ELISA?S OCTOBER-DECEMBER PROFIT BEFORE EXTRAORDINARY ITEMS AND TAXES INCREASED TO EUR 51 MILLION
ELISA CORPORATION STOCK EXCHANGE RELEASE 10 FEBRUARY 2005 AT
8.30am
ELISAS OCTOBER-DECEMBER PROFIT BEFORE EXTRAORDINARY ITEMS AND
TAXES INCREASED TO EUR 51 MILLION
October-December
· Profit before extraordinary items and taxes increased to EUR
51 million (-93). Revenue amounted to EUR 351 million (391). The
comparable profit before taxes was EUR 33 million (32).
· During the last quarter of 2004, the number of Elisas
subscriptions in mobile communications rose by 15 000
subscriptions excluding MVNO subscriptions. At the
end of the year, the number of subscriptions amounted to
1 383 515. The number of subscriptions, both for Elisas own and
for service operators in Elisas network, developed favourably.
· During the fourth quarter, the number of broadband
subscriptions rose by over 37 000, amounting to 222 307
subscriptions at the end of the year.
· The financial position strengthened: equity ratio was 51 per
cent (40) and net debt was reduced to EUR 410 million (654).
In October-December 2004, Elisas key figures were:
Income statement Financial statements Comparable
EUR million Q4/2004 Q4/2003 Q4/2004* Q4/2003**
Revenue 351 391 351 351
EBITDA 114 96 96 116
EBIT 55 -83 37 41
Profit before 51 -93 33 32
extraordinary items
and taxes
Earnings per share, 0.26 -0.34 0.17 0.16
EUR
CAPEX 54 63 54 60
Figures describing the financial position and cash flow:
Financial position 31.12.2004 31.12.2003
Net debt 410 654
Equity ratio, % 51.1 40.4
Cash flow statement 1-12/2004 1-12/2003
Cash flow after 204 105
investments
In January-December 2004, Elisas key figures were:
Income statement Financial statements Comparable
EUR million 1-12/2004 1-12/2003 1-12/2004* 1-
12/2003**
Revenue 1356 1538 1356 1382
EBITDA 432 385 414 403
EBIT 193 -34 175 122
Profit before
extraordinary items 166 -74 148 86
and taxes
Earnings per share, 0.78 -0.12 0.68 0.33
EUR
CAPEX 170 194 170 176
*Exclusive of EUR 13 million capital gain on real estate and EUR 5
million revenue recognition due to a change in calculating
principles of the pension provision.
** Exclusive of the Germany-based business, and adjusted to
correspond to the revenue booking procedure change in mobile
communications, effective as of early 2004, as well as exclusive
of substantial non-recurring items.
The Board of Directors will recommend that a dividend of EUR 0.40
per share be distributed for 2004, and that authorisation to
purchase own shares be acquired.
CEO Veli-Matti Mattila:
Elisa did well in the fierce market. The 2004 performance clearly
improved.
More than a year ago we set our target to improve profitability.
Now our comparable results before taxes have improved
substantially, by approximately 70 per cent.
Last year Elisa did very well in the fierce market. Weighed
against the other large mobile communications operators, we were
the first to turn the amount of subscriptions back onto a growth
track. Our broadband subscriptions almost doubled. Elisa Broadband
is now available in every municipality in Finland.
Elisa underwent a radical restructuring last year. All our
products and services are now available to our customers in one
desk. Our operational model was adapted to correspond to the
objectives of an integrated Elisa. Elisa became an umbrella brand,
offering all mobile communication services.
Last November, we introduced our third-generation mobile
communication services. At the early stage, business customers
will be the main users of these services. In 2005, we expect to
gain thousands of new 3G customers.
We believe the market situation will remain fierce and prices may
still fall. However, our target is to consolidate our market
position further and improve our results.
ELISA CORPORATION
Velipekka Nummikoski
Vice President, Corporate Communications
Further information:
Mr Veli-Matti Mattila, President and CEO, tel. +358 10 262 2635
Ms Tuija Soanjärvi, CFO, tel. +358 10 262 2606
Mr Vesa Sahivirta, IR-director, tel. +358 10 262 3036
Distribution:
Helsinki Stock Exchange
Major media
Financial statement 2004
Market situation
The market situation was tight throughout 2004. Prices continued
to fall for the average call minute rate in the mobile phone
business, and subscriber usage increased. The robust demand for
broadband subscriptions in the fixed network market prevailed,
whereas the number of traditional subscriptions decreased.
Elisa invested heavily in sales and continued extensive marketing.
Consumer awareness of the umbrella brand increased substantially.
The number of Elisas own mobile phone subscriptions and those of
service operators in Elisas network continued to develop
favourably. The decrease in subscriptions in early 2004 was
reversed already in the second quarter, and the number of
subscriptions at the year-end was larger than a year earlier. New
operators increased their market share in the low-end segment.
Elisas Kolumbus subscription that was launched in this segment
succeeded well, and increased its number of subscriptions. The
number of broadband subscriptions in the fixed network business
continued to grow strongly. The number of traditional
subscriptions decreased as voice shifts to mobile subscriptions.
In April, Elisa revamped its brand as part of the corporate
strategy process. Elisa became the principal umbrella brand of the
whole group. In addition, Elisa will use selected retail and
product brands.
Changes in corporate structure
The groups judicial structure was radically changed. The mergers
of the following companies into Elisa were entered in the Trade
Register: Elisa Networks Ltd and Soon Net Ltd on 30 April 2004;
Soon Com Ltd, Oy Heltel Ab, ElisaCom Ltd, RPOCom Oy and Riihimäen
Puhelin Oy on 1 July 2004. In accordance with an announced plan,
the following companies merged into their parent company Oy
Radiolinja Ab: Radiolinja Aava Oy, Radiolinja Suomi Oy, Radiolinja
Origo Oy and Witem Oy. The change of Oy Radiolinja Abs name to
Elisa Matkapuhelinpalvelut Oy was entered in the Trade Register on
1 July 2004. The merger of Oy Radiolinja Ab into Elisa was delayed
due to a district court process on the annulment of the decision
made at Oy Radiolinja Abs shareholders meeting in spring 2000 to
increase the share capital.
Soon Net Ltd of Elisa and Eltel Networks signed an agreement on
transferring the installation business. Along with the
transaction, 67 Soon Net employees joined Eltel Networks on 1
April 2004. The business transfer applied to the construction,
maintenance and repairing of the telecommunication network.
Elisa abandoned the Germany-based business and divested the entire
share capital of its subsidiary Elisa Kommunikation GmbH to a
consortium led by Apax Partners. Due to the transaction, which
took place in early 2004, the Germany-based business has not been
consolidated into Elisa for 2004. The financial impact of the
transaction was recorded for the year 2003.
On 27 May 2004, extraordinary meetings of Yomi and Elisa approved
a merger plan, according to which Yomi merged into Elisa on 31
December 2004. For each Yomi share, Yomis shareholders received a
merger consideration of 0.5654 of a new Elisa share. The
acquisition cost of the shares within the group amounted to EUR 52
million.
Elisa increased its holdings in its subsidiary Finnet
International Ltd, a provider of international telecommunication
services, from 51.2 per cent to 100 per cent. The purchase price
was EUR 7.7 million. The selling parties were minority
shareholders which comprise local telcos.
On 30 June 2004, Elisa and Fujitsu Services Oy signed an agreement
on outsourcing Elisa's desktop and data centre services to
Fujitsu. The agreement came into force on 1 July 2004. At the same
time, approximately 100 employees from Elisa joined Fujitsu.
Performance
Financial statements Comparable
EUR million 1-12/2004 1-12/2003 1-12/2004 1-12/2003*
Mobile communications 713 757 713 735
Fixed network 654 686 654 686
Germany-based business - 134 - -
Other businesses 111 98 111 98
Sales between segments -121 -137 -121 -137
Total 1356 1538 1356 1382
*Exclusive of the Germany-based business, and adjusted to
correspond to the change in the revenue booking procedure in
mobile communications, effective as of early 2004.
Elisa's revenue for January-December decreased by 12 per cent over
the last year. The reduced revenue was affected by the divested
German operations, the volume of the traditional fixed network
products, as well as by the reduced interconnection fees in the
mobile communications business, the fall in prices, and the change
in the revenue booking procedure. The comparable revenue decreased
by 2 per cent.
Comparable revenue for the mobile communication business decreased
by 3 per cent over the previous year. The fall in prices slightly
exceeded the increased usage. Revenue was boosted by the enhanced
operations of the Estonian subsidiary.
Revenue for the fixed network business decreased by 5 per cent
over last year. The change in revenue was mainly due to the
declining volume in traditional subscription products and
equipment sales. The increased number of broadband subscriptions
improved the revenue.
Performance
Financial statements Comparable
EUR million 1-12/2004 1-12/2003 1-12/2004* 1-
12/2003**
Mobile communications
EBITDA 219 210 219 212
EBITDA, % 31 % 28 % 31 % 29 %
EBIT 101 73 101 75
Fixed network
EBITDA 185 167 185 180
EBITDA, % 28 % 24 % 28 % 26 %
EBIT 79 45 79 58
Germany-based business
EBITDA - 4 - -
EBIT - -134 - -
Other businesses and
corporate functions
EBITDA 28 4 10 12
EBIT 14 -17 -4 -10
Total
EBITDA 432 385 414 403
EBITDA, % 32 % 25 % 31 % 29 %
EBIT 193 -34 175 122
*Exclusive of EUR 13 million capital gain on real estate, and EUR
5 million revenue recognition due to a change in calculating
principles of pension provision.
** Exclusive of the Germany-based business, and adjusted to
correspond to the change in the revenue booking procedure in
mobile communications, effective as of early 2004, as well as
exclusive of substantial non-recurring items.
Elisas EBITDA increased by 12 per cent over the previous year,
and relative profitability rose to 32 per cent (25) of the
revenue. Improved profitability was substantially affected by
streamlining measures executed in the business, reduction in
pension fund payments and disposal of the Germany-based business.
Elisa sold its former main office and booked a EUR 13 million
capital gain on the transaction. Owing to the change in
calculating principles of the pension provision, the company also
recognised EUR 5 million in revenue. All these have been handled
as non-recurring items.
The group's other financing income and expenses totalled EUR -27
million (-40). The financing income also included the share of the
associated companies results, EUR 0.7 million (-0.3). Reduced
financing expenses were mainly due to the decreased net debt.
Income taxes in the income statement amounted to EUR -52 million
(+60, including a EUR 89 million tax asset booked from the losses
of the Germany-based business). Altering the tax base from 29 per
cent to 26 per cent at the beginning of 2005 increased tax
expenses by EUR 2 million due to a change in the deferred tax
asset.
The group's January-December results after taxes and minority
interests were EUR 107 million (-17). The group's earnings per
share (EPS) amounted to EUR 0.78 (-0.12). At the end of 2004, the
group shareholders' equity per share stood at EUR 6.00 (5.09 at
the end of 2003).
Mobile communications
1-12/2004 1-12/2003 Change
Number of subscriptions* 1 383 515 1 374 146 1 %
Revenue/subscription**(ARPU), 37.8 41.6 -9 %
Churn**, % 33.7 18.6
Usage, million minutes* 2 498 2 310 8 %
Usage, min./subscription/mth** 156 146 7 %
SMS, million minutes* 537 453 19 %
SMS, msg/subscription/mth** 34 29 18 %
Value-added services/revenue 14 % 12 %
* Elisas network operator in Finland
** Elisas service operator
In 2004, the number of Elisas network operator subscriptions in
Finland rose by approximately 9 400 excluding MVNO subscriptions.
The share of Elisas own service operator accounted for
approximately 2 300 subscriptions of the increase.
The usage by subscribers continued to grow throughout the year.
The number of call minutes increased by approximately 8 per cent,
and the number of SMS messages sent grew by approximately 19 per
cent.
Revenue per subscription (ARPU) decreased by approximately 9 per
cent over last year. This was partly due to a change in the
revenue booking procedure. Comparable ARPU decreased by
approximately 4 per cent because of reduced interconnection fees
and consumer prices. The revenue booking procedure was changed in
early 2004, so that remunerations payable to providers of value-
added services and interconnection costs to be invoiced are
directly booked as a deduction of revenue.
Elisas subsidiary in Estonia succeeded well. Revenue was EUR 75.3
million (60.9), EBITDA EUR 22.5 million (17.5) and EBIT EUR 13.2
million (8.2). At the end of 2004, there were 225 500
subscriptions (167 750).
On 15 April 2004, the Finnish Government amended 3G mobile
communication licences. The amended licenses allow partial joint
constructing and use of networks.
On 23 November 2004, Elisa launched its 3G network for commercial
use and simultaneously began offering the Vodafone Mobile Connect
3G/GPRS data card, which is connected to laptops.
Elisa and Saunalahti agreed on initiating mobile network
cooperation. A part of Saunalahtis new customers use Elisas
network, and the 3G services to be launched will function on
Elisas network.
Fixed network business
Number of subscriptions 31.12.2004 31.12.2003 Change
Broadband subscriptions 222 307 127 388 75 %
ISDN channels 159 591 200 455 -20 %
Cable TV subscriptions 198 447 183 469 8 %
Analogue and other 639 202 675 272 -5 %
subscriptions
Subscriptions, total 1 219 547 1 186 584 3 %
Brisk demand for broadband subscriptions continued during the
whole 2004. In autumn, the speeds in slower categories were
doubled, and the prices of the greater speed categories were
reduced. The number of broadband subscriptions increased by 75 per
cent over the previous year. The number of traditional
subscriptions continued to decrease as voice is shifting to the
mobile network and data to broadband subscriptions.
Elisa continued to substantially expand the coverage area of
broadband during 2004. By the end of the year, the availability of
broadband was extended to every municipality in Finland. Sales in
the new areas had a very positive start.
Nordea and Elisa signed an agreement, which states that Elisa acts
as Nordeas principal provider of telecommunication services in
Finland. The agreement entails fixed network voice communications,
mobile communications and data transfer services throughout the
country.
The Ministry of Justice renewed its voice services by outsourcing
the phone systems of 9 500 employees and over 350 offices to
Elisas service production. The new Salmisaari Courthouse in
Ruoholahti, Helsinki, was one of the principal targets of the
agreement.
Elisa is the first commercial enterprise in Finland, which has
been registered as a CERT organisation (Computer Emergency
Response Team) with 24-hour CERT operations. A CERT team is a
group of experts specialised in information security emergencies
and situations requiring immediate action.
Personnel
During 2004, the average number of personnel at Elisa was 5 590
(7 172). By the end of 2004, the number of personnel was 5 376
(6 683).
31.12.2004 31.12.2003 Change
Mobile communications 1 477 1 678 -12 %
Fixed network 3 015 3 572 -16 %
Germany-based business - 426 -
Other businesses 814 905 -10 %
Corporate functions 70 102 -31 %
Total 5 376 6 683 -20 %
Labour negotiations, initiated in October 2003, were completed on
12 January 2004. As a result, the number of personnel was reduced
by approximately 900 people.
On 22 April 2004, Elisas employees established a personnel fund.
The fund includes approximately 4 000 members with membership
based on employment. The fund is owned by the employees, and they
administer the funds paid as rewards by the company and the
proceeds received from the invested capital.
Investments
EUR million 1-12/2004 1-12/2003 Comparable
1-12/2003*
Investments
- in fixed assets 170 194 176
- in shares 61 28 8
Total 231 222 184
Aforementioned investments
include GSM leasing
liability 20 28
buy-backs
*Exclusive of the Germany-based business
Capital expenditures in the mobile business were EUR 83 million
(98) and EUR 83 million (74) in the fixed network business. The
investments included GSM leasing liability buy-backs from telcos
for EUR 20 million (28).
Investments in shares were mainly the increase in Elisas holdings
to 100 per cent of Yomi and Finnet International.
Financial position
The group's financial position and liquidity strengthened clearly
in 2004. This was particularly affected by positive performance,
the divestment of the Germany-based business and the disposal of
real estate. The January-December cash flow after investments
amounted to EUR 204 million (105).
The disposal of the Germany-based business reduced the group's
interest-bearing liabilities by EUR 65 million, and the leasing
liabilities outside the balance sheet decreased by EUR 133
million. During 2004, the groups net debt decreased by one-third
from the level in 2003, amounting to EUR 410 million (654) on 31
December 2004.
Elisa sold its former main office real estate to Sponda. The
selling price was EUR 25.5 million and a capital gain of
approximately EUR 13 million was booked from the transaction.
On 20 September 2004, Elisa completed a note exchange offer. As a
consequence of this, the average maturity of loans was extended
from 3 years to 5.5 years. A new long-term benchmark bond was also
issued. Of the old loans, 66.4 per cent were exchanged for notes
maturing on 22 September 2011. All in all, the notes issued
amounted to EUR 260 010 000.
Financial key indicators
EUR million 31.12.2004 31.12.2003
Net debt 410 654
Gearing, % 46.4 87.5
Equity ratio, % 51.1 40.4
1-12/2004 2003
Cash flow after investments 204 105
Ratings per long-term loans
Credit rating agency Rating Outlook
Moodys Investor Services Baa2 Stable
Standard & Poors BBB Stable
Share
At the end of 2004, the company's total number of shares was
141 989 109. The market capitalisation on 31 December 2004 stood
at EUR 1 682 million. In 2004, a total of 121.4 million company
shares were traded on the Helsinki Stock Exchange for an aggregate
of EUR 1 380 million. The exchange was 88.3 per cent of the number
of shares in the market.
The number of Elisas A warrants for the year 2000 was 3 600 000
and B warrants for the year 2000 was 3 600 000. At the end of the
year, the market capitalisation of the warrants amounted to EUR
0.3 million.
Treasury shares
At the end of 2004, the total number of Elisa's shares owned by
the subsidiaries was 210 672 (781 563 at the end of 2003). The
nominal value of the shares totalled EUR 105 336, and their
proportion of the share capital and voting rights was 0.15 per
cent.
During the period of 2-3 November 2004, Yomi sold its 556 870
Elisa shares with a nominal value of EUR 278 435 in total on the
Helsinki Stock Exchange. The sale price totalled EUR 6 388 573.55,
on average EUR 11.47 per share. The transaction related to the
restructuring of Yomi's balance sheet.
Moreover, the Elisa Group Pension Fund owned 202 263 Elisa shares
(722 363 at the end of 2003) at year-end.
Research and Development
In 2004, the group invested EUR 17 million (24) in research and
development. Important research trends were IP technologies, the
end-users perspective, and the evolution of wireless equipment.
Customer-centred R&D is of key importance in developing new
services.
Shifting to IFRS reporting
Elisa will adopt International Financial Reporting Standards
(IFRS) at the beginning of 2005. The first interim report
conforming to IFRS will be for the period of January-March 2005.
On 14 February 2005, Elisa will publish a release on the effects
of shifting to IFRS.
The Board of Directors authorisations
On 31 March 2004, the Annual General Meeting authorised the Board
of Directors to decide on increasing the company's share capital
through one or more new issues, taking a convertible bond and/or
granting warrants, so that in a new issue the subscription of new
shares in exchange for the convertible bonds and pursuant to
warrants, a maximum aggregate of 27.6 million of the companys
shares can be issued and the companys share capital can be
increased by a maximum of EUR 13.8 million in total. The
authorisation is valid for one year from the Annual General
Meeting. The pre-emption rights of shareholders may be waived by
means of this authorisation if there is an important financial
reason for doing so.
The companys Board of Directors has no valid authorisation to
acquire or assign treasury shares.
Private offering
On 28 March 2004, the Boards of Directors of Elisa and Yomi signed
a merger plan, which was approved by an extraordinary meeting of
Yomi on 27 May 2004. According to the plan, Yomi merged with Elisa
on 31 December 2004.
As a merger consideration, Yomis shareholders received 0.5654 of
an Elisa share for each Yomi share. All in all 3 977 352 new Elisa
shares were given as merger consideration. The shares were entered
in the Trade Register on 31 December 2004, whereupon they received
full shareholder rights. These shares entitle their holders to a
dividend for the financial year ending on 31 December 2004. Due to
this share issue, the companys share capital increased by EUR
1 988 676. After the share issue, the companys shares amounted to
141 989 109 and the share capital entered in the Trade Register
increased to EUR 70 994 554.50.
Major legal issues
Processes pending in regard to Elisa Matkapuhelinpalvelut Oy
(formerly known as Oy Radiolinja Ab) are the action for annulment
of the decision made at the spring 2000 shareholders meeting to
increase the share capital, an appeal against the resolution by
Helsinki District Court to dismiss the action (with which Oy
Multiclearing Ltd demands increasing the redemption price of 255
shares from EUR 7 904.83 to approximately EUR 50 000), plus an
action for annulment demanding the cancellation of the merger
decision made at the shareholders meeting in December 2003.
Processes relating to the merger of Yomi and Elisa are the request
of shareholders who oppose the merger decision on the redemption
price of approx. 636 000 shares, and an appeal against a decision
by Turku Administrative Court, in which the Administrative Court
dismissed the request for a special audit.
TeliaSonera Finland Oyj is demanding EUR 13.2 million in
compensation from Elisa Matkapuhelinpalvelut Oy for patent
infringement and damages. It also requests that using the system
pursuant to the alleged patent must be prohibited. The patent
dispute relates to the implementation of Elisa Heimopalvelu.
Elisa denies the patent infringement allegations.
On 2 November 2004, the Finnish Communications Regulatory
Authority (Ficora) initiated an investigation on the pricing of
Elisa Matkapuhelinpalvelut Oys terminating traffic. Elisa
Matkapuhelinpalvelut Oy has forwarded clarifications to Ficora.
The matter is still pending.
Events after the financial period
On 18 January 2005, Elisa and IBM signed a letter of intent to
concentrate Elisa's application management services in IBM. The
seven-year agreement will come into force on 1 March 2005. On that
date, 150 employees from Elisa will join IBM as established
employees.
Outlook
The competition in the telecommunications market in Finland is
envisaged to remain tight. It is estimated that usage of both the
mobile and fixed network products will increase. Elisa aims to
strengthen its market position.
Elisas revenue for 2005 is estimated to increase slightly. Due to
the implemented and ongoing revamping of operations, the companys
competitive edge will continue to improve and profitability will
remain good. The comparable EBITDA and EBIT for the first half
of the year is estimated to remain at the same level as in the
fourth quarter of 2004. Capital expenditure will amount to 15 per
cent of the revenue at most, and the cash flow will continue to be
clearly positive.
THE BOARD OF DIRECTORS
ELISA CORPORATION
FINANCIAL STATEMENTS 1 JANUARY-31 DECEMBER 2004
(eur million)
(Figures are not audited)
CONSOLIDATED INCOME STATEMENT
Oct- Oct- Jan- Jan-
Dec Dec Dec Dec
2004 2003 2004 2003
Revenue 350,8 391,0 1 356,0 1 538,2
Other operating income 19,9 12,8 30,9 33,9
Operating expenses -257,2 -308,0 -954,7 -1 187,4
Depreciation and value
adjustments:
On fixed assets -48,2 -75,6 -195,5 -273,2
On Corporation's goodwill -10,8 -103,2 -43,3 -145,1
EBIT 54,5 -83,0 193,4 -33,6
Financial income and expenses:
Share of associated companies'
profit 1,5 0,3 0,7 -0,3
Other financial income and
expenses -5,0 -10,6 -27,9 -39,7
Profit before extraordinary items 51,0 -93,3 166,2 -73,6
Extraordinary items
Profit after extraordinary items 51,0 -93,3 166,2 -73,6
Income taxes -12,6 47,0 -52,2 59,7
Minority interest -2,7 -0,5 -7,4 -2,6
Net profit 35,7 -46,8 106,6 -16,5
CONSOLIDATED BALANCE SHEET 31 Dec 31 Dec
2004 2003
Fixed assets
Intangible assets 62,5 64,2
Consolidated goodwill 440,6 459,5
Tangible assets 649,9 856,4
Share in associated companies 16,2 20,1
Other investments 12,5 12,0
1 181,7 1 412,2
Current assets
Inventories 15,1 15,9
Deferred tax receivable 13,5 81,9
Receivables 368,0 352,4
Marketable securities 96,1 6,5
Cash in hand and in banks 66,8 60,8
559,5 517,5
Total assets 1 741,2 1 929,7
Shareholders' equity
Share capital 71,0 69,0
Share premium account 561,8 516,7
Contingency fund 3,4 3,4
Retained earnings 108,2 126,5
Net profit 106,6 -16,5
851,0 699,1
Minority interests 33,6 77,3
Provisions for liabilities and charges 17,1 51,6
Liabilities
Long-term creditors 565,5 616,5
Short-term creditors 274,0 485,2
839,5 1 101,7
Total shareholders' equity and liabilities 1 741,2 1 929,7
Items presented in the tables for each row have
been rounded.
CONSOLIDATED CASH FLOW STATEMENT 1)
(eur million)
Jan- Jan-
Dec Dec
2004 2003
cash inflow from operating activities
Profit before extraordinary items 166,2 -73,6
Adjustments:
Depreciation and value adjustments 238,8 418,3
Other financial income and expenses 27,2 39,6
Provisions for liabilities and charges -23,3 -4,3
Sales profits from the disposal of fixed assets -16,6 -2,0
Sales profits from business operations and shares -5,6 -1,3
Other adjustments 0,3 -0,6
Cash inflow before working capital 387,0 376,1
Change in working capital 4,9 -16,0
Cash inflow before taxes and financials 391,9 360,1
Received dividens and intrests and intrest paid -42,9 -40,7
Taxes paid -16,0 -14,6
Free funds from operations 333,0 304,8
Cash flow in investements
Investments in fixed assets -170,1 -193,7
Disposal of fixed assets 36,6 5,0
Investments in shares and other investments -10,4 -26,9
Disposal of shares and other investments 12,0 15,2
Disposal of business operations 2,8 1,0
Cash flow in investments -129,1 -199,4
Cash flow after investments 203,9 105,4
Cash flow in financing
Sales of treasury shares 6,4
Change in interest-bearing receivables 24,3 -17,6
Change in long-term loans -9,1 -96,5
Change in short-term loans -116,9 12,0
Dividends paid -13,0 -1,8
Cash flow in financing -108,3 -104,0
Change in financial assets 95,6 1,4
Financial assets at the beginning of
the financial period 67,3 65,9
Financial assets at the end of
the financial period 162,9 67,3
1) Consolidated cash flow statement has been
regrouped from the beginning of 2004.
LIABILITIES
31 Dec 31 Dec
(eur million) 2004 2003
Mortgages, pledges and guarantees
Mortgages
For own and group companies 27,6 77,0
Pledges given
Pledges given as surety 0,2 23,7
Guarantees given
For others 11,0
Mortgages, pledges and guarantees total 27,8 111,6
Derivative contracts
Forward contracts and swap agreements
Market value of underlying security 13,5 14,2
Market value 1,3 1,7
Leasing contracts and
other commitments
Leasing commitments 23,6 35,3
Repurchase commitments 4,6 2,7
Real estate leases 156,6 136,1
Lease liabilities total 184,8 174,1
Leasing commitments consists mainly from leases
of IT and office equipment and cars.
Real estate leases consists both office and
technical space.
Leasing and rental agreements of telecom networks
Fixed network 9,0 16,0
German business 132,8
Mobile network *) 29,8 55,4
Rental agreement liabilities, total 38,8 204,2
*) Added to this, a provision for the future
redemptions of GSM network financial agreements
Other commitments 9,1 6,0
Lease-leaseback agreement (QTE facility)
Termination risk 22,8 26,8
Total value of the arrangement 149,8 160,7
KEY FIGURES
(eur million)
Oct- Oct- Jan- Jan-
Dec Dec Dec Dec
2004 2003 2004 2003
Earnings/share (EPS), EUR 0,26 -0,34 0,78 -0,12
Shareholders' equity/share,
EUR 6,00 5,09
Gross investments in
fixed assets 54,0 63,1 170,2 193,8
Gross investments as
% of revenue 15,4 16,1 12,5 12,6
Purchase of shares 52,7 3,4 61,1 27,7
Non-interest-bearing debt 283,2 406,7
Average number of personnel 5 590 7 172
ADJUSTED GROUP KEY FIGURES
(exclusive of non-recurring
items)
Oct- Oct- Jan- Jan-
Dec Dec Dec Dec
2004 2003 2004 2003
Revenue 350,8 391,0 1 356,0 1 538,2
EBITDA 95,6 118,0 414,3 406,9
EBITDA, % 27,3 30,2 30,6 26,5
EBIT 36,6 33,3 175,5 82,7
EBIT, % 10,4 8,4 12,9 5,4
Profit before
extraordinary items 33,1 23,0 148,3 42,7
Adjusted key figures have
been calculated without
the following non-recurring
items:
Restructuring costs and
pension provision 5,1 -22,2 5,1 -22,2
Capital gain of real estate
sales 12,8 12,8
Write-downs in Germany -94,1 -94,1
Non-recurring items, total 17,9 -116,3 17,9 -116,3
Impact on EBITDA 17,9 -22,2 17,9 -22,2
Impact on EBIT 17,9 -116,3 17,9 -116,3
Impact on profit before
extraordinary items 17,9 -116,3 17,9 -116,3
KEY FIGURES BY SEGMENTS OCTOBER-DECEMBER/2004 1)
(eur million)
Revenue EBITDA EBIT
Oct-Dec Oct-Dec Oct-Dec
2004 2003 2004 2003 2004 2003
Mobile 179,9 201,3 52,1 62,7 32,2 38,8
Amortisation
on goodwill -9,6 -9,6
Total 179,9 201,3 52,1 62,7 22,6 29,2
Fixed
Network 162,0 171,4 41,8 29,2 16,1 -5,6
Amortisation
on goodwill -0,9 0,8
Total 162,0 171,4 41,8 29,2 15,2 -4,8
Germany
Carrier-
business 32,6 2,2 -10,7
Amortisation
on goodwill -91,6
Total 32,6 2,2 -102,3
Other
Companies
Comptel 17,9 13,3 5,1 2,6 4,6 1,9
Other
Companies 2) 15,5 10,6 1,0 1,0 -0,9 0,4
Amortisation
on goodwill -0,4 -2,9
Total 33,4 23,9 6,1 3,6 3,3 -0,6
Unallocated
expenses 3) 2,6 0,9 13,5 -1,9 13,4 -4,5
Intra-segment
sales -27,1 -39,1
Corporation
total 350,8 391,0 113,5 95,8 54,5 -83,0
KEY FIGURES BY SEGMENTS (exclusive of non-recurring items)
Segments
Revenue EBITDA EBIT
Oct-Dec Oct-Dec Oct-Dec
2004 2003 2004 2003 2004 2003
Mobile 179,9 201,3 52,1 64,3 22,6 30,8
Fixed
Network 162,0 171,4 41,8 42,3 15,2 8,3
Germany 32,6 2,2 -8,2
Other
Companies 33,4 23,9 6,1 3,6 3,3 -0,6
Unallocated
expenses 2,6 0,9 -4,4 5,6 -4,5 3,0
Intra-segment
sales -27,1 -39,1
Corporation
total 350,8 391,0 95,6 118,0 36,6 33,3
1) Business has been re-grouped to match new organisation.
Segment figures are not comparable with the previously reported
figures for the business areas in earlier years.
2) Includes Yomi IT companies.
3) Includes unallocated expenses of corporate headquarters and
administration.
KEY FIGURES BY SEGMENTS JANUARY-DECEMBER/2004 1)
(eur million)
Revenue EBITDA EBIT
Jan-Dec Jan-Dec Jan-Dec
2004 2003 2004 2003 2004 2003
Mobile 712,8 757,3 218,7 210,0 139,1 110,9
Amortisation
on goodwill -38,2 -38,2
Total 712,8 757,3 218,7 210,0 100,9 72,7
Fixed
Network 653,6 686,0 185,3 166,6 82,3 46,3
Amortisation
on goodwill -3,5 -1,8
Total 653,6 686,0 185,3 166,6 78,8 44,5
Germany
Carrier-
business 134,1 3,8 -33,7
Amortisation
on goodwill -100,0
Total 134,1 3,8 -133,7
Other
Companies
Comptel 59,7 54,0 16,7 9,5 14,5 6,6
Other
Companies 2) 48,7 41,7 1,2 -1,8 -4,8 -5,6
Amortisation
on goodwill -1,7 -5,1
Total 108,4 95,7 17,9 7,7 8,0 -4,1
Unallocated
expenses 3) 2,4 2,2 10,3 -3,4 5,7 -13,0
Intra-segment
sales -121,2 -137,1
Corporation
total 1 356,0 1 538,2 432,2 384,7 193,4 -33,6
KEY FIGURES BY SEGMENTS (exclusive on non-recurring items)
Segments
Revenue EBITDA EBIT
Jan-Dec Jan-Dec Jan-Dec
2004 2003 2004 2003 2004 2003
Mobile 712,8 757,3 218,7 211,6 100,9 74,3
Fixed
Network 653,6 686,0 185,3 179,7 78,8 57,6
Germany 134,1 3,8 -39,6
Other
Companies 108,4 95,7 17,9 7,7 8,0 -4,1
Unallocated
expenses 2,4 2,2 -7,6 4,1 -12,2 -5,5
Intra-segment
sales -121,2 -137,1
Corporation
total 1 356,0 1 538,2 414,3 406,9 175,5 82,7
1) Business has been re-grouped to match new organisation.
Segment figures are not comparable with the previously reported
figures for the business areas in earlier years.
2) Includes Yomi IT companies.
3) Includes unallocated expenses of corporate headquarters and
administration.
FINANCIAL SITUATION
(eur million)
31 Dec 30 Sep 30 Jun 31 Mar 31 Dec
04 04 04 03 03
Long-term debt
Bonds and notes 481,4 484,9 471,5 471,5 471,5
Loans from the Pension funds 75,4 79,6 79,5 79,6 79,5
Loans from financial
institutions 1,9 3,3 3,5 3,4 57,8
Total 558,8 567,8 554,5 554,5 608,8
Short-term debt
Bonds and notes 0,0 100,0 100,0 100,0 100,0
Loans from financial
institutions 0,2 0,7 0,7 1,7 12,2
Committed credit line 1) 0,0 0,0 0,0 0,0 0,0
Commercial papers 2) 0,0 0,0 0,0 0,0 0,0
Others 14,4 3) 10,2 10,2 23,9 25,5
Total 14,6 111,0 110,9 125,6 137,7
Interest-bearing debt, total 573,4 678,8 665,5 680,1 746,6
Security deposits 0,0 0,0 0,0 25,2 24,5
Securities 96,1 128,7 114,0 24,3 6,5
Cash and bank 66,8 89,1 39,0 43,3 60,8
Interest-bearing receivables 162,9 217,8 153,0 92,8 91,8
Net debt 4) 410,5 461,0 512,5 587,3 654,8
1) The committed credit line is a joint EUR 170 million revolving
credit facility with eight banks, which Elisa Corporation may
flexibly use on agreed pricing. The loan arrangement is valid
until 16 June 2008.
2) Elisa Corporation has agreed on a joint programme with seven
banks on issuing commercial papers. The arrangement is not
committed. The maximum amount of the arrangement is EUR 150
million.
3) Redemption liability for minority shareholders in Elisa
Matkapuhelinpalvelut (EUR 2,6m) and in Yomi Oyj (EUR 4,3m)
and deposits in the Financial Services Office (EUR 7,6m).
4) Net debt is interest-bearing debt less cash and liquid
interest-bearing receivables.
Key Financial Indicators 31 Dec 30 Sep 30 Jun 31 Mar 31 Dec
04 04 04 04 03
Gearing 46,4% 56,0% 64,0% 75,9% 87,5%
Equity ratio 51,1% 45,5% 46,2% 44,4% 40,4%
Formulae for financial indicators
Gearing %
Interest-bearing debt-cash and bank-securities
---------------------------------------------x 100
Shareholders' equity + minority interests
Equity ratio %
Shareholders' equity + minority interests
-----------------------------------------x 100
Balance sheet total - advances received
