ELISA CORPORATION HALF-YEAR FINANCIAL REPORT RELEASE 13 JULY 2018 AT 8:30 AM
Second quarter 2018
- Revenue amounted to EUR 458 million (445)
- Comparable EBITDA was EUR 157 million (151) and EBIT EUR 98 million (92)
- Reported EBITDA was EUR 160 million (148) and EBIT EUR 101 million (88)
- Comparable earnings per share were EUR 0.47 (0.44), reported EPS EUR 0.49 (0.70)
- Cash flow after investments was EUR 81 million (76)
- Mobile post-paid voice ARPU was EUR 20.4 (20.4 in previous quarter)
- Mobile post-paid voice churn was 17.4 per cent (19.2 in previous quarter)
- Mobile service revenue increased by 1.6 per cent to EUR 201 million (198)
- The number of post-paid mobile subscriptions increased by 8,300 and prepaid subscriptions decreased by 1,400 during the quarter
- The number of fixed broadband subscriptions increased by 1,000 during the quarter
- Net debt / EBITDA was 1.9 (1.8 end 2017) and gearing 126 per cent (103 end 2017)
January–June 2018
- Revenue was EUR 907 million (861)
- Comparable EBITDA was EUR 312 million (294) and EBIT EUR 195 million (180)
- Reported EBITDA was EUR 313 million (291), and EBIT EUR 196 million (177)
- Comparable earnings per share were EUR 0.94 (0.87) and reported EPS EUR 0.95 (1.13)
- Cash flow after investments was EUR 133 million (139)
Key indicators
| EUR million | 4-6/2018 | 4-6/2017 | Δ % | 1-6/2018 | 1-6/2017 | Δ % |
| Revenue | 458 | 445 | 2.8 | 907 | 861 | 5.4 |
| EBITDA | 160 | 148 | 8.3 | 313 | 291 | 7.5 |
| Comparable EBITDA | 157 | 151 | 4.1 | 312 | 294 | 6.1 |
| EBIT 1) | 101 | 88 | 13.8 | 196 | 177 | 10.5 |
| Profit before tax 1) | 95 | 129 | -26.1 | 184 | 213 | -13.4 |
| EPS, EUR | 0.49 | 0.70 | -30.8 | 0.95 | 1.13 | -15.8 |
| Comparable EPS, EUR | 0.47 | 0.44 | 6.2 | 0.94 | 0.87 | 8.7 |
| Capital expenditure | 61 | 64 | -5.0 | 114 | 117 | -3.1 |
1) Comparable figures 4-6/2018: EBIT EUR 98m (92), profit before tax EUR 92m (87). Comparable 1-6/2018: EBIT EUR 195m (180), profit before tax EUR 184m (171).
Financial position and cash flow
| EUR million | 30 Jun 2018 | 30 Jun 2017 | End 2017 |
| Net debt | 1,201 | 1,231 | 1,073 |
| Net debt / EBITDA 1) | 1.9 | 2.1 | 1.8 |
| Gearing ratio, % | 125.9 | 140.0 | 103.2 |
| Equity ratio, % | 37.0 | 34.3 | 40.5 |
| EUR million | 4-6/2018 | 4-6/2017 | Δ % | 1-6/2018 | 1-6/2017 | Δ % |
| Cash flow after investments | 81 | 76 | 7.3 | 133 | 139 | -3.9 |
1) (interest-bearing debt – financial assets) / (four previous quarters’ comparable EBITDA)
Additional key performance Indicators are available at elisa.com/investors (Elisa Operational Data.xlsx)
CEO Veli-Matti Mattila: Earnings continued to grow thanks to improved competitiveness
In the second quarter of the year, our revenue and earnings grew year-on-year. The period was the best second quarter in our history. The result improved mainly due to the growth in mobile service revenue and digital services as well as Elisa’s improved operational productivity.
Finland is leading the way of a mobile life, in which mobile data is affordable and easy to use. Finnish people are clear pioneers in the use of mobile data. Elisa will enable this to continue by making the world’s first 5G video call between two countries with commercial 5G network equipment and devices. In addition to Tampere, 5G-ready networks have already been built in Turku and its surroundings. The construction of a 5G-ready network in Jyväskylä began in June. A 5G-era subscription is available for 25 per cent of the population with maximum speed of 600 Mbit/s.
Fast mobile broadband subscriptions continue to grow in popularity among consumers, corporate customers and organisations. The post-paid mobile subscription base grew by 8,300 subscriptions during the quarter, while the prepaid subscription base reduced by 1,400 subscriptions. The fixed-network broadband subscription base grew by 1,000 subscriptions.
The Finnish Communications Regulatory Authority (FICORA) has made a statistic on the number of the most significant network disturbances of operators in 2017. Elisa’s share of the total network disturbances of all operators is notably small and clearly smaller than Elisa’s market share. The long-term development of customer experience and quality, by artificial intelligence, for example, has resulted in a significant reduction of Elisa’s network disturbances and given the company a clear lead in FICORA’s statistics.
The selection of Elisa Viihde continued to expand. The EU regulation which took effect at the beginning of April guarantees that the Elisa Viihde service is available in all 28 EU countries. The filming of a new original series, the crime drama Kaikki synnit , began during the quarter. The filming of the second season of the popular comedy series Kolmistaan is also underway.
Finland’s first nationwide NB-IoT (Narrowband Internet of Things) readiness enabled the new technology’s testing with more than fifty companies. The NB-IoT allows data collection from different devices, for example from sensors. These NB-IoT applications will be able to take advantage of the 5G network’s growing capacity in the future.
We opened the Elisa AI Co-Creation Challenge for world-class artificial intelligence teams. The teams are developing business by exploiting Elisa’s data. The challenge will culminate at Slush in December, when awards will be given to the winners.
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.
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 at the same level or slightly higher than in 2017. Recent acquisitions, mobile data and digital services are expected to increase revenue. Comparable EBITDA is anticipated to be at the same level or 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 Half-Year Financial Report January–June 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
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