Elisa Corporation Annual Report 2011 1 2 Elisa Corporation Annual Report 2011 Report of the CEO
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Annual Report 2011 Content Corporate Elisa in brief Consumer 1 4 Customers 6 Customers 3 Report of the CEO 8 Personnel 11 Environment The report of the Board of Directors and financial 14 statements Corporate Governance 75 Statement Shareholder information Annual General Meeting distribution, the Board of Directors will consider the company’s Elisa’s Annual General Meeting 2012 will be held at the Helsinki Fair financial position, future financing needs and the financial targets Center, Congress entrance, Messuaukio 1, Helsinki, at 2:00 pm on set for the company. Distribution of profit includes dividend Wednesday, 4 April 2012. payment, capital repayment and purchase of treasury shares. Shareholders registered in the company’s shareholder register The Board of Directors proposes to the Annual General Meeting maintained by Euroclear Finland Ltd by Friday, 23 March 2012, are that the profit for the period 2011 shall be added to accrued earn- eligible to attend the Annual General Meeting. ings and that a dividend of EUR 1.30 per share be paid based on A shareholder, who is registered in the shareholders’ register of the adopted financial statements 2011. The dividend will be paid the company and who wants to participate in the Annual General to the shareholders registered in the Register of Shareholders held Meeting, shall register for the Meeting no later than Friday, 28 by Euroclear Finland Ltd on the record date Wednesday, 11 April March 2012 at 6:00 p.m. by giving a prior notice of participation. 2012. The Board of Directors proposes that the dividend be paid Such notice can be given: on Wednesday, 18 April 2012. a) through Elisa’s website www.elisa.fi/annualgeneralmeeting (available only for directly registered shareholders); Financial information b) by e-mail elisa.yhtiokokous@yhteyspalvelut.elisa.fi; In addition to an annual report in electronic format, Elisa will publish c) by telephone +358 800 0 6242 from Monday to Friday at interim reports on 27 April 2012, 13 July 2012 and 19 October 2012 8:00 a.m.–6:00 p.m.; in Finnish and in English. The annual report will be available in elec- d) by telefax +358 10 262 2727; or tronic format at www.elisa.fi. e) by regular mail to Elisa Corporation, Yhtiökokousilmoittautumiset, The annual report, interim reports, information about the Annual PO Box 138, FI-33101 Tampere. General Meeting, stock exchange releases and other investor infor- mation are also posted on Elisa’s website at www.elisa.com under Shareholders are entitled to make proposals at the Annual the heading Investors. General Meeting and to address the meeting. Shareholders will exercise their voting rights based on the number of shares they The contact person for Elisa’s Investor Relations: hold. Each share carries one vote, and final decisions are made by Vesa Sahivirta voting. Director, IR and Financial Communications Tel. +358 10 262 3036 Profit distribution policy e-mail vesa.sahivirta@elisa.fi In accordance with Elisa’s profit distribution policy, profit distri- bution is 40–60 per cent of the profit for the financial period. Distribution of additional profit to shareholders is also an option. When preparing a proposal or making a decision regarding profit Elisa in brief Elisa’s position as an efficient network service provider is strong. In addi- tion to this role, company offers and develops interesting new services, tailor-made for our customers. ICT services aimed at corporate customers and online services aimed at consumer customers are on the increase. Elisa is a telecom and ICT service company and it is listed on NASDAQ The competitive environment in Finland was intense but stable OMX Helsinki’s Large Cap list. Elisa serves about 2.2 million consumer in 2011. The favorable development in the number of mobile customers, corporate customers and public administration organi- subscriptions and the use of data services continued. The smart- zations regionally by delivering superior user experiences to Finns phone market grew very fast. When a wider range of phones and increasing the productivity of business with online and ICT serv- became available, smartphones accounted for about two-thirds ices. As the market leader of mobile subscriptions, Elisa provides its of all mobile phones sold. This further increased the use of mobile customers with the fastest and most extensive networks in Finland. data services. Furthermore, the growth was promoted by mobile Our services are offered worldwide in cooperation with Vodafone broadband services and the use of several terminal devices for and Telenor. Our business operations comprise consumer customers different purposes. The number and use of traditional fixed network business and corporate customers business. We operate under two subscriptions decreased further. However, the number of fixed brands: Elisa and Saunalahti. broadband subscriptions increased primarily due to the growth in new services. Elisa’s profit distribution in 2011 included a EUR 0.90 per share divi- dend, which was paid in April. Shareholders also received an extra dividend of EUR 0.40 per share in November. Revenue EBIT Key indicators: EUR million EUR million 1,530 EUR million 2011 2010 2009 1,463 1,430 Revenue 1,530 1,463 1,430 295 EBITDA 506 485 484 268 267 EBIT 295 268 267 Profit before tax 265 197 235 Net result 201 151 177 Earnings per share, EUR 1.29 0.96 1.13 Research and product development 5 10 10 Investments in shares 0 35 6 2011 2010 2009 2011 2010 2009 Capital expenditures 197 184 171 Equity ratio, % 42 43 46 Gearing, % 94 93 80 Employees on 31 Dec 3,772 3,665 3,331 Elisa Corporation Annual Report 2011 1 2 Elisa Corporation Annual Report 2011 Report of the CEO Elisa succeeds well in 2011 conference service for mobile terminal equipment. Our customers In 2011, economic uncertainty in Europe and Finland was a major were the first to enjoy packaged daily traveller prices in the EU theme. Despite this uncertainty, however, the demand for ICT serv- and outside it. The service makes managing the costs of data use ices remained strong. This strength is, to a large extent, a reflection abroad easier. We were also the first in Finland to grant mobile of how important ICT is in modern society. Simply put, our services certificates. are an integral part of making the daily life of Finnish and Estonian Elisa has been a pioneer in environmental areas as well. We were people easier. However, this stable demand is based on the serv- the first telecommunication and ICT service company to publish ices being affordable. Studies show that the prices of telecommu- the emissions savings of our services. For example, through the nication services in Finland are below the average prices in the EU. cloud services produced in Elisa’s server centers, our customers Telecommunications is the only product group in Finland that is less can reduce their energy consumption by more than 90 per cent. expensive than the EU average. Solutions that improve energy efficiency and reduce traveling, Consumers and companies showed an increasing interest in new cloud services and technological development all play a key role services. On the consumer side, a growing number of customers in emissions saving. want entertainment services that provide superior user experi- ences. On the company side, customers are looking to improve For all our success, we can thank our loyal their productivity with quickly deployable video-based communi- customers and the excellent Elisa employees. cation solutions. Some of this demand can be seen in the continu- Elisa’s revenue developed well and increased by 4.6 per cent in ally growing popularity of smart phones and tablets. In 2010, the 2011. Among European operators, our rate of growth was at the share of smart phones in the total sales volume of telephones was top level. Our earnings also grew, and our financial position stayed 2 per cent. In 2011, that figure increased to 74 per cent. strong in 2011. On the basis of the good earnings trend, strong cash Overall, Elisa’s revenue and earnings developed well, and in line flow and good equity ratio, the Board of Directors is also proposing with the outlook given at the beginning of the year. Our market posi- a distribution of profits at the Annual General Meeting in the spring. tion and competitiveness developed strongly, despite the highly The distribution will, once again, be at the top level among Finnish competitive environment. Our number of subscriptions increased listed companies. in both fixed broadband and mobile services, where we exceeded Elisa also believes strongly in its responsibility as a corpo- the level of 4 million users. Likewise, the use of new consumer serv- rate citizen. In addition to the significant payment of taxes, Elisa ices and work-enhancing ICT solutions increased clearly during the invested heavily in network and service systems that benefit all. year. In 2011, we were the most significant investor in the sector. Our investments in the development of the Finnish ICT infrastructure Strategy showing results were EUR 190 million. People’s increasing need for wireless data Throughout the year, we continued to implement our strategy. All transmission and the high popularity of smart phones have boosted the key elements have progressed as planned: the development of Elisa’s investments in its 3G network in particular, which has been one Elisa, the strengthening of our market position and the provi- determined to be the most comprehensive in Finland in an inde- sion of new services to our customers. Strong investments in our pendent study. This enables Elisa and Saunalahti to guarantee their invoicing and delivery capabilities have produced improvements. customers trouble-free mobile services throughout the country.