Elisa’s Financial Statements 2013

ELISA FINANCIAL STATEMENTS RELEASE 7 FEBRUARY 2014 AT 8:30 AM

Fourth quarter 2013

• Revenue amounted to EUR 401 million (396)
• EBITDA was EUR 122 million (124), and excluding non-recurring items EUR 134 million
• EBIT was EUR 69 million (74), and excluding non-recurring items EUR 81 million
• Profit before tax was EUR 60 million (64), and excluding non-recurring items EUR 72 million
• Earnings per share was EUR 0.32 (0.32), excluding non-recurring items EUR 0.37 (0.34)
• Mobile ARPU was EUR 16.0 (16.1 in previous quarter)
• Churn was 17.6 per cent (18.0 in previous quarter)
• The number of Elisa’s mobile subscriptions increased by 38,000 during the quarter
• The number of fixed broadband subscriptions was at the previous quarter's level
• Net debt/EBITDA was 2.0 (1.7) and gearing 113 (99) per cent

Year 2013

• Revenue was EUR 1,547 million (1,553)
• EBITDA was EUR 491 million (501), and excluding non-recurring items EUR 508 million
• EBIT was EUR 281 million (299), and excluding non-recurring items EUR 298 million
• Profit before tax was EUR 255 million (269), and excl. non-recurring items EUR 272 million
• Cash flow after investments was EUR 84 million (155), excluding acquisitions EUR 177 million
• The Board of Directors proposes a dividend of EUR 1.30 per share

Key indicators

¹⁾ Excluding non-recurring items: Q4 EBIT EUR 81m, Profit before tax EUR 72m and EPS EUR 0.37, Full year EBIT EUR 298m, Profit before tax EUR 272m and EPS EUR 1.33

Financial position and cash flow

¹⁾ (interest-bearing debt – financial assets) / (4 previous quarters’ EBITDA exclusive of non-recurring items)

²⁾ Full-year cash flow after investments excluding investments in PPO and Sulake shares EUR 177m (155)

The Board of Directors proposes to the Annual General Meeting a dividend of EUR 1.30 (1.30) per share. The Board of Directors decided also to propose to the General Meeting an authorisation to acquire maximum 5 million treasury shares, which corresponds to 3 per cent of the total shares.

Key Performance Indicators are available on www.elisa.com/investors › Elisa Quarterly Data.xls

CEO Veli-Matti Mattila:

“Elisa's earnings grew in 2013

Elisa's pre-tax profit excluding non-recurring items grew compared to the previous year. Revenue remained at the previous year's level. Revenue was increased by the purchase of PPO's operations and the mobile service product upgrade, while a decrease in interconnection fees and the intense mobile services campaigns carried out early in the year affected the figures negatively. Smartphones, USB modems and routers are an increasingly important part of the lives of consumers and business clients/organizations. Developments in mobile devices and applications and the increase in data transfer rates enabled by 4G technology have strongly accelerated the use of mobile data services.

Our mobile subscription base grew by 89,000 during the year under review. The number of fixed-network broadband subscriptions also grew by nearly 60,000 subscriptions, mainly due to the PPO acquisition. In the last quarter of the year, the number of mobile subscriptions increased by 38,000, while the number of fixed-network broadband subscriptions remained at the same level even though a portion of subscriptions in Eastern Finland were sold according to the Competition Authority's condition for the PPO deal.

In the Consumer Customer business, sales of the Elisa Kirja e-book service achieved the milestone of one million e-books downloaded. The Elisa Kirja e-book service now also offers anyone the opportunity to publish their own book. The Elisa Wallet service now lets you send payments to any mobile phone number, making it easy to move back small sums of money. The demand for the Omaguru help service, which offers guidance in the use of domestic technical equipment, continued to grow with excellent customer satisfaction.

The demand for ICT services grew among our corporate customers as they improved their competitiveness and productivity. The use of video connections for purposes such as loan negotiations with banks increased. Appelsiini, an Elisa subsidiary, launched the Povari cloud based information distribution service, offering a new safe and easy way of transferring and distributing information. The data remains safe in Elisa's data centres in Finland.

In 2013, we continued our strong investments in our fast, extensive mobile network. At the end of the year, we won the auctions for the 800 MHz frequencies that we wanted. The new frequencies allow the cost-efficient construction of a high-speed 4G LTE network even in less densely populated areas, as well as improved indoor coverage in urban areas.

During the year under review, we began to use electricity with a guarantee of origin in our production operations, which makes us able to offer low-emissions services to our customers.

We carried out several measures to improve profitability, including streamlined product portfolio and IT systems and operations, more efficient customer service and sales, and lower administrative costs; these projects continued with good results throughout the year.

We will continue our determined work to improve customer satisfaction and the productivity of our operations. Development of new services and our strong investment capacity also 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 maximum 12 per cent of revenue. Elisa’s financial position and liquidity are good.

Elisa is continuing its cost efficiency measures, in the areas of streamlining product portfolio and IT systems and operations, increasing customer service and sales efficiency, as well as reducing general administration costs.

Elisa's transformation into a provider of new, exciting 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 1.30 per share. The dividend payment corresponds to 104 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 7 April 2014 are entitled to funds distributed by the General Meeting. The Board of Directors proposes that the payment date be 15 April 2014. 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 2013 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