ELISA'S INTERIM REPORT JANUARY-SEPTEMBER
Third quarter 2008
Revenue was EUR 374 million (394)
EBITDA was EUR 129 million (132), EBIT EUR 77 million (82),
EBITDA margin increased to 35 per cent (33)
Profit before tax amounted to EUR 67 million (89)
Earnings per share was EUR 0.33 (0.45)
Cash flow after investments was EUR 51 million (6)
Financial position and liquidity are good. Cash and undrawn credit
lines totalled EUR 201 million and there are no refinancing needs
expected on a three-year time scale.
EBITDA for the last quarter of the year is expected to improve on the
previous quarter
ARPU in the mobile business was at the previous quarter's level EUR
26.4 (26.8).
Churn increased to 14.1 per cent from the previous quarter (11.2)
The number of Elisa's mobile subscriptions increased by 57,400 during
the quarter, due in particular to the new 3G customers, mobile
broadband and prepaid subscriptions
The number of fixed broadband subscriptions decreased by 3,200 on the
previous quarter
Net debt / EBITDA was 1.7x (1.5x at the end of 2007) and gearing 107
per cent (71 at the end of 2007)
January-September 2008
Revenue was EUR 1,113 million (1,166)
EBITDA was EUR 342 million (373), EBIT EUR 187 million (228)
EBITDA excluding non-recurring items was EUR 349 million (363),
EBIT EUR 194 million (217)
Cash flow after investments was strong, EUR 176 million (61)
Extra implementation costs of the new billing and CRM system and
revenue adjusting items affected EBITDA negatively by EUR 22 million
Key indicators:
EUR million 7-9/2008 7-9/2007 1-9/2008 1-9/2007
Revenue 374 394 1113 1166
EBITDA 129 132 342 373
EBITDA excluding
non-recurring items 129 132 349 363
EBIT 77 82 187 228
Profit before tax 67 89 157 220
Earnings per share, EUR 0.33 0.45 0.78 1.06
Capital expenditures 42 44 120 138
Financial position and cash flow:
EUR million 30.9.2008 30.9.2007 31.12.2007
Net debt 891 646 738
Net debt / EBITDA 1) 1.7 1.2 1.5
Gearing ratio, % 107.4 65.3 71.3
Equity ratio, % 40.8 45.7 47.9
+---------------------------------------------------------------+
| EUR million | 7-9/2008 | 7-9/2007 | 1-9/2008 | 1-9/2007 |
|-------------------+----------+----------+----------+----------|
| Cash flow | | | | |
| after investments | 51 | 6 | 176 | 61 |
+---------------------------------------------------------------+
1) (interest-bearing debt - financial assets) / (EBITDA exclusive of
non-recurring items x 4)
CEO Veli-Matti Mattila:"Elisa's profitability has improved, driven by strengthened
competitiveness and more efficient operations
Elisa achieved strong profitability and cash flow in the third
quarter of 2008. This is due to strengthened competitiveness and
determined actions to improve the efficiency of the operations.
Revenue met expectations, although sales of equipment were at a lower
level than expected. Elisa's financial position and liquidity are
strong.
Elisa succeeded well given the fierce competition in mobile
communication. Our mobile subscription base increased by nearly
60,000 new subscriptions. There was growth especially in 3G services
and mobile broadband and we continue to be the 3G market leader.
Customers have appreciated the 3G network with the best coverage in
Finland, reaching over 270 locations by the end of the year.
Finns have quickly adopted the use of mobile broadband; also when
measured at the international level. The growth has been excellent
and thus we upgrade our estimate that there will be up to 1.7 million
people using 3G services in Finland by the end of the year.
The new billing and CRM system is now in full use and operating
smoothly. The measures to improve our customer service have succeeded
well and as a result of that the queuing times to our call centres
have further decreased and customer satisfaction is at the good
level. We will continue consistently to further develop the quality
of our services.
We will continue to follow our strategy and develop One Elisa,
improve our profitability and provide new services. A strong market
position, improved competitiveness and good financial position
provide Elisa with an excellent basis for the rest of the year.
Despite the generally insecure economic environment, we maintain a
positive attitude towards continued success."
ELISA
Vesa Sahivirta
Director, IR and Financial Communications
tel. +358 50 520 5555
Additional information:
Mr Veli-Matti Mattila, CEO, tel. +358 10 262 2635
Mr Jari Kinnunen, CFO, tel. +358 10 262 9510
Mr Vesa Sahivirta, Director, IR and Financial Communications, tel.
+358 50 520 5555
Distribution:
Helsinki Stock Exchange
Principal media
www.elisa.com
INTERIM REPORT JANUARY-SEPTEMBER 2008
The interim report has been prepared in accordance with the IAS 34
standard, "Interim reports". The information presented in this
interim report is unaudited.
Market situation
The base of mobile communications subscriptions and the use of data
services have evolved favourably in Finland with 3G subscriptions
comprising a significant proportion of new subscriptions. The use of
services made available through 3G subscriptions has also increased.
Another factor contributing to the growth has been the use of
multiple terminal devices for different purposes, mobile broadband
services and prepaid subscriptions. Churn has been at a normal level
in relation to the market situation, and competition has been seen in
services and in campaigning.
In the fixed network business the number and usage of traditional
subscriptions decreased at a slower pace than in the previous
quarters. The fixed broadband market is declining slightly, while the
subscription growth is now in mobile broadband.
Revenue, earnings and financial position
Revenue:
EUR million 7-9/2008 7-9/2007 1-9/2008 1-9/2007
Mobile communications 237 252 689 727
Fixed network 150 157 462 480
Inter-segment sales -13 -15 -38 -41
Total 374 394 1113 1166
Third quarter 2008
Revenue decreased by 5 per cent due to lower mobile interconnection
fees as of the beginning of the year and lower roaming fees as of
September 2007. Lower fees reduced revenue by EUR 15 million.
Terminal equipment sales were at the same level.
The new fees affected the Mobile segment's revenue, which decreased
by 6 per cent. The Fixed network segment's revenue decreased by 4 per
cent driven by lower volumes in the traditional analogue network.
January-September 2008
Elisa's revenue decreased by 5 per cent on last year mainly due to
lower mobile interconnection and roaming fees, which reduced revenue
by EUR 46 million. The Mobile segment's revenue decreased by 5
percent and the Fixed network segment's by 4 per cent.
The revenue adjusting items in January-September affected revenue
negatively by approximately EUR 11 million.
Earnings:
+-------------------------------------------------------------------+
| EUR million | 7-9/2008 | 7-9/2007 | 1-9/2008 | 1-9/2007 |
|-----------------------+----------+----------+----------+----------|
| Mobile communications | | | | |
| EBITDA | 74 | 80 | 193 | 220 |
| EBITDA-% | 31 | 32 | 28 | 30 |
| EBITDA excl. | | | | |
| non-recurring items | 74 | 80 | 196 | 220 |
| EBITDA-%, excl. | | | | |
| non-recurring items | 31 | 32 | 28 | 30 |
| EBIT | 45 | 53 | 106 | 143 |
|-----------------------+----------+----------+----------+----------|
| Fixed network | | | | |
| EBITDA | 55 | 54 | 151 | 159 |
| EBITDA-% | 36 | 34 | 33 | 33 |
| EBITDA excl. | | | | |
| non-recurring items | 55 | 54 | 155 | 149 |
| EBITDA-%, excl. | | | | |
| non-recurring items | 36 | 34 | 34 | 31 |
| EBIT | 32 | 31 | 83 | 91 |
|-----------------------+----------+----------+----------+----------|
| Corporate functions | | | | |
| EBITDA | 0 | -3 | -2 | -6 |
| EBIT | 0 | -3 | -2 | -6 |
|-----------------------+----------+----------+----------+----------|
| Total | | | | |
| EBITDA | 129 | 132 | 342 | 373 |
| EBITDA-% | 35 | 33 | 31 | 32 |
| EBITDA excl. | | | | |
| non-recurring items | 129 | 132 | 349 | 363 |
| EBITDA-%, excl. | | | | |
| non-recurring items | 35 | 33 | 31 | 31 |
| EBIT | 77 | 82 | 187 | 228 |
+-------------------------------------------------------------------+
Third quarter 2008
Elisa's EBITDA declined by 2 per cent on the previous year, but the
EBITDA margin improved to 35 per cent (33). Additional implementation
costs of the new billing and CRM system continued and affected EBITDA
negatively by approximately EUR 2 million, as expected. During the
last quarter of the year these additional costs are expected to come
to an end.
Financial income and expenses totalled EUR -10 million (7, including
a EUR 13 million gain on the sale of Comptel shares). The increase in
financial expenses was mainly due to an increase in net debt. Income
taxes in the income statement amounted to EUR -16 million (-17).
Elisa's July-September earnings after taxes were EUR 51 million (72).
The Group's earnings per share (EPS) amounted to EUR 0.33 (0.45). At
the end of September, the Group's equity per share was EUR 5.32 (6.53
at the end of 2007).
January-September 2008
EBITDA declined by 8 per cent on the previous year. EBITDA excluding
non-recurring items declined EUR 14 million or by 4 per cent.
Implementation of the new billing and CRM system and revenue
adjusting items affected EBITDA negatively by approximately EUR 22
million.
Financial position:
EUR million 30.9.2008 30.9.2007 31.12.2007
Net debt 891 646 738
Net debt / EBITDA 1) 1.7 1.2 1.5
Gearing ratio, % 107.4 65.3 71.3
Equity ratio, % 40.8 45.7 47.9
+---------------------------------------------------------------+
| EUR million | 7-9/2008 | 7-9/2007 | 1-9/2008 | 1-9/2007 |
|-------------------+----------+----------+----------+----------|
| Cash flow | | | | |
| after investments | 51 | 6 | 176 | 61 |
+---------------------------------------------------------------+
1) (interest-bearing debt - financial assets) / (EBITDA exclusive of
non-recurring items x 4)
The financial position and liquidity are good. Cash and undrawn
credit lines totalled EUR 201 million at the end of the quarter and
there are no refinancing needs expected on a three-year time scale.
Third quarter
The July-September cash flow after investments increased to EUR 51
million. Contributing to the increase was a change in net working
capital. Net debt decreased by EUR 7 million in the third quarter.
Net debt increased through share buy-backs of EUR 43 million.
January-September 2008
Elisa's financial position and liquidity remained good. Elisa's net
debt increased from EUR 738 million to EUR 891 million mainly due to
the capital repayment of EUR 284 million in March 2008.
Cash flow after investments increased clearly on the previous year to
EUR 176 million (61) mainly due to the change in net working capital.
Changes in corporate structure
There were no changes in corporate structure during the third
quarter.
Mobile communication business
+-----------------------------------------------------------------+
| Number of subscriptions | 30.9.2008 | 30.9.2007 | 31.12.2007 |
|----------------------------+-----------+-----------+------------|
| Total number of | | | |
| subscriptions | 2,830,000 | 2,622,300 | 2,657,400 |
|----------------------------+-----------+-----------+------------|
| - Subscriptions in Finland | 2,487,700 | 2,309,800 | 2,334,600 |
|----------------------------+-----------+-----------+------------|
| - Subscriptions in Estonia | 342,300 | 312,500 | 322,800 |
+-----------------------------------------------------------------+
+-------------------------------------------------------------------+
| User-specific indicators 1) | 7-9/2008 | 7-9/2007 | 1-12/2007 |
|---------------------------------+----------+----------+-----------|
| Average revenue/subscription, | | | |
| €/month | 26.4 | 29.9 | 30.0 |
|---------------------------------+----------+----------+-----------|
| Annualised churn, % | 14.1 | 11.2 | 12.2 |
|---------------------------------+----------+----------+-----------|
| Outgoing calls, | | | |
| min/subscription/month | 216 | 217 | 218 |
|---------------------------------+----------+----------+-----------|
| SMS, message/subscription/month | 57 | 51 | 53 |
|---------------------------------+----------+----------+-----------|
| Non-voice services/revenue, % | 22 | 19 | 19 |
|---------------------------------+----------+----------+-----------|
| Indicators on network usage 2) | 7-9/2008 | 7-9/2007 | 1-12/2007 |
|---------------------------------+----------+----------+-----------|
| Outgoing calls, million minutes | 1,498 | 1,428 | 5,661 |
|---------------------------------+----------+----------+-----------|
| SMS, million messages | 403 | 382 | 1,550 |
+-------------------------------------------------------------------+
1) Elisa's service operators in Finland (excluding
prepaid subscriptions)
2) Elisa's network operator in Finland
Elisa's network operator in Finland increased the number of its
subscriptions by approximately 208,000 from a year ago. The increase
was due markedly to the success of 3G service bundles, mobile
broadband and prepaid subscriptions. The increase in subscriptions in
the third quarter was approximately 57,000. The total number of
subscriptions at the end of September was 2.8 million.
In the third quarter, the call minutes per subscription of Elisa's
own service operators were at the same level, 216 (217) and the
number of SMS messages increased by 12 per cent to 57 (51) on the
corresponding period last year. Due to the increase in the number of
subscriptions of Elisa's service operators, the total call minutes in
the network grew by 5 per cent and the number of SMS messages
increased by 5 per cent.
Mobile communication revenues decreased by 6 per cent given the lower
interconnection fees and equipment sales. Revenue per subscription
declined 12 per cent on the previous year to EUR 26.4 due to lower
interconnection fees as of the beginning of the year and lower
roaming fees as of September 2007.
The mobile communication business of Elisa's Estonian subsidiary has
been negatively affected by lower interconnection fees since November
2007. Revenue declined to EUR 25.2 million (30.6), EBIT declined to
EUR 6.9 million (7.4) and EBITDA to EUR 9.1 million (10.1). The
number of subscriptions increased by 29,800 to 342,300 (312,500).
Subscriptions grew by 7,600 in the third quarter.
Fixed network business
Number of subscriptions 30.9.2008 30.9.2007 31.12.2007
Broadband subscriptions 519,800 518,400 521,800
ISDN channels 56,400 70,900 70,800
Cable TV subscriptions 242,500 235,700 237,100
Analogue and other subscriptions 456,600 483,500 471,500
Total number of subscriptions 1,275,300 1,308,500 1,301,300
Elisa continued to be the Finnish broadband market leader. Broadband
growth has been taken by the Mobile broadband, which affected the
amount of fixed broadband subscriptions in the third quarter.
Year-on-year growth was 1,400 or 0.3 per cent.
The number of traditional subscriptions continued to decrease as
voice calls shifted to the mobile communication network and data
transfers to broadband subscriptions.
Personnel
In January-September the average number of personnel at Elisa was
2,938 (3,326).
Personnel by segments:
30.9.2008 30.9.2007 31.12.2007
Mobile communications 1,278 1,313 1,252
Fixed network 1,562 1,878 1,727
Corporate functions 36 38 36
Total 2,876 3,229 3,015
Investments
EUR million 7-9/2008 7-9/2007 1-9/2008 1-9/2007 1-12/2007
Capital expenditures, 42 44 120 138 206
of which
- mobile communication
business 25 21 65 63 91
- GSM leasing liability
buy-backs 0 0 2 0 2
- fixed network
business 17 23 53 75 113
Shares 0 6 13 11 12
- of which achieved
through an exchange
of shares 5 5 5
Total 42 51 133 149 218
Mobile business investments grew mainly due to capacity and coverage
increase of the 3G network. Investments in the fixed network business
have declined due to the decrease in the traditional analogue
business and reduced number of broadband subscription installations.
Financing arrangements and ratings
Valid financing arrangements:
Maximum amount In use on 30.9.2008
EUR million
Committed credit limits 300 120
Commercial paper programme ¹) 250 81
EMTN programme ²) 1,000 636
1) The programme is not committed.
2) European Medium Term Note programme, not committed.
Long-term credit ratings:
Credit rating agency Rating Outlook
Moody's Investor Services Baa2 Stable
Standard & Poor's BBB Stable
Share
Trading of shares 7-9/2008 7-9/2007 1-9/2008 1-9/2007
Shares traded, millions 83.7 72.0 262.7 243.0
Volume, EUR million 1,145.9 1,465.6 4,159.7 5,200.8
% of shares 53.8 45.5 168.7 153.6
Shares and market values 30.9.2008 30.9.2007 31.12.2007
Total number of shares 166,307,586 166,307,586 166,307,586
Treasury shares 10,688,629 8,049,976 8,049,976
Outstanding shares 155,618,957 158,257,610 158,257,610
Closing price, EUR 13.74 21.80 21.00
Market capitalisation,
EUR million 2,138 3,450 3,323
Treasury shares, % 6.4 4.8 4.8
On 5th August 2008, Elisa was notified, in accordance with Chapter 2,
Section 9 of the Finnish Securities Market Act, of a change in the
company's ownership as follows:
DNA Oy, Lännen Puhelin Oy, Oulun Puhelin Holding Oyj, Kuopion Puhelin
Sijoitus Oy and PHP Liiketoiminta Oyj aggregate ownership in Elisa
shares and votes exceeded 5 per cent. The companies may use their
voting rights in mutual understanding.
The share repurchases announced by Elisa on 1st August 2008 was
completed on 16 September 2008. Elisa purchased 3,000,000 of its own
shares on the Helsinki Stock Exchange during 8.8 - 16.9.2008. The
average price per share was EUR 14.43 and the total purchase price
approximately EUR 43 million. Elisa now holds 10,688,629 treasury
shares following these purchases.
The Board of Directors' authorisations
The Board of Directors has authorisation to decide on the
distribution of funds out of distributable equity up to a maximum of
EUR 250,000,000. The authorization is valid until the commencement of
the next Annual General Meeting.
The Board of Directors has authorisation to issue shares and special
rights. The authorisation is valid until 31 March 2010. A maximum
aggregate of 50.0 million of the company's shares can be issued under
the authorization. A total of 361,347 shares were issued on 2 May
2008.
The Board of Directors has authorisation to acquire treasury shares.
The amount of shares that may be purchased under the authorisation is
maximum 15,000,000. The authorisation is valid until August 31, 2009.
Significant legal issues
There have not been any material changes in the legal issues
disclosed in the previous interim report nor prior to that.
Substantial risks associated with Elisa's operations
Risk management is part of Elisa's internal control system. It aims
to ensure that risks affecting the company's business are identified,
influenced and monitored. The company classifies risks into
strategic, operational, insurable and financial risks.
Strategic and operational risks:
The telecommunications industry is under intense competition in
Elisa's main market areas, which may have an impact on Elisa's
business. The telecommunications industry is subject to heavy
regulation. Elisa and its business are monitored and regulated by
several public authorities. This regulation also affects the price
level of some products and services offered by Elisa.
The rapid developments in telecommunications technology may have a
significant impact on Elisa's business.
Elisa's main market is Finland, where the number of mobile phones per
inhabitant is among the highest in the world, which means that growth
in subscriptions is limited. Furthermore, the volume of phone traffic
in Elisa's fixed network has decreased in the past few years. These
factors may limit the opportunities for growth.
The deterioration of the economic environment may impact the demand
for Elisa's services and products, and therefore growth prospects.
However, the demand for communication services is expected to
continue also during a possible recession.
Accident risks:
The company's core operations are covered by insurance against damage
and interruptions caused by accidents. Accident risks also include
litigations and claims.
Financial risks:
In order to manage interest rate risk, the Group's borrowing and
investments are diversified in fixed- and variable-rate instruments.
Interest rate derivatives are used to manage interest rate risk.
As most of Elisa Group's cash flow is denominated in euros, the
exchange rate risk is minor.
The objective of liquidity risk management is to ensure the Group's
financing in all circumstances. The Group's liquid assets, committed
credit limits and investments totalled EUR 201 million at the end of
September 2008 (EUR 317 million at the end of 2007 ).
Liquid assets are invested within confirmed limits to investment
targets with a good credit rating. The business units are liable for
credit risk associated with accounts receivable. Credit risk
concentrations in accounts receivable are minor as the customer base
is wide. The company uses credit derivatives to manage counterparty
risks relating to the QTE arrangement. Elisa has provided a guarantee
for a credit derivative portfolio, which carries a certain credit
default threshold prior to guarantee obligation. The maximum
liability under guarantee is disclosed in note 3. Contingent
Liabilities.
Given the recent financial market turmoil, the banking sector has
suffered and the banks' ability to finance companies have
deteriorated, with some capital market activities not operating
fully. However, Elisa has cash, committed credit facilities and a
sustainable cash flow to cover its foreseeable financing needs.
Events after the financial period
On 13 October 2008, Elisa received a notice from Novator Finland Oy
in accordance with Chapter 2, Section 9 of the Finnish Securities
Market Act, that Novator has sold its entire shareholding in Elisa
Corporation.
On 13 October 2008, Elisa received two notices from Varma Mutual
Pension Insurance Company in accordance with Chapter 2, Section 9 of
the Finnish Securities Market Act, announcing firstly that Varma
holds more than 10 per cent (12.21) of Elisa's shares and votes. In
the second notice Varma announced that they hold more than 15 per
cent (15.71) of Elisa's shares and votes.
The Finnish State has announced that Varma is entitled to oblige the
Finnish State to redeem at least 50 per cent of Elisa shares
(purchased by Varma on 13 October 2008) at the same day's purchase
price and to use this right at its discretion once the State has made
the necessary financing decisions.
Outlook for 2008
Competition in the Finnish telecommunications market remains
challenging. The market is focusing increasingly on services. The use
of mobile communications and mobile broadband products is continuing
to rise. Elisa's aim is to further reinforce its position as the
service leader.
Elisa's full year EBITDA excluding non-recurring items is expected to
be at the same level as in 2007. EBIT excluding non-recurring items
is expected to be at the same or slightly lower level as in 2007. As
a result of lower terminal sales volumes, revenue is estimated to be
slightly less than in 2007. The extra implementation costs of the
billing and CRM system are expected to come to an end during the last
quarter of the year. Determined execution of profitability
improvement measures will continue. Strong growth in mobile
subscriptions and seasonality also contribute positively to
profitability.
The contributory factors for long-term growth and profitability
improvement include the 3G market growth and efficiency measures,
which are continuing as expected. Elisa's financial position and
liquidity are good. There are no refinancing needs expected on a
three-year time scale. The current financial market turmoil is
expected have no material impact on Elisa's operations in the fourth
quarter.
Full-year capital expenditure is expected to be 10 to 12 per cent of
revenue, and cash flow will substantially improve on the previous
year due to factors such as change in net working capital.
BOARD OF DIRECTORS
Elisa Corporation
1.1. - 30.9.2008
Unaudited
CONSOLIDATED INCOME STATEMENT
7-9 7-9 1-9 1-9 1-12
EUR million Note 2008 2007 2008 2007 2007
Revenue 1 374,4 394,5 1112,9 1166,3 1568,4
Other operating income 1,5 4,8 3,5 19,7 21,0
Materials and services -165,7 -175,4 -493,4 -529,7 -707,0
Employee expenses -32,3 -38,3 -119,3 -130,5 -181,2
Other operating
expenses -48,5 -53,7 -161,4 -152,5 -201,8
EBITDA 1 129,4 131,9 342,3 373,3 499,4
Depreciation and
amortisation -52,5 -49,9 -155,0 -145,5 -197,4
EBIT 1 76,9 82,0 187,3 227,8 302,0
Financial income 1,2 16,3 9,9 24,0 27,9
Financial expense -11,0 -9,1 -39,9 -32,1 -44,7
Share of associated
companies' profit 0,0 0,0 0,0 0,1 0,0
Profit before tax 67,1 89,2 157,3 219,8 285,2
Income taxes -15,8 -17,0 -34,0 -49,7 -64,9
Profit for the period 51,3 72,2 123,3 170,1 220,3
Attributable to:
Equity holders of
the parent 51,3 72,4 123,0 169,7 219,8
Minority interest 0,0 -0,2 0,3 0,4 0,5
51,3 72,2 123,3 170,1 220,3
Earnings per share
(EUR)
Basic 0,33 0,45 0,78 1,06 1,38
Diluted 0,33 0,45 0,78 1,06 1,38
Average number of outstanding
shares (1000 shares)
Basic 157 451 158 016 158 065 159 808 159 417
Diluted 157 451 158 016 158 065 159 808 159 417
Elisa Corporation
1.1. - 30.9.2008
Unaudited
CONSOLIDATED BALANCE SHEET
30.9. 31.12.
EUR million 2008 2007
Non-current assets
Property, plant and equipment 614,0 637,3
Goodwill 776,2 773,6
Other intangible assets 182,2 194,5
Investments in associated companies 0,1 0,1
Available-for-sale investments 36,9 30,9
Receivables 8,4 7,3
Deferred tax assets 29,4 31,7
1647,2 1675,4
Current assets
Inventories 24,6 28,5
Trade and other receivables 350,5 454,8
Cash and cash equivalents 21,1 16,9
396,2 500,2
Total assets 2043,4 2175,6
Equity attributable to equity holders of the parent 827,6 1033,4
Minority interest 1,7 2,0
Total equity 829,3 1035,4
Non-current liabilities
Deferred tax liabilities 30,7 34,9
Provisions 5,5 7,3
Interest-bearing debt 670,4 627,3
Other non-current liabilities 17,2 24,6
723,8 694,1
Current liabilities
Trade and other payables 245,6 303,2
Tax liabilities 0,4 10,8
Provisions 2,7 4,1
Interest-bearing debt 241,6 128,0
490,3 446,1
Total equity and liabilities 2043,4 2175,6
Elisa Corporation
1.1. - 30.9.2008
Unaudited
CONDENSED CONSOLIDATED
CASH FLOW STATEMENT
1-9 1-9 1-12
EUR million 2008 2007 2007
Cash flow from operating activities
Profit before tax 157,3 219,8 285,2
Adjustments
Depreciation and amortisation 155,0 145,5 197,4
Other adjustments 26,4 -7,7 3,6
181,4 137,8 201,0
Change in working capital
Change in trade and other receivables 104,6 -99,3 -116,0
Change in inventories 3,9 15,2 10,0
Change in trade and other payables -58,1 -34,5 6,5
50,4 -118,6 -99,5
Financial items, net -35,1 -15,8 -18,9
Taxes paid -48,8 -59,1 -82,2
Net cash flow from operating activities 305,2 164,1 285,6
Cash flow from investing activities
Capital expenditure -119,1 -135,4 -203,7
Purchase of shares -10,6 -4,9 -6,2
Proceeds from asset disposal 0,6 37,4 38,2
Net cash used in investing activities -129,1 -102,9 -171,7
Cash flow before financing activities 176,1 61,2 113,9
Cash flow from financing activities
Purchase of treasury shares -43,3 -85,6 -85,6
Proceeds from treasury shares 1,7 1,7
Proceeds from long-term borrowings 80,0 350,0 350,0
Repayment of long-term borrowings -30,0 -44,2 -44,2
Change in short-term borrowings 109,0 -25,0 67,0
Repayment of finance lease liabilities -2,8 -5,3 -6,7
Dividends paid and capital repayment -284,8 -243,6 -401,4
Net cash used in financing activities -171,9 -52,0 -119,2
Change in cash and cash equivalents 4,2 9,2 -5,3
Cash and cash equivalents at beginning of
period 16,9 22,2 22,2
Cash and cash equivalents at end of period 21,1 31,4 16,9
Elisa
Corporation
1.1.-30.9.2008
Unaudited
STATEMENT OF CHANGES
IN EQUITY
Reserve
for
Trea- invested Retai- Mino-
Share sury non- ned rity
Share pre- sha- Other restricted ear- inte- Total
EUR million capital mium res reserves equity nings rest equity
Balance at
January 1,
2007 83,0 530,4 -81,3 422,1 353,4 4,7 1312,3
Available-
for-sale
investments -10,2 -10,2
Items
recognised
directly in
equity -10,2 -10,2
Profit for
the period 169,7 0,4 170,1
Total
recognised
income and
expense for
the period -10,2 169,7 0,4 159,9
Acquisitions
of
subsidiaries 5,3 -0,8 -2,8 1,7
Dividends -401,5 -0,4 -401,9
Purchase of
treasury
shares -85,6 -85,6
Sales of
treasury
shares 1,1 0,4 1,5
Share-based
compensation 2,2 2,2
Balance at
September 30,
2007 83,0 530,4 -165,8 417,2 123,4 1,9 990,1
Balance at
January 1,
2008 83,0 -165,8 403,9 535,7 176,6 2,0 1035,4
Available-
for-sale
investments -2,4 -2,4
Items
recognised
directly in
equity -2,4 -2,4
Profit for
the period 123,0 0,3 123,3
Total
recognised
income and
expense for
the period -2,4 123,0 0,3 120,9
Capital
repayment -284,9 -284,9
Dividends -0,6 -0,6
Purchase of
treasury
shares -43,3 -43,3
Share-based
compensation 7,1 -5,3 1,8
Balance at
September 30,
2008 83,0 -202,0 401,5 250,8 294,3 1,7 829,3
Elisa Corporation
1.1. - 30.9.2008
Unaudited
NOTES
BASIS OF PREPARATION
The Interim report has been prepared in accordance
with the IFRS recognition and measurement principles,
although all requirements of IAS 34 standard have not
been followed. The Interim consolidated financial
statements have been prepared in accordance with
International Financial Reporting Standards (IFRS)
effective at the time of preparing and adopted for use
by European Union. The accounting principles applied
in the Interim report are the same as those applied in
the Consolidated financial statements at December 31,
2007. This Interim consolidated financial statements
should be read in conjunction with the 2007
Consolidated financial statements.
1. BUSINESS SEGMENT INFORMATION
7-9/2008 Fixed Unallocated Group
EUR million Mobile Network items Eliminations Total
External
sales 232,8 141,6 374,4
Inter-segment
sales 3,9 8,9 -12,8 0,0
Revenue 236,7 150,5 -12,8 374,4
EBITDA 74,4 54,8 0,2 129,4
EBIT 45,0 31,7 0,2 76,9
Financial
income and
expense -9,8 -9,8
Share of
associated companies'
profit 0,0 0,0
Profit before
tax 67,1
Investments 25,0 16,9 41,9
7-9/2007 Fixed Unallocated Group
EUR million Mobile Network items Eliminations Total
External
sales 246,0 148,3 0,2 394,5
Inter-segment
sales 5,8 9,1 -14,9 0,0
Revenue 251,8 157,4 0,2 -14,9 394,5
EBITDA 80,4 54,2 -2,7 131,9
EBIT 53,4 31,5 -2,9 82,0
Financial
income and
expense 7,2 7,2
Share of
associated companies'
profit 0,0 0,0
Profit before
tax 89,2
Investments 21,0 23,4 44,4
Elisa Corporation
1.1. - 30.9.2008
Unaudited
1-9/2008 Fixed Unallocated Group
EUR million Mobile Network items Eliminations Total
External
sales 677,1 435,8 1112,9
Inter-segment
sales 11,5 25,9 -37,4 0,0
Revenue 688,6 461,7 -37,4 1112,9
EBITDA 192,8 151,5 -2,0 342,3
EBIT 105,9 83,4 -2,0 187,3
Financial
income and
expense -30,0 -30,0
Share of
associated companies'
profit 0,0 0,0
Profit before
tax 157,3
Investments 67,5 52,7 120,2
1-9/2007 Fixed Unallocated Group
EUR million Mobile Network items Eliminations Total
External
sales 711,7 454,1 0,5 1166,3
Inter-segment
sales 15,1 26,2 -41,3 0,0
Revenue 726,8 480,3 0,5 -41,3 1166,3
EBITDA 219,9 159,3 -5,9 373,3
EBIT 143,1 90,6 -5,9 227,8
Financial
income and
expense -8,1 -8,1
Share of
associated companies'
profit 0,1 0,1
Profit before
tax 219,8
Investments 62,6 75,2 137,8
1-12/2007 Fixed Unallocated Group
EUR million Mobile Network items Eliminations Total
External
sales 959,7 608,7 1568,4
Inter-segment
sales 20,2 33,5 -53,7 0,0
Revenue 979,9 642,2 -53,7 1568,4
EBITDA 299,5 206,0 -6,1 499,4
EBIT 194,8 113,4 -6,2 302,0
Financial
income and
expense -16,8 -16,8
Share of
associated companies'
profit 0,0 0,0
Profit before
tax 285,2
Investments 92,8 113,6 206,4
Elisa Corporation
1.1. - 30.9.2008
Unaudited
2. OPERATING LEASE COMMITMENTS
30.9. 31.12.
EUR million 2008 2007
Due within 1 year 19,9 20,6
Due after 1 year but within 5 years 37,4 42,6
Due after 5 years 17,1 21,1
Total 74,4 84,3
3. CONTINGENT LIABILITIES
30.9. 31.12.
EUR million 2008 2007
Pledges given
Pledges given as surety 0,8 1,3
Guarantees given
For others (* 43,2 42,3
Pledges and guarantees given, total 44,0 43,6
Other commitments
Repurchase commitments 0,1 0,2
Contingent liabilities in QTE-arrangement
Lease-leaseback agreement (QTE facility)
Total value of the arrangement 141,9 137,9
Termination risk 12,6 14,5
*) EUR 41,9 million is related to hedging of
the guarantor bank in the QTE-arrangement
More information in Elisa's Annual Report 2007
4. DERIVATIVE INSTRUMENTS
30.9. 31.12.
EUR million 2008 2007
Interest rate swaps
Nominal value 150,0 150,0
Fair value recognised in the balance sheet -3,5 -3,0
Credit default swaps (*
Nominal value 46,1 45,6
Fair value recognised in the balance sheet 1,2 1,0
*) CDS is related to hedging of the guarantor bank
in the QTE-arrangement
More information in Elisa's Annual Report 2007
Elisa
Corporation
1.1. - 30.9.2008
Unaudited
KEY FIGURES
1-9 1-9 1-12
EUR million 2008 2007 2007
Shareholders' equity/share, EUR 5,32 6,24 6,53
Interest bearing net debt 890,9 646,0 738,4
Gearing 107,4% 65,3% 71,3%
Equity ratio 40,8% 45,7% 47,9%
Return on investment (ROI) *) 15,7% 18,9% 18,3%
Gross investments in fixed assets 120,2 137,8 206,4
of which finance lease investments 1,0 2,5 2,7
Gross investments as % of revenue 10,8% 11,8% 13,2%
Investments in shares, 12,9 11,3 12,4
Average number of employees 2938 3364 3299
*) rolling 12 months profit preceding
the reporting date
Formulae for financial indicators
Gearing %
Interest-bearing debt -
cash and cash equivalents
------------------------------------ x 100
Total equity
Equity ratio %
Total equity
-------------------------------x 100
Balance sheet total -
advances received
Return on investment % (ROI)
Profit before taxes +
interest and other
financial expenses
-----------------------------------------x 100
Total equity +
interest bearing liabilities (average)
Net debt
Interest-bearing debt - cash and
cash equivalents
Shareholders' equity per share
Equity attributable to equity holders
of the parent
------------------------------------------------
Number of shares outstanding
at end of period
Earnings/share
Profit for the period attributable to
equity holders of parent
---------------------------------------------------
Average number of outstanding shares
