ELISA FINANCIAL STATEMENT RELEASE 31 JANUARY 2018 AT 8:30 AM
Fourth quarter 2017
Year 2017
Key indicators
EUR million | 10-12/2017 | 10-12/2016 | Δ % | 1-12/2017 | 1-12/2016 | Δ % |
Revenue | 473 | 434 | 8.9 | 1,787 | 1,636 | 9.3 |
EBITDA | 151 | 139 | 8.9 | 608 | 563 | 7.9 |
Comparable EBITDA | 154 | 139 | 10.7 | 613 | 564 | 8.7 |
EBIT 1) | 93 | 76 | 22.1 | 378 | 339 | 11.4 |
Profit before tax 1) | 87 | 74 | 16.9 | 403 | 320 | 26.0 |
EPS, EUR1) | 0.45 | 0.37 | 21.9 | 2.11 | 1.61 | 30.9 |
Capital expenditure | 71 | 84 | -15.7 | 246 | 226 | 9.1 |
1) Comparable figures: 10-12/2017 EBIT EUR 95m (85), profit before tax EUR 89m (80) and EPS EUR 0.46 (0.41); 1-12/2017 EBIT EUR 384m (349), profit before tax EUR 364m (327) and EPS EUR 1.86 (1.66).
Financial position and cash flow
EUR million | End 2017 | End 2016 |
Net debt | 1,073 | 1,124 |
Net debt / EBITDA1) | 1.8 | 2.0 |
Gearing ratio, % | 103.2 | 115.7 |
Equity ratio, % | 40.5 | 38.5 |
EUR million | 10-12/2017 | 10-12/2016 | Δ % | 1-12/2017 | 1-12/2016 | Δ % |
Cash flow after investments2) |
48 |
-115 |
n.a. |
300 |
65 |
359.6 |
1) (interest-bearing debt – financial assets) / (four previous quarters’ comparable EBITDA)
2) Comparable cash flow 10-12/2016 EUR 53m, 1-12/2017 EUR 246m and 1-12/2016 EUR 281m. See page 5.
The Board of Directors proposes to the Annual General Meeting a dividend of EUR 1.65 per share. The Board of Directors also decided to propose an authorisation to acquire a maximum of 5 million treasury shares, which corresponds to 3 per cent of the total shares.
CEO Veli-Matti Mattila: Revenue and result grew markedly
Elisa ’s competitiveness and result have continued to grow. Competitiveness has strengthened further thanks to the continuous improvement of customer experience and quality. The revenue and earnings in 2017 were the best ever. Earnings has grown, for instance, due to an increase in mobile service revenue and investments in the productivity of Elisa ’s operations, as well as recent acquisitions.
Elisa ’s unique model in the pricing of unlimited data, the increasing use of video services, and investments in the expansion of the 4G network have made Elisa a clear pioneer in the use of mobile data. Elisa ’s network carries the fifth most mobile data in Europe1). The number of post-paid mobile subscriptions grew by 19,100 during the year. The total decline in the number of mobile subscriptions was 15,400, affected by a decline in the number of prepaid subscriptions of 34,500. The number of fixed-network subscriptions grew by 97,400, influenced by the acquisition of Starman.
We have increased the amount of original series content for consumers. In 2017, Elisa Viihde released four original series. For 2018, Elisa Viihde has already revealed the release of five new original series, including the international drama series Arctic Circle and Bullets. Elisa Kirja, Finland’s largest reseller of e-books, grew during the year. In addition to the popular Premium subscriptions, we launched Elisa Reissunetti, which is an inexpensive, one-gigabyte (1 GB) data package for travellers to far-away destinations.
Demand for integrated IT and telecommunication solutions continued to grow, and we strengthened our pioneering role with the Santa Monica Networks acquisition, for example. The number of orders received for the services in question grew significantly.
We are pursuing an even better customer experience and testing new technologies in both our mobile and fixed networks. We were the first operator to introduce 5G readiness to the mobile network in Finland. Construction of the network has begun in Tampere, the first city in which the new network will be implemented on such a large scale. Once complete, the new network will provide the area with faster, up to 1 Gbit/s, and more reliable internet connections.
Elisa was rewarded as one of Finland’s best workplaces and is the largest listed company ever in the category of Great Place to Work Finland's large companies, in which it achieved third place. We offered young people an opportunity to get to know working life and, together with our subsidiaries and temporary agency employees, hired 250 young people for summer jobs. Our digital schools have already attracted more than a thousand children. Elisa established the ShedHelsinki foundation, which emphasizes diversity among young people and produces year-round club activities and musical theatre performances. We also encouraged an increase in interaction between parents and teenagers in the “Pidetään yhtä” (“Stay Connected”) project. Elisa employees participated in voluntary work by being present in the everyday lives of young people.
The continuous improvement of customer experiences and quality are essential cornerstones of our culture, and we will continue to keep a strong focus on them. Increasing productivity, internationalising our digital services, delivering value with data connectivity, and our strong investment capability will continue to create a solid foundation for creating competitive value in the future.
1) Source: Tefficient industry analysis 4 2017 mobile data usage and revenue per operator Q3 2017
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.
Profit distribution
According to Elisa ’s distribution policy, profit distribution is 80–100 per cent of the previous fiscal year’s net profit. In addition, any excess capital can be distributed to shareholders. When making the distribution proposal or decision, the Board of Directors will take into consideration the company's financial position, future financial needs and financial targets. Profit distribution includes dividend payment, capital repayment and purchase of treasury shares.
The Board of Directors proposes to the Annual General Meeting a dividend of EUR 1.65 per share. The dividend payment corresponds to 89 per cent of the financial period’s comparable net profit.
Shareholders who are listed in the company’s register of shareholders maintained by Euroclear Finland Ltd on 16 April 2018 are entitled to funds distributed by the General Meeting. The Board of Directors proposes that the payment date be 24 April 2018. The profit for the period will be added to retained earnings.
The Board of Directors also decided to propose to the General Meeting that the Board of Directors be authorised to acquire a maximum of 5 million treasury shares, which corresponds to 3 per cent of the total shares.
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 Financial Statements Release 2017 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