Elisa’s Financial Statements Release 2022

Jan 27, 2023

Fourth quarter 2022 financial highlights

  • Revenue increased by EUR 27m to EUR 563m, mainly due to growth in mobile and digital services.
  • Mobile service revenue increased by 5.4 per cent to EUR 234m.
  • Comparable EBITDA grew by EUR 7m to EUR 185m.
  • Comparable EBIT increased by EUR 8m to EUR 119m.
  • Comparable cash flow decreased by EUR 1m to EUR 86m.
  • In Finland, mobile post-paid ARPU increased to EUR 21.5 (21.1 in the previous quarter), and mobile post-paid churn decreased to 16.2 per cent (18.6).
  • During the quarter, the net increase in post-paid mobile subscriptions was 23,500. The contribution of M2M and IoT subscriptions was +35,400.
  • Prepaid subscriptions decreased by 11,600 during the quarter.
  • The number of fixed broadband subscriptions decreased by 1,500 during the quarter.

Key indicators

EUR million 4Q22 4Q21 Δ %   2022 2021 Δ %
Revenue 563 536 5.1 %   2,130 1,998 6.6 %
EBITDA 185 176 5.4 %   733 697 5.1 %
Comparable EBITDA (1 185 178 3.9 %   735 706 4.2 %
EBIT 119 109 9.6 %   470 431 9.1 %
Comparable EBIT (1 119 111 7.1 %   472 439 7.4 %
Profit before tax 115 105 9.8 %   456 418 9.0 %
Comparable PBT (1 115 108 7.2 %   458 427 7.3 %
EPS, EUR 0.60 0.54 11.5 %   2.33 2.15 8.8 %
Comparable EPS, EUR 0.60 0.55 8.9 %   2.34 2.19 7.2 %
Capital expenditure 97 82 19.3 %   290 265 9.3 %
Net debt 1,276 1,219 4.6 %   1,276 1,219 4.6 %
Net debt / EBITDA (2 1.7 1.7     1.7 1.7  
Gearing ratio, % 101.9 % 101.2 %     101.9 % 101.2 %  
Equity ratio, % 40.6 % 39.9 %     40.6 % 39.9 %  
Cash flow (3 86 85 1.3 %   300 322 -6.7 %
Comparable Cash flow (4 86 87 -1.7 %   321 338 -5.0 %

1) 2022 excluding EUR 2m in restructuring costs; 4Q21 excluding EUR 3m and 2021 excluding EUR 8m in restructuring costs. 2) (Interest-bearing debt – financial assets) / (four previous quarters’ comparable EBITDA). 3) Cash flow before financing activities. 4) 2022 excluding EUR 21m in share investments; 4Q21 excluding EUR 2m and 2021 excluding EUR 16m in share investments.

The Board of Directors proposes to the Annual General Meeting a dividend of EUR 2.15 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.

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

CEO Veli-Matti Mattila: Another strong year driven by our solid strategy

Elisa continued its solid development. In the fourth quarter, revenue increased by 5 per cent from the previous year to EUR 563 million. Comparable EBITDA improved by 4 per cent to EUR 185 million and comparable earnings per share by 9 per cent to EUR 0.60. Despite geopolitical challenges and increasing uncertainties, all of our businesses have had excellent performance.

Our long-term strategy and operational capability have enabled us to deliver stable financial results in all our business areas. Elisa is not immune to increasing energy costs; however, due to comprehensive hedging, the negative impact of increasing energy prices was moderate.

In 2022, Elisa continued its strong leadership in the development of 5G. In Finland, 5G network coverage reached 277 locations, serving more than 86 per cent of Finns. In Estonia, after winning the 5G frequency auctions, we were the first operator to open a 5G network, with our 3.5 GHz frequency for commercial use already running in the summer. By the end of the year, our 5G coverage reached 70 per cent of Estonians.

We have systematically improved energy efficiency in our network with continuous network optimisation and automation, and by utilising the latest network technologies. In 2022, our network energy efficiency improved by 5.7 per cent, and since 2016, we have improved energy efficiency in our Finnish mobile network by 78 per cent. We have begun the ramp-down of the 3G network in Finland and will finalise the work during 2023. Almost all mobile data usage has already moved to modern, more energy-efficient networks.

The home broadband market is developing favourably, supported by different solutions. For example, Elisa continued actively investing in its optical fibre network. High-speed connections from Elisa are already available to more than a million locations via optical fibre or a cable modem. The fixed wireless network service also continued to grow.

The international digital services business progressed well during the quarter, as revenues and the order backlog grew strongly. We continuously pilot new innovations in our home markets. One of the latest ones is our distributed energy storage solution, which utilises our mobile base station battery capacity to save on our own energy costs, and also enables us to offer electricity grid balancing services to transmission system operators. This innovation is an example of how our mission – a sustainable future through digitalisation – fuels our solution and business development.

As the next step in our continuous sustainability improvement work, our long-term environmental and energy management systems received ISO 14001 and ISO 50001 certification. Elisa’s climate reporting score improved to A- in CDP (the global climate impact disclosure system), to which we have been reporting systematically since 2011.

We will continue to focus strongly on continuous improvement of the customer experience and quality. Increasing productivity, expanding our digital services internationally and creating value with data, as well as our strong investment capability, continue to lay a solid foundation for competitively creating value in the future.

Outlook and guidance for 2023

The development of the general economy includes many uncertainties. Growth in the Finnish economy is expected to stall. In particular, uncertainty relating to Russia's war in Ukraine, such as inflation and energy prices, is continuing. 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 2022. 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 2022. However, the EBITDA growth potential is more challenging in the first half of the year. 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 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.

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 2.15 per share. The dividend payment corresponds to 92 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 11 April 2023 are entitled to funds distributed by the General Meeting. The Board of Directors proposes that the payment date be 19 April 2023. 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 five million treasury shares, which corresponds to 3 per cent of the total shares.


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