ELISA INTERIM REPORT RELEASE 24 APRIL 2014 AT 8:30am
First quarter 2014
- Revenue was EUR 382 million (361
- EBITDA was EUR 126 million (109)
- EBIT was EUR 72 million (59)
- Profit before tax amounted to EUR 64 million (53)
- Earnings per share was EUR 0.32 (0.26)
- Cash flow after investments was EUR 39 million (37)
Mobile ARPU was EUR 15.8 (16.0 in previous quarter)
- Mobile churn was 17.2 per cent (17.6 in previous quarter)
- The number of Elisa’s mobile subscriptions increased by 21,400 during the quarter
- The number of fixed broadband subscriptions decreased by 1,800 on the previous quarter
- Net debt / EBITDA was 1.8 (2.0 end 2013) and gearing 102 per cent (113 end 2013)
Key indicators
| 1st Quarter | Full year | ||
| EUR million | 2014 | 2013 1) | 2013 1) |
| Revenue | 382 | 361 | 1,547 |
| EBITDA | 126 | 109 | 491 |
| EBIT | 72 | 59 | 281 |
| Profit before tax | 64 | 53 | 255 |
| Earnings per share, EUR | 0.32 | 0.26 | 1.25 |
| Capital expenditure | 48 | 47 | 240 |
1) Excluding non-recurring items: Q1 2013 EBITDA EUR 111m, EBIT EUR 61m, profit before tax EUR 55m and EPS EUR 0.26. Full year 2013 EBITDA EUR 508m, EBIT EUR 298m, Profit before tax EUR 272m and EPS EUR 1.33.
Financial position and cash flow
| EUR million | 31.3.2014 | 31.3.2013 | End 2013 |
| Net debt | 933 | 807 | 971 |
| Net debt / EBITDA 1) | 1.8 | 1.7 | 2.0 |
| Gearing ratio, % | 101.9 | 118.4 | 112.6 |
| Equity ratio, % | 41.1 | 33.3 | 37.3 |
| 1st Quarter | Full year | ||
| EUR million | 2014 | 2013 | 2013 |
| Cash flow after investments | 39 | 37 | 84 |
1) (interest-bearing debt – financial assets) / (four previous quarters’ EBITDA excluding 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 revenue and earnings grew from last year
The uncertainty in the general economic situation continued to be reflected in the behaviour of companies and consumers. In the challenging operating environment in this quarter, Elisa's performance has been strong. Elisa's earnings and revenue increased during the quarter compared to last year. Demand for new services and the growth of smartphone markets continued to be strong. Smartphones made up 86 per cent of overall sales.
Our mobile subscription base grew by over 21,000 during the first quarter of the year. About one third of new sales are 4G mobile broadband subscriptions, and the number is growing steadily. The number of fixed-network broadband subscriptions decreased by about 1,800. The use of mobile data services grew alongside that of smartphones due to demand for USB modems and routers among both consumers and business clients.
Elisa introduced Pilvilinna, a cloud service aimed at consumers for storing photographs, videos and other files. The service stores the files in Finland and it supports all common operating systems. Contactless payment is increasing among consumers as new payment locations are taken into use. Some major retail chains already accept contactless payment, and there are currently around 3,000 contactless payment locations. The Elisa Wallet service allows hassle-free payment at these locations.
Elisa has cooperated with public administration in projects to improve the productivity of the sector. Together with the City of Turku, we discovered potential savings of tens of millions of euros by reforming service provision models and operating methods. The key findings were related to remote transactions, customer service and efficiency in the use of facilities. A concrete measure implemented in cooperation with the Social Insurance Institution of Finland was a remote use pilot project where customers were provided with interpreters through a video link directly in their homes.
At the beginning of the year, we became the first operator in Finland to open 4G LTE 800 MHz frequencies to customers. The introduction of these new frequencies means increasingly comprehensive coverage for fast 4G mobile data services as well as improved inside coverage. Today, 4G coverage is available to 89 per cent of people living in Finland. With this development our service clearly exceeds the best international universal service obligation level.
We will continue our determined work to improve customer satisfaction and the productivity of our operations. 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 at the same level as in 2013 or slightly higher. 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 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 Q1 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
