Elisa's Interim Report January – September 2014

ELISA’S INTERIM REPORT JANUARY – SEPTEMBER 2014

ELISA INTERIM REPORT RELEASE 17 OCTOBER 2014 AT 8:30 A.M.

Third quarter 2014

• Revenue amounted to EUR 384 million (395)
• EBITDA was EUR 142 million (138) and EBIT was EUR 89 million (84)
• Profit before taxes amounted to EUR 83 million (78)
• Earnings per share were EUR 0.43 (0.38)
• Cash flow after investments was EUR 39 million (51)

• Mobile ARPU was EUR 15.9 (16.2 in previous quarter)
• Mobile churn was 16.9 per cent (15.7 in previous quarter)
• The number of Elisa’s mobile subscriptions increased by 33,600 during the quarter
• The number of fixed broadband subscriptions decreased by 3,600 on the previous quarter
• Net debt / EBITDA was 2.0 (2.0 end 2013) and gearing 126 per cent (113 end 2013)

January–September 2014

• Revenue was EUR 1,150 million (1,146)
• EBITDA was EUR 395 million (369) and EBIT was EUR 234 million (212)
• Earnings per share grew to 1.10 (0.93)
• Cash flow after investments was EUR 143 million (58), excluding investments in shares EUR 166 million (146)

Key indicators

¹⁾ Excluding non-recurring items: Q3/2013: EBITDA EUR 142m, EBIT EUR 87m, profit before tax EUR 81m and EPS EUR 0.40. 1-9/2013: EBITDA EUR 374m, EBIT EUR 217m, profit before tax EUR 200m and EPS EUR 0.96.

Financial position and cash flow

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

²⁾ Excluding investments in shares Q3/14 EUR 61m, 1-9/2014 EUR 166m and 1-9/2013 EUR 146m

Additional information regarding the Key Performance Indicators is available at: www.elisa.com/investors (Elisa Operational Data.xls)

CEO Veli-Matti Mattila:
Strong earnings thanks to comprehensive improvement of competitiveness

The overall uncertainty of the general economic situation continued. Earnings grew year-on-year in the third quarter. Revenue fell slightly, but the improvement of Elisa's competitiveness continued successfully. The demand for 4G subscriptions continued to be brisk, which is a sign of customers' readiness to pay more for faster connections. We actively built the most comprehensive LTE network in Finland, with almost 3,000 4G LTE base stations. According the independent research company European Communications Engineering Oy, Elisa's 4G LTE network has the widest coverage in Finland.

A record amount of data moved through Elisa's network during the period. The use of mobile data services increased by 80 per cent since last year among both consumers and corporate customers. We lowered mobile roaming prices, which fuelled mobile data growth abroad as well. An example of this is the 15-fold increase in the United States during the vacation season. Our mobile subscription base grew by 33,600 during the third quarter. The number of fixed network broadband subscriptions fell by approximately 3,600 but the number of cable TV subscriptions grew by 3,400.

The popularity of Elisa Viihde IPTV is based on its continuously developing content. In the third quarter we introduced a variety of different content to Elisa Viihde. The new content covers, for example, sports, tourism, and crime drama. The position of the Elisa Kirja e-book service as the leading publisher of Finnish language e-books strengthened further when the sales of e-books almost doubled compared with last summer.

We invested in cybersecurity services offered to corporations. In the future, our customers will be able to obtain the most comprehensive data security solutions on the market as managed services from one operator. Elisa Videra was the first corporation in Finland to be awarded the CMSP certificate by Cisco for its highest level video conferencing services.

Elisa's 4G network already covers 95 per cent of Finns. 4G LTE speeds are available to 90 per cent of Finns. The EUR 200 million that we annually invest in Finland enables even smoother connections for modern data transfer needs.

Elisa has expanded strongly into new business areas. Our new brand strategy and corporate identity, launched on 15 October, covers our multifaceted business. From now on our services for both consumer and corporate customers are known under one, unified brand. Our renewed brand communicates more clearly Elisa’s broad offering of services and products, and also brings efficiency in marketing.

We will continue our determined work to improve both customer satisfaction and our operational productivity. Improving our productivity, developing new services for our customers, and maintaining our strong investment ability 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 slightly higher than in 2013. 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 cost efficiency 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 administration 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.

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 Q3 2014 Interim Report 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