 1,495 Total 3,321 2,854 3,017 The number of personnel increased by about 300 from the beginning of the year. Personnel growth mainly occurred in call centers as a result of an increase in the customer service business. The call center headcount varies flexibly according to customer demand and business activity. Investments EUR million 4-6/2009 4-6/2008 1-6/2009 1-6/2008 Capital expenditures, of which 36 41 70 78 - Consumer Customers 19 22 37 43 - Corporate Customers 17 19 33 35 Shares 1 11 6 13 Total 37 52 76 91 The main capital expenditures arose from the capacity and coverage increase of the 3G network. Financing arrangements and ratings Valid financing arrangements: Maximum amount In use on 30.6.2009 EUR million Committed credit limits 300 5 Commercial paper programme ¹) 250 119 EMTN programme ²) 1,000 600 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 324 million at 30 June 2009 (EUR 258 million at the end of 2008). There are no major refinancing needs expected before the year 2011. Share Trading of shares 4-6/2009 4-6/2008 1-6/2009 1-6/2008 Shares traded, millions 57.2 94.4 106.4 177.2 Volume, EUR million 602.3 1,372 1156.6 2,984 % of shares 34 57 64 107 Shares and market values 30.6.2009 30.6.2008 31.12.2008 Total number of shares 166,307,586 166,307,586 166,307,586 Treasury shares 10,688,629 7,688,629 10,688,629 Outstanding shares 155,618,957 158,618,957 155,618,957 Closing price, EUR 11.73 13.33 12.30 Market capitalisation, EUR million 1,825 2,114 1,914 Treasury shares, % 6.4 4.6 6.4 In March, Elisa distributed a dividend of 0.60 euros 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 that 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. The Board of Directors' authorisations On 18 March 2009, 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 amount of shares under this authorization is 15,000,000 shares at maximum. 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 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 1,800Mhz and 2,100Mhz wavebands. In the 1,800Mhz waveband, the radio license is valid until November 2017 and in the 2,100Mhz waveband, the radio licence is valid to March 2019. The 1,800Mhz frequencies can be used for the LTE (Long Term Evolution technology). Significant legal issues On 28 May 2009, The Court of Appeal of Helsinki 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 Finnish Competition Authority has withdrawn its intent to make a report concerning the pricing of Elisa's broadband and removed the matter from the agenda. 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, 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 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, 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. 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 derivatives 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 7 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 324 million at 30 June 2009 (EUR 258 million at the end of 2008). 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 million guarantee for a credit derivative portfolio (CDO). The risk for the guarantee being called increased due to the credit crisis in 2008, after which there have not been any material changes. The rating of the portfolio is at B1 level. The guarantee is valid until 15 December 2012. The maximum liability USD 60 million, if realised, would mean cash payments of USD 0.5 million in 2010, USD 33.0 million in 2011 and USD 26.5 million in 2012. Given the recent financial market turmoil, the banking sector has suffered and the banks' ability to finance companies have deteriorated, with some capital market activities not operating fully. However, Elisa has cash reserves, committed credit facilities and a sustainable cash flow to cover its foreseeable financing needs. A detailed description of the financial risk management can be found in the 2008 Annual Report on page 15. Events after the financial period There have not been any significant events following the reporting period. Outlook for 2009 The current economic environment and financial market turmoil creates uncertainty for the 2009 outlook. Competition in the Finnish telecommunications market remains challenging. The general economic downturn has so far had a slight impact on the 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 or slightly lower level than last year. The use of mobile communications and mobile broadband products is continuing to rise. The equipment sales volumes and service sales in some customer segments may decrease. EBITDA excluding non-recurring items is also expected to be at the same or slightly lower level than last year. Elisa will determinedly continue to stimulate demand for its services and continue to drive productivity improvements of its operations. Likewise, capital expenditure will be actively controlled to a maximum 12 per cent of revenue, and it may be reduced clearly if the general economy deteriorates further. The contributory factors for long-term growth and profitability improvement include the 3G market growth and efficiency measures, which are continuing as expected. Elisa's financial position and liquidity are good. There are no major refinancing needs expected before the year 2011. BOARD OF DIRECTORS Elisa Corporation 1.1. - 30.6.2009 Unaudited CONSOLIDATED INCOME STATEMENT 4-6 4-6 1-6 1-6 1-12 EUR million Note 2009 2008 2009 2008 2008 Revenue 1 354,9 371,5 705,9 738,5 1485,0 Other operating income 1,1 1,1 2,0 2,0 6,5 Materials and services -143,6 -169,2 -289,3 -327,7 -652,4 Employee expenses 7 -47,6 -41,7 -94,5 -87,0 -162,5 Other operating expenses -48,4 -57,0 -92,8 -112,9 -205,0 EBITDA 1 116,4 104,7 231,3 212,9 471,6 Depreciation and amortisation 3 -52,5 -51,5 -105,7 -102,5 -207,1 EBIT 1 63,9 53,2 125,6 110,4 264,5 Financial income 2,7 1,9 6,1 8,7 17,1 Financial expense -10,8 -17,3 -22,5 -28,9 -54,0 Share of associated companies' profit 0,0 0,0 0,0 0,0 0,0 Profit before tax 55,8 37,8 109,2 90,2 227,6 Income taxes -13,5 -6,0 -25,7 -18,2 -50,6 Profit for the period 42,3 31,8 83,5 72,0 177,0 Attributable to: Owners of the parent 42,1 31,7 83,1 71,7 176,3 Non-controlling interests 0,2 0,1 0,4 0,3 0,7 42,3 31,8 83,5 72,0 177,0 Earnings per share (EUR) Basic and diluted 0,27 0,20 0,53 0,45 1,12 Average number of outstanding shares (1000 shares) Basic and diluted 155 619 158 492 155 619 158 375 157 450 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Profit for the period 42,3 31,8 83,5 72,0 177,0 Other comprehensive income, net of tax: Available-for-sale investments 1,0 -2,3 -0,1 -1,8 -10,4 Total comprehensive income 43,3 29,5 83,4 70,2 166,6 Total comprehensive income attributable to: Owners of the parent 43,1 29,4 83,0 69,9 165,9 Non-controlling interests 0,2 0,1 0,4 0,3 0,7 43,3 29,5 83,4 70,2 166,6 Elisa Corporation 1.1. - 30.6.2009 Unaudited CONSOLIDATED STATEMENT OF FINANCIAL POSITION 30.6. 31.12. EUR million Note 2009 2008 Non-current assets Property, plant and equipment 3 610,2 630,5 Goodwill 3 781,6 778,6 Other intangible assets 3 166,8 177,5 Investments in associated companies 0,1 0,1 Available-for-sale investments 29,2 29,0 Receivables 12,5 12,4 Deferred tax assets 27,7 28,3 1628,1 1656,4 Current assets Inventories 4 22,3 21,7 Trade and other receivables 272,9 319,4 Cash and cash equivalents 28,8 33,0 324,0 374,1 Total assets 1952,1 2030,5 Equity attributable to owners of the parent 5 864,8 873,4 Non-controlling interests 1,2 1,6 Total equity 866,0 875,0 Non-current liabilities Deferred tax liabilities 26,3 30,9 Provisions 5,1 5,6 Interest-bearing debt 6 622,5 672,3 Other non-current liabilities 14,1 14,0 668,0 722,8 Current liabilities Trade and other payables 232,3 255,5 Tax liabilities 5,5 3,4 Provisions 1,4 1,5 Interest-bearing debt 6 178,9 172,3 418,1 432,7 Total equity and liabilities 1952,1 2030,5 Elisa Corporation 1.1. - 30.6.2009 Unaudited CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS 1-6 1-6 1-12 EUR million 2009 2008 2008 Cash flow from operating activities Profit before tax 109,2 90,2 227,6 Adjustments Depreciation and amortisation 105,7 102,5 205,8 Other adjustments 15,5 20,3 32,1 121,2 122,8 237,9 Change in working capital Change in trade and other receivables 51,0 110,0 132,5 Change in inventories -0,5 3,6 6,7 Change in trade and other payables -16,3 -61,2 -56,2 34,2 52,4 83,0 Financial items, net -17,0 -19,8 -38,8 Taxes paid -34,5 -33,6 -59,5 Net cash flow from operating activities 213,1 212,0 450,2 Cash flow from investing activities Capital expenditure -69,6 -77,4 -179,2 Purchase of shares -9,3 -10,0 -11,6 Proceeds from asset disposal 0,8 0,4 0,8 Net cash used in investing activities -78,1 -87,0 -190,0 Cash flow before financing activities 135,0 125,0 260,2 Cash flow from financing activities Purchase of treasury shares -43,3 Proceeds from long-term borrowings 80,0 80,0 Repayment of long-term borrowings -36,0 -30,0 -30,0 Change in short-term borrowings -6,9 109,9 38,6 Repayment of finance lease liabilities -2,4 -2,0 -4,0 Dividends paid and capital repayment -93,9 -284,9 -285,4 Net cash used in financing activities -139,2 -127,0 -244,1 Change in cash and cash equivalents -4,2 -2,0 16,1 Cash and cash equivalents at beginning of period 33,0 16,9 16,9 Cash and cash equivalents at end of period 28,8 14,9 33,0 Elisa Corporation 1.1. - 30.6.2009 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, 2008 83,0 -165,8 403,9 535,7 176,6 2,0 1035,4 Capital repayment -284,9 -284,9 Dividends -0,6 -0,6 Share-based compensation 7,0 -5,7 1,3 Total comprehensive income -1,8 71,7 0,3 70,2 Balance at June 30, 2008 83,0 -158,8 402,1 250,8 242,6 1,7 821,4 EUR million 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 Elisa Corporation 1.1. - 30.6.2009 Unaudited NOTES BASIS OF PREPARATION The Interim consolidated financial statements are in compliance with IAS 34 "Interim Financial Reporting". The Interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) effective at the time of preparation and adopted for use by the European Union. This Interim consolidated financial statements should be read in conjunction with the 2008 consolidated financial statements. Except for accounting principle changes listed below, the accounting principles applied in this Interim report are the same as in the Consolidated financial statements at December 31, 2008. Changes in accounting principles The Group adopted the following standards, amendments to standards and interpretations as from 1 January 2009 onward: - IFRS 8 Operating Segments standard which requires segment information to be presented on the basis of internal reporting provided to management. Elisa's internal organizational and management structure is based on a customer-oriented operating model. The new operating segments to be presented are Consumer Customers and Corporate Customers. Accounting principles and comparable figures for 2008 have been published on 17 April, 2009. - IAS 1 Presentation of Financial Statements. The amendments concerning the income statement and statement of changes in equity have affected the presentation of Interim consolidated financial statements. Following newly adopted standards and interpretations have not had any effect on Interim consolidated financial statements. - Revised IAS 23 Borrowing Costs - Revised IFRS 2 Share-based Payment - IFRIC 13 Customer Loyalty Programmes - IFRIC 14 The Limit on a Defined Benefit Assets, Minimum Funding Requirements and their Interaction 1. SEGMENT INFORMATION 4-6/2009 Consumer Corporate Unallocated Group EUR million Customers 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 4-6/2008 Consumer Corporate Unallocated Group EUR million Customers Customers Items Total Revenue 218,3 153,2 371,5 EBITDA 56,3 48,4 104,7 Depreciation and amortisation -29,6 -21,9 -51,5 EBIT 26,7 26,5 53,2 Financial income 1,9 1,9 Financial expense -17,3 -17,3 Share of associated companies' profit 0,0 0,0 Profit before tax 37,8 Investments 22,2 18,5 40,7 Elisa Corporation 1.1. - 30.6.2009 Unaudited 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 1-6/2008 Consumer Corporate Unallocated Group EUR million Customers Customers Items Total Revenue 439,2 299,3 738,5 EBITDA 122,8 90,1 212,9 Depreciation and amortisation -59,0 -43,5 -102,5 EBIT 63,8 46,6 110,4 Financial income 8,7 8,7 Financial expense -28,9 -28,9 Share of associated companies' profit 0,0 0,0 Profit before tax 90,2 Investments 42,8 35,5 78,3 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. - 30.6.2009 Unaudited 2. ACQUISITIONS Elisa Oyj acquired all shares of Xenetic Oy on February 13, 2009. Xenetic was founded in 2000 and it is a leading Finnish hosting service company, the business of which consists of computer rooms, monitoring, control, data communications, data security services and equipment, and application leasing. Xenetic Oy was consolidated with the Group since March 2009. If the acquisition had been made as of the beginning of the financial period 2009, it would not have had any major impact in Group's revenue or earnings for the period. In a business deal signed on 6 February 2009, Elisa Oyj has acquired the asset management and logistics system business of Trackway Oy. The total acquisition cost was EUR 5.1 million, of which EUR 6.2 million effected on cash flow (including cash limit repayment). The business combinations resulted in goodwill of EUR 2.0 million. Additional purchase price relating to previous year's acquisitions resulted in goodwill of EUR 1.0 million. 3. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS Property Other plant and intangible EUR million equipment Goodwill assets Cost, 1 January 2009 2320,3 778,6 379,3 Additions 57,6 12,6 Acquisitions of subsidiaries 2,2 3,0 2,5 Disposals -0,5 Reclassifications 0,5 -0,5 30 June 2009 2380,1 781,6 393,9 Accumulated depreciation/ amortisation, 1 January 2009 1689,8 201,8 Depreciation for the period 80,5 25,3 Disposals and reclassifications -0,4 30 June 2009 1769,9 227,1 Net carrying amounts: 1 January 2009 630,5 778,6 177,5 30 June 2009 610,2 781,6 166,8 Commitments to purchase property, plant and equipment and intangible assets amounts to EUR 33,9 million as at 30 June 2009. 4. INVENTORIES Write-downs of inventories amounting to EUR 0,7 million were recognised at 30 June, 2009 (EUR 1,6 million, 31 December, 2008) 5. EQUITY Dividends On 18 March, 2009 Elisa's Annual General Meeting decided of a dividend of 0,60 euros per share. The total dividend amounts to EUR 93,4 million and payment started on 30 March, 2009. Elisa Corporation 1.1. - 30.6.2008 Unaudited 6. ISSUANCES AND REPAYMENTS OF DEBT No bonds have been issued during the first half of 2009. Repayments of Bonds Nominal Nominal Book interest Effective Maturity EUR million value value rate interest date EMTN programme 2001/ EUR 1,000 million 6-month euribor + III/2002 20,0 20,0 1,02% 6,439 % 8.4.2009 6-month euribor + V/2002 6,0 6,0 1,00% 6,419 % 8.4.2009 6-month euribor + VI/2002 10,0 10,0 1,00% 6,419 % 8.4.2009 Total of repayments 36,0 36,0 The unused amount of EUR 1,000 million EMTN program is EUR 400 million as at 30 June 2009. 7. 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: Xenetic Oy acquired 100 % Related party transactions with associated companies 1-6/2009 Sales 0,0 Purchases 0,3 Management remuneration will be announced in Annual financial statements. Elisa Corporation 1.1. - 30.6.2009 Unaudited 8. OPERATING LEASE COMMITMENTS 30.6. 31.12. EUR million 2009 2008 Due within 1 year 20,9 22,2 Due after 1 year but within 5 years 35,9 36,8 Due after 5 years 15,6 15,2 Total 72,4 74,2 9. CONTINGENT LIABILITIES 30.6. 31.12. EUR million 2009 2008 Mortgages For own and group companies 0,7 0,4 Pledges given Pledges given as surety 0,8 Guarantees given For others (* 43,4 44,3 Mortgages, pledges and guarantees total 44,1 45,5 Other commitments Repurchase commitments 0,0 0,1 *) EUR 42.5 million is related to the guarantee given on a CDO portfolio. 10. DERIVATIVE INSTRUMENTS 30.6. 31.12. EUR million 2009 2008 Interest rate swaps Nominal value 150,0 150,0 Fair value recognised in the balance sheet 1,6 1,0 Credit default swaps (* Nominal value 44,8 47,4 *) 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. 11. EVENTS AFTER THE BALANCE SHEET DATE No significant events have taken place after the balance sheet date. Elisa Corporation 1.1. - 30.6.2009 Unaudited KEY FIGURES 1-6 1-6 1-12 EUR million 2009 2008 2008 Shareholders' equity per share, EUR 5,56 5,17 5,61 Interest bearing net debt 772,6 898,1 811,6 Gearing 89,2% 109,3% 92,8% Equity ratio 44,6% 40,4% 43,3% Return on investment (ROI) *) 17,0% 16,3% 15,6% Gross investments in fixed assets 70,2 78,3 183,9 of which finance lease investments 0,6 0,9 4,7 Gross investments as % of revenue 10,0% 10,6% 12,4% Investments in shares 6,2 12,6 14,8 Average number of employees 3143 2970 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 end of period Earnings/share Profit for the period attributable to equity holders of parent --------------------------------------------------- Average number of outstanding shares |
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