Elisa’s Financial Statements Release 2020
ELISA FINANCIAL STATEMENT RELEASE 29 JANUARY 2020 AT 8:30 AM
Fourth quarter 2019 financial highlights
- Revenue increased by EUR 17m to EUR 487m, mainly due to the Polystar acquisition, growth in mobile services and equipment sales.
- Mobile service revenue increased by 1.5 per cent to EUR 208m.
- EBITDA, including the IFRS 16 change, grew by EUR 10m to EUR 168m.
- EBIT, including the IFRS 16 change, increased by EUR 2m to EUR 100m.
- Comparable cash flow decreased by EUR 2m to EUR 55m, mainly due to a change in net working capital, impacted by increased equipment sales.
- Mobile post-paid ARPU was at the previous quarter’s level, EUR 19.3 (19.4).
- Mobile churn was at the previous quarter’s level, 20.1 per cent (20.1).
- The number of post-paid mobile subscriptions increased by 36,800 from the previous quarter.
- Prepaid subscriptions decreased by 10,800 during the quarter.
- The number of fixed broadband subscriptions decreased by 8,300 during the quarter, and excluding clean-up of non-revenue-generating-unit subscriptions, increased by 4,700.
Key indicators
| EUR million | 4Q19 | 4Q18 | Δ % | 2019 | 2018 | Δ % | |
| Revenue | 487 | 471 | 3,5 % | 1 844 | 1 832 | 0,7 % | |
| EBITDA 1) | 168 | 158 | 6,3 % | 661 | 640 | 3,2 % | |
| Comparable EBITDA 1)2) | 168 | 158 | 6,3 % | 668 | 639 | 4,4 % | |
| EBIT 3) | 100 | 98 | 1,7 % | 395 | 404 | -2,2 % | |
| Comparable EBIT | 100 | 98 | 1,7 % | 402 | 403 | -0,3 % | |
| Profit before tax | 96 | 93 | 3,3 % | 372 | 381 | -2,4 % | |
| Comparable PBT | 96 | 93 | 3,3 % | 379 | 380 | -0,4 % | |
| EPS, EUR | 0,49 | 0,49 | -0,3 % | 1,90 | 1,98 | -4,1 % | |
| Comparable EPS, EUR | 0,49 | 0,47 | 4,0 % | 1,93 | 1,95 | -1,0 % | |
| Capital expenditure | 83 | 92 | -10,3 % | 256 | 254 | 0,6 % | |
| Net debt | 1 184 | 1 068 | 10,9 % | 1 184 | 1 068 | 10,9 % | |
| Net debt / EBITDA 4) | 1,8 | 1,7 | 1,8 | 1,7 | |||
| Gearing ratio, % | 103,0 % | 94,8 % | 103,0 % | 94,8 % | |||
| Equity ratio, % | 41,0 % | 42,4 % | 41,0 % | 42,4 % | |||
| Cash flow | 55 | 52 | 6,2 % | 257 | 272 | -5,4 % | |
| Comparable cash flow 5) | 55 | 58 | -3,8 % | 323 | 282 | 14,7 % | |
1) Includes EUR 5m IFRS 16 impact in 4Q19 and EUR 18m in 2019. 2) 2019: EUR 6m restructuring costs and EUR 1m one-off transaction cost relating to Polystar acquisition. 3) IFRS 16 has no material impact on EBIT. 4) (Interest-bearing debt – financial assets) / (four previous quarters’ comparable EBITDA). 5) 2019: excluding EUR 66m investments in acquisition and shares.
The Board of Directors proposes to the Annual General Meeting a dividend of EUR 1.85 per share. The Board of Directors also decided to propose an authorisation to acquire a maximum of 5 million treasury shares, which corresponds to 3 per cent of the total shares.
Additional key performance Indicators are available at elisa.com/investors (Elisa Operational Data.xlsx).
CEO Veli-Matti Mattila: Elisa’s revenue and EBITDA grew; 5G already available in thirteen cities
Continuous improvement of quality and customer experience strengthened again Elisa’s ability to succeed, as competition remained intense. Both revenue and comparable EBITDA increased in 2019. EBITDA was improved by the IFRS 16 change, increase in revenue and improved profitability of operational activities.
The mobile postpaid subscription base increased by 36,800 subscriptions during the quarter, while the prepaid subscription base decreased by 10,800 subscriptions. Elisa continued to serve customers as a 5G forerunner by introducing the 5G Fixed Wireless Access (FWA) service, during the quarter. The 5G FWA service is an excellent way to have a high-speed, stable and reasonably priced internet connection for the home if no optical fibre connection is feasible. The number of fixed broadband subscriptions decreased by 8,300 during the quarter, and excluding clean-up of non-revenue-generating-unit subscriptions, increased by 4,700. In 2019, Elisa was the first Finnish operator to launch sales of 5G devices and subscriptions. And for corporate customers, 5G has opened new avenues for utilising the Internet of Things.
During the fourth quarter, Elisa launched the original series Duke of Sipoo II and The Man in Room 301 in the Elisa Viihde entertainment service. Elisa’s original series have been successful internationally and were nominated for a total of 13 Venla awards (the “Finnish Oscars”). We expanded the Elisa Viihde service with a smart TV app and introduced a new service, Elisa Viihde Premium. In 2019, we launched altogether six original series, of which Bullets, Arctic Circle and All the Sins have been sold to more than 30 countries.
In 2019, Elisa’s consistent work to improve quality was recognised with Finland’s quality award, Suomen laatupalkinto. We made the Great Place to Work Finland list again, being the largest company on the list for the third consecutive year. This year, we were also listed among the best places to work in Europe for the first time.
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.
Outlook and guidance for 2020
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 2019. Mobile data and digital services are expected to increase revenue. Full-year comparable EBITDA is anticipated to be at the same level or slightly higher than in 2019. 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 growth in the mobile data market, as well as digital 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 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 1.85 per share. The dividend payment corresponds to 96 per cent of the financial period’s comparable net profit.
Shareholders who are listed in the company’s register of shareholders maintained by Euroclear Finland Ltd on 6 April 2020 are entitled to funds distributed by the General Meeting. The Board of Directors proposes that the payment date be 15 April 2020. 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 Release 2019 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. +358 520 5555
Distribution:
Nasdaq Helsinki
Principal media
www.elisa.com