Elisa’s Interim Report January-June 2013

ELISA INTERIM REPORT RELEASE 12 JULY 2013 AT 8:30am

Second quarter 2013
- PPO companies consolidated as of 1 May 2013
- Revenue amounted to EUR 390 million (389)
- EBITDA was EUR 122 million (122) and EBIT was EUR 69 million (72)
- Profit before tax was EUR 63 million (66)
- Earnings per share was EUR 0.30 (0.32)
- Cash flow after investments was EUR -30 million (47), excluding PPO acquisition EUR 54 million

- Mobile ARPU was EUR 16.2 (15.4 in previous quarter)
- Mobile churn was 17.7 per cent (20.0 in previous quarter)
- The number of Elisa’s mobile subscriptions increased by 19,700 during the quarter
- The number of fixed broadband subscriptions increased by 58,300 on the previous quarter
- Net debt / EBITDA was 2.1 (1.7 end 2012) and gearing 137 per cent (99 end 2012)

January – June 2013
- Revenue was EUR 751 million (771)
- EBITDA was EUR 231 million (243), EBIT EUR 128 million (140)
- Cash flow after investments was EUR 7 million (85), excluding acquisitions EUR 95 million

Key indicators:

Financial position and cash flow:

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

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

CEO Veli-Matti Mattila:

“Elisa’s result at last year’s level

Elisa’s result and revenue continued at the same level even though the competitive situation remained intense during the second quarter of the year. Insecurity regarding the general economic situation was reflected in the cautiousness of companies and consumers. However, the demand for new services continued strong. Revenue was negatively affected by the drop in the interconnection fees. Revenue was positively affected by the acquisition of PPO's business operations and the abatement of the most aggressive price campaigns, which occurred at the turn of the year.

Our mobile subscription base grew by 19,700 during the second quarter of the year. The number of fixed network broadband subscriptions increased by more than 58,300 with the acquisition of PPO. The use of smartphones and USB modems further increased the growth in mobile data services among both consumers and corporate customers.

A number of new service features were developed for consumers. It will now be possible to watch HBO’s quality TV series via the Elisa Viihde service immediately after the show premieres in the United States. New payment methods are now incorporated in Elisa Lompakko, the first mobile payment service in the Nordic Countries. For example, it will be possible to use Elisa Rahaviesti to send payments to all mobile phone numbers in the future, which will facilitate the transfer and repayment of small amounts. In addition, we launched an extension to our data security service for consumers. In the future, consumers will be able to do secure online banking not only on the computer but also with any mobile device. 

Corporate customers’ interest in ICT services increased in both the public and private sectors. A recent study shows that municipalities have significant needs for reform in service solutions and the renewal of the tools of mobile personnel, to which Elisa’s services can respond. 

In the first quarter of the year, we began new measures to improve profitability in this challenging environment. Our measures with regard to the areas in question, such as streamlining product selections and IT systems, enhancing the efficiency of customer service and sales, and cutting administrative costs, will accelerate further in the second half of the year.

We have further refined our strategy. Our focus areas are to bring added value to customers through the use of data, accelerate new service businesses, and improve performance through increased customer understanding, quality, and cost-efficiency. Improving our productivity, developing new services for our customers, and maintaining our strong investment capabilities provide a solid foundation for competitive operations in the future."

Outlook for 2013

The macroeconomic environment in Finland is still expected to be weak in 2013. 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 the previous year. 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 at the same level as in 2012. As a result of the PPO consolidation, full–year capital expenditure is expected to be approximately 13 per cent of revenue. The mid-term target of maximum 12 per cent is still valid. Elisa’s financial position and liquidity are good.

In order to secure good results in a more challenging environment, Elisa is continuing its accelerated cost efficiency measures, in the areas of streamlining product portfolio and IT systems, increasing  customer service and sales efficiency, as well as reducing  general administration costs.

Elisa's transformation into a provider of new, exciting and relevant services for its customers continues. 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 Q2 2013 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