Elisa’s Interim Report Q3 2018
ELISA CORPORATION INTERIM REPORT RELEASE 18 OCTOBER 2018 AT 8:30 AM
Elisa’s Interim Report January–September 2018
Third quarter 2018
- Revenue amounted to EUR 454 million (454)
- EBITDA was EUR 169 million (165) and EBIT was EUR 110 million (109)
- Profit before tax was EUR 104 million (104)
- Earnings per share were EUR 0.53 (0.53)
- Comparable cash flow after investments was EUR 85 million (71)
- Mobile post-paid voice ARPU was EUR 20.4 (20.4 in previous quarter)
- Mobile post-paid voice churn was 17.2 per cent (17.4 in previous quarter)
- Mobile service revenue increased by 1.1 per cent to EUR 203 million (201)
- The number of mobile subscriptions increased by 16,400 during the quarter (post-paid 8,300 and pre-paid 8,100)
- The number of fixed broadband subscriptions increased by 2,000 during the quarter
- Net debt / EBITDA was 1.8 (1.8 end 2017)
January–September 2018
- Revenue was EUR 1,361 million (1,315)
- EBITDA was EUR 482 million (457) and EBIT EUR 305 million (285)
- Comparable EBITDA was EUR 481 million (460) and EBIT EUR 305 million (289)
- Profit before tax: EUR 288 million (317), comparable EUR 288 million (275)
- Earnings per share were EUR 1.48 (1.66) and comparable EPS was EUR 1.48 (1.40)
- Comparable cash flow after investments was EUR 224 million (202)
- Guidance for 2018 was upgraded: Revenue and comparable EBITDA are estimated to be slightly higher than in 2017
Key indicators
| EUR million | 7-9/2018 | 7-9/2017 | Δ % | 1-9/2018 | 1-9/2017 | Δ % |
| Revenue | 454 | 454 | 0.0 | 1,361 | 1,315 | 3.5 |
| EBITDA | 169 | 165 | 2.1 | 482 | 457 | 5.6 |
| Comparable EBITDA | 169 | 165 | 2.1 | 481 | 460 | 4.7 |
| EBIT 1) | 110 | 109 | 1.2 | 305 | 285 | 7.0 |
| Profit before tax 1) | 104 | 104 | 0.3 | 288 | 317 | -8.9 |
| EPS, EUR1) | 0.53 | 0.53 | 0.1 | 1.48 | 1.66 | -10.8 |
| Capital expenditure | 49 | 58 | -16.4 | 162 | 176 | -7.5 |
1) Comparable 7-9/2018: EBIT EUR 110m (109), profit before tax EUR 104m (104), EPS EUR 0.53 (0.53). Comparable 1-9/2018: EBIT 305m (289), profit before tax EUR 288m (275), EPS EUR 1.48 (1.40).
Financial position and cash flow
| EUR million | 30 Sept 2018 | 30 Sept 2017 | End 2017 |
| Net debt | 1,118 | 1,120 | 1,073 |
| Net debt / EBITDA1) | 1.8 | 1.9 | 1.8 |
| Gearing ratio, % | 107.2 | 116.0 | 103.2 |
| Equity ratio, % | 40.4 | 37.5 | 40.5 |
| EUR million | 7-9/2018 | 7-9/2017 | Δ % | 1-9/2018 | 1-9/2017 | Δ % |
| Cash flow after investments2) | 87 | 113 | -23.2 | 220 | 252 | -12.5 |
1) (interest-bearing debt – financial assets) / (four previous quarters’ comparable EBITDA)
2) Excluding investments in shares, sale of shares and loan repayment 7-9/2018 EUR 85m (71) and 1-9/2018 EUR 224m (202).
Additional key performance indicators are available at elisa.com/investors (Elisa Operational Data.xlsx)
CEO Veli-Matti Mattila: Strong result from Elisa again
We have generated the strongest quarterly result in our history. Revenue was at the previous year’s level despite some divestments. Revenue increased due to growth in mobile and digital services and declined due to divestments. The result grew due to an improvement in the productivity of Elisa’s operations and the growth in the revenue of mobile services. The continuous improvement of quality and operations improved Elisa’s competitiveness.
Finland continues to be a clear pioneer in the use of mobile data. Elisa enables Finns to remain at the spearhead of mobile development. The latest step involved Elisa being the first operator to commence the construction of a 5G-ready network in Helsinki. These 5G-ready networks have already been built in Turku, Tampere and Jyväskylä. In the auction that began during the third quarter, Elisa acquired its preferred 5G frequencies, which will be available for commercial use on 1 January 2019. Fast mobile broadband subscriptions facilitate smooth daily lives of consumers, corporate customers and organisations. Elisa’s subscriptions do not include a commitment obligation, which is why customers perceive them as fair. The post-paid mobile subscription base grew by 8,300 subscriptions during the quarter, while the prepaid subscription base reduced by 8,100 subscriptions. The fixed-network broadband subscription base also grew by 2,000 subscriptions.
Elisa offers its customers high-quality content. The international original series Bullets had its premiere during the autumn, and five international hit series, including The Good Doctor, were released in the service. The filming of the original series Nyrkki also began in September. The recently published biography of Kimi Räikkönen, The Unknown Kimi Räikkönen, was released exclusively as an e-book and audiobook on Elisa Kirja. The market for e-books in Finland grew by more than 65 per cent compared to the previous year.*
As a trailblazer in Wi-Fi calling, Elisa is introducing the service to the majority of consumer customers. Elisa also provides the widest selection of Wi-Fi calling-enabled handsets. Wi-Fi calls are connected considerably faster than before, and they significantly improve sound quality as well as indoor coverage.
Thirteen teams from eight countries were selected for the Elisa AI Co-Creation Challenge competition, targeting world-class AI teams. The teams represent healthcare, for example, as well as comprehension of the Finnish language and real-time analysis of sport videos.
The continuous improvement of the customer experience and quality are an integral part of our corporate culture, and we will continue to keep a strong focus on them. Increasing productivity, internationalising our digital services, creating value with data, and our strong investment capability will continue to create a solid foundation for the creation of competitive value in the future.
* Finnish Book Publishers Association
Outlook and guidance for 2018
The macroeconomic environment in Finland has improved, but long-term structural challenges still remain. Competition in the Finnish telecommunications market remains challenging.
Revenue is estimated to be slightly higher than in 2017. Recent acquisitions, mobile data and digital services are expected to increase revenue. Comparable EBITDA is anticipated to be slightly higher than in 2017. 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 growth and profitability improvement will derive from the growth in the mobile data market, as well as digital 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 Interim Report Q3 2018 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 Helsinki
Principal media
www.elisa.com