1 08/02/2007 Group Overview / Veli-Matti Mattila President and CEO
Group OverviewVeli-Matti Mattila
President and CEO
ContentsGROUP OVERVIEW
Performance since previous Investor DayElisa strategy Updated financial targets
2 08/02/2007 Group Overview / Veli-Matti Mattila President and CEO
3 08/02/2007 Group Overview / Veli-Matti Mattila President and CEO
Performance since previous Investor Day
Market position strengthened…GROUP OVERVIEW – PERFORMANCE SINCE PREVIOUS INVESTOR DAY
4 08/02/2007 Group Overview / Veli-Matti Mattila President and CEO
28% 28% 28%
36% 36%37%
39% 39%
47% 47% 47% 47% 47%45%
43%
1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06E
PTT mobile market share
Broadband market shares in FinlandMobile market shares in Finland
Elisa mobile market share
31%
32%
35%36% 36%
35%35%
31%
30%
29%29%29%29%29%
30%
1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06E
Source: Company reports, Elisa estimates
… and productivity improved…GROUP OVERVIEW – PERFORMANCE SINCE PREVIOUS INVESTOR DAYPersonnel
Personnel (at end of period)
6467 68
7380
91
106112
17 17 18 1924 24
34 33
1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06
Revenue & EBITDA per personRevenue per person (EURt)
EBITDA per person (EURt)52054988
4772 46814367
4216
3661 3592
1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06
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All numbers comparable (excl. EO items)
…enabling leadership in growth businesses GROUP OVERVIEW – PERFORMANCE SINCE PREVIOUS INVESTOR DAY3G subscriptions & services Elisa broadband connections
308
346
420
460 473 480496
269
1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06
Total 3G bundle market(cumulative, '000)
Broadband connections (thousands)
167
263
358
52
258
383
522
1Q06 2Q06 3Q06 4Q06
Total 3G subscribtion market(cumulative, '000)
Elisa’ market share>50%
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Source: Company reports, Elisa estimates
Profitability improved after hypercompetitionGROUP OVERVIEW – PERFORMANCE SINCE PREVIOUS INVESTOR DAY
85
97107
118 120
101
111104
86 84 8589
103 100
123 119
23%25%
28%30%
36%
30%33%
30%
26% 25% 26% 26%
30%
26%
32%30%
Q12003
Q22003
Q32003
Q42003
Q12004
Q22004
Q32004
Q42004
Q12005
Q22005
Q32005
Q42005
Q12006
Q22006
Q32006
Q42006
EBITDA EBITDA-margin
Elisa Investor Day (Feb ’05)
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Progress towards given targets well on trackGROUP OVERVIEW – PERFORMANCE SINCE PREVIOUS INVESTOR DAY
Parameter Target set in Feb 2005 Execution so far
Average revenue growth Flat to slightly positive annually on comparable basis
Clear improvement (i.e. from 31% in FY04)
Operative capex-to-sales 11-13%
Improvement from the current level (i.e. from EUR 259m in FY04)
Net debt / EBITDA: 1 - 2xGearing: 50 - 80%Equity ratio: 40 - 50%
Above 15%
EBITDA-margin
13.0% (2H06)
30.6% (2H06)
14.0% (2H06)
EUR 264m (2H06 annualized)
0.78x (2H06)28.6% (end-06)63.4% (end-06)
CAPEX
Operative cash flow
Capital structure
ROCE 16.5% (2H06)
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*) All figures on a comparable basis
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Elisa strategy
Internet is driving new services…GROUP OVERVIEW – MARKET DYNAMICS
SPIT
SPIM
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…and development in mobile is enriching users´ lifeGROUP OVERVIEW – MARKET DYNAMICS
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Elisa strategy GROUP OVERVIEW – ELISA STRATEGY
Integrating One Elisa
New services and new markets
2003–
Strengthening market position 2005–
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…still significant further potential…GROUP OVERVIEW – ELISA STRATEGY: INTEGRATING ONE ELISA
Product and services streamlining
Processes
Outsourcing
Procurement
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…e.g. within IT-systems GROUP OVERVIEW – ELISA STRATEGY: INTEGRATING ONE ELISA
Present IT-systems include for example:Customer relationship management systems ~ 80 systemsBusiness intelligence systems ~ 50 systemsOrdering and self service systems ~ 50 systemsOperations support systems ~ 40 systemsHR and Administration ~ 40 systems
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Customer oriented business units platform for growth GROUP OVERVIEW – ELISA STRATEGY: STRENGTHENING MARKET POSITION
Networks
Products
Customers
Consumers Enterprises
ProductionElisa 2003
Elisa 2004 -2005
Elisa 2006 -
Origoltd
Invoicialtd
Lounetltd
Aava ltd ElisaNetworks ltd RPO ltd
Radiolinjaltd
ElisaComltd Soon ltd
ElisaMobile
ElisaFixed
ElisaRegional
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Opportunistic development of new services GROUP OVERVIEW – ELISA STRATEGY: NEW SERVICES AND NEW MARKETS
Market drivers•Web 2.0 services
•Mobility•A ”Flat world”•Open source
Mobility•Broadband
•Convenience• Imaging and video•Audio and music
Open source•Users as an integrated part
of service development•Users as contributors
•Open source applications•Customer self service
Web 2.0 services•User generated content
•Tagging and search•Long tail
•New Pricing
A “Flat world”•Global value networks
•Compressed supply chains•Services available 24/7• International workflow
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Opportunistic search for new marketsGROUP OVERVIEW – ELISA STRATEGY: NEW SERVICES AND NEW MARKETS
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Updated financial targets – by end-2009
Updated financial targets – by end-2009GROUP OVERVIEW
ROCE
Capital structure• Net debt / EBITDA
• Gearing
Capex-to-sales (operative)
EBITDA-margin
Average revenue growthpercentage yoy
Above 20%
1.5 - 2x50 - 100%
10 - 12%
Above 35%
Mid single digit
Target*Parameter
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*) All figures on a comparable basis
CEO prioritiesGROUP OVERVIEW
Further productivity improvements targeting
world-class efficiency
Further strengthening market position via
service leadership
Opportunistic development of
new businesses and acquisitions
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Thank you and Q&A
Forward looking statements
Statements made in this document relating to future status or circumstances, including future performance and other trend projections are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of Elisa.
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