Elisa Oyj — Earnings Release 2019

Oct 17, 2019

Elisa’s Interim Report Q3 2019

Elisa’s Interim Report Q3 2019

ELISA CORPORATION INTERIM REPORT RELEASE 17 OCTOBER 2019 AT 8:30 AM

Third quarter 2019 financial highlights

· Revenue increased by EUR 11m to EUR 465m, mainly due to the Polystar
acquisition and growth in mobile services.
· Mobile service revenue increased by 2.3 per cent to EUR 208m. Competition
has remained intense.
· EBITDA, including the IFRS 16 change, grew by EUR 10m to EUR 179m.
· EBIT, including the IFRS 16 change, increased by EUR 3m to EUR 113m.
· Comparable cash flow grew by EUR 13m to EUR 98m mainly due to higher EBITDA
and change in net working capital.
· Mobile post-paid voice ARPU was at the previous quarter’s level of EUR 20.30
(20.20).
· Mobile post-paid voice churn increased slightly to 18.2 per cent (18.0 in
previous quarter).
· The number of post-paid mobile subscriptions increased by 18,500 from the
previous quarter.
· Due to seasonality, prepaid subscriptions increased by 19,800 during the
quarter.
· The number of fixed broadband subscriptions increased by 8,100 during the
quarter.
· The EBITDA guidance for 2019 has been upgraded to “slightly higher”
(previously “same level or slightly higher”).

Key indicators

EUR million 3Q19 3Q18 Δ % 1Q-3Q19 1Q-3Q18 Δ %
Revenue 465 454 2,4 % 1 356 1 361 -0,3 %
EBITDA1) 179 169 5,8 % 493 482 2,2 %
Comparable EBITDA1) 179 169 5,8 % 500 481 3,9 %
EBIT2) 113 110 2,5 % 295 305 -3,4 %
Comparable EBIT2) 113 110 2,5 % 302 305 -0,9 %
Profit before tax 107 104 2,5 % 276 288 -4,2 %
Comparable PBT 107 104 2,5 % 283 288 -1,5 %
EPS, EUR3) 0,53 0,53 -0,6 % 1,40 1,48 -5,4 %
Comparable EPS, EUR 0,53 0,53 -0,6 % 1,44 1,48 -2,6 %
Capital expenditure 56 49 14,7 % 173 162 6,8 %
Net debt 1 235 1 118 10,5 % 1 235 1 118 10,5 %
Net debt / EBITDA4) 1,9 1,8 1,9 1,8
Gearing ratio, % 115,3 % 107,2 % 115,3 % 107,2 %
Equity ratio, % 37,6 % 40,4 % 37,6 % 40,4 %
Cash flow 97 87 11,9 % 202 220 -8,1 %
Comparable cash flow5) 98 85 15,2 % 268 224 19,6 %

1) Includes EUR 5m IFRS 16 impact in 3Q19 and EUR 13m in 1Q-3Q19. 2) IFRS 16 has
no material impact on EBIT 3) EPS EUR 0.55 excluding adjustment of deferred tax
asset. 4) (Interest-bearing debt – financial assets) / (four previous quarters’
comparable EBITDA). 5) Excluding investments in shares.

Additional key performance Indicators are available at
elisa.com/investors (http://www.elisa.com/investors) (Elisa Operational
Data.xlsx).

CEO’s review: Thousands of 5G users, Elisa’s result improved

Improvements in quality and customer experience, as well as investments in
pioneering technologies, strengthened Elisa’s competitiveness, even though the
market situation remained challenging. Revenue and EBITDA in the third quarter
grew from the previous year. The growth in revenue was mostly due to mobile
services and acquisition.

The shift among customers to increasingly fast mobile broadband subscriptions is
continuing. Consumers, corporate customers and organisations appreciate fast
connections which make everyday life smoother. The mobile subscription base
increased by 38,300 subscriptions during the quarter, and growth in the prepaid
subscription base accounted for 19,800 of those subscriptions. The fixed-network
broadband subscription base grew by 8,100 subscriptions.

Finns are pioneers of 5G services, and there are already thousands of 5G users,
who are especially eager to learn and utilise the possibilities of this new
technology. The Port of Helsinki is at the vanguard of Finnish companies – and
indeed companies the world over – in adopting a 5G network for ship passengers
in Helsinki’s West Harbour. Millions of passengers pass through the West Harbour
every year. The City of Turku also serves as a pioneering entity on this front.
Among other things, the city has piloted taking senior citizens on virtual
reality walks along the banks of the Aura River.

Together with the City of Turku, Elisa organised a hackathon which aimed to find
ideas relying on 5G technology to prevent social problems such as
marginalisation. The winner, the Know Your Hoods service, helps people to get to
know the services in their neighbourhood beforehand through virtual means. Nine
partners were selected to develop 5G services in the Elisa Co-creation
Challenge. Applications were received from a total of 12 countries.

The rights to the Elisa Viihde original series Arctic Circle were sold to more
than 20 countries, including Germany, Spain and the Netherlands. We released yet
another new original series, Perfect Commando. In addition, the hit series
Downshifters will continue with a third season. In September, top gamers faced
off in the major e-sports event the Arctic Invitational, which is also the
world’s first arena event for 5G gaming.

Elisa aims to actively develop the responsibility of the ICT industry’s supply
chain and therefore joined the Joint Audit Cooperation (JAC) association, which
carries out responsibility audits for industry manufacturers and suppliers. The
association provides individual operators a better chance to address operational
shortcomings.

The continuous improvement of the customer experience and quality are integral
parts of our corporate culture, and we will continue to focus on them strongly.
Increasing productivity, expanding our digital services internationally and
creating value with data, as well as our strong investment capability, will
continue to lay a solid foundation for creating value competitively in the
future.

Veli-Matti Mattila
CEO

Outlook and guidance for 2019

The positive development of the macroeconomic environment is decelerating in
Finland. Competition in the Finnish telecommunications market remains keen.

Full-year revenue is estimated to be at the same level or slightly higher than
in 2018. Mobile data and digital services are expected to increase revenue. Full
-year comparable EBITDA is anticipated to be slightly higher than in 2018.
Capital expenditure is expected to be a maximum of 12 per cent of revenue.

Elisa is continuing its productivity improvement development, for example by
increasing automation and data analytics in different processes, such as
customer interactions, network operations and delivery. Additionally, Elisa’s
continuous quality improvement measures will increase customer satisfaction and
efficiency, and reduce 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 the growth in the mobile data market, as well as digital 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 Interim Report Q3 2019 and the complete report is attached as a pdf-file
to this release and is also available on our website at
elisa.com/investors (http://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: