Earnings call transcript: Elisa Q1 2025 misses forecast, stock dips

Elisa Oyj reported its first-quarter earnings for 2025, revealing a slight miss against analyst expectations. The Finnish telecommunications company posted an EPS of €0.58, marginally below the forecasted $0.5697, and generated €556 million in revenue, just under the expected $559.52 million. In response, Elisa’s stock fell by 1.75% in pre-market trading, settling at $45.78. According to InvestingPro analysis, Elisa currently trades near its Fair Value, with the company maintaining strong financial health metrics and an overall "GOOD" financial health rating.

Key Takeaways

• Elisa’s Q1 revenue reached €556 million, a 4% increase year-over-year.
• EPS grew by 2.3% to €0.58, despite a slight miss on forecasts.
• The company launched innovative technologies including 5.5G and 5G Plus.
• Stock price declined by 1.75% following the earnings report.
• Elisa maintains strong market leadership in fiber network coverage.

Company Performance

Elisa demonstrated steady growth in the first quarter of 2025, with a 4% year-over-year increase in revenue and a 2.3% rise in EPS. The company capitalized on its leadership in fiber network coverage and continued to differentiate itself through technological advancements such as 5.5G and 5G Plus. Despite these achievements, competitive pressures in the Finnish mobile market and a decrease in postpaid subscriptions presented challenges.

Financial Highlights

• Revenue: €556 million, up 4% year-over-year.
• Earnings per share: €0.58, a 2.3% increase year-over-year.
• EBITDA: €199 million, a 4.6% rise year-over-year.
• EBITDA Margin: 35.8%, showing slight improvement.
• CapEx: €72 million, representing 12% of sales.

Earnings vs. Forecast

Elisa’s actual EPS of €0.58 was slightly below the forecasted $0.5697, and the revenue of €556 million fell short of the $559.52 million expectation. The minor miss in both earnings and revenue reflects stable performance amidst competitive market conditions.

Market Reaction

Following the earnings announcement, Elisa’s stock experienced a 1.75% decline in pre-market trading. The stock’s movement is within typical volatility ranges, with the current price of $45.78 situated between its 52-week high of $49.08 and low of $40.2.

Outlook & Guidance

Elisa remains optimistic about its future, maintaining its guidance for the full year. The company expects mid-single-digit growth in mobile service revenue and aims for positive EBITDA from its International Software Services by the end of 2025. Elisa continues to focus on 5G upselling strategies and productivity improvements.

Executive Commentary

CEO Tobi Manner emphasized the company’s differentiation through 5G offerings, stating, "We are differentiating ourselves with five gs offering from our competitors." CFO Jari Kinnonen highlighted ongoing efficiency efforts, noting, "We are doing constantly productivity improvement measures."

Risks and Challenges

• Competitive pressures in the Finnish mobile market could impact growth.
• Decrease in postpaid subscriptions may affect revenue streams.
• Market fragmentation in fiber could challenge expansion efforts.
• Macroeconomic factors could influence consumer spending and investment.
• Technological shifts require continuous innovation and adaptation.

Q&A

During the earnings call, analysts inquired about the drivers behind mobile service revenue growth and the impact of competitive dynamics. Management confirmed there were no macro-related deal delays and clarified trends in fiber and copper revenue.

Full transcript - Elisa Oyj (ELISA) Q1 2025:

Vesas Sahibirte, Head of Investor Relations, Elisa: Good morning, everyone, and welcome to Elisa’s First Quarter twenty twenty five Interim Report Conference Call and Analyst Meeting. I’m Vesas Sahibirte, Head of Investor Relations. And here, we have a very familiar team, CEO, Tobi Manner and CFO, Jari Kinnonen as well as some of my colleagues and audience. We start with a presentation followed by Q and A. And in Q and A, we take first questions from the audience and then from the conference call lines.

We are ready to start, so I give word to Topi. Please go ahead.

Tobi Manner, CEO, Elisa: Thank you, Wenza, and good day everybody here in the room as well as those of you joining remotely. Welcome to Elisa’s Q1 earnings call. Lately the Q and A part of these sessions has been taking quite a bit of time. So we have been shortening the presentations to give space for more Q and A this time around and that is basically the reason of us taking the number of slides down a bit. So with that, let’s get right down to business and look at the Q1 highlights.

During the quarter, our revenue increased with 4% that was very much driven by the international software services, setup now being consolidated to the numbers and also driven by the increase in mobile service revenue. The comparable EBITDA was up 4.6% boosted by our continuous improvement measures in terms of efficiency. As stated, the mobile service revenue was up by 2.6 and in the international software services, namely in ELISA Indastric, the growth amounted to 57%. The comparable organic growth for that part of the business was 2.1%. The churn on the market decreased to 18.6% from a little bit above 20% in Q4.

The number of postpaid subscriptions decreased with some 17,000. Part of that was M2M and IoT subscriptions roughly 6,000 of those. And then also majority of the decrease is coming from mobile broadband subscriptions as customers move from mobile broadband to fiber and that move is visible in the market. That is not something that is only impacting Elisa and our numbers that is very much visible for all players in the market as witnessed by the releases of various players on the market in Q4. With that, the fixed broadband subscription base increased with some 8,000 driven by the fiber connections.

And then in our AGM a couple of weeks back, the dividend for the year was approved to $0.03 euros and this indeed is the eleventh consecutive year of increasing dividend in Elisa. So then looking at the numbers a bit more closely, the revenue for the quarter landed at €556,000,000 As stated, there was a 4% increase in that number. In addition to international software services and domestic digital services, mobile services also roaming increased a bit. The revenue was weighed down by fixed services, especially copper PSTN revenue being on decrease a bit. EBITDA improved with €9,000,000 and landed at €199,000,000 altogether.

The EBITDA margin when we compare to the same quarter last year improved with couple of decimals to 35.8%. Mobile service revenue as stated 2.6%. The mobile service revenue was the increase was coming from the five gs upselling. That five gs upselling remains to be intact. Whenever we upgrade a customer from four gs to five gs, we get this average monthly billing increase of more €3 Going forward, we expect the mobile service revenue growth to increase.

So when it comes to the full year, we expect mobile service revenue to increase We have been doing a number of offering changes baking in digital security products to our mobile subscriptions such as mobile ID and DNS filter for consumers or denial of service attack protection for corporates. And when we have been doing these offering changes for customers, we are creating new value for customers and we are pricing the new services accordingly, namely increasing the pricing. And that will be supportive of mobile service revenue going forward. And as stated, we have started that rollout already with the first cohort customers.

ARPU increased during the quarter with 5% and the churn came down a bit to 18.6%. The majority of the competition we see in the four gs space and then there’s still some campaigning going on in that space. And as stated, we see some move from mobile broadbands to fiber connections, so that will also be visible in the mobile churn number. This is the first quarter when we are reporting three segments, including the International Software Services, ELISA Industrial as a segment. This is done in accordance with our strategy to create better understanding for the three businesses and better transparency to the three businesses that we are having.

If we are looking at consumer customers, consumer customers in Finland and in Estonia, the revenue increased with 1.9% and EBITDA increased with 2.5%. EBITDA margin stayed on the same level as in the comparison quarter in Q1 last year at 41%. So it is a very profitable business that we are running with consumers. Related to corporate customers, the revenue increased with 0.3% and that basically reflects the pretty challenging market that we have in Finland and Estonia for Corporate Services. If we look at the small companies and the micro companies, the number of bankruptcies in the market has been increasing a bit that has been impacting our demand of services at the low end of the corporate customer base.

And then when we go to the medium sized companies, when we go to the large companies, these companies have been running cost efficiency measures scrutinizing their service portfolios. So it has been a bit tough market, but on this market we have been faring well. So we are winning customers, we are winning business, we are winning market share, especially in the IT services and in the cybersecurity. So the growth of corporate is driven by mobile services also by interconnection and roaming including the domestic digital services where we have the IT services included. Fixed services, most notably PSTN is weighing the revenue down.

However, it is noteworthy that the Corporate Customer segment EBITDA increases with 4%, which is a good number. And that clearly tells the story that we have been streamlining the cost base in this segment, increasing the productivity of the business and with that improving the EBITDA quite notably. The EBITDA margin of this segment increased from 32% last year to 33% in this quarter. Then when we come to the International Software Services, as stated the revenue picked up with 57% approximately driven by acquisitions, especially the consolidation of Sedapta, the comparable growth was 2%. We also saw quite a notable increase in recurring revenue.

So the recurring revenue increased with 20% and basically tells the story that we are gradually taking steps toward a more SaaS based model business model in the software business. The EBITDA for the quarter in ELISA industry was €2,000,000 So there was a €3,000,000 improvement from last year. And this clearly underscores that for this year we expect to be in positive territory in terms of EBITDA for the full year in this segment. As you would remember, we had our Capital Markets Day at the March in London that we communicated our new strategy faster profitable growth and communicated also our new mid term targets more than 4% growth in terms of revenue, more than 4% growth in terms of EBITDA. And now especially when we zoom in to the EBITDA number, clearly you will see that during Q1 we are delivering according to these ambitions.

So the implementation of the strategy has started out well and we are progressing according in accordance with our plans according to the path that we have been plotting for ourselves. The four spearheads of growth that we have are five gs and fiber, home related digital services, corporate IT and cyber and then the mentioned international software services namely Elisa Industry. Simplicity and productivity is a significant part of the strategy. The strategy is about faster profitable growth, but it is enabled by simplification and productivity measures. And when you look at the Q1 numbers, the continuous improvement in terms of cost efficiency is visible in the numbers.

And therefore, it is important to underline that this is indeed part our plan as well. When we look at the five gs and fiber more closely, clearly the five gs upselling continues. When we look at the penetration of high speeds above 200 megabit speeds that linear trend continues to be intact. And yet again, whenever we upgrade customers from four gs to five gs, we get the average monthly billing increase of more than €3 As mentioned, we have now started to we have made changes to our mobile product offering, embedding mobile ID and DNS filter for our customers and that rollout has started with the first cohort of customers with very encouraging results. A notable development during the quarter was that as the first telco in the world, we introduced 5.5 for our customers.

So as the first telco in the world introducing 5.5 gs for our customers in limited commercial deployment for consumers. This is yet again a showcase of us being a technology leader in this industry. We are also differentiating ourselves on the market by offering five gs standalone to our customers, what we call five gs plus to our customers. And now we start to have critical mass for the five gs customers. If we look at our total customer base of five gs customers, the five gs plus penetration out of all five gs customers is already above 20 and increasing quite fast because all of our new sales to customers is five gs plus And an intriguing data point is that customers are clearly seeing the value in five gs plus They experienced faster speeds.

They experienced better quality network and more resilient network. They experienced better energy consumption, which is visible to customers in the battery life of their phone. And with that the customer satisfaction of five gs plus customers in comparison to non standalone five gs customers is more than 10 points better measured with Net Promoter Score. So Net Promoter Score of five gs plus customers is 10 points better than the earlier generation of five gs customers. And this is an intriguing data point in terms of the customer value that we are creating.

With that, we have now also decided to roll out five gs standalone namely five gs plus to Estonia to have that differentiation for our customers also on the Estonian market. Quite many things are also happening on the fiber space, good steps being taken forward in that category of services. We for example introduced 10 giga fiber connections to our customers. And we also announced a regional collaboration with MPI Telecom, a joint venture with which we are accelerating the fiber build in the country. We are expanding our footprint of the fiber market.

And with that, we have now announced that we have started to build fiber on 200 regions, micro markets around the country. So a lot of activity in the fiber business as of now. Then moving into the digital and software services. In the home services, we have introduced a couple of new Elisa Entertainment Original Series. One of them is Ivalo, the fourth season of the series, very well received by the customers.

This is the blockbuster of our original series. As stated, the fourth season and the most viewed of our original series both here in the home market as well as in international export market. Another new series, another new launch is a series called Sunset Crow. In the energy services, in energy solutions for homes, now we are talking about Elisa battery, namely Elisa Kotiaco. We have been increasing the footprint of that solution being available to customers to Finnish houses single dwelling units.

And now we can offer that solution for half of the Finnish single dwelling units. This solution is creating quite a bit of traction on the market, very high customer interest. And for those early adopters who have been having the solution for a couple of months, we have very high Net Promoter Scores, so very high customer satisfaction. So this is very encouraging for the subsequent steps of penetrating the market further. In Corporate and IT, actually quite a bit of customer wins in the large segment in the medium segment.

Clearly, we are competitive with our IT service and cybersecurity solution. Here we have couple of public references, but we have been winning also other customers whose name we cannot mention for confidentiality reasons. So good deal pipeline, good hit ratio for our IT services as well as cybersecurity services. Then when we come to the International Software Services and Elisa Industry, the organic comparable growth for the quarter was 2%. There was some move of deals from Q1 to Q2 as would be relatively typical for this software business.

Some of these deals were related to deliveries. So we have sold to customers already earlier and now we’re the deals and there were some delay in the deliveries and therefore we can account for the revenue only in Q2. So move between quarters. Also some deals that were moved from Q1 to Q2, but already now in Q2 during the first fifteen days we have been signing those deals. And that’s why we see this move between the quarters.

And the bottom line of this is that when we look at the full year and the full year revenue estimate, we see the growth continuing in double digit levels during the full year. And this is indeed backed up by strong order intake during Q1. So our Q1 order intake comparable growth on that one was 16%. Also some intriguing product development in this space. We launched a new AI powered virtual manager for production planning in Elisa Indastrich, a virtual manager called Lumi that we will be offering to customers from here onwards.

And then we come to the final page of the presentation, is the outlook and guidance. Our outlook for the remainder of the year stays intact, so no changes in the guidance. With that, I will hand over to Jari.

Jari Kinnonen, CFO, Elisa: All right. Thank you. All right. Thank you and good morning from my side. Let’s start from profit and loss and main lines, good development in all earnings lines and development although somewhat challenging environment macro wise and a lot of uncertainties in the marketplace.

So 4% revenue growth or €21,000,000 And if we go in that €21,000,000 interconnection and roaming and the equipment sales both growing €1,000,000 In service revenues, international software services, 14,000,000 increase acquisitions impacting there. Domestic digital services, euros 1,000,000 growth corporate IT growing small decline in consumer digital services. Fixed services minus 2,000,000 growth in consumer fixed services very much driven by fixed broadband growing. Fixed broadband subscription base growth was almost 8,000 in the quarter. Negative impact in traditional voice both in consumer and corporate customers.

Mobile service revenue, 6,000,000 growth both consumer and corporate customers growing. EBITDA growth was higher than revenue at 4.6, service revenue growth contributing to that also the continuous productivity improvement and cost efficiency measures, what we did also last year and continued in this quarter contributed to that. EBIT growth was 3.1% to 125,700,000.0 and EPS growth 2.3% to €0.58 Also in Estonia positive development revenue return to growth trend, 4% growth mobile and fixed service revenue growing and that also contributes together with productivity improvement measures to EBITDA growth, which was 7%. We did some price increases in Estonia that had some impact in the subscription base. Postpaid was declining to 2,500 and prepaid 3,400.

CapEx was reported CapEx €72,000,000 and guided CapEx excluding licenses and IFRS 16 leases was €65,000,000 in line with guidance 12% CapEx to sales. Main investments continue in five gs coverage increase in fixed side fiber investments and IT investments. Cash flow, comparable cash flow was €82,000,000 slight decrease, 4% compared to year ago. Positive impact from higher EBITDA as well as positive net working capital change, also paid taxes were lower negative impact through higher CapEx and higher paid interest. And the both of these had some timing impacts.

Comparison year CapEx was somewhat lower level than normally and the same with interest expenses or in paid interest comparison year had some loan interest, the interest for shorter than normal typical one year time period. So these impacts are not repeating going forward. EBITDA operating cash flow conversion continued at high level 67%. Also capital structure and balance sheet position continues at solid way and in line with our medium term targets, net debt to EBITDA 1.8 times and equity ratio 41.6%. The same with return ratios, return on equity 30.3% and return on investments 18.8%.

In terms of interest bearing debt, average interest currently is 2.4%. Then about dividend, two weeks ago, ATM decision was €2.235 per share dividend to two payments. First payment was done last week, 1.18 and the second payment will happen in October 24. And this is represents dividend yield of 5.6 against the share price end of last year, growth four point four percent and eleventh consecutive growth year underlying our strong commitment to competitive shareholder remuneration. And now, Wessa will continue, please.

Vesas Sahibirte, Head of Investor Relations, Elisa: Thank you, Jari. And now we move on to Q and A part, and then the first question comes from here. Felix

Felix Hendrickson, Analyst, Nordea: Hendrickson, Nordea. I have three. First of all, organic growth of 2%, pretty solid order intake, as you highlighted. But have you seen any sort of hesitancy from your industrial customer space in light of the heightened macro and geopolitical uncertainty against the tariffs and all that stuff?

Tobi Manner, CEO, Elisa: No, we haven’t. So we cannot of course rule out that those wouldn’t come later. But as of now we seen those. So for example the moves from Q1 to Q2 they were not macro economy related. They were not tariff related.

As stated there were sort of earlier sales that we were already delivering and there were delays in that. So we will be delivering those now during Q2 and we will be accounting for that revenue during Q2. And then some deals simply moved from Q1 to Q2. And as stated, some of them we have already gotten during the April.

Felix Hendrickson, Analyst, Nordea: Got it. And then you’ve now mentioned that you’ve seen some shift from consumers shifting from mobile broadband to fiber. So just curious on how we should think about your fixed service revenue. Should we expect that line item to return to growth this year against the backdrop of growth in fiber, but then the legacy pressures that you have in that area?

Tobi Manner, CEO, Elisa: Well, it’s worthwhile to note that when a customer moves from mobile broadband to fiber based Internet connection in the SDU segment then revenue wise that trade is actually positive to us, a bit positive to us. So that will need to be taken into consideration. Then when it comes to the fixed business more broadly, stated that it’s being weighed down by the PSTN and that is certainly impacting the measures. But we are building fiber, customers are taking more fiber. So over the medium term that will be supportive of the fiber revenue and the fixed business revenue.

Yes,

Jari Kinnonen, CFO, Elisa: just continue of course the fixed services overall includes especially in the corporate side, larger service portfolio. So different types of services besides traditional voice or fixed broadband. Corporate networks is one thing, which is included there and currently the macro economy situation has impacted in this services. As Toppy mentioned earlier, so number of bankruptcies in the small businesses for example has increased and some impact in that service is visible there. And once this situation improves, of course, the dilutive impact is becoming less.

Felix Hendrickson, Analyst, Nordea: Right. And then as a final sort of follow-up to that, how have you seen the competitive intensity in the fiber market lately? I mean, we’ve seen some of your private equity backed competitors raise new funding lately. So just curious to see how you’ve seen the developments there, any movement one way or the other?

Tobi Manner, CEO, Elisa: It is an active marketplace. As stated, quite a fragmented market in Finland altogether some 140 players out there in the market. Some of them are tiny municipality based utilities effectively. Then there would be more regional companies, more private equity backed players and then us. And in terms of fiber availability, we have the most comprehensive network in the country.

So we are market leader in that respect. And we are building more fiber than ever and with the joint venture with MBI Telecom, we are increasing our footprint of the market. So clearly we are one of the players that are making advances on the market.

Felix Hendrickson, Analyst, Nordea: Thanks. That’s all from my side.

Kim Osteyvann, Analyst, OP Markets: Yes, it’s Kim Osteyvann from OP Markets. I guess the regular question on the competition. So as you mentioned, the churn came down from Q4 levels, but it’s still quite elevated at 18.6%. Do you see any roadmap to go back to like 15% levels? Or is the competition still this kind of heated that we should expect the churn to be like near 20% going forward also?

Tobi Manner, CEO, Elisa: The competition situation on the market has been quite tight. And now of course during the Q1 we saw a step toward right direction in terms of churn. And that is of course a good direction of travel in terms of churn. How it will play out going forward remains to be seen. It’s a competitive marketplace out there.

The competition is very much related to four gs and the campaigning. And then when you dive into the churn number, you will need to remember that this phenomenon of mobile broadband being replaced with fiber connections is relatively new in the market. It impacts all players, the whole market not only Elisa, but it’s visible in the churn numbers mobile churn numbers of all players.

Kim Osteyvann, Analyst, OP Markets: Okay. Thank you.

Matt Rigoni, Analyst, Carnegie: Hi. Good afternoon. It’s Matt Rigoni Carnegie. Couple of questions. You had this slowing mobile service revenue growth now, which was clearly lower than what it has been in the past years.

And you said that you expect it to go back to the mid single digit levels. What are the kind of tasks that you need to achieve in order to get there? And was there something you explained that there were some like this trend shift from mobile broadband to fiber. But if that is still going to continue, and you said just that it’s in early stages, what are the measures that you need to do in order to get back to the mid single digit growth in MSR?

Tobi Manner, CEO, Elisa: So yes, we do expect to be in mid single digits in terms of mobile service revenue growth when we look at the full year. And that of course would be meaning that the MSR trend would turn going forward turn upwards. And the single biggest lever for the MSR growth going forward will still be the five gs up sales. Continued five gs up sales, now we have more than half of the opportunity still to be captured. And now we are writing new chapters to the five gs up sales story with five gs plus and then 5.5 gs.

So that is key part of the story. Then the mobile value added services play a big role in terms of MSR growth going forward. As stated, customers have concerns around their digital security on the overall. They are willing to pay for those services. And we have now already changed our offering to consumers baking in mobile ID, baking in DNS filter to our mobile subscriptions.

And with that creating effectively a new package, new offering and pricing that in accordance with the value that we are creating for customers increasing the price a bit. And this will be supportive of our mobile service revenue when we roll that out to new cohorts of customers. We have already started to do so and the results have been very encouraging. Then on corporate space, we are doing similar things in terms of changing offering and we also see some scope of further price increases there.

Matt Rigoni, Analyst, Carnegie: All right. Thank you. Then you have had many years without restructuring costs, but now last year and this year you have had more than usual and you still want to kind of improve your efficiency. And it seems that it triggers these one off costs. Do you think that the similar level of one cost that you booked in Q1 would be representative for the full year?

And if not, would you think that you could give an indication of where the one off cost would be for 2025 for instance?

Jari Kinnonen, CFO, Elisa: Yeah. One of course they relate to personnel reductions. So last year there was in Q1 and Q4 ’1 off costs and two fifty reduction, a bit more. And now also in the first quarter, we continued with productivity improvement measures. So we are doing constantly productivity improvement measures.

At some point of time, there is also personnel reductions. And going forward, this productivity improvement measures will be there and will continue and can be that also in some point of time there will be reductions happening. But it is so that we are doing it very much with the focus to improve productivity rather than having a target to reduce employees. So it’s a bit different approach compared to some other companies.

Matt Rigoni, Analyst, Carnegie: All right. Thank you. Then finally, you have earlier announced mobile data volume, but you didn’t announce it this time. So should we assume that the negative trend in the data volume has continued?

Tobi Manner, CEO, Elisa: No, no, you should not assume that.

Matt Rigoni, Analyst, Carnegie: All right. Thank you. That’s all from me.

Vesas Sahibirte, Head of Investor Relations, Elisa: Any further questions from audience? Not at this point of time, so we’ll ask the first question from conference call lines, please.

Conference Operator: The next question comes from Andrew Lee from Goldman Sachs. Please go ahead.

Andrew Lee, Analyst, Goldman Sachs: Hi, everyone. Good afternoon. I had three questions, which are hopefully fairly quick. First one was just there on the competition in the Finnish mobile market. An MVNO entrant has been registered Finland this year.

Just wondered if you have any update on your updated thoughts on the likely impact or the progress of that MVNO launch? Second question, just on ISS. Just wondered on your visibility now for full year 2025, given I think you normally have high visibility on a six to nine month basis for this business. And just confirming that this growth, the double digit growth and what you said at the CMD for the broader group, 4% EBITDA growth guide, those are organic numbers that you’re talking about. And then finally, just on restructuring, just following up from the question preceding this one.

Could you just comment on the upside to margin and EBITDA growth, I. E, does your midterm EBITDA growth guide of 4% include those restructuring costs in it? Just clarifying on that one, too. Thank you.

Tobi Manner, CEO, Elisa: Yes. If you, Jari, take the last one, I can take at least start with the first two ones. So related to the your question, Andrew, related to MVNO, do we have any updates? No, not really any further updates on that one. I mean generally speaking Finnish market is not an easy one for an MVNO to enter because of the unlimited data offering that we have in the market.

So it has been tried before and not that successfully. So that is probably the sort of general perspective on that one. And then related to your next second question that was about ISS and the visibility and the organic growth being embedded into our midterm targets. So yes, the midterm targets revenue growth of 4% and EBITDA growth of more than 4%, they are organic targets. And when we look at the Q1 results, when we zoom in to EBITDA, the organic EBITDA growth was above 4% clearly.

So in that sense we have started to implement our strategy and we are progressing in accordance with our plans. And then when it comes to ISS, we do have visibility to the order book. The sales cycle is typically six to nine months to your point. The order intake during Q1 was a good 16% increase in order intake. And that of course is an important data point backing our view that during the year we will be seeing double digit organic growth in the ELISA industrial business.

So that is something that we are indeed going for. And we also expect that ISS will be EBITDA wise profitable for the full calendar year of 2025.

Jari Kinnonen, CFO, Elisa: I continue to the last one. So medium term targets EBITDA growth more than 4%. It’s comparable EBITDA, so excluding one off charges.

Andrew Lee, Analyst, Goldman Sachs: Okay. Thank you both.

Conference Operator: The next question comes from Fredrik Lithell from Handelsbanken. Please go ahead.

Fredrik Lithell, Analyst, Handelsbanken: Thank you. Thank you for taking my questions as well. I’m curious to hear if you could describe a little bit more on the mobile ID and the NSF filter, how you sort of price that in? Is that sort of more for more thinking? So you add it and you increase the prices?

Or is it some type of optionality in that? And secondly, a little bit discussion maybe on the potential for further five gs upselling, if you think you will be able to keep the €3 positive effects or if it’s a more difficult upsell that you’re standing in front of the sort of second half of it all? Thank you.

Tobi Manner, CEO, Elisa: Okay. So related to the offering changes that we are making with the mobile ID and the DNS filter embedding them to mobile subscription, I guess it would be the more for more thinking that you are saying. So we are embedding those into the subscriptions. Customers are getting more services, more value. And with that we are increasing the price a bit.

And as stated, this rollout of the new offering has started. When we sort of sub segment our customer base, we have different kinds of mobile subscriptions. Some of them would be continuous, some of them would be fixed term and therefore just based on the terms and conditions there would be varying degrees of possibility to roll out the offering to customers. But we have started with the first cohort things are moving forward in terms of the rollout and the reception from the customers has been positive.

Fredrik Lithell, Analyst, Handelsbanken: Okay.

Tobi Manner, CEO, Elisa: And then the second question that was that will the second half of five gs upsells be somehow different than the first half if I understood it correctly? So we don’t see any significant difference in that sense. So clearly the five gs up sales continues as a trend and the value that we are creating for customers is very visible in our customer satisfaction numbers. So if we compare non standalone five gs customers versus four gs customers, the non standalone five gs customers are more satisfied than the four gs customers. There’s a marked difference.

And five gs plus customers namely the five gs standalone customers are more satisfied, 10 points more satisfied than the five gs non standalone customers. So clearly we are generating value for customers in terms of this offering. And that generation of customer value is in the heart of the up sales. And then therefore these NPS data points are so important for the continued up sales story. And the introduction of new technologies with five gs plus and five five gs are equally important for the continued five gs upsell story.

Fredrik Lithell, Analyst, Handelsbanken: Can I have just a follow-up on that? Sounds good and promising. How do you stand to your competition in this sense? I mean, I guess the other ones are trying to follow you a little bit, but is the distance quite steep for them to catch up on or?

Tobi Manner, CEO, Elisa: We differentiating ourselves with five gs offering from our competitors. So we are the one who is offering five gs plus and we are clearly the player who has the critical mass in Europe in terms of five gs plus in our customer base. And therefore we are probably the first one who can show these kinds of data points to the market. And as stated with the 5.5 gs we were the first one in the world with that deployment.

Fredrik Lithell, Analyst, Handelsbanken: Okay. Thank you very much.

Conference Operator: The next question comes from Terence Tsui from Morgan Stanley. Please go ahead.

Terence Tsui, Analyst, Morgan Stanley: Thank you very much. I’ve got several questions, please. The first one being a financial question around the EPS growth in Q1, which was less than the EBITDA growth and appears to be dragged by depreciation and financial expenses being a bit higher this quarter. At the Capital Markets Day, I thought these were meant to be tailwinds going forward. So maybe you can just make a few comments around why they were a bit higher in Q1 versus this time last year.

Second question I had was around the customer experience on five gs plus So you mentioned improved battery life, improved latency. Just wondered if you can quantify that. So how much better was the battery life? How much lower is the latency? That would be helpful.

And then if I can just sneak in a very quick final question on the follow-up on the migration from mobile broadband to fiber. Can you say a few words around retention? So those customers that are migrating away from your mobile broadband, how many of those are going to your competitors versus being retained by your fiber services? Thank you very much.

Tobi Manner, CEO, Elisa: If you start with

Jari Kinnonen, CFO, Elisa: the first start with the EPS. So indeed as we said in the Capital Markets Day, there will be in relative terms positive impact to cash flow regarding CapEx and future depreciation as we changed or went back to 12% CapEx to sales for this year from 13% last year. So that will be more visible in the year on year comparison in coming quarters. And depreciations So that’s for the depreciation. For the financial expenses, it’s a bit similar thing that was regarding cash flow that there is some timing impact now in this quarter that is not repeating similarly on coming quarters.

And in comparison here there was refinancing, which make the difference in year on year comparison in interest expenses also in profit and loss. And going forward it’s more sort of stable and differences in coming quarters year on year basis is smaller.

Tobi Manner, CEO, Elisa: And then Terence related to your second question related to five gs plus the latency, lower latency and the battery life and that data we are not disclosing that data as of now. But clearly the difference is big enough for customers to experience it. So 10 difference in terms of Net Promoter Score is a quite significant difference. And therefore it all boils down to the customer experience, the perceived value by customers and clearly we are generating that with five plus And then your third question related to mobile broadband and the move to fiber. So the majority of the mobile broadband customers who sort of terminate the subscription are going into fiber.

And when we look at that transfer, what needs to be remembered is that the revenue per subscription in fiber is that higher than for mobile broadband and then the fiber connection per se is of course very, very sticky business. So the churn in fiber is clearly lower than in mobile broadband on the overall. So that’s where we are. This is a phenomenon for the entire market and that needs to be kept in mind when we talk about this.

Terence Tsui, Analyst, Morgan Stanley: Thank you, Toppy. Thank you, Yari. Have a good Easter.

Tobi Manner, CEO, Elisa: Thank you. Likewise.

Conference Operator: The next question comes from Andre Kabatsek from UBS. Please go ahead.

Tobi Manner, CEO, Elisa0: Hi. Good morning, everyone. Thank you for the presentation. I had two questions, please, and I’ll ask them one by one. So the first question, just on, churn levels.

Obviously, we’ve, seen them, increase over the past year at least. But just taking a step back, it seems like we’ve had an extraordinarily low period of churn over ’22 and ’23 as a product of just the commercial locks that that everyone in the country seem to be on in terms of just continuous price rises of very similar nature. So is this basically just going back to, in your view, levels that we saw prior to 2022 when it comes to churn? And if so, you know, and I guess you’d touched upon this, Sophie, a bit, but is this a phenomenon that you think the whole market is seeing and therefore maybe very little impact on, for example, subscriber acquisition or retention costs? Or is this something that you seem to be doing a bit more poorly and then the market today and is something therefore that could limit growth and profitability going forward?

That’s the first question please.

Tobi Manner, CEO, Elisa: So if I start on our performance on market. So when we look at our performance on the market, as stated we are in mobile subscriptions, we are differentiating with our product with the five gs plus especially. When we look at our customer satisfaction measured by Net Promoter Score for consumers and corporates alike, we were at all time high levels at the end of the year. So our customer service is working. Customers are happy with it.

Our brand stands strong on the market. So it is very much related to campaigning the churn number. And to your point, I mean if we take the long history of churn on the Finnish market, it has been fluctuating between say 15% at the low end to a bit more than 20% at the high end. I think that the highest number on quarterly churn during the past ten years is something like 22%. So we are within that bracket.

We are within that bracket. And going forward, it remains to be seen how competition will develop. But clearly in Q1, we took a step toward the right direction in terms of the churn being lowered.

Tobi Manner, CEO, Elisa0: And then if I just maybe ask a different way. So the churn levels that you’re seeing today, they obviously are accounted for in the guidance in terms of EBITDA and you don’t expect any kind of material impact on your profitability from, say, higher churn today than we saw over

Tobi Manner, CEO, Elisa: Mean exactly. So I mean our guidance for the full year stays intact. When it comes to mobile service revenue, we reiterate our soft guidance that we expect to see mid single digit MSR growth for the full year. We have these activities backing that number that will be supporting that number going forward. And also our midterm targets stay intact.

And as stated in terms of EBITDA, we are delivering in terms of those midterm targets during Q1.

Tobi Manner, CEO, Elisa0: Thank you, Sophie. And a follow-up on what you mentioned just mobile service revenue growth. So you reported 2.6 quarter. Obviously, that’s a bit of a step down from the underlying, say, 4% last year. But the 2.6% is basically now, if I’m not mistaken, entirely just driven by upsell.

There is basically no pricing impact whatsoever this quarter. So if you can confirm that and if that is true, then the 2.6% number does seem to be actually a bit better as an underlying kind of upsell driver than in the past. So again, if that is true, if you can maybe break down a bit. Obviously, we know the kind of premium that people pay for the four gs to five gs upsell, but there seems to be already some kind of migration to higher tariffs already on the five gs side. Is that the correct way to think about this?

Tobi Manner, CEO, Elisa: Yes. I would say broadly, yes. So for all practical purposes, the Q1 MSR growth was driven by the five gs upsells. There was a bit of tail impact from earlier price changes. But for all practical purposes it was very much driven by the upsells during Q1.

Tobi Manner, CEO, Elisa0: And I just want to follow-up. So obviously there’s upsell from four gs to five gs, but are you already seeing an upsell within the five gs buckets?

Tobi Manner, CEO, Elisa: Yes, yes. So generally we are seeing I mean not only within the five gs bucket, but also within the four gs bucket, we see upsells from lower speeds to higher speeds and that is taking place.

Tobi Manner, CEO, Elisa0: Awesome. Thank you very much.

Tobi Manner, CEO, Elisa: Thank you.

Conference Operator: The next question comes from Ajay Soni from JPMorgan. Please go ahead.

Tobi Manner, CEO, Elisa1: Hi, there. Thanks for taking my question. I’ve just got a couple. The first is around your mobile service revenues. So can you just remind us the ARPU upside you get from selling the mobile ID and DNS filter?

And what is the penetration of these amongst your customer base from the beginning of the year versus now, just so we can get an idea of what the uptake is? Second question is around the ISS. You said the recurring revenue increased by 20% year over year. And I just want to know what portion of the ISS revenue do you consider recurring? Thank you.

Tobi Manner, CEO, Elisa: So when it comes to the offering changes related to mobile ID and DNS filter, now I’m sort of averaging things out a we are talking about something like €2 per subscription. So that’s the first one. And then could you please remind me of your second point?

Jari Kinnonen, CFO, Elisa: Recurring revenue. Can take So recurring revenue includes licenses in SaaS, SaaS form and services relating to licenses as well as maintenance fees.

Tobi Manner, CEO, Elisa1: Just on both of those for the Mobile ID, could you give us an idea of what the penetration was at the beginning of the year versus now? And then simply on the recurring revenue, what portion of the ISS revenue is do you consider recurring? Thank you.

Tobi Manner, CEO, Elisa: On the first one, I mean, mobile ID penetration at the start of the year was is something that we are basically not disclosing. So we will need to you will need to observe the revenue development on that one.

Jari Kinnonen, CFO, Elisa: Regarding revenue share is approximately 60.

Tobi Manner, CEO, Elisa1: Great. Thank you very much.

Conference Operator: The next question comes from Ulrich Rath from Bernstein. Please go ahead.

Tobi Manner, CEO, Elisa2: Thanks very much. I have more sort of cleanup questions, suppose. First one would be on fixed line customer additions. You highlighted the strength is driven by fiber. Could you maybe add a bit of color in what respect, if any, the result in the first quarter was unusual because of particular campaigning or particular acceleration effects, maybe that would be temporary on the shift from mobile broadband.

So what I’m trying to get at here is do we expect significantly accelerating fixed line intake in 2025? Or was the first quarter a bit of an outlier because of the timing of campaigns and other things? And in this respect also, could you clarify one comment you made in the prepared remarks, which was these 200 micro markets? What’s the size of the micro market? What defines a micro market for you?

My second question would be on the ISS comments that you made about delayed deliveries moving into the second quarter and also some projects delayed into the second quarter. Could you give that or quantify that in very rough terms? Did you miss a percentage point or two percentage points roughly in the first quarter because of this? Or was it a much larger or indeed a smaller effect? And also within ISS, I was interested whether you would be I mean, following on, on Andrew’s question, would you say your confidence in that positive EBITDA contribution has increased since the Capital Markets Day?

I think at the Capital Markets Day, used the qualifier minor EBITDA. Would you drop that qualifier today because you have more visibility and you’re more confident on that? Or would you still say it’s going to be minor? Thank you so much.

Tobi Manner, CEO, Elisa: Good. Yes, good very specific questions. When it comes to the ISS EBITDA, our soft guidance is and continues to be that we expect to see EBITDA on positive territory for the full year of 2025. And then in terms of the move from Q1 to Q2, we are quantifying that. But let’s say that it is noteworthy enough for us to give a verbal comment about it.

So that’s probably what we have to say about that part of your question. Then moving to your first point about the mobile broadband and the move to fiber. But you will need to remember in terms of mobile broadband is that there’s some seasonality in that one. In our market typically during the summer period customers are taking more mobile broadbands because they are more on the move. They also spent quite a bit of time at their summer houses where they don’t have fiber.

So they need the mobile broadband more. So there is this kind of seasonality pattern in the mobile broadband. So that is something that is good to note when you do your modeling.

Tobi Manner, CEO, Elisa2: Very helpful. And on these micro markets, what makes a micro market?

Tobi Manner, CEO, Elisa: Yes. I think that we are generally speaking, I mean we are not specifying that or we are not disclosing these sort of exact criteria of that one. But we are talking about certain areas of cities. We are talking about smaller towns and then so forth.

Tobi Manner, CEO, Elisa2: Thank you very much.

Tobi Manner, CEO, Elisa: Thank you.

Conference Operator: The next question comes from Sami Sarkamis from Danske Bank. Please go ahead.

Tobi Manner, CEO, Elisa3: Hi. I’d like to still revisit two topics that have been discussed. The first one is the MSR growth outlook for this year. Are you confident that the planned portfolio changes and upselling on the back of price increases on the back of security features, is that going to be enough to bring MSR growth back to 4% to 6% range? Or are you planning additional measures in the second half of the year?

And then second question would be on the Fixed Service revenue outlook. I understand that there are multiple factors playing in, but if we just focus on Copper and Fiber trends, are you already at the point where copper revenues are offsetting for declining in copper revenues?

Tobi Manner, CEO, Elisa: Yari, if you take the second one. Can take the first. So in terms of the mobile service revenue, yes, we are reiterating the soft guidance of mid single digit revenue growth for MSR during the course of this year. We have made these offering changes that we have discussed. We have started the rollout and the results are encouraging.

Then of course we are also managing our business on ongoing basis. So from one month to another, from one quarter to another and then that of course is embedded in our soft guidance. So we are ready to take these measures as needed during the course of the year.

Jari Kinnonen, CFO, Elisa: And yes, the fiber and copper revenues, so there has been long term declining trend in copper revenues and it is approaching end of life cycle. And at the same time, now we’ve been investing into fiber. There’s more customer demand also in fiber and we see growth in fiber connection fixed broadband subscriptions continuing and that impacting to obviously to fixed service revenue. And currently these net offsetting the copper decline.

Tobi Manner, CEO, Elisa3: So I guess you would anticipate growing fixed revenues going into next year as the weight of fiber revenues continues to grow?

Jari Kinnonen, CFO, Elisa: We are planning to extend fiber and connect more customers and increase the revenue. Like discussed earlier question regarding fixed services, it at the same time it includes also especially in the corporate side many other services, but we see that medium term fixed services are developing positively.

Tobi Manner, CEO, Elisa3: Okay. Thanks.

Tobi Manner, CEO, Elisa: Thank you.

Conference Operator: The next question comes from Siyah He from Citi. Please go ahead.

Tobi Manner, CEO, Elisa4: Thank you for the presentation. I just have one question and I just want clarification please. And the first question is the rent. I understand that you put out this $200,000,000 budget back in 2023. And then I wondering if you could update us how much has been spent and maybe some information on the budgets that you expect to spend with the JV MPUI?

And if you could, what would be the ultimate coverage target for you on fiber in Finland? And question is a clarification. I just want to check that the rollout of the value added services, they are only applied to your front book rather than all of your back book as well. Thank you.

Jari Kinnonen, CFO, Elisa: Yeah, if I start with this €200,000,000 so we communicated that two years ago summer twenty twenty three that as we saw increasing customer demand for fiber, we are investing in coming years and we said €200,000,000 in coming years. So it means several years without specifying exactly how many years. And now this JV that we announced a couple of weeks ago that is part of that investment plan. So we are now sort of accelerating the amount to sort a bit shorter period of time with this structure.

Tobi Manner, CEO, Elisa: Related to the offering changes that we are doing on the subscription side. It will partially include back book changes to customers. But that is something that you will need to understand that is actually quite a granular approach because the terms and conditions of customers are allowing different types of changes to the offering. And then therefore we will be moving forward in terms of the rollout of the offering in batches. But it will not only be front book, it will be including a subset of back book changes.

Tobi Manner, CEO, Elisa4: Thank you very much.

Conference Operator: The next question comes from Adam Foxrumley from HSBC. Please go ahead.

Tobi Manner, CEO, Elisa5: Thanks for having me on. Just had a bit of a follow-up to Steve’s question, please, on the economics of the joint venture you announced a few weeks ago, NPY Telecom. I mean, I don’t think you’re going to tell us how much you’re investing explicitly, but can you talk to us about how we’re going to see that through your financial statements? Is it going to be in your CapEx line? Does it end up being a contribution to a JV?

And then operationally, will the customers be Elisa customers? And then do you have options to reconsolidate the joint venture in time? Hopefully, some fairly standard questions about how these things work. Thanks very much.

Jari Kinnonen, CFO, Elisa: All right. So JV is visible in it’s an associated company, so we are not fully consolidating it. It’s the results will be in associated share of associated company results. So then the revenues and the customer side did show that customers are Elisa customers and we are showing the revenues like we are showing today. And regarding then the connection to JV, there is lease agreement which is IFRS 16 lease agreement and visible in IFRS 16 leases.

And IFRS 16 leases are going through profit and loss in depreciation and financial expenses line. And in the balance sheet we have equity share of the JV in the associated company in the assets. And there’s no impact into CapEx.

Tobi Manner, CEO, Elisa5: And do you have an option to consolidate the JV in time? And I suppose another related question is, is this infrastructure like vehicle where you would expect significant leverage to sit within the Imprico to help with the financing?

Jari Kinnonen, CFO, Elisa: Yes. There are certain arrangements that enable us to consolidate at certain point of time.

Conference Operator: There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Vesas Sahibirte, Head of Investor Relations, Elisa: Okay. Thank you for the questions. Just to check if there are any questions from the audience. No, there seems to be no questions. So thank you for participating and we wish you a nice Eastern break.

Tobi Manner, CEO, Elisa: Thank you very much. Thank you.

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