Elisa’s Financial Statements 2015

ELISA FINANCIAL STATEMENTS RELEASE 29 JANUARY 2016 AT 8:30 AM

Fourth quarter 2015

• Revenue amounted to EUR 404m (386)
• EBITDA was EUR 128m (125) and EBIT was EUR 68m (71)
• EBITDA and EBIT excluding non-recurring items were EUR 131m (125) and 77m (71), respectively
• Earnings per share were EUR 0.35 (0.31), excluding non-recurring items EUR 0.37
• Cash flow after investments was EUR 30m (42)

• Mobile ARPU was EUR 16.5 (15.9 in previous quarter)
• Mobile churn was 16.2 per cent (16.1 in previous quarter)
• Mobile service revenue increased by 11 per cent to EUR 188m (169)
• The number of Elisa’s mobile subscriptions decreased by 8,700 during the quarter
• The number of fixed broadband subscriptions decreased by 2,200 during the quarter
• Net debt / EBITDA was 1.8 (1.9) and gearing 104 per cent (114)

Year 2015

• Revenue was EUR 1,569m (1,535)
• EBITDA was EUR 532m (520) and EBIT was EUR 312m (305)
• EBITDA and EBIT excluding non-recurring items were EUR 536m (520) and 322m (305), respectively
• Earnings per share were EUR 1.52 (1.41), excluding non-recurring items EUR 1.54 (1.41)
• Cash flow after investments was EUR 253m (185), excl. acquisitions EUR 266 (224)
• The number of Elisa’s mobile subscriptions increased by 16,800 during the year
• The number of fixed broadband subscriptions decreased by 23,500 during the year
• The Board of Directors proposes a dividend of EUR 1.40 per share

Key indicators

¹⁾ Excluding non-recurring items: Q4 2015 EBIT EUR 77m, Profit before tax EUR 71m and EPS EUR 0.37, full year 2015 EBIT EUR 322m, Profit before tax EUR 300m and EPS EUR 1.54

Financial position and cash flow

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

The Board of Directors proposes to the Annual General Meeting a dividend of EUR 1.40 (1.32) per share. The Board of Directors decided also to propose an authorisation to acquire a maximum of 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:
Upgrades to faster mobile data speeds resulted in Elisa's best ever earnings in 2015

Elisa's competitiveness strengthened further and earnings grew despite the challenging general economic situation. Both revenue and EBITDA increased compared with the previous year. Elisa's result was particularly improved by the growth in mobile service revenue during the year. In addition, Elisa's operational efficiency improved.

The demand for faster subscriptions grew strongly as a result of the use of smartphones and apps among consumers, corporate customers and organisations. Accordingly, we launched a subscription that enables speeds of up to 300 Mbps for customer sales. Our mobile subscription base grew by approximately 17,000 during the year. The decline in the number of fixed broadband subscriptions amounted to 24,000. In the last quarter of the year the mobile subscription base reduced by approximately 9,000 subscriptions, and the number of fixed broadband subscriptions fell by 2,000.

The Elisa Viihde offering expanded significantly during the year. We continued our significant and long-term investments in domestic films by co-producing the first original series in the history of Elisa Viihde, Downshiftaajat ("Downshifters"). Of our other new services, Elisa Kirja, the largest Finnish e-book service, has increased its popularity, and almost one in ten Finns has purchased at least one e-book.

The uncertainty in the financial situation creates a natural need for companies to look for alternative digital solutions. We launched the Elisa Internet of Things (IoT) service in Finland and Estonia, which is an open cloud platform that lets corporate customers start to innovate new business operations and gain significant competitive advantages. We established the Elisa Cyber Security Centre to protect companies and the public administration against cyber-threats. The centre observes, reports on and combats cyber-threats 24/7.

Elisa's determined construction of the 4G network progressed at record speed. Already, some 98 per cent of Finns live within the scope of the 4G network with the widest coverage in Finland, and it extends to over 290 localities. Fast Internet connections have been set up using new frequencies in sparsely populated areas, in particular. Since the beginning of the year, our customers have used more data in our 4G network than in the 2G and 3G networks combined.

We actively invested in providing jobs for young people. Elisa, together with its subsidiaries and employment agencies, employed 200 young people in summer jobs. We participated in the Responsible Summer Job campaign and were involved in the Work for the Young programme. We also continued to arrange popular digital schools for children. 

We will continue our determined work to improve the customer experience and our operations. Improving our productivity, developing digital services for our customers and maintaining our strong investment capability 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 revenue is estimated to be at the same level as in 2015. 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 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.

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 1.40 per share. The dividend payment corresponds to 92 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 4 April 2016 are entitled to funds distributed by the General Meeting. The Board of Directors proposes that the payment date be 12 April 2016. The profit for the period will be added to retained earnings.

The Board of Directors also decided 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 2015 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