Elisa - Interim report (Q1 and Q3)

Elisa’s Interim Report Q1 2014

ELISA INTERIM REPORT RELEASE 24 APRIL 2014 AT 8:30am

First quarter 2014

  -- Revenue was EUR 382 million (361
  -- EBITDA was EUR 126 million (109) 
  -- EBIT was EUR 72 million (59) 
  -- Profit before tax amounted to EUR 64 million (53) 
  -- Earnings per share was EUR 0.32 (0.26)
  -- Cash flow after investments was EUR 39 million (37)

  Mobile ARPU was EUR 15.8 (16.0 in previous quarter)

  -- Mobile churn was 17.2 per cent (17.6 in previous quarter)
  -- The number of Elisa's mobile subscriptions increased by 21,400 during the
     quarter
  -- The number of fixed broadband subscriptions decreased by 1,800 on the
     previous quarter
  -- Net debt / EBITDA was 1.8 (2.0 end 2013) and gearing 102 per cent (113 end
     2013)

  Key indicators

-------------------------------------------------
                          1st Quarter   Full year
EUR million              2014  2013 1)    2013 1)
-------------------------------------------------
-------------------------------------------------
Revenue                   382      361      1,547
EBITDA                    126      109        491
EBIT                       72       59        281
Profit before tax          64       53        255
Earnings per share, EUR  0.32     0.26       1.25
Capital expenditure        48       47        240
-------------------------------------------------

1) Excluding non-recurring items: Q1 2013 EBITDA EUR 111m, EBIT EUR 61m, profit
before tax EUR 55m and EPS EUR 0.26. Full year 2013 EBITDA EUR 508m, EBIT EUR
298m, Profit before tax EUR 272m and EPS EUR 1.33. 

Financial position and cash flow

EUR million           31.3.2014  31.3.2013  End 2013
----------------------------------------------------
----------------------------------------------------
Net debt                    933        807       971
Net debt / EBITDA 1)        1.8        1.7       2.0
Gearing ratio, %          101.9      118.4     112.6
Equity ratio, %            41.1       33.3      37.3
----------------------------------------------------



-----------------------------------------
                   1st Quarter  Full year
EUR million         2014  2013       2013
-----------------------------------------
Cash flow             39    37         84
after investments                        
-----------------------------------------

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

Additional information regarding the Key Performance Indicators is available at
www.elisa.com/investors  Elisa Operational Data.xls. 


CEO Veli-Matti Mattila:

“Elisa's revenue and earnings grew from last year

The uncertainty in the general economic situation continued to be reflected in
the behaviour of companies and consumers. In the challenging operating
environment in this quarter, Elisa's performance has been strong. Elisa's
earnings and revenue increased during the quarter compared to last year. Demand
for new services and the growth of smartphone markets continued to be strong.
Smartphones made up 86 per cent of overall sales. 

Our mobile subscription base grew by over 21,000 during the first quarter of
the year. About one third of new sales are 4G mobile broadband subscriptions,
and the number is growing steadily. The number of fixed-network broadband
subscriptions decreased by about 1,800. The use of mobile data services grew
alongside that of smartphones due to demand for USB modems and routers among
both consumers and business clients. 

Elisa introduced Pilvilinna, a cloud service aimed at consumers for storing
photographs, videos and other files. The service stores the files in Finland
and it supports all common operating systems. Contactless payment is increasing
among consumers as new payment locations are taken into use. Some major retail
chains already accept contactless payment, and there are currently around 3,000
contactless payment locations. The Elisa Wallet service allows hassle-free
payment at these locations. 

Elisa has cooperated with public administration in projects to improve the
productivity of the sector. Together with the City of Turku, we discovered
potential savings of tens of millions of euros by reforming service provision
models and operating methods. The key findings were related to remote
transactions, customer service and efficiency in the use of facilities. A
concrete measure implemented in cooperation with the Social Insurance
Institution of Finland was a remote use pilot project where customers were
provided with interpreters through a video link directly in their homes. 

At the beginning of the year, we became the first operator in Finland to open
4G LTE 800 MHz frequencies to customers. The introduction of these new
frequencies means increasingly comprehensive coverage for fast 4G mobile data
services as well as improved inside coverage.  Today, 4G coverage is available
to 89 per cent of people living in Finland. With this development our service
clearly exceeds the best international universal service obligation level. 

We will continue our determined work to improve customer satisfaction and the
productivity of our operations. 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 2014

The macroeconomic environment in Finland is still expected to be weak in 2014.
Competition in the Finnish telecommunications market also remains challenging. 

Full year revenue is estimated to be at the same level or slightly higher than
in 2013. Mobile data, ICT and new online services as well as completed
acquisitions are expected to increase revenue. Full-year EBITDA, excluding
non-recurring items, is anticipated to be at the same level as in 2013 or
slightly higher. 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 cost efficiency measures, for example by streamlining
product portfolio and IT systems and operations. Additionally, Elisa is
continuing to increase customer service and sales efficiency, as well as to
reduce general administration 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 Q1 2014 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 OMX Helsinki
Principal media
www.elisa.com

Attachments:

140424INTERIM REPORT Q1 2014.pdf