Elisa Oyj Ord A

Good morning, everyone, and welcome to ELISA's first quarter 2026 conference call. We start with a presentation given by CEO Topi Manner and CFO Christian Pullola. And after that, we move on to Q&A. And I think we are ready to start. And I give word to Topi, please go ahead.

Thank you, Vesa, and good day, everybody. Welcome to this ELISA Q1 earnings call. And let's get right down to business and briefly go through the Q1 highlights. During the quarter, our revenue decreased by 1.3%, and this was to a large extent driven by lower equipment sales, impacted especially by higher device prices due to the shortages of memory chips worldwide. Telecom service revenue increased by 0.5% driven by fixed service revenue. The mobile service revenue declined by 0.1% as the full impact of intense campaigning in Q4 was visible in the MSR. International software services revenue increased by 6.9%. During the quarter, however, we sold a small software business in Brazil. Adjusting for this, the comparable organic revenue growth was 7.7% in Elisa Industry. Comparable EBITDA on group level increased by 2.2%, especially driven by our cost efficiency measures. Cash flow continued to develop strongly during the quarter and increased by 15.7%. What was notable during the quarter was that the churn decreased to 17.2% from 23% level of Q4. So this 6% unit decrease in churn is... a bigger decrease than the typical seasonality would be. Postpaid voice subscriptions decreased by 2,700, and in the fixed broadband subscription base, we experienced strong growth, 14,000, on the back of the strong customer demand that we are seeing on the market. The transformation program where we are targeting 40 million euros of course savings during the calendar year of 26 is progressing well according to the plan and we will deliver the communicated savings during this year. So it was indeed a quarter of slower growth, as stated, driven by equipment sales. What impacted the revenue was a small divestment that we made, Epic TV, that impacted the revenue with 3 million euros. However, it did not have any EBITDA impact as such. The biggest increases in revenue came from the international software services and from digital services. EBITDA during the quarter landed at 203 in accordance with our own expectations. EBITDA margin increased to 37%, partially reflecting the little bit different mix of revenue resulting from the decrease in equipment sales. In telecom service revenue, I stated that we grew with 0.5%, and there we did see the full impact of the lower price levels in Q4. The upsells from 4G to 5G, however, continues intact. I will come back to this a little later. And then suddenly in the fiber broadband, we saw growth as described a moment ago. The churn during the quarter was 17.2%, and this is broadly in line with the long-term average churn on the Finnish market. And what is notable is that the churn also decreased to a lower level than it was in Q1 2025. So then looking into the mobile KPIs in a little bit deeper fashion, it is good to note that our new sales prices in mobile subscriptions on the consumer side of the business returned to Q1 25 levels in March. So in the upper right hand corner in the graph, you are seeing the prices of new consumer mobile subscriptions. And what you also see there is that during the year 25, we saw gradual pressure to new sales margins culminating in the campaigning of Q4. And now we have been seeing the mentioned return to Q1 25 levels. What is also noteworthy that going forward, there will be a bit of time lag in how the new sales prices turn into mobile service revenue as there are fixed term contracts in the customer base of our competitors. And when we acquire those customers to us, there typically is a time lag of some months before the new prices actually come into effect. The churn we already discussed in terms of sales and marketing costs. During the Q4 last year, we had 5 million euros of more sales and marketing costs. And then those campaigning related costs were decreased during Q1 in line with the churn development.