Elisa’s Half-Year Financial Report January–June 2023
ELISA CORPORATION HALF-YEAR FINANCIAL REPORT RELEASE 14 JULY 2023 AT 8:30 AM
Second quarter 2023 financial highlights
- Revenue increased by EUR 11m to EUR 533m, mainly due to growth in mobile and fixed services.
- Mobile service revenue increased by 5.4 per cent to EUR 241m.
- Year-on-year revenue growth of international digital services was slightly negative due to the expected volatility of the business. For the full year, strong double-digit organic growth is expected.
- Comparable EBITDA grew by EUR 3m to EUR 183m.
- Comparable EBIT increased by EUR 2m to EUR 116m.
- Comparable cash flow increased by EUR 27m to EUR 108m, mainly due to a positive change in net working capital.
- In Finland, mobile post-paid ARPU increased to EUR 21.9 (21.7 in the previous quarter), and mobile post-paid churn decreased to 13.6 per cent (14.9).
- During the quarter, the number of post-paid mobile subscriptions increased by 43,300, of which 32,900 were M2M and IoT subscriptions.
- Prepaid subscriptions increased by 2,200 during the quarter.
- The number of fixed broadband subscriptions decreased by 4,200 during the quarter.
- The guidance for the full year 2023 is unchanged.
Key indicators
| EUR million | 2Q23 | 2Q22 | Δ % | 1H/23 | 1H/22 | Δ % | |
| Revenue | 533 | 522 | 2.2 % | 1,072 | 1,033 | 3.8 % | |
| EBITDA | 183 | 177 | 3.0 % | 366 | 354 | 3.3 % | |
| Comparable EBITDA (1 | 183 | 179.36 | 1.8 % | 366 | 356 | 2.7 % | |
| EBIT | 116 | 111 | 3.8 % | 233 | 223 | 4.4 % | |
| Comparable EBIT (1 | 116 | 113.46 | 2.0 % | 233 | 225 | 3.5 % | |
| Profit before tax | 110 | 108 | 1.6 % | 222 | 217 | 2.6 % | |
| Comparable profit before tax (1 | 110 | 110 | -0.3 % | 222 | 219 | 1.7 % | |
| EPS, EUR | 0.56 | 0.55 | 0.9 % | 1.13 | 1.10 | 2.3 % | |
| Comparable EPS, EUR | 0.56 | 0.56 | -0.9 % | 1.13 | 1.11 | 1.4 % | |
| Capital expenditure | 70 | 67 | 4.1 % | 135 | 125 | 7.6 % | |
| Net debt | 1,459 | 1,431 | 1.9 % | 1,459 | 1,431 | 1.9 % | |
| Net debt / EBITDA (2 | 2.0 | 2.0 | 2.0 | 2.0 | |||
| Gearing ratio, % | 134.9 % | 135.4 % | 134.9 % | 135.4 % | |||
| Equity ratio, % | 35.2 % | 35.3 % | 35.2 % | 35.3 % | |||
| Cash flow (3 | 108 | 82 | 32.2 % | 179 | 135 | 32.7 % | |
| Comparable cash flow (4 | 108 | 81 | 33.0 % | 179 | 147 | 21.5 % | |
1) 2022 excluding EUR 2m in restructuring costs. 2) (Interest-bearing debt – financial assets) / (four previous quarters’ comparable EBITDA). 3) Cash flow before financing activities. 4) 1H22 excluding EUR 12m in share investments.
Additional key performance indicators are available at elisa.com/investors (Elisa Operational Data.xlsx).
CEO Veli-Matti Mattila: Good performance despite some anticipated headwinds
Elisa continued its good performance. In the second quarter, revenue increased by 2 per cent from the previous year to EUR 533 million. Comparable EBITDA improved by 2 per cent to EUR 183 million, and earnings per share were EUR 0.56. Despite increased salary costs, inflation and geopolitical challenges, all of our businesses have had solid performance.
During the second quarter, our 5G population coverage reached nearly 90 per cent in Finland. Also, Elisa was the first telco in Europe to deploy in-service software upgrade capability in a commercial 5G standalone network.
We continued our active investments in our fibre network, and in June, we announced EUR 200 million in investments in the coming years to expand e.g. fibre-to-the-home (FTTH) connections. The fibre rollout is based on customer demand, and customers value Elisa’s reliability and simple pricing model. As the market leader in Finland, Elisa continues to develop its fixed network business.
Elisa has achieved the status of a strong and diverse IT player in the Finnish market by offering comprehensive IT solutions to businesses and organisations. Elisa's IT business won several significant new customers and received acknowledgement for its expertise in automation and artificial intelligence with the Microsoft Partner of the Year award.
Elisa’s international digital services businesses continued to build momentum for growth. For example, Elisa Polystar recently won significant contracts for AI and analytics solutions from two large European operators.
We continued to implement our mission: a sustainable future through digitalisation. Elisa was ranked among the Financial Times Europe’s Climate Leaders for the third year in a row, achieving the highest total score of any Finnish company.
Elisa's unique strategy generates sustainable profit and growth. Our competitiveness is based on continuously increasing our productivity and quality, our strong investment capability, and the growth opportunities from our innovative digital services globally. Elisa and its entire personnel are engaged in creating value for our customers and a positive impact on society to ensure solid financial performance for shareholders.
Outlook and guidance for 2023
Development in the general economy includes many uncertainties. Growth in the Finnish economy is expected to stall. In particular, uncertainty relating to Russia’s war in Ukraine, such as inflation and energy prices, is continuing. 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 as or slightly higher than in 2022. Mobile data and digital services are expected to increase revenue. Full-year comparable EBITDA is anticipated to be at the same level as or slightly higher than in 2022. Capital expenditure is expected to be a maximum of 12 per cent of revenue.
Elisa is continuing to develop to improve productivity, for example by increasing automation and data analytics in different processes, such as customer interaction, 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.
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