Elisa: Elisa's Half-Year Financial Report January-June 2024

ELISA CORPORATION HALF-YEAR FINANCIAL REPORT RELEASE 16 JULY 2024 AT 8:30 AM

Second quarter 2024 financial highlights

• Revenue increased by 2 per cent, or EUR 9m, to EUR 541m.
• Mobile service revenue increased by 4.7 per cent to EUR 252m.
• EBITDA grew by 4 per cent, or EUR 7m, to EUR 190m.
• EBIT increased by 5 per cent, or EUR 6m, to EUR 121m.
• Comparable cash flow decreased by EUR 14m to EUR 94m, mainly due to higher capital expenditure and a change in net working capital.
• In Finland, mobile post-paid ARPU increased to EUR 23.1 (22.8 in the previous quarter), and mobile post-paid churn was at the same level, 15.0 per cent (15.0).
• During the quarter, the number of post-paid mobile subscriptions increased by 42,100. M2M and IoT subscriptions grew by 47,100.
• Prepaid subscriptions increased by 5,300 during the quarter.
• The number of fixed broadband subscriptions increased by 600 during the quarter.

Key indicators

EUR million	2Q24	2Q23	Δ %		1H/24	1H/23	Δ %
Revenue	541	533	1.6 %		1,076	1,072	0.3 %
EBITDA	190	183	4.0 %		370	366	1.0 %
Comparable EBITDA (1	190	183	4.0 %		380	366	3.8 %
EBIT	121	116	4.8 %		233	233	0.2 %
Comparable EBIT (1	121	116	4.8 %		243	233	4.6 %
Profit before tax	114	110	3.3 %		218	222	-2.2 %
Comparable profit before tax (1	114	110	3.3 %		228	222	2.5 %
EPS, EUR	0.57	0.56	2.4 %		1.09	1.13	-3.6 %
Comparable EPS, EUR (1	0.57	0.56	2.4 %		1.14	1.13	0.9 %
Capital expenditure	84	70	21.1 %		152	135	12.9 %
Net debt	1,383	1,459	-5.2 %		1,383	1,459	-5.2 %
Net debt / EBITDA (2	1.8	2.0			1.8	2.0
Gearing ratio, %	125.2 %	134.9 %			125.2 %	134.9 %
Equity ratio, %	34.8 %	35.2 %			34.8 %	35.2 %
Cash flow (3	76	108	-29.5 %		138	179	-23.2 %
Comparable cash flow (4	94	108	-12.7 %		180	179	0.5 %

¹⁾ 1H2024 excluding EUR 10m restructuring costs. ²⁾ (Interest-bearing debt - financial assets) / (four previous quarters' comparable EBITDA). ³⁾ Cash flow before financing activities. ⁴⁾ 2Q2024 excluding EUR 18m in share investments and loans granted. 1H/24 excluding EUR 43m in share investments and loans granted.

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

CEO Topi Manner: Good earnings growth continuing, improving performance in B2B

In the second quarter, Elisa continued its good performance despite geopolitical and macroeconomic headwinds. Revenue increased by 2 per cent to EUR 541 million. EBITDA improved by 4 per cent to EUR 190 million, driven by mobile service revenue, efficiency improvements and improving momentum in the B2B segment where corporate investments in connectivity, software and IT services are starting to pick up. Earnings per share was EUR 0.57.

During the second quarter, we continued to expand the coverage of our high-speed connections and services. Elisa's standalone 5G network services make us a frontrunner in the international arena, and also during the second quarter, we introduced 5G+ (i.e. standalone 5G) to all of our new subscriptions, which differentiates us further from our competitors.

Since June, we have been building our fibre network utilising new technology (XGS-PON), taking energy-efficient steps towards 100 Gbps connections. At the beginning of July, we announced the acquisition of fibre networks in the eastern and northeastern parts of Finland from Kaisanet.

We continued to grow with bolt-on acquisitions in accordance with our strategy. The acquisition of Leanware Oy, announced in April, was closed and accelerates the growth of Elisa IndustrIQ's industrial software business.

Elisa's Distributed Energy Storage (DES) solution has been deployed by Ålcom, a telco from the Åland Islands, to utilise energy from solar panels in mobile network operations. This is the first time that solar energy production has been added to an Elisa DES deployment.

Elisa is now the world's 66th most sustainable company and the best Finnish company on the ranking of the World's Most Sustainable Companies in 2024 by Time Magazine and Statista. Elisa continues to receive global recognition in this area, an indication that we have emerged as one of the world's leading companies from the sustainability point of view. It is also testament to Elisa's 15 years of commitment to working toward a sustainable future where net zero emissions by 2040 is our key target.

Our performance during the quarter clearly demonstrates our strong commitment to profitable growth, creating customer value by being a technology frontrunner as well as continuously improving productivity and quality.

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 as 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 as 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. [phone]
Mr Jari Kinnunen, CFO, tel. [phone]
Mr Vesa Sahivirta, IR Director, tel. [phone]

Distribution:

Nasdaq Helsinki
Principal media
elisa.com