Elisa Oyj: Elisa's Interim Report Q1 2024

First quarter 2024 financial highlights

• Revenue decreased by EUR 5m to EUR 535m, mainly due to business disposals.
• Mobile service revenue increased by 5.8 per cent to EUR 249m.
• Comparable EBITDA grew by EUR 7m to EUR 190m.
• Comparable EBIT increased by EUR 5m to EUR 122m.
• Comparable cash flow increased by EUR 15m to EUR 86m, mainly due to a change in net working capital.
• In Finland, mobile post-paid ARPU increased to EUR 22.8 (22.4 in the previous quarter), and mobile post-paid churn decreased to 15.0 per cent (15.4).
• During the quarter, post-paid mobile subscriptions increased by 18,200. M2M and IoT subscriptions grew by 36,100.
• Due to seasonality, prepaid subscriptions decreased by 14,800 during the quarter.
• The number of fixed broadband subscriptions increased by 3,300 during the quarter.

Key indicators

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EUR million 1Q24 1Q23 Δ % 2023
Revenue 534.5 540 -1.0 % 2,180
EBITDA 179.7 183 -2.0 % 756
Comparable EBITDA [(1] 190.0 183 3.6 % 756
EBIT 112 117 -4.5 % 482
Comparable EBIT [(1-2] 121.9 117 4.3 % 487
Profit before tax 104 112 -7.5 % 458
Comparable profit before tax [(1-2] 114 112 1.6 % 464
EPS, EUR 0.52 0.57 -9.5 % 2.34
Comparable EPS, EUR [(1-2] 0.57 0.57 -0.5 % 2.37
Capital expenditure 68 66 4.2 % 321
Net debt 1,260 1,217 3.5 % 1,304
Net debt / EBITDA [(3] 1.7 1.6 1.7
Gearing ratio, % 92.0 % 91.0 % 100.8 %
Equity ratio, % 43.8 % 42.6 % 41.6 %
Cash flow [(4] 62 71 -13.7 % 347
Comparable cash flow [(5] 86 71 20.6 % 361

[1)][ ]1Q2024 excluding EUR 10m in restructuring costs. [2)] 2023 excluding a EUR 6m impairment. [3)] (Interest-bearing debt - financial assets) / (four previous quarters' comparable EBITDA). [4)] Cash flow before financing activities. [5)] 1Q2024 excluding EUR 24m in share investments. 2023 excluding EUR 14m in share and business investments and sales.

Additional key performance indicators are available at elisa.com/investors (Elisa Operational Data.xlsx).

CEO Topi Manner: A good start to the year despite a challenging environment

In the first quarter, Elisa continued its good performance despite geopolitical and macroeconomic headwinds. Revenue decreased by EUR 5 million to EUR 535 million due to business disposals and a decrease in equipment sales and interconnection revenue. However, comparable EBITDA improved by 4 per cent to EUR 190 million, driven by mobile service revenue and efficiency improvements. Comparable earnings per share was EUR 0.57. On 12 April 2024, for the tenth consecutive year, Elisa's AGM approved a growing dividend, of EUR 2.25 per share.

During the first quarter, we continued to expand the coverage of our high-speed connections. Elisa was the first operator in Finland to launch standalone 5G subscriptions, including standalone 5G fixed wireless access (FWA) connections for consumers. We continued to expand our fibre network, and we made G.fast technology available to residential properties, allowing the speed of a building's indoor copper network to be accelerated to the speed of fibre.

As a sign of Elisa's innovativeness, the Finnish Transport and Communications Agency (Traficom) recognised Elisa with the 2024 Information Security Trailblazer award for its pioneering work in preventing scam calls and messages in Finland. The country now has a nationwide call blocking solution based on the scam call blocking solution that Elisa developed and patented. Elisa has also become the first telecom operator in Finland to register its own SMS Sender ID with Traficom, preventing scammers from sending text messages claiming to be from Elisa.

We continued to grow with bolt-on acquisitions in accordance with our strategy. In Finland, Elisa's corporate business strengthened its position as a provider of mobile value-added services by acquiring a majority stake in Moontalk Oy. The acquisition of Romaric, a provider of manufacturing automation and optimisation software solutions, strengthens Elisa IndustrIQ's software portfolio and its foothold in the US market. The acquisition of Leanware Oy, which was announced in April, will accelerate the growth of Elisa IndustrIQ's industrial software business by adding warehouse management software to the offering. It also strengthens Elisa IndustrIQ's foothold in the Finnish manufacturing customer base.

Elisa's Distributed Energy Storage (DES) solution is gaining international interest. In February, DNA Tower Finland, part of Telenor Group, announced their roll-out of Elisa's DES solution in their equipment spaces, supporting the energy transition.

Elisa is rated as one of the most sustainable companies in the world. CDP, a global environmental disclosure system, recognised Elisa's leadership in corporate transparency and performance on climate change by including Elisa on its highest "A List".

As Elisa's new CEO, I'm impressed by the culture of excellence in the company and the commitment and capabilities of our people. Our competitiveness is based on continuous improvement of productivity and quality, the innovativeness of our people in creating customer value, and clear priorities in making investments. Together with the entire Elisa team, I will stay focused on the long-term execution of our strategy, and I see further potential for generating profitable growth in our home markets in Finland and Estonia, as well as through digital services internationally.

Outlook and guidance for 2024

The development in the general economy includes many uncertainties. Growth in the Finnish economy is expected to stall. In particular, there is continuing uncertainty in e.g. inflation and energy prices relating to Russia's war in Ukraine and other conflicts. Challenges in global supply chains may also result in uncertainties in volumes and prices. Competition in the Finnish telecommunications market remains keen.

Full-year revenue is estimated to be at the same level or slightly higher than in 2023. Mobile data and digital services are expected to increase revenue. Full-year comparable EBITDA is anticipated to be at the same level or slightly higher than in 2023. Capital expenditure is expected to be 12-13 per cent of revenue.

Elisa continues to improve productivity, for example by increasing automation and data analytics in different processes, such as customer interaction, 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 revenue growth and profitability improvement will derive from growth in the mobile data market, as well as domestic and international digital services.

ELISA CORPORATION

Additional information:

Mr Topi Manner, CEO, tel. +358 10 265 1200
Mr Jari Kinnunen, CFO, tel. +358 10 262 9510
Mr Vesa Sahivirta, IR Director, tel. +358 50 520 5555

Distribution:

Nasdaq Helsinki
Principal media
elisa.com