Elisa - Financial Statement Release

Elisa’s Financial Statements 2014

ELISA FINANCIAL STATEMENTS RELEASE 30 JANUARY 2015 AT 8:30 A.M.

Fourth quarter 2014

  -- Revenue amounted to EUR 386 million (401)
  -- EBITDA was EUR 125 million (122, excluding non-recurring items 134) and
     EBIT was  EUR 71 million (69, excluding non-recurring items 81)
  -- Profit before taxes amounted to EUR 63 million (60, excluding non-recurring
     items 72)
  -- Earnings per share were EUR 0.31 (0.32, excluding non-recurring items 0.37)
  -- Cash flow after investments was EUR 42 million (26)
  -- Result includes extra expenses of approx. EUR 6 million relating brand
     renewal, outsourcing and visual communications business reorganization

  -- Mobile ARPU was EUR 15.0 (15.3 in previous quarter)
  -- Mobile churn was 16.6 per cent (16.9 in previous quarter)
  -- The number of Elisa's mobile subscriptions decreased by 26,600 during the
     quarter. Prepaid decreased by 32,400 and postpaid increased by 5,800.
  -- The number of fixed broadband subscriptions was at the previous quarter's
     level
  -- Net debt / EBITDA was 1.9 (2.0 end 2013) and gearing 114 per cent (113)

Year 2014

  -- Revenue was EUR 1,535 million (1,547)
  -- EBITDA was EUR 520 million (491, excluding non-recurring items 508) and
     EBIT was  EUR 305 million (281, excluding non-recurring items 298)
  -- Profit before tax was EUR 278 million (255, excluding non-recurring items
     272)
  -- Earnings per share were EUR 1.41 (1.25, excluding non-recurring items 1.33)
  -- Cash flow after investments was EUR 185 million (84), excl. acquisitions
     EUR 224 (177)
  -- The Board of Directors proposes a dividend of EUR 1.32 per share

Key indicators

---------------------------------------------------------
                               4th Quarter    Full year  
EUR million                   2014  20131)   2014  20131)
---------------------------------------------------------
---------------------------------------------------------
Revenue                        386     401  1,535   1,547
EBITDA                         125     122    520     491
EBIT                            71      69    305     281
Profit before tax               63      60    278     255
Earnings per share, EUR       0.31    0.32   1.41    1.25
Capital expenditure             47      90    191     240
CAPEX excluding licence fees    47      57    191     202
---------------------------------------------------------

1) Excluding non-recurring items: Q4 2013 EBITDA EUR 134m, EBIT EUR 81m, Profit
before tax EUR 72m and EPS EUR 0.37, FY 2013: EBITDA EUR 508m, EBIT EUR 298m,
Profit before tax EUR 272m and EPS EUR 1.33 

Financial position and cash flow

EUR million           End 2014  End 2013
----------------------------------------
----------------------------------------
Net debt                 1,001       971
Net debt / EBITDA 1)       1.9       2.0
Gearing ratio, %         114.0     112.6
Equity ratio, %           39.4      37.3
----------------------------------------



----------------------------------------
                 4th Quarter   Full year
EUR million       2014  2013  2014  2013
----------------------------------------
Cash flow after     42    26   185    84
investments 2)                          
----------------------------------------

1) (interest-bearing debt - financial assets) / (four previous quarters' EBITDA
exclusive of non-recurring items) 

2) Full-year cash flow after investments excluding investments in PPO, Sulake
and Anvia shares EUR 224m (177) 

The Board of Directors proposes to the Annual General Meeting a dividend of EUR
1.32 (1.30) per share. The Board of Directors decided also to propose to the
General Meeting an authorisation to acquire max. 5 million treasury shares,
which corresponds to 3 per cent of the total shares. Key Performance
Indicators: www.elisa.com/investors ›  Elisa Operational Data.xls 

CEO Veli-Matti Mattila:

Best result in Elisa's history

Elisa's earnings grew in 2014 and competitiveness improved further. The use of
mobile data services continued to increase intensely. The availability of 4G,
the widespread use of smartphones and the popularity of mobile apps have
already become deeply rooted in the lives of consumers, corporate customers and
organisations. Revenue remained at the previous year's level. In the last
quarter of the year, extra costs affected our earnings negatively. Divestments,
Elisa Videra and lower interconnection prices reduced fourth-quarter revenue.
The overall uncertainty in the general economic situation continued. 

Our mobile subscription base grew by approximately 33,000 during the year. The
decline in the number of fixed broadband subscriptions amounted to 8,000.
During the last quarter of the year, the mobile subscription base fell by
approximately 27,000 due to the decline in prepaid subscriptions during the
summer. The number of fixed broadband subscriptions remained unchanged. 

The Elisa Viihde IPTV service gained a number of new functionalities and
additional content during the year. Towards the end of the year, Elisa Viihde
IPTV was made accessible to smartphones and tablets, whereby the viewing of
recordings is possible across 3G, 4G and WLAN connections. Sales of e-books in
the Elisa Kirja service doubled during the year. EpicTV, which focuses on
outdoor and adventure sports, already reaches 4.4 million visitors each month.
We introduced a Square Trade additional protection plan for smartphones and
tablets. The service guarantees users a quick replacement for mobile equipment
in case of failures. We also introduced MS Office for consumers. It will be
possible to get programs through a monthly subscription as part of their
operator's invoice. 

The uncertainty in the economic situation is creating demand for ICT services.
Companies and organisations have been investing in innovative new practices
that improve productivity and bring value to their customers. The Elisa
Etämittaus (remote measurement) mobile app received an award in the Best Mobile
Service in Finland 2014 competition. The app accelerates the diagnosis of
various diseases, asthma, for example. We strengthened our selection of
information and cybersecurity services for corporate customers. The Elisa Kilpi
service offers help during denial-of-service attacks, and the Elisa Aisti
service's security view provides operator-level monitoring for the use of
companies. 

During the year, we expanded Elisa 4G to cover almost all Finns. A significant
part of our EUR 200 million annual investments in Finland are directed towards
enabling 4G LTE speeds, which already cover 95 per cent of Finns. We were also
the first company in Europe to test new technologies improving coverage, double
4G LTE network transmission speeds at large public events, and use a mini base
station augmenting indoor coverage for companies. 

For schoolchildren, Elisa organised a number of digital schools, as well as
helping senior citizens to get acquainted with new technologies and the
opportunities they provide. Elisa's climate report again received an excellent
grade in the CDP index. The result is an indication of our long-term work to
measure emissions. 

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 2015

The macroeconomic environment in Finland is still expected to be weak in 2015.
Competition in the Finnish telecommunications market also remains challenging. 

Full-year revenue is estimated to be at the same level as in 2014. Mobile data,
ICT and new online services are expected to increase revenue. Full-year EBITDA,
excluding non-recurring items, is anticipated to be at the same level as in
2014. 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. 

Profit distribution

According to Elisa's distribution policy, profit distribution is 80-100 per
cent of the previous fiscal year's net profit. In addition, any possible excess
capital can be distributed to shareholders. When making the distribution
proposal or decision, the Board of Directors will take into consideration the
company's financial position, future financial needs and financial targets.
Profit distribution includes dividend payment, capital repayment and purchase
of treasury shares. 

The Board of Directors proposes to the Annual General Meeting a dividend of EUR
1.32 per share. The dividend payment corresponds to 94 per cent of the
financial period's net profit. 

Shareholders who are listed in the company's register of shareholders
maintained by Euroclear Finland Ltd on 30 March 2015 are entitled to funds
distributed by the General Meeting. The Board of Directors proposes that the
payment date be 8 April 2015. The profit for the period shall be added to
retained earnings. 

The Board of Directors decided also to propose to the General Meeting that the
Board of Directors be authorised to acquire a maximum of 5 million treasury
shares, which corresponds to 3 per cent of the total shares. 

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 Financial Statements 2014 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:

FINANCIAL STATEMENTS 2014.pdf