Pasi Lehmus. Elisa Corporation Investor Day, February 2005

Transcription

1 Investor Day, February 2005 Pasi Lehmus Elisa Fixed 1

2 Fixed segment Contents Summary Financial performance Operational performance Operational priorities Market dynamics 2

3 Fixed segment Summary Top line in slight decline Sales split Margin stabilizing Capital intensity normalising due to broadband Success in the broadband market Other service operators 17 % Cable TV 1 % Other 4 % EUR 653m PSTN 39 % Corporate services 26 % Broadband 13 % Based on consolidated numbers, Finland 3

4 Fixed - Financial performance Broadband upheld top line decline Successful market operations in broadband boosted subscriber base Broadband could not fully compensate Fixed sales declining trend Sales development Price erosion in corporate data and down due to seasonal variations (vacations) -2 % -1 % 3 % -6 % 3 % -4 % 1 % -3 % 1 % 2002 Sales (EURm) Quarterly change (%) 4

5 Fixed - Financial performance Stable margin level Successful cost control and operational development EBITDA development Simplified corporate structure Operational integration Personnel reduction Centralized purchasing, IT Broadband growth puts pressure on short term margin 32 % 26 % 27 % 27 % 25 % 32 % 27 % 29 % 26 % Increased last mile and sales costs 2002 EBITDA (EURm) EBITDA margin (%) 5

6 Fixed - Financial performance Capital intensity driven by broadband Capital intensity increased CAPEX development ADSL network expansion Network IT systems (NIMS) Investments in customer premises equipment affecting Seasonal phenomenon % 10 % 10 % 7 % 15 % 9 % 9 % 14 % 19 % 2002 CAPEX (EURm) CAPEX/Sales (%) 6

7 Fixed - Financial performance Capital intensity impacts cash flow Depreciation vs. CAPEX development Operating cash flow development % 16 % 16 % 20 % 9 % 23 % 18 % 16 % 5 7 % Depreciation CAPEX Cash flow (EURm) Cash flow/sales (%) Operating cash flow = EBITDA - CAPEX 7

8 Fixed - Operational performance PSTN line erosion driven by mobile and broadband Broadband is compensating decline, total fixed subscriber base grows PSTN subscriber base and traffic are decreasing Quarterly Fixed subscriber base Traffic from fixed to mobile brings new revenue from mobile operators Number portability is extended to corporate numbers in 1H 2005 Analogue and ISDN Broadband 8

9 Fixed - Operational performance Strong growth in broadband Active market strategy Broadband offering expanded nationwide Distribution extended to independent retail chains Quarterly subscriber growth and net adds Estimated market share increased 2%-units in Rapid growth created process issues Cable TV remains part of Elisa broadband strategy Broadband subs ('000) Net adds ('000) 9

10 Fixed - Operational priorities Broadband is in the focus Market development Estimated market 1 million subscribers in summer 2005 Demand for higher access speeds Elisa drives the market Active role to get maximum growth Growth management by improving processes Utilizing existing mobile retail channels Customer loyalty programs 10

11 Fixed - Operational priorities Corporate services driven by mobile and IP As a fully integrated operator Elisa has capability of providing truly convergent solutions with wireless PBX combining different networks (mobile, IP, fixed), intelligent network and terminals enables one terminal concept for a customer strengthens Elisa s position in the corporate market Elisa has a strong position in the market as the largest reseller of Cisco IPcommunication equipment in Finland PBX PBX and and corporate corporate data data Mobile Mobile Wireless PBX IP IP 11

12 Fixed - Operational priorities Convergence is reality PBX is mobile ICT service package Elisa seamless service package Wireless PBX Intelligent network services Application integration Elisa Applications Service Services Agreement Fujitsu Special Communication Data & Basic IT services applications applications communications IT-Infra PBX and services terminals Data infra communications Voice infra Implementation Support and maintenance Expert services Traditional PBX services VoIP solutions and services Mobile services 12

13 Fixed - Market dynamics VoIP is evolution not revolution VoIP is already significant driver in corporate segment Elisa provides VoIP telephony services to residential customers, but so far not aggressively VoIP is an opportunity to Elisa to expand market outside SMP areas 13

14 Fixed - Market dynamics Triple play: Elisa is playing to win win Fixed network Cable network Fixed network Cable network Analogue Analogue Internet (ADSL) Voice (PSTN) TV (Cable TV) Digital Internet (Cable modem) New business potential New business potential especially outside SMP areas TV (IPTV) Digital Internet (ADSL) Voice (VoIP) Voice (PSTN) TV (Cable TV) Digital Internet (Cable modem) Voice (VoIP) Alternative technology evolution in SMP areas Alternative technology evolution in SMP areas and some new business potential 14

15 Summary Fixed summary Broadband growth Strong position in corporate segment Stable margins 15

16 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, forwardlooking 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. 16

17 Thank you 17