Elisa - Interim report (Q1 and Q3)

Elisa’s Interim Report January–June 2016

ELISA INTERIM REPORT RELEASE 15 JULY 2016 AT 8:30 AM

Second quarter 2016

  -- Revenue amounted to EUR 393 million (390)
  -- EBITDA was EUR 134 million (131) and EBIT was EUR 81 million (79)
  -- Profit before taxes amounted to EUR 75 million (74) 
  -- Earnings per share were EUR 0.38 (0.38)
  -- Cash flow after investments was EUR 69 million (70)

  -- Mobile ARPU grew to EUR 16.6 (16.3 in previous quarter)
  -- Mobile churn increased to 17.0 per cent (16.1 in previous quarter)
  -- Mobile service revenue increased by 7 per cent to EUR 190 million (178)
  -- The number of Elisa’s mobile subscriptions increased by 6,600 during the
     quarter
  -- The number of fixed broadband subscriptions decreased by 4,200 on the
     previous quarter
  -- Net debt / EBITDA was 1.9 (1.8 at end 2015) and gearing 128 per cent (104
     at end 2015)

January–June 2016

  -- Revenue was EUR 783 million (771)
  -- EBITDA was EUR 270 million (260), EBIT EUR 165 million (155)
  -- Profit before taxes amounted to EUR 153 million (145)
  -- Earnings per share grew to EUR 0.77 (0.75)
  -- Cash flow after investments was EUR 133 million (138)

  -- Acquisition of Anvia’s ICT companies was completed on 1 July 2016

Key indicators

----------------------------------------------------
                          2nd Quarter   Year-to-date
EUR million              2016  2015     2016    2015
----------------------------------------------------
----------------------------------------------------
Revenue                   393   390      783     771
EBITDA                    134   131      270     260
EBIT                       81    79      165     155
Profit before tax          75    74      153     145
Earnings per share, EUR  0.38  0.38     0.77    0.75
Capital expenditure        56    49      100     100
----------------------------------------------------
                                                    

Financial position and cash flow

EUR million           30 Jun 2016  30 Jun 2015  End 2015
--------------------------------------------------------
--------------------------------------------------------
Net debt                    1,054        1,075       962
Net debt / EBITDA 1)          1.9          2.0       1.8
Gearing ratio, %            127.5        135.8     103.9
Equity ratio, %              36.8         35.1      41.4
--------------------------------------------------------



------------------------------------------------------
                             2nd Quarter  Year-to-date
EUR million                   2015  2014   2015   2014
------------------------------------------------------
Cash flow after investments     69    70    133    138
------------------------------------------------------

1) (interest-bearing debt – financial assets) / (four previous quarters’ EBITDA
exclusive of non-recurring items) 
2) Excluding investments in shares Q2/16 EUR 83m, Q2/15 EUR 79m, H1/16 EUR 156m
and H1/15 EUR 148m 

Other Key Performance Indicators are available at www.elisa.com/investors
(Elisa Operational Data.xls). 


CEO Veli-Matti Mattila: Elisa's earnings growth continues

The challenging economic situation has remained unchanged, but at Elisa we were
still able to strengthen our competitiveness. In the second quarter of the
year, our revenue and earnings grew again year-on-year. The result improved
over the previous period due to mobile service revenue growth and productivity
improvements in Elisa's operational activities. 

The shift of consumers, corporate customers and organisations to becoming users
of fast mobile broadband subscriptions continued with the active use of
smartphones and applications. The mobile subscription base increased by 6,600
subscriptions during the quarter, while the fixed network broadband
subscription base fell by 4,200 subscriptions. 

The Anvia ICT companies acquisition concluded with a solution where Elisa
purchases Anvia's telecom, IT and entertainment services. An extraordinary
general meeting of Anvia's shareholders approved the Board of Directors'
proposal with a majority of over three-quarters. We believe that by combining
the performance of Anvia and Elisa, the customers in the area will receive even
better service and a more extensive service offering. The solution is also
positive from the point of view of the development of shareholder value. 

It is important for our customers that they can surf worry-free on the net,
without fearing large telephone bills. According to our studies, 4G users are
particularly satisfied with their connections. We are also preparing for the
needs of the future, and Elisa became the first operator in the Nordic
countries to test the 700 MHz frequency. This new frequency improves the
coverage and capacity of the mobile network. 

We are pursuing an even better customer experience and testing new technologies
in both the mobile and fixed networks. As our latest innovation, we tested the
G.fast technology, which enables speeds of up to 1 Gbit/s in the current fixed
broadband network. The technology is particularly suitable for low-rise
residential areas and old high-rise buildings. Elisa was the first reseller in
Europe to launch OnePlus phones to consumers, and particularly to
entrepreneurs. 

Elisa's open development and service platform, Elisa IoT, received
international recognition. Its application, which can visualise process
information coming from dozens of different automation systems and other
information sources in one 3D view, received the award for best solution of the
year for the Internet of Things at the LiveWorx 2016 event. In Finland, S
Group, Finland's largest retail store chain, is taking advantage of Elisa’s
Internet of Things by using it to place all their active network devices under
remote monitoring in a data-secure manner. 

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

Outlook and guidance for 2016

The macroeconomic environment in Finland is still expected to be weak in 2016.
Competition in the Finnish telecommunications market also remains challenging. 

Full-year guidance includes the companies acquired from Anvia for six months.
Full-year revenue is estimated to be slightly higher than in 2015. Mobile data,
ICT and new online services are expected to increase revenue. Comparable
full-year EBITDA, i.e. excluding non-recurring items, is anticipated to be
slightly higher than in 2015. Full-year capital expenditure is expected to be a
maximum of 12 per cent of revenue. Elisa’s financial position and liquidity are
good. 

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

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

Disclosure procedure

Elisa is adopting the disclosure procedure enabled by the Standard 5.2b
published by the Finnish Financial Supervision Authority. This is a summary of
Elisa’s Q2 2016 Interim Report and the complete report is attached as a
pdf-file to this release and is also available on our website at
www.elisa.com/investors. 


ELISA CORPORATION

Additional information:

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

Distribution:

Nasdaq Helsinki
Principal media
www.elisa.com

Attachments:

INTERIM REPORT Q2 2016.pdf