The report of the Board of Directors 2015

The Financial report has been prepared in accordance with the International Financial Reporting Standards (IFRS).

Market situation

The competitive environment has been intense during the last year, typically having some campaigning and quite long discount periods in campaigns. The smartphone market grew and the usage of data services continued to evolve favourably. Approximately 92 per cent of the mobile handsets sold in 2015 were smartphones. Another factor contributing to mobile market growth has been the increased network coverage of new 4G speeds. The competition in the fixed broadband market has been fierce in multi-dwelling units. The number and usage of traditional fixed network subscriptions is decreasing.

The markets for new visual communications (videoconferencing), IT outsourcing and IPTV entertainment services have continued to develop favourably. The demand for other new consumer online services is also growing.

Revenue, earnings and financial position

Revenue and earnings
EUR million 2015 2014 2013
Revenue 1,569 1,535 1,547
EBITDA 532 520 491
EBITDA excl. non-recurring items 536 520 508
EBITDA-% 33.9 33.8 31.7
EBITDA-% excl. non-recurring items 34.1 33.8 32.8
EBIT 312 305 281
EBIT excl. non-recurring items 322 305 298
EBIT-% 19.9 19.9 18.1
EBIT-% excl. non-recurring items 20.5 19.9 19.3
Return on equity, % 27.0 25.6 22.9

Revenue increased by 2 per cent. Growth in the mobile service business and equipment sales in both Finland and Estonia, as well as new services in the Consumer Customers segment affected revenue positively. Lower mobile interconnection rates, Corporate Customers’ visual communication services, and the decrease in usage and subscriptions of traditional fixed telecom services and operator sales in both segments affected revenue negatively.

Reported EBITDA includes non-recurring item of EUR 3 million, which relates to personnel reductions. EBITDA excluding non-recurring items increased by 3 per cent mainly due to revenue growth and productivity improvement measures. EBIT excluding non-recurring items increased by 5 per cent. Depreciation includes a EUR 6 million goodwill impairment write-down relating to Sulake Corporation.

Net financial income and expenses were EUR -24 million (-27), mainly due to lower interest rates and net debt. Income taxes in the income statement decreased to EUR -47 million (-55). Taxes include a positive change in deferred tax assets of EUR 6 million relating to Sulake Corporation. Elisa’s net profit was EUR 244 million (223). The Group’s earnings per share amounted to EUR 1.52, excluding non-recurring items EUR 1.54 (1.41).

Financial position
EUR million End 2015 End 2014 End 2013
Net debt 962 1,001 971
Net debt / EBITDA 1) 1.8 1.9 2.0
Gearing ratio, % 103.9 114 112.6
Equity ratio, % 41.4 39.4 37.3
EUR million 2015 2014 2013
Cash flow after investments 253 185 84
1) (interest-bearing debt – financial assets) / (4 previous quarters’ EBITDA exclusive of non-recurring items)

Cash flow after investments was EUR 253 million, excluding acquisition EUR 266 million (185, excluding acquisitions 224). Cash flow excluding acquisitions grew, mainly due to increased EBITDA, improved net working capital change and lower net financial costs.

The financial and liquidity positions are good. Net debt decreased to EUR 962 million as a result of growth in cash flow and fewer share acquisitions compared to 2014. Cash and undrawn committed loans and credit lines totalled EUR 479 million at the end of 2015.

Changes in corporate structure

Elisa made a tender offer to all shareholders of Anvia at a price of EUR 2,000 per share from 15 April 2015 to 26 June 2015. Elisa’s holding in Anvia increased to 32.5 per cent calculated without the disputed transaction of Anvia’s treasury shares.

Consumer Customers business

EUR million 2015 2014
Revenue 983 954
EBITDA 348 327
EBITDA excl. non-recurring items 349 327
EBITDA-% 35.4 34.3
EBITDA-% excl. non-recurring items 35.5 34.3
EBIT 221 204
EBIT excl. non-recurring items 229 204
CAPEX 111 105

Revenue increased by 3 per cent. Mobile services, equipment sales and growth in new services contributed positively to revenue. The decrease in usage and subscriptions of traditional fixed telecom services and operator sales affected revenue negatively, as did the lower mobile interconnection rates.

Reported EBITDA includes a non-recurring item of EUR 1 million, which relates to personnel reductions. EBITDA excluding non-recurring items increased by 7 per cent, mainly due to revenue growth and productivity improvement measures.

Corporate Customers business

EUR million 2015 2014
Revenue 586 581
EBITDA 185 193
EBITDA excl. non-recurring items 187 193
EBITDA-% 31.5 33.2
EBITDA-% excl. non-recurring items 31.9 33.2
EBIT 91 101
EBIT excl. non-recurring items 93 101
CAPEX 85 87

Revenue increased by 1 per cent. Growth in mobile services, equipment sales and IT services contributed positively to revenue. Lower mobile interconnection rates, a decrease in visual communication services as well as a decrease in usage and subscriptions of traditional fixed telecom services and operator sales affected revenue negatively.

Reported EBITDA includes non-recurring items of EUR 2 million, which relates to personnel reductions. EBITDA excluding non-recurring items decreased by 3 per cent, mainly due to personnel increases and lower profitability in the visual communication business.


In 2015, the average number of personnel at Elisa was 4,146 (4,138). Employee expenses increased to EUR 266 million (248), mainly due to changes in collective labour agreements and performance-based bonuses. Personnel at the end of 2015 amounted to 4,083 (4,089). Personnel by segment at the end of the period:

  End 2015 End 2014
Consumer Customers 2,290 2,338
Corporate Customers 1,793 1,751
Total 4,083 4,089


EUR million 2015 2014
Capital expenditure, of which 196 191
Consumer Customers 111 105
Corporate Customers 85 87
Shares 18 43
Total 213 235

In 2015, the main capital expenditures related to the capacity and coverage increase of the 4G networks, as well as to other network and IT investments. Investments in shares in 2015 relate to the ownership increase in Anvia.

Financing arrangements and ratings

Valid financing arrangements
EUR million Maximum
In use on
31 Dec 2015
Committed credit lines     300 0
EIB loan commitment     150 0
Commercial paper programme ¹)     250 171
EMTN programme ²)     1,000 600
1) Domestic commercial paper program, not committed
2) Euro Medium Term Note program, not committed
Long-term credit ratings
Credit rating agency Rating Outlook
Moody’s Investor Services Baa2 Stable
Standard & Poor’s BBB+ Stable

The Group’s cash and undrawn committed loans and credit lines totalled EUR 479 million (341) on 31 December 2015.

Standard & Poors upgraded Elisa’s rating to ‘BBB+’ and affirmed the outlook as stable on 18 March 2015. 

On 6 October 2015, Elisa signed a EUR 150 million loan agreement with the European Investment Bank. The loan can be drawn within 12 months from signing and its maturity is seven years.


Share trading volumes and closing prices are based on trades made on the Nasdaq Helsinki.

Trading of shares 2015 2014
Shares traded, millions 113.3 112.7
Volume, EUR million 3,214.4 2,359.4
% of shares 67.7 67.4
Shares and market values End 2015 End 2014
Total number of shares 167,335,073 167,335,073
Treasury shares 7,851,006 7,986,043
Outstanding shares 159,484,067 159,349,030
Closing price, EUR 34.79 22.61
Market capitalisation, EUR million 5,822 3,783
Treasury shares, % 4.69 4.77

Elisa shares are also traded in alternative marketplaces. According to the Fidessa Fragmentation Index, the trading volumes in these markets during 2015 were 153 per cent (112) of that of the Nasdaq Helsinki. The total trading volume in all marketplaces represents approximately 171 per cent (143) of outstanding shares.

Number of shares Total number of shares Treasury shares Outstanding shares
Shares at 31 Dec 2014 167,335,073 7,986,043 159,349,030
Performance Share Plan 4.2.2015 1)   -133,197 133,197
Restricted Share Plan 5.11.2015 1)   -1,840 1,840
Shares at 31 Dec 2015 167,335,073 7,851,006 159,484,067
1) Stock exchange bulletins 5 February 2015 and 5 November 2015

Research and development

The majority of the service development occurs during the ordinary course of business and is accounted for as a normal operating expense. Elisa invested EUR 15 million (13) in research and development, of which EUR 13 million was capitalised in 2015 (EUR 11 million in 2014 and EUR 8 million in 2013), corresponding to 0.9 per cent of revenue (0.8 per cent in 2014 and 0.6 per cent in 2013).

Annual General Meeting

On 26 March 2015, Elisa’s Annual General Meeting decided to pay a dividend of EUR 1.32 per share based on the 2014 financial statements. The dividend was paid to shareholders on
8 April 2015. 

The Annual General Meeting adopted the financial statements for 2014. The members of the Board of Directors and the CEO were discharged from liability for 2014.

The number of the members of the Board of Directors was confirmed at six. Mr Raimo Lind, Mr Petteri Koponen, Ms Leena Niemistö, Ms Seija Turunen, Mr Jaakko Uotila and Mr Mika Vehviläinen were re-elected as members of the Board of Directors. Mr Raimo Lind was elected as the Chairman of the Board and Mr Mika Vehviläinen as the Deputy Chairman.

Mr Raimo Lind (Chair), Ms Leena Niemistö and Mr Mika Vehviläinen were appointed to the Compensation & Nomination Committee. Ms Seija Turunen (Chair), Mr Petteri Koponen and Mr Jaakko Uotila were appointed to the Audit Committee.

KPMG Oy Ab, authorised public accountants, was appointed the company’s auditor. Mr Esa Kailiala, APA, is the responsible auditor.

Board of Directors’ authorisations

The Annual General Meeting decided on to authorise the Board of Directors to resolve to repurchase or accept as pledge the company’s own shares. The repurchase may be directed. The amount of shares under this authorisation is 5 million shares at maximum. The authorisation is effective until 30 June 2016.

The Annual General Meeting decided to authorise the Board of Directors to pass a resolution concerning the share issue, the right of assignment of treasury shares and/or the granting of special rights entitling to shares. A maximum aggregate of 15 million of the company’s shares can be issued under the authorization. The authorisation is effective until 30 June 2016.

Elisa Shareholders' Nomination Board

As of 4 September 2015, the composition of Elisa's Shareholders' Nomination Board is as follows:

  • Mr Kari Järvinen, Chief Executive Officer, nominated by Solidium Oy
  • Mr Reima Rytsölä, Chief Investment Officer, nominated by Varma Mutual Pension Insurance Company
  • Mr Timo Ritakallio, Chief Executive Officer, nominated by Ilmarinen Mutual Pension Insurance Company
  • Mr Ted Roberts, Head of Finnish Equities, nominated by Nordea Funds
  • Mr Raimo Lind, Chairman of the Board of Elisa

The Nomination Board elected Mr Kari Järvinen as the chair.

The shareholders' Nomination Board was established in 2012 by Annual General Meeting. Its duty is to prepare proposals for the election and remuneration of the members of the Board of Directors of Elisa for the Annual General Meeting.

Significant legal and regulatory issues

The paper invoice case initiated by the Consumer Ombudsman is still pending in the Supreme Court. The Consumer Ombudsman is asking that paper invoices for mobile subscriptions should be free of charge.

Elisa and Anvia are in dispute over the ownership arrangement of Anvia's treasury shares and their use at the General Meeting on 20 May 2015 and 19 August 2015. Elisa has requested that the aforementioned arrangement be confirmed to be invalid. Companies owned by Anvia, in turn, have brought an action for annulment in order to amend or annul the decisions made at the General Meeting. The consideration of the matters in the court instances is ongoing.

In April 2015, the Finnish Communications Regulatory Authority (FICORA) released the decisions on price levels of copper and fibre access lines. According to the decisions, Elisa and other major Finnish fixed-line operators must apply monthly maximum rental prices of EUR 10.70 in copper access lines and EUR 75.50 in fibre access lines. Elisa and some other fixed-line operators have appealed against the decision to the Supreme Administrative Court. On 6 July 2015, the Supreme Administrative Court has issued interim decisions, in which it suspended the implementation of the FICORA decisions until the appeals are resolved in the Supreme Administrative Court or until otherwise ordered.

On 8 April 2015, according to the Finnish Competition Act, the Finnish Competition and Consumer Authority (FCCA) approved the transaction in which Elisa gains control over Anvia.

On 13 March 2015, Helsinki District Court dismissed Visual Data Oy’s claim demanding EUR 3.5 million damages from Elisa and several other telecommunication companies under the Competition Act (relates to publishing of subscribers’ contact information). Visual Data has lodged an appeal.

In August 2015, FICORA issued a decision on the maximum interconnection fees for Finnish mobile operators. This decision is valid for three years. All Finnish mobile operators have an equal interconnection fee. From 1 December 2015, the interconnection fee reduced to 1.25 cents per minute. The MTR price reduction lowers both Elisa’s revenue and costs, and thus has no material impact on profitability. Operators have appealed the decision to the Supreme Administrative Court. The Supreme Administrative Court has issued an interim decision not to suspend, so far, the implementation of the FICORA decision.

The new EU regulation regarding roaming and net neutrality has been officially approved and will come into force on 30 April 2016. Retail roaming charges will end in June 2017 provided that the new wholesale regulation is in force. Several substantial issues (e.g. fair use limits and wholesale regulation) are still open and were left to be decided later with separate regulation. Therefore, the final effects on Elisa remain open.

During the transitional period, starting from April 2016 and ending in June 2017, operators may charge an additional charge to domestic prices for all roaming use. The additional charge may not be higher than the current regulated wholesale roaming prices. Consequently, retail roaming prices will decrease and this is expected to have a slightly negative impact on Elisa’s result.

Substantial risks and uncertainties associated with Elisa’s operations

Risk management is part of Elisa’s internal control system. It aims to ensure that risks affecting the company’s business are identified, influenced and monitored. The company classifies risks into strategic, operational, hazard and financial risks.

Strategic and operational risks

The telecommunications industry is under intense competition in Elisa’s main market areas, which may have an impact on Elisa’s business. The telecommunications industry is subject to heavy regulation. Elisa and its businesses are monitored and regulated by several public authorities. This regulation also affects the price level of some products and services offered by Elisa. Regulation may also require investments which have long payback times.

The final effects of the new EU regulation regarding roaming and net neutrality are still open, and therefore it might have a financial impact on Elisa’s mobile business.

The rapid developments in telecommunications technology may have a significant impact on Elisa’s business.

Elisa’s main market is Finland, where the number of mobile phones per inhabitant is among the highest in the world, and growth in subscriptions is thus limited. Furthermore, the volume of phone traffic on Elisa’s fixed network has decreased during the last few years. These factors may limit opportunities for growth.

Hazard risks

The company’s core operations are covered by insurance against damage and interruptions caused by accidents and disasters. Accident risks also include litigation and claims.

Financial risks

In order to manage the interest rate risk, the Group’s loans and investments are diversified into fixed- and variable-rate instruments. Interest rate swaps can be used to manage the interest rate risk.

As most of Elisa's operations and cash flow are denominated in euros, the exchange rate risk is minor.

The objective of liquidity risk management is to ensure the Group’s financing in all circumstances. Elisa has cash reserves, committed credit facilities and a sustainable cash flow to cover its foreseeable financing needs.

Liquid assets are invested within confirmed limits in financially solid banks, domestic companies and institutions. Credit risk concentrations in accounts receivable are minor as the customer base is broad. 

A detailed description of financial risk management can be found in Note 34 to the consolidated financial statements.

Corporate responsibility

Elisa’s key role in society is to enhance sustainable digitalisation by continuously improving the reliability, safety and availability of services and mitigating their climate impacts. Elisa’s focus is on customer satisfaction and, in environmental responsibility, on climate responsibility and energy efficiency, which can be influenced significantly through Elisa’s services and actions.

Customer demand for environmentally friendly ICT and online services continued to increase in 2015. Increasing usage enabled a further reduction in our customers carbon dioxide footprint of a total of 32,313 tCO2 (30,971), showing a 4 per cent reduction.

Elisa’s own carbon footprint continued to decline, and the footprint of mobile data is now zero. Elisa has purchased renewable energy with guarantees of origin since 2013. In 2015, expanded purchases covered all of electricity usage in Finland and Estonia. Energy efficiency in Elisa’s data centres continued to improve, showing savings of 6,075 tCO2 (5,029). Elisa saved 914 tCO2 (823) through e-billing.

Elisa reports on its carbon footprint every year in the international CDP survey. In the CDP Nordic Climate Change 2015 report, Elisa's climate reporting received a perfect score of 100 out of 100 and Elisa made the Climate Disclosure Leadership 2015 (CDLI) index. The average score for Nordic companies was 84. Elisa's climate report for investors and global markets has received the highest ratings of Nordic enterprises and best of telecom companies.

Elisa is a pioneer in changing working culture and promoting flexible work using different kinds of virtual tools to support work and replace travelling. In 2015 employees teleworked on average 75 (70) days and participated in 211,014 (202,771) virtual meetings. Personnel survey reached an all-time high over a twelve-year period.

Elisa will publish its third online responsibility report as part of the Annual Report 2015. The responsibility report incorporates the GRI index.

Corporate Governance Statement

Elisa will publish a separate Corporate Governance Statement during week 10 (beginning 7 March 2016) on the company website at

Events after the financial period

The Shareholders’ Nomination Board of Elisa Corporation proposes to the Annual General Meeting of 31 March 2016 that the number of members of the Board of Directors be seven. The Nomination Board proposes that Mr Raimo Lind, Mr Petteri Koponen, Ms Leena Niemistö, Ms Seija Turunen, Mr Jaakko Uotila and Mr Mika Vehviläinen be re-elected as members of the Board. The Nomination Board further proposes that Ms Clarisse Berggårdh be elected as a new member of the board.

Outlook and guidance for 2016

The macroeconomic environment in Finland is still expected to be weak in 2016. Competition in the Finnish telecommunications market also remains challenging.

Full-year revenue is estimated to be at the same level as in 2015. Mobile data, ICT and new online services are expected to increase revenue. Full-year EBITDA, excluding non-recurring items, is anticipated to be at the same level as in 2015. Full-year capital expenditure is expected to be a maximum of 12 per cent of revenue. Elisa’s financial position and liquidity are good.

Elisa is continuing its productivity improvement measures, for example by streamlining the product portfolio and IT systems and operations. Additionally, Elisa is continuing to increase customer service and sales efficiency, as well as to reduce general administrative costs.

Elisa's transformation into a provider of exciting, new and relevant services for its customers is continuing. Long-term growth and profitability improvement will derive from mobile data market growth, as well as new online and ICT 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 possible 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 1.40 per share. The dividend payment corresponds to 92 per cent of the financial period’s net profit.

Shareholders who are listed in the company’s register of shareholders maintained by Euroclear Finland Ltd on 4 April 2016 are entitled to funds distributed by the General Meeting. The Board of Directors proposes that the payment date be 12 April 2016. 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 5 million treasury shares, which corresponds to 3 per cent of the total shares.

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