Elisa’s Financial Statements Release 2021

ELISA FINANCIAL STATEMENT RELEASE 27 JANUARY 2022 AT 8:30 AM

Fourth quarter 2021 financial highlights

• Revenue increased by EUR 37m to EUR 536m, mainly due to the camLine acquisition, Elisa Viihde Viaplay cooperation and growth in mobile revenue.
• Mobile service revenue increased by 6.1 per cent to EUR 222m.
• Comparable EBITDA grew by EUR 7m to EUR 178m.
• Comparable EBIT increased by EUR 8m to EUR 111m.
• Comparable cash flow decreased by EUR 12m to EUR 87m, mainly due to higher capital expenditure and a change in net working capital.
• In Finland, mobile post-paid ARPU increased to EUR 20.7 (20.1 in the previous quarter), and mobile post-paid churn increased to 20.5 per cent (16.3).
• During the quarter, the net increase in post-paid mobile subscriptions was 7,100. M2M and IoT subscriptions contributed was +17,200.
• Prepaid subscriptions decreased by 10,300 during the quarter.
• The number of fixed broadband subscriptions decreased by 200 during the quarter.

Key indicators

¹⁾ 4Q21 excluding EUR 3m and 2021 excluding EUR 8m in restructuring costs. ²⁾ 4Q20 and 2020 excluding goodwill write-down of EUR 6m. ³⁾ 4Q20 and 2020 excluding EUR 6m capital gain from sale of Sulake shares. ⁴⁾ (Interest-bearing debt – financial assets) / (four previous quarters’ comparable EBITDA). ⁵⁾ 4Q21 excluding EUR 2m in share investments and 2021 excluding EUR 16m in share investments. 4Q20 excluding EUR 49m in share investments and EUR 3m from sale of shares; 2020 excluding EUR 57m in share investments and EUR 6m from sale of shares.

The Board of Directors proposes to the Annual General Meeting a dividend of EUR 2.05 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: strong performance and successful 5G business growth continued

Elisa continued its solid development. Revenue increased by 8 per cent to EUR 536 million from the previous year. Comparable EBITDA improved by 4 per cent to EUR 178 million and comparable earnings per share by 8 per cent, to EUR 0.55. Despite the restrictions and lockdowns due to the COVID-19 situation, we achieved a strong result. Full-year revenue for 2021 increased by 5 per cent over the previous year, comparable EBITDA by 3 per cent and comparable earnings per share by 7 per cent.

In 2021, Elisa continued its strong leadership in the development of 5G. During the year, 5G coverage expanded from 2 million to over 4 million Finns in over 150 locations, and the latest independent operator study at the end of the year¹⁾ again confirmed that Elisa's network is the most comprehensive. Data usage in our mobile networks grew by 21 per cent, mainly due to growth in 5G usage.

Nearly 90 per cent of mobile phones sold are now 5G devices. We were the first to launch a sustainable 5G subscription in Finland. Elisa Rehti 5G compensates for the carbon footprint of the manufacturing and usage of the phone as well as providing identity protection.

The Finnish public safety network Virve is transitioning to broadband technology, and the service will use Elisa's nationwide 4G and 5G mobile networks. The authorities will have access to privileged subscriptions and new functions (e.g. speech recognition) that will improve the efficiency of incident management and communication. Elisa is the sole supplier for this Finnish government-owned network.

The international digital services business progressed well during the quarter. Revenues as well as the order backlog grew strongly.

During the fourth quarter, the COVID-19 pandemic intensified, and we focused on providing sustainable and innovative digital solutions to our customers and ensuring a safe working and business environment. We received from RAKLI²⁾ the Vuoden ympäristöteko (“Working Environment Act of the Year”) award for our actions in utilising digitalisation to support our personnel in moving to remote and hybrid working, and for the help we have provided to our partners during the pandemic.

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

¹⁾ Boftel: Operator comparison September 2021
²⁾ RAKLI is a Finnish association of professional property owners, real estate investors, corporate real estate managers and construction clients

Outlook and guidance for 2022

Growth in the Finnish economy is expected to continue. However, there are some uncertainties, such as inflation and changes in the geopolitical environment. Challenges in global supply chains may also result in uncertainties in volumes and prices. Competition in the Finnish telecommunications market remains keen.

Full-year revenue is estimated to be at the same level or slightly higher than in 2021. 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 2021. 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 revenue growth and profitability improvement will derive from growth in the mobile data market, as well as domestic and international digital 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 2.05 per share. The dividend payment corresponds to 94 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 8 April 2022 are entitled to funds distributed by the General Meeting. The Board of Directors proposes that the payment date be 20 April 2022. 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 five 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 2021 and the complete report is attached as a pdf-file to this release and is also available on our website at 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 50 520 5555

Distribution:

Nasdaq Helsinki
Principal media
elisa.com