ANNUAL REVIEW
RESPONSIBILITY
CORPORATE GOVERNANCE
REMUNERATION
2021
FINANCIAL STATEMENTS
I
ELISA FINANCIAL STATEMENTS 2021
Contents
THE REPORT OF THE BOARD OF DIRECTORS 1
FINANCIAL STATEMENTS 9
Consolidated Financial Statements 9
Consolidated income statement and statement of
comprehensive income 9
Consolidated statement of nancial position 11
Consolidated cash ow statement 13
Consolidated statement of changes in equity 15
Notes 16
1. General accounting principles 16
1.1 Basic information about the Group 16
1.2 Basis of presentation of nancial statements 16
1.3 Applied new and revised standards 17
2. Operational result 19
2.1 Operating segments and geographical areas 19
2.2 Items aecting comparability 21
2.3 Revenue 24
2.4 Other operating income 26
2.5 Operating expenses 27
2.6 Earnings per share 28
3. Business acquisitions and disposals 28
4. Personnel 35
4.1 Employee expenses 35
4.2 Share-based incentives 38
4.3 Pension obligations 42
5. Tangible and Intangible assets 45
5.1 Depreciation, amortisation and impairment 45
5.2 Property, plant and equipment 46
5.3 Right-of-use assets 49
5.4 Intangible assets 52
6. Inventories, trade and other receivables,
trade and other liabilities 57
6.1 Inventories 57
6.2 Trade and other receivables 57
6.3 Trade and other liabilities 60
7. Capital structure 62
7.1 Financial risk management 62
7.2 Capital management 66
7.3 Equity 67
7.4 Financial assets and liabilities 69
8. Other notes 79
8.1 Taxes 79
8.2 Provisions 82
8.3 Related party details 83
8.4 O-balance sheet leases and other commitments 88
8.5 Events after the end of the reporting period 89
9. Key indicators 90
9.1 Key indicators describing the Group’s nancial
development 90
9.2 Alternative performance measures 92
9.3 Per-share indicators 94
PARENT COMPANY FINANCIAL STATEMENTS 96
Parent company operational results 96
Income statement 96
Balance sheet 97
Cash ow statement 98
Notes to the nancial statements of the parent
company 100
Accounting principles 100
Notes to the income statement 101
1. Revenue 101
2. Other operating income 101
3. Materials and services 101
4. Personnel expenses 102
5. Depreciation and amortisation 103
6. Auditor fees 103
7. Financial income and expenses 103
8. Appropriations 104
9. Income taxes 104
Notes to the balance sheet 104
10. Intangible and tangible assets 104
11. Investments 107
12. Inventories 108
13. Non-current receivables 108
14. Current receivables 109
15. Shareholders’ equity 110
16. Provisions 111
17. Non-current liabilities 111
18. Current liabilities 112
19. Lease commitments and other liabilities 113
SHARES AND SHAREHOLDERS 115
BOARD’S PROPOSAL FOR THE PROFITS DISRIBUTION 119
SIGNATURES 119
AUDITOR’S REPORT 120
AUDITOR’S REASONABLE ASSURANCE REPORT
ON ELISA OYJ’S ESEF FINANCIAL STATEMENTS 125
Contents
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1
ELISA FINANCIAL STATEMENTS 2021
Market situation
The competitive environment has been active, especially in 4G
subscriptions. The COVID-19 pandemic continued to impact
the market situation to some extent. The amount of travel has
been very low although it increased slightly towards the end of
the year. On the other hand, the usage of mobile voice
and data continued to evolve favourably. Brisk demand for
5G services has also continued due to the wider range of 5G
devices and better network coverage. Competition in the xed
broadband market has continued to be intense in multi-
dwelling units, and the number and usage of traditional xed
network subscriptions is decreasing.
The markets for IT and IPTV entertainment services have
continued to develop favourably. The demand for other digital
services is also growing.
Revenue, earnings and nancial position
EUR million 2021 2020 2019
Revenue 1,998 1,895 1,844
EBITDA 697 685 661
EBITDA-% 34.9% 36.2% 35.8%
Comparable EBITDA
1)
706 685 668
Comparable EBITDA-% 35.3% 36.2% 36.2%
EBIT 431 409 395
EBIT-% 21.6% 21.6% 21.4%
Comparable EBIT
1–2)
439 415 402
Comparable EBIT-% 22.0% 21.9% 21.8%
Return on equity, % 28.8% 28.1% 26.6%
1)
Excluding EUR 8m restructuring costs in 2021.
2)
Excluding goodwill write-down of EUR 6m in 2020.
Report of the board of directors 2021
THE REPORT OF THE BOARD OF DIRECTORS
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ELISA FINANCIAL STATEMENTS 2021
Revenue increased by 5 per cent on the previous year,
mainly due to the camLine acquisition and Elisa Viihde Viaplay
cooperation, as well as growth in mobile services, domestic
digital services and equipment sales. A decrease in usage and
subscriptions of traditional xed telecom services and other
xed services as well as interconnection and roaming aected
revenue negatively.
EBITDA includes EUR 8 million in one-o restructuring
costs relating to personnel reductions. Comparable EBITDA
increased by 3 per cent and comparable EBIT by 6 per cent,
mainly due to revenue growth and eciency improvement
measures.
Net nancial income and expenses decreased to
EUR –12 million (–13, excluding the sale of Sulake shares –18),
mainly due to the renancing in January. Income taxes in the
income statement were EUR - 75 million (–70). Net prot was
EUR 343 million (328), and earnings per share were EUR 2.15
(2.05). Comparable earnings per share were EUR 2.19 (2.05).
Financial position
EUR million 2021 2020 2019
Net debt 1,219 1,207 1,184
Net debt / EBITDA
1)
1.7 1.8 1.8
Gearing ratio, % 101.2% 101.9% 103.0%
Equity ratio, % 39.9% 39.1% 41.0%
Cash flow 322 300 257
Comparable cash flow
2)
338 351 323
1)
(Interest-bearing debt – financial assets) / (four previous quarters’ comparable EBITDA).
2)
Excluding EUR 16m in share investments in 2021 and excluding EUR 57m share investments and EUR 6m sale of shares in 2020.
Comparable cash ow after investments decreased by
4 per cent to EUR 338 million (351). Higher EBITDA and lower
interest paid aected cash ow positively. A less-positive
change in net working capital due to increased inventories,
as well as higher taxes paid and capital expenditure, aected
cash ow negatively.
The nancial position and liquidity are strong. Cash and
undrawn committed credit lines totalled EUR 414 million at
the end of the reporting period.
Changes in corporate structure
In September, Elisa acquired 50.1 per cent of the Belgium-
based software company TenForce. The company serves
mostly large global industrial customers with a SaaS model.
The company provides operational risk management (ORM)
software for process industries to help protect them from
environmental, health, safety and quality (EHSQ) risks.
In November 2021, TenForce NV’s subsidiary TenForce
USA LLC acquired 100 per cent of the US-based Process Data
Control Corporation.
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ELISA FINANCIAL STATEMENTS 2021
Consumer Customers business
EUR million 2021 2020 2019
Revenue 1,241 1,183 1,152
EBITDA 475 461 433
EBITDA-% 38.3% 38.9% 37.6%
Comparable EBITDA
1)
478 461 435
Comparable EBITDA-% 38.5% 38.9% 37.8%
EBIT 314 291 268
EBIT-% 25.3% 24.6% 23.3%
Comparable EBIT
1-2)
317 293 271
Comparable EBIT-% 25.6% 24.8% 23.5%
CAPEX 169 170 171
1)
Excluding EUR 3m in restructuring costs in 2021.
2)
Excluding goodwill write-down of EUR 2.5 million in 2020.
Revenue increased by 5 per cent. Mobile services, equipment sales, the Elisa Viihde
Viaplay cooperation and entertainment services all aected revenue positively, while it was
negatively aected by interconnection and roaming, as well as the decrease in xed services.
EBITDA includes EUR 3 million in one-o restructuring costs relating to personnel reductions.
Comparable EBITDA increased by 4 per cent, mainly due to revenue growth and eciency
improvement measures.
Corporate Customers business
EUR million 2021 2020 2019
Revenue 757 711 692
EBITDA 222 224 228
EBITDA-% 29.4% 31.6% 32.9%
Comparable EBITDA
1)
228 224 232
Comparable EBITDA-% 30.1% 31.6% 33.6%
EBIT 116 118 127
EBIT-% 15.4% 16.6% 18.3%
Comparable EBIT
1-2)
122 122 131
Comparable EBIT-% 16.1% 17.1% 19.0%
CAPEX 96 96 85
1)
Excluding EUR 6m in restructuring costs in 2021.
2)
Excluding goodwill write-down of EUR 3.5 million in 2020.
Revenue increased by 6 per cent. Revenue was positively aected by the camLine acquisition,
equipment sales and domestic digital services, whereas the decrease in xed services as well
as interconnection and roaming had a negative eect. EBITDA includes EUR 6 million in one-o
restructuring costs relating to personnel reductions. Comparable EBITDA increased by 2 per cent.
Personnel
In 2021, the average number of personnel at Elisa was 5,391 (5,097) and employee expenses
totalled EUR 374 million (326). Personnel by segment at the end of the period:
2021 2020 2019
Consumer Customers 2,845 2,914 2,736
Corporate Customers 2,526 2,257 2,148
Total 5,371 5,171 4,884
The growth in personnel was mainly due to the camLine and TenForce acquisitions.
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ELISA FINANCIAL STATEMENTS 2021
Investments
EUR million 2021 2020 2019
Capital expenditure
(1
, of which 265 266 256
Consumer Customers 169 170 171
Corporate Customers 96 96 85
Shares 28 70 83
Total 293 336 339
Capital expenditure excluding leasing 247 245 227
1)
2020 includes EUR 7 million investment for 26 GHz frequency licence and EUR 2 million acquisition in business operations.
The main capital expenditures related to the coverage increases in the 5G network, as well as to other network and IT investments. Capital expenditure in 4Q21 includes EUR 7 million of leased assets, and
EUR 18 million in 2021.
Financing arrangements and ratings
EUR million
Maximum
amount
In use on
31 Dec 2021
Committed credit limits 300 0
Commercial paper programme (not committed) 350 0
EMTN programme (not committed) 1 500 900
Long term credit ratings Rating Outlook
Credit rating agency
Moody's Investor Services Baa2 Stable
S&P Global Ratings BBB+ Stable
In September, Elisa signed a EUR 130 million, sustainability-linked revolving credit facility with six banks. The facility has a ve-year maturity with an option to extend it by two years.
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ELISA FINANCIAL STATEMENTS 2021
Share
Share trading volumes are based on trades made on the Nasdaq Helsinki and alternative marketplaces. Closing prices are based on
the Nasdaq Helsinki.
Trading of shares 2021 2020 2019
Nasdaq Helsinki, millions 81.6 122.5 96.7
Other marketplaces, millions
(1
167.3 264.3 168.5
Total volume, millions 248.9 386.8 265.2
Value, EUR million 12,698.1 19,803.8 11,145.4
% of shares 148.7% 231.2% 158.5%
   
Shares and market values 2021 2020 2019
Total number of shares 167,335,073 167,335,073 167,335,073
Treasury shares 7,147,772 7,252,165 7,437,277
Outstanding shares 160,187,301 160,082,908 159,897,796
Closing price, EUR 54.12 44.87 49.25
Market capitalisation, EUR million 9,056 7,508 8,241
Treasury shares, % 4.27 % 4.33 % 4.44 %
   
Number of shares Total Treasury Outstanding
Shares on 31 Dec 2020 167,335,073 7,252,165 160,082,908
Performance share plan, 2 Feb 2021
(2
-95 241 95 241
Restricted share plan, 18 Jun 2021
(3
-9 152 9 152
Shares on 31 Dec 2021 167,335,073 7,147,772 160,187,301
1)
Other marketplaces: based on Bloomberg.
2
) Stock exchange bulletin 2 February 2021.
3)
Stock exchange bulletin 18 June 2021.
On 2 February 2021, Elisa transferred 95,241 treasury shares to people involved in the Performance Share Plan for the period
2018–2020. On 18 June 2021, Elisa transferred 9,152 treasury shares to people involved in the Restricted Share Plan.
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 16 million (10) in research
and development, of which EUR 7 million (8) was capitalised in
2021, corresponding to 0.8 per cent (0.5) of revenue.
Annual General Meeting 2021
On 8 April 2021, Elisa’s Annual General Meeting decided to
pay a dividend of EUR 1.95 per share based on the adopted
nancial statements of 31 December 2020. The dividend was
paid to shareholders registered in the company’s share register
maintained by Euroclear Finland Ltd on 12 April 2021. The
dividend was paid on 20 April 2021.
The Annual General Meeting adopted the nancial
statements for 2020. The members of the Board of Directors
and the CEO were discharged from liability for 2020.
The number of the members of the Board of Directors was
conrmed at eight. Ms Clarisse Berggårdh, Mr Kim Ignatius, Mr
Topi Manner, Ms Eva-Lotta Sjöstedt, Ms Seija Turunen, Mr Anssi
Vanjoki and Mr Antti Vasara were re-elected as members of the
Board of Directors, and Mr Maher Chebbo as a new member
of the Board of Directors. Mr Anssi Vanjoki was appointed as
the Chair and Ms Clarisse Berggårdh as the Deputy Chair of the
Board of Directors.
The Annual General Meeting decided that the amount of
annual remuneration for the members of the Board of Directors
and remuneration for meeting participation be changed. The
Chair is now paid annual remuneration of EUR 126,000, the
Deputy Chair and the Chairs of the Committees EUR 84,000, and
other Board members EUR 69,000; additionally, they receive EUR
800 per meeting of the Board and of a committee. However,
if a Board member lives permanently outside Finland and is
physically present at a Board or committee meeting that is held
in a country other than his/her permanent home country, the
meeting fee is EUR 1,600.
The audit rm KPMG Oy Ab was re-elected as the company’s
auditor. Mr Toni Aaltonen, APA, is the responsible auditor.
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ELISA FINANCIAL STATEMENTS 2021
Composition of the Committees of
the Elisa’s Board of Directors
The Board of Directors held its organising meeting and
appointed Ms Clarisse Berggårdh (Chair), Mr Maher Chebbo,
Ms Eva-Lotta Sjöstedt and Mr Antti Vasara to the People and
Compensation Committee. Ms Seija Turunen (Chair), Mr Kim
Ignatius and Mr Topi Manner were appointed to the Audit
Committee.
Authorisations of the Board of Directors
The Annual General Meeting decided 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
number of shares under this authorisation is 5 million shares
at maximum. The authorisation is valid for 18 months from
the date of the resolution of the General Meeting.
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 referred to in the Limited
Liability Companies Act. The number of shares under
this authorisation is 15 million shares at maximum. The
authorisation is valid for 18 months from the date of the
resolution of the General Meeting.
Elisa Shareholders’ Nomination Board
The largest shareholders were determined according to
the shareholder register of Elisa on 31 August 2021, and
they named the members of the Nomination Board. The
composition of the Nomination Board since September 2021
is as follows:
• Mr Pauli Anttila, Investment Director, nominated by Solidium
Oy
• Mr Jouko Pölönen, President and CEO, nominated by
Ilmarinen Mutual Pension Insurance Company
• Mr Reima Rytsölä, Deputy CEO, nominated by Varma Mutual
Pension Insurance Company
• Ms Hanna Hiidenpalo, Director, Chief Investment Ocer,
nominated by Elo Mutual Pension Insurance Company
• Mr Anssi Vanjoki, Chair of the Board of Elisa
The Nomination Board elected from amongst its members
Mr Pauli Anttila as the chair.
Elisa’s Shareholders’ Nomination Board was established
in 2012 by the 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.
Signicant legal and regulatory issues
In January 2021, new provisions related to national security
in Finnish networks came into force. The new rules prohibit
the use, in the critical parts of a network, of communications
network devices that could endanger national security. The
provision also applies retroactively to current network devices.
The critical parts of a network are dened at a general level
in the legislation. The Finnish Transport and Communications
Agency has dened the critical parts of a network more
precisely. An entitlement to compensation may be possible if a
network device is prohibited.
After a tax audit on foreign dividend withholding tax,
Elisa received a decision in April 2021 according to which it is
required to pay a total of EUR 1.7 million in allegedly wrongly
levied withholding taxes relating to the years 2015 and 2016.
Elisa has appealed the decision.
The European Commission’s delegated act based on
the European Electronic Communications Code directive,
which sets out single, maximum, EU-wide mobile and xed
voice termination rates, came into force on 1 July 2021. The
mobile voice termination rate will decrease to 0.2 cents per
minute (previously it was 0.82 in Finland and 0.7 in Estonia)
on a glide path until 2024. The xed voice termination rate
has decreased to 0.07 cents per minute (previously 2.8 in
Finland and 0.089 in Estonia). These changes will not have any
material impact on Elisa’s prots.
On 24 November 2021, the Estonian parliament
adopted amendments to the Electronic Communications
Act aimed at supplementing national security requirements.
The amendments enter into force on 1 February 2022.
According to the amendments, an operator must coordinate
with the state on the hardware and software used in its
communications networks, as well as on the corresponding
suppliers. If the state deems that a supplier poses a high risk,
usage of that supplier’s hardware and software in a 5G mobile
network is allowed only until 31 December 2025, and until 31
December 2029 in earlier generation (2G–4G) networks and
xed networks.
The start date of the Estonian 3.5 GHz spectrum auction
has not yet been announced. The frequencies can be used for
5G networks.
In July 2020, Tucana Telecom NV initiated legal
proceedings against Polystar OSIX AB in the Business
Court of Brussels with a claim of infringement of exclusivity
included in the distribution agreement and also of wrongful
termination of the distribution agreement. Related to this legal
proceeding, an arbitration award was granted in December
2021 according to which Emblasoft Group AB is entitled to
withdraw a certain deposit held as collateral for claims made
by Elisa. Elisa estimates that these legal proceedings will have
no material nancial implications.
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 aecting the company’s business are
identied, inuenced and monitored. The company classies
risks into strategic, operational, hazard and nancial risks.
Strategic and operational risks:
The telecommunications industry is intensely competitive
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
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ELISA FINANCIAL STATEMENTS 2021
and regulated by several public authorities. This regulation also
aects the price level of some products and services oered by
Elisa and may also require investments that have long payback
times.
Elisa processes dierent kinds of data, including personal
and trac data. Therefore, the applicable data protection
legislation, especially the General Data Protection Regulation,
has a signicant impact on Elisa and its businesses.
The rapid developments in telecommunications technology
may have a signicant impact on Elisa’s business.
Changes in governmental relationships may increase
the risk that there will be restrictions on network providers’
equipment that is also used in Elisa’s network. This might have
nancial or operational impacts 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 therefore limited. Furthermore, the
volume of phone trac on the xed network has decreased
during recent years. These factors may limit opportunities for
growth. New international business expansion and possible
future acquisitions abroad may increase risks.
Elisa is liable to pay direct and indirect taxes and
withholding taxes in the countries in which it operates. The tax
authorities have taken a slightly more intense approach to tax
inspection of late. Tax payments may be challenged by local tax
authorities, and this may have a negative nancial impact on
Elisa.
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.
The direct and indirect eects of the coronavirus
(COVID–19) pandemic are uncertain. If the pandemic continues
for a prolonged period, this may signicantly contribute to
a slowdown in economic growth, which may have negative
eects on Elisa through customer demand, suppliers’ security
of supply and employee health. Elisa has adapted its operations
and taken many proactive measures due to the COVID–19
pandemic, e.g. more intensive follow-up of customer demand
for existing services, as well as emerging demand for new
business opportunities. Also, the company has moved to
remote working in the duties where it is possible.
Financial risks:
In order to manage the interest rate risk, the Group’s loans
and investments are diversied into xed- and variable-rate
instruments. Interest rate swaps can be used to manage the
interest rate risk.
As most of Elisa’s operations and cash ow are
denominated in euros, the exchange rate risk is minor.
Currency derivatives can be used to manage the currency risk.
The objective of liquidity risk management is to ensure the
Group’s nancing in all circumstances. Elisa has cash reserves,
committed credit facilities and a sustainable cash ow to cover
its foreseeable nancing needs.
Liquid assets are invested within conrmed limits in
nancially solid banks, domestic companies and institutions.
Credit risk concentrations in accounts receivable are minor, as
the customer base is broad.
COVID–19 has increased volatility in the nancial markets.
This might have an eect on Elisa’s ability to raise funds and
increase nancing costs.
A detailed description of nancial risk management can be
found in Note 7.1 to the consolidated nancial statements.
COVID–19 situation and impacts
The impact of COVID–19 on Elisa’s business has been limited.
Operations have continued as planned, and all supply chains
have continued to operate normally. Elisa has continued its way
of working mainly as remote working. The nancial eects have
been seen mainly in lower roaming revenue due to the reduced
amount of travel. Elisa’s nancial position and cash ow have
remained strong. Elisa has prepared for various scenarios to
secure its nancial position.
Corporate responsibility and
non-nancial reporting
Elisa’s business operations and digitalisation solutions contribute
to sustainable development and to environmentally friendly
actions among its customers and society. Elisa is committed
to the principles of the UN Global Compact in its business
operations, and we have identied our contribution to the
UN Sustainable Development Goals. Elisa is a pioneer in
environmental work: the company is carbon neutral, and the
company has set ambitious climate goals aligned with the Paris
Climate Agreement and in accordance with the requirements of
the Science Based Targets initiative.
Sustainability has been part of Elisa’s strategy for over
ten years. Our renewed sustainability targets for 2022–2024
emphasise the importance of Elisa’s handprint, focusing on
the availability of fast connections, cybersecurity, increasing its
carbon handprint, the energy eciency of the mobile network,
innovations and promoting equality.
Elisa will publish its ninth assured responsibility report as
part of the Annual Report 2021 during week 11 (beginning
14 March 2022). The responsibility report has been prepared
according to the Global Reporting Initiative Standards, including
selected indicators from the SASB Telecommunication
Services Standard, and the report meets the requirements
for non-nancial reporting, including information with the EU
Taxonomy Regulation. The report includes medium-term targets,
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ELISA FINANCIAL STATEMENTS 2021
performance and metrics. In addition, Elisa will publish
data related to the Task Force on Climate-related Financial
Disclosures (TCFD) on the company website.
In recognising Elisa’s material corporate responsibility,
the most important nancial, social and environmental
eects and risks of the company, as well as other signicant
trends aecting the industry, have been taken into account.
The management’s description of corporate responsibility is
available on the company website.
Corporate Governance Statement
The Group has published a Corporate Governance Statement
and a Remuneration Report on week 5.
Events after the nancial period
There were no material events after the nancial period.
Outlook and guidance for 2022
Growth in the Finnish economy is expected to continue.
However, there are some uncertainties, such as ination and
changes in the geopolitical environment. Challenges in global
supply chains may also result in uncertainties in volumes and
prices. Competition in the Finnish telecommunications market
remains keen.
Full-year revenue is estimated to be at the same level or
slightly higher than in 2021. Mobile data and digital services
are expected to increase revenue. Full-year comparable
EBITDA is anticipated to be at the same level or slightly
higher than in 2021. Capital expenditure is expected to be a
maximum of 12 per cent of revenue.
Elisa is continuing its productivity improvement
development, for example by increasing automation and
data analytics in dierent processes, such as customer
interactions, network operations and delivery. Additionally,
Elisa’s continuous quality improvement measures will increase
customer satisfaction and eciency and reduce costs.
Elisa’s transformation into a provider of exciting, new and
relevant services for its customers is continuing. Long-term
revenue growth and protability improvement will derive from
growth in the mobile data market, as well as domestic and
international digital services.
Prot distribution
According to Elisa’s distribution policy, prot distribution
is 80–100 per cent of the previous scal year’s net prot.
In addition, any 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 nancial position, future nancial needs and
nancial targets. Prot 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 2.05 per share. The dividend
payment corresponds to 94 per cent of the nancial period’s
comparable net prot.
Shareholders who are listed in the company’s register of
shareholders maintained by Euroclear Finland Ltd on 8 April
2022 are entitled to funds distributed by the General Meeting.
The Board of Directors proposes that the payment date be 20
April 2022. The prot 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 ve million treasury shares, which
corresponds to 3 per cent of the total shares.
BOARD OF DIRECTORS
CONSOLIDATED
FINANCIAL STATEMENTS
PARENT COMPANY
FINANCIAL STATEMENTS
BOARD’S PROPOSAL FOR PROFIT
DISTRIBUTION
AUDITOR’S REPORT
SHARES AND
SHAREHOLDERS
THE REPORT OF THE BOARD
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9
ELISA FINANCIAL STATEMENTS 2021
EUR million Note 2021 2020
Revenue 2.1, 2.3 1,997.9 1,894.6
Other operating income 2.4 9.0 4.1
Materials and services 2.5 –763.6 –713.7
Employee expenses 4.1 –373.8 –325.7
Other operating expenses 2.5 –172.2 –174.2
EBITDA 2.1 697.4 685.2
Depreciation, amortisation and impairment 2.1, 5.1 –266.6 –276.2
EBIT 2.1 430.8 409.0
Financial income 7.4.1 4.6 8.7
Financial expenses 7.4.1 –16.5 –21.2
Share of associated companies’ profit –0.5 1.9
Profit before tax 418.4 398.3
Income taxes 8.1.1 –74.9 –70.2
Profit for the period 343.5 328.1
Attributable to
Equity holders of the parent 343.6 328.0
Non-controlling interests –0.2 0.1
343.5 328.1
Earnings per share (EUR)
Basic 2.6 2.15 2.05
Diluted 2.6 2.15 2.05
Average number of outstanding shares (1,000 shares)
Basic 2.6
160,174
160,066
Diluted 2.6
160,174
160,066
Consolidated income statement
FINANCIAL STATEMENTS
Consolidated Financial Statements
Consolidated income statement and statement of
comprehensive income
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10
ELISA FINANCIAL STATEMENTS 2021
EUR million Note 2021 2020
Profit for the period
343.5
328.1
Other comprehensive income, net of tax
Items which may be reclassified subsequently to profit or loss
Cash flow hedge
0.9
0.4
Translation differences
–1.2
3.1
Items which are not reclassified subsequently to profit or loss
Remeasurements of the net defined benefit liability 4.3
–2.8
4.5
Other comprehensive income
–3.0
8.0
Total comprehensive income
340.4
336.1
Total comprehensive income attributable to
Equity holders of the parent
340.5
336.1
Non-controlling interests
–0.1
0.0
Consolidated statement of comprehensive income
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11
ELISA FINANCIAL STATEMENTS 2021
EUR million Note 31 Dec. 2021 31 Dec. 2020
ASSETS
Non-current assets
Property, plant and equipment 5.2 752.7 735.1
Right-of-use assets 5.3 91.0 94.6
Goodwill 5.4.1 1,139.4 1,131.4
Intangible assets 5.4 198.1 210.1
Investments in associated companies 8.3.2 10.6 1.4
Other financial assets 7.4.3 16.4 15.6
Trade and other receivables 6.2.2, 7.4.4 103.2 94.9
Deferred tax assets 8.1.2 13.1 11.9
2,324.5 2,295.1
Current assets
Inventories 6.1 82.8 67.9
Trade and other receivables 6.2.1 506.3 457.8
Tax receivables 0.7 0.5
Cash and cash equivalents 114.1 220.1
703.9 746.3
TOTAL ASSETS 2.1 3,028.4 3,041.4
Consolidated statement of financial position
Consolidated statement of nancial position
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12
ELISA FINANCIAL STATEMENTS 2021
EUR million Note 31 Dec. 2021 31 Dec. 2020
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital 83.0 83.0
Treasury shares –126.1 –128.4
Reserve for invested non-restricted equity 90.9 90.9
Other reserves 373.9 375.7
Retained earnings 776.1 761.5
Equity attributable to equity holders of the parent 4.2, 7.3 1,197.8 1,182.7
Non-controlling interests 6.3 1.5
TOTAL SHAREHOLDERS' EQUITY 1,204.1 1,184.2
LIABILITIES
Non-current liabilities
Deferred tax liabilities 8.1.2 25.3 26.2
Interest-bearing financial liabilities 7.4.2, 7.4.3 1,141.4 1,136.8
Lease liabilities, interest-bearing 7.4.2, 7.4.3 73.4 78.8
Trade payables and other liabilities 6.3, 7.4.3, 7.4.4 41.0 32.2
Pension obligations 4.3 14.4 11.0
Provisions 8.2 2.8 2.9
1,298.3 1,288.0
Current liabilities
Interest-bearing financial liabilities 7.4.2, 7.4.3 100.2 193.5
Lease liabilities, interest-bearing 7.4.2, 7.4.3 18.1 17.7
Trade and other payables 6.3, 7.4.3 401.6 356.3
Tax liabilities 2.9 1.2
Provisions 8.2 3.1 0.5
526.0 569.2
TOTAL LIABILITIES 1,824.3 1,857.2
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 3,028.4 3,041.4
Consolidated statement of financial position
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13
ELISA FINANCIAL STATEMENTS 2021
EUR million Note 2021 2020
Cash flow from operating activities
Profit before tax 418.4 398.3
Adjustments
Depreciation, amortisation and impairment 5.1 266.6 276.2
Financial income (-) and expenses (+) 7.4.1 11.9 12.5
Gains (-) and losses (+) on the disposal of fixed assets –1.8 –1.6
Increase (+) / decrease (-) in provisions on the income statement 2.6 –1.6
Other adjustments –15.6 –14.2
263.7 271.3
Change in working capital
Increase (-) / decrease (+) in trade and other receivables –31.7 11.2
Increase (-) / decrease (+) in inventories –17.6 –1.2
Increase (+) / decrease (-) in trade and other payables 52.6 2.6
3.3 12.7
Dividends received 0.6 0.7
Interest received 2.8 2.4
Interest paid –17.4 –17.8
Taxes paid –75.7 –67.6
Net cash flow from operating activities 595.7 600.0
Consolidated cash flow statement
Consolidated cash ow statement
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ELISA FINANCIAL STATEMENTS 2021
EUR million Note 2021 2020
Cash flow from investing activities
Equity investments and business acquisitions 3 –4.5 –49.0
Contingent consideration of subsidiaries –1.1 –5.0
Investments in associates –9.7
Other investments –0.4 –2.4
Capital expenditure –258.8 –249.2
Loans granted –0.5
Proceeds from disposal of subsidiaries and businesses 3 2.0
Proceeds from disposal of other investments 0.1 3.1
Proceeds from disposal of tangible and intangible assets 0.8 0.6
Net cash flow used in investing activities –274.1 –300.0
Cash flow before financing activities 321.6 300.0
Cash flow from financing activities
Proceeds from long-term borrowings 100.4 297.8
Repayment of long-term borrowings –174.1
Increase (+) / decrease (-) in short-term borrowings –19.6 –113.5
Repayment of lease liabilities –23.1 –20.8
Acquisition of non-controlling interests –0.1
Dividends paid –310.9 –295.7
Net cash used in financing activities –427.4 –132.4
Change in cash and cash equivalents –105.8 167.6
Translation differences –0.2 0.6
Cash and cash equivalents at the beginning of the period 220.1 52.0
Cash and cash equivalents at the end of the period 114.1 220.1
Consolidated cash flow statement
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DISTRIBUTION
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15
ELISA FINANCIAL STATEMENTS 2021
Consolidated statement of changes in shareholders' equity
EUR million
Share
capital
Treasury
shares
Reserve for
invested
non-
restricted
equity
Other
reserves
Retained
earnings Total
Non-
controlling
interests
Total
equity
Balance at 1 January 2020 83.0 –132.2 90.9 370.8 737.0 1,149.6 0.7 1,150.3
Profit for the period 328.0 328.0 0.1 328.1
Other comprehensive income
Translation differences 3.2 3.2 –0.1 3.1
Cash flow hedge 0.4 0.4 0.4
Remeasurements of the net defined benefit liability 4.5 4.5 4.5
Total other comprehensive income 4.9 3.2 8.1 –0.1 8.0
Total comprehensive income 4.9 331.2 336.1 0.0 336.1
Dividend distribution –296.2 –296.2 –0.1 –296.2
Share-based compensation 3.8 3.8 3.8
Acquisition of non-controlling interests 1.0 1.0
Increase in ownership interests in subsidiaries that do not result in
change of control 0.0 0.0 –0.1 –0.1
Other changes –10.6 –10.6 –10.6
Balance at 31 December 2020 83.0 –128.4 90.9 375.7 761.5 1,182.7 1.5 1,184.2
Profit for the period 343.6 343.6 –0.2 343.5
Other comprehensive income
Translation differences –1.2 –1.2 0.1 –1.2
Cash flow hedge 0.9 0.9 0.9
Remeasurements of the net defined benefit liability –2.8 –2.8 –2.8
Total other comprehensive income –1.9 –1.2 –3.1 0.1 –3.0
Total comprehensive income –1.9 342.4 340.6 –0.1 340.4
Dividend distribution –312.4 –312.4 –0.1 –312.5
Share-based compensation 2.3 2.3 2.3
Acquisition of non-controlling interests 5.1 5.1
Other changes –15.5 –15.5 –15.5
Balance at 31 December 2021 83.0 –126.1 90.9 373.9 776.1 1,197.8 6.3 1,204.1
Consolidated statement of changes in shareholders' equity
Consolidated statement of changes in equity
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16
ELISA FINANCIAL STATEMENTS 2021
1 GENERAL ACCOUNTING PRINCIPLES
1.1 Basic information about the Group
Elisa Corporation (“Elisa” or “the Group”) engages in
telecommunications activities and provides ICT and online
services in Finland and in selected international market areas.
The parent company of the Group is Elisa Corporation (“the
parent”) domiciled in Helsinki, and its registered address is
Ratavartijankatu 5. The shares of the parent company, Elisa
Corporation, have been listed on the Nasdaq Helsinki since
1997.
On 26 January 2022, Elisa Corporation's Board of Directors
accepted this nancial statement for publication. A copy of
nancial statement is available from Elisa’s head oce at
Ratavartijankatu 5, Helsinki, or on the company’s website at
corporate.elisa.com.
1.2 Basis of preparation of nancial statements
Elisa’s consolidated nancial statements are prepared in
accordance with International Financial Reporting Standards
(IFRS), including adherence to IAS and IFRS standards and SIC
and IFRIC interpretations valid as at 31 December 2021. In the
Finnish Accounting Act and the provisions issued pursuant
to it, the International Financial Reporting Standards refer to
standards and interpretations that have been approved for
application in the EU according to the procedures provided
for in EU regulation (EC) No. 1606/2002 (“IFRS”). The notes to
the consolidated nancial statements are also compliant with
Finnish accounting and corporate legislation.
Notes to the consolidated financial statements
The consolidated nancial statements have been
prepared under the historical cost convention with the
exception of nancial assets and liabilities, share-based
payments, pension liabilities and derivatives recognised at fair
value through prot or loss or statement of comprehensive
income. The nancial statements are presented in EUR million
and the gures are rounded to one decimal place.
1.2.1 Accounting principles, structure
and presentation of the consolidated
nancial statements
The accounting policies and descriptions of management's
judgment-based conclusions are mainly found in the notes to
the nancial statements, which are listed in the table below.
Only some general accounting policies are described in this
section.
Summary of notes, related to accounting principles for the
consolidated nancial statements of Elisa Group.
Accounting principle Note
Operating segments 2.1
Revenue from contracts with customers
2.3
Other operating income
2.4
Research and development costs
2.5
Earnings per share
2.6
Business acquisitions and disposals
3
Share-based incentives
4.2
Pension obligations
4.3
Property, plant and equipment
5.2
Right-of-use assets
5.3
Intangible assets
5.4
Goodwill
5.4.1
Inventories, trade and other receivables, trade and
other liabilities
6
Financial assets and liabilities
7.4
Derivative instruments
7.4.4
Income taxes
8.1.1
Deferred tax assets and liabilities
8.1.2
Provisions
8.2
Consolidation principles, subsidiaries
8.3.1
Consolidation principles, joint arrangements
8.3.2
Off-balance sheet leases
8.4
The symbols below indicate the gures mentioned in
the notes that match the balances in the income statement,
statement of nancial position and the cash ow statement.
I/S
= Income Statement
B/S = Balance Sheet
C/F = Cash Flow Statement
Notes
1. General accounting principles
1.1 Basic information
about the Group
1.2 Basis of presentation of nan-
cial statements
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17
ELISA FINANCIAL STATEMENTS 2021
Consolidation principles
The consolidated nancial statements include the parent
company, Elisa Corporation, subsidiaries, associates and joint
arrangements as described in detail in Notes 8.3.1 and 8.3.2.
Foreign currency items
The consolidated nancial statements are presented in euros,
which is the functional and presentation currency of the
parent company.
Transactions in foreign currencies
Foreign currencies transactions are translated into functional
currency using the exchange rates prevailing on the dates
of the transactions. Monetary items have been translated
into the functional currency at the exchange rates prevailing
at the end of the reporting period. Non-monetary items
denominated in foreign currencies are translated at the
exchange rate at the date of the transaction, excluding items
measured at fair value that are translated at the exchange
rates prevailing on the valuation date. Gain and losses arising
from the currency translations are recognised through prot
or loss. Foreign exchange gain and losses resulting from
operating activities are included in the respective items above
operating prot. Foreign exchange gain and losses from the
liabilities denominated in a foreign currency are included
in nancial income and expenses, with the exception for
exchange rate dierences on foreign currency items that
constitute a part of the net investment made in a foreign
unit. These exchange rate dierences are recognised in
other comprehensive income and accumulated exchange
rate dierences are included in the translation dierence
presented in shareholders’ equity.
Translation of foreign Group
companies’ nancial statements
The income statements of foreign subsidiaries that use a
functional currency other than the Group’s presentation
currency have been converted into euro at the average
exchange rate prevailing during the year, and statements of
nancial position at the exchange rate prevailing at the end of
the reporting period. The dierent exchange rates applicable
to the conversion of prot or loss on the income statement
and balance sheet result in a translation dierence recognised
in shareholders’ equity on the balance sheet, and any change
in this dierence is recognised in other comprehensive
income. Translation dierences arising from the elimination
of the acquisition cost of foreign subsidiaries, as well as
translation dierences arising from equity items accumulated
after the acquisition, are recognised in other comprehensive
income. When a subsidiary is divested in full or in part,
accumulated translation dierences are recognised in the
income statement as part of the sales gain or loss.
Goodwill arising from the acquisition of foreign entities
and the fair value adjustments made to the book values of the
assets and liabilities of such foreign entities upon acquisition
is treated as assets and liabilities belonging to the foreign
entities. These are converted into euro at the exchange rate
prevailing at the end of the reporting period.
1.2.2 Accounting principles that require
management’s judgement and key
sources of estimation uncertainty
Preparation of the nancial statements requires the Group’s
management to make certain estimates and consideration.
In addition, judgement in applying the accounting policies is
required. This applies particularly to cases in which valid IFRS
standards provide for alternative methods of recognition,
measurement or presentation.
The estimates made in connection with the preparation
of nancial statements are based on the management’s best
view at the end of the nancial period, and the outcome may
dier from the estimates and assumptions. Estimates are
based on historical experience and assumptions concerning
the future that are believed to be reasonable at the end of the
nancial period. The Group regularly assesses the realisation
of estimates and assumptions, as well as changes in the
underlying factors. Any changes in estimates and assumptions
are recorded for the nancial year during which the estimate
or assumption was adjusted, and for all subsequent periods.
Signicant areas of estimation and uncertainty in applying
accounting policies that have the most signicant impact on
amounts recognised in the nancial statements are related
to business combinations (3), impairment of intangible assets
(5.4.1), share-based payments (4.2), recognition of net dened
pension liability (4.3) and recognition of deferred tax assets
(8.1.2).
1.3 Applied new and revised standards
The consolidated nancial statements have been prepared
in accordance with the same accounting policies used in
2020, with the exception for the following new standards,
interpretations and revisions to existing standards that
the Group has applied since 1 January 2021. Revisions did
not have a material impact on the consolidated nancial
statements.
• Interest Rate Benchmark Reform Phase 2 – Amendments to
IFRS 9 Financial Instruments, IAS 39 Financial Instruments:
Recognition and Measurement, IFRS 7 Financial
Instruments: Disclosures, IFRS 4 Insurance Contracts and
IFRS 16 Leases. Amendments address issues aecting
1.3 Applied new and revised standards
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18
ELISA FINANCIAL STATEMENTS 2021
nancial statements when changes are made to contractual
cash ows and hedging relationships as a result of interest
rate benchmark reform. Amendments assist companies in
providing useful information about the eects of interest
rate benchmark reform on nancial statements.
• Amendments to IFRS 16 Leases since 30.6.2021. The
amendments allow the lessees not to account for rent
concessions as lease modications if the concessions are a
direct consequence of the Covid–19 pandemic and only if
certain conditions are met.
• In April 2021, the IFRS Interpretations Committee nalised
its agenda decision on conguration or customisation
costs in a cloud computing arrangement (IAS 38 Intangible
Assets). In this agenda decision, the IFRS IC considered
when an intangible asset in relation to conguration
or customisation of the application software can be
recognised. IFRIC agenda decisions have no eective date,
so they are expected to be applied as soon as possible.
The agenda decision does not have a material impact on
the accounting policies applied to implementation costs in
cloud computing arrangement.
On 1 January 2022, the Group will adopt the following new
standards, providing these are approved by the EU by the
planned date of adoption. Revisions are not expected to have
a material impact on the consolidated nancial statements.
• Amendments to IAS 16 Property, Plant and Equipment.
Under the amendments, proceeds from selling items
before the related item of PPE is available for use should
be recognized in prot or loss, together with the costs of
producing those items.
• Amendments to IAS 37 Provisions, Contingent Liabilities
and Contingent Assets. When an onerous contract is
accounted for basing on the costs of fullling the contract,
the amendments clarify that these costs comprise both the
incremental costs and an allocation of other direct costs.
• Annual Improvements to IFRS Standards 2018–2020
On 1 January 2023, the Group will adopt the following
new standard, providing this is approved by the EU by the
planned date of adoption. Revisions are not expected to have
a material impact on the consolidated nancial statements.
• IFRS 17 Insurance Contracts. The new standard for
insurance contracts will help investors and other parties
understand better insurers’ risk exposure, protability and
nancial position. This standard replaces IFRS 4 standard.
• Amendments to IAS 1 Presentation of Financial Statements.
The amendments are to promote consistency in application
and clarify the requirements on determining if a liability
is current or non-current. The amendments clarify the
application of materiality to disclosure of accounting
policies to help companies provide useful accounting policy
disclosures.
• Amendments to IAS 8 Accounting policies, Changes in
Accounting Estimates and Errors. The amendments clarify
how companies should distinguish changes in accounting
policies from changes in accounting estimates, with a
primary focus on the denition of and clarications on
accounting estimates.
• Amendments to IAS 12 Income Taxes. The amendments
narrow the initial recognition exemption (IRE) and clarify
that the exemption does not apply to transactions such as
leases and decommissioning obligations which give rise to
equal and osetting temporary dierences.
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19
ELISA FINANCIAL STATEMENTS 2021
2 Operational result
2.1 Operating segments and geographical areas
The Group has two reporting segments: Consumer Customers and Corporate Customers. The organisational and management structure of Elisa Group is based on a customer-oriented
operating model. The reportable segments are based on the internal reporting provided to management.
The Consumer Customers segment provides consumers with telecommunications and communications services, such as fixed and mobile subscriptions with supplementary digital services,
cable-tv subscriptions, Elisa Viihde entertainment service and Elisa Kirja e-reading service.
The Corporate Customers segment provides corporate and public administration organisations with services such as IT and communication solutions for the digital environment as well as
fixed and mobile subscriptions. The Corporate Customers segment provides worlwide services such as video conferencing services, solutions for automation of network management and
operation for mobile operators, and IoT solutions for industry.
Operating segments:
2021
EUR million
Consumer
Customers
Corporate
Customers
Unallocated Group
Total
Revenue 1,241.3 756.6 1,997.9
EBITDA 475.1 222.3 697.4
Depreciation, amortisation and
impairment –160.7 –105.8 –266.6
EBIT 314.4 116.5 430.8
Financial income 4.6 4.6
Financial expenses –16.5 –16.5
Share of associated companies' profit –0.5 –0.5
Profit before tax 418.4
Investments 168.7 96.3 265.1
Assets 1,822.3 1,051.2 154.9 3,028.4
2020
EUR million
Consumer
Customers
Corporate
Customers
Unallocated Group
Total
Revenue 1,183.4 711.2 1,894.6
EBITDA 460.8 224.4 685.2
Depreciation, amortisation and
impairment –169.9 –106.3 –276.2
EBIT 290.8 118.1 409.0
Financial income 8.7 8.7
Financial expenses –21.2 –21.2
Share of associated companies' profit 1.9 1.9
Profit before tax 398.3
Investments 170.1 96.1 266.2
Assets 1,802.5 989.4 249.5 3,041.4
EBITDA 2021
Consumer Customers 475.1
Corporate Customers 222.3
Revenue 2021
Consumer Customers 1,241.3
Corporate Customers 756.6
2. Operational result
2.1 Operating segments and geographical areas
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20
ELISA FINANCIAL STATEMENTS 2021
Geographical areas
,
2021
EUR million Finland
Rest of
Europe
Other
countries
Group
total
Revenue 1,702.5 251.2 44.2 1,997.9
Assets 2,551.3 446.5 30.6 3,028.4
2020
EUR million Finland
Rest of
Europe
Other
countries
Group
total
Revenue 1,639.1 234.1 21.4 1,894.6
Assets 2,584.4 443.8 13.2 3,041.4
Accounting Principles – Operating Segments:
The segments are controlled by segment-specific performance reporting that includes external revenue, EBITDA, EBIT and capital investments. Financial items, share of associated
companies’ profit and income taxes are not allocated to operating segments. The costs of production and support functions are allocated to operating segments on the matching principle.
Operations in Estonia are divided into the Consumer Customers and Corporate Customers operating segments on the basis of customer accounts.
Segment assets consist of intangible and tangible assets, right-of-use assets, inventories, trade and other non-interest bearing receivables. Deferred tax assets, investments in associated
companies, other investments, interest-bearing receivables, financial items and income tax receivables are not included in segment assets. Liabilities are not allocated to operating
segments.
The accounting principles of the segments are the same as those used in the preparation of the financial statements.
The reported geographical areas are Finland, Rest of Europe and Other Countries. Revenues are presented on the basis of customer location. The assets are presented on the basis of their
location.
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ELISA FINANCIAL STATEMENTS 2021
2.2 Items aecting comparability
Elisa uses comparable key figures in its financial reporting to describe the financial development of its business and increase comparability between different periods.
Exceptional transactions outside the ordinary course of business are treated as items affecting comparability. Such items, as identified by the Group, are for example capital gains and losses
from divestments of the assets and businesses, acquisition costs of assets and businesses, impairments, restructuring expenses and costs of legislative changes, damages or litigations.
Income statement
EUR million 2021 2020
Expenses related to acquisitions of subsidiaries and business combinations –8.4
Items affecting comparability in EBITDA –8.4
Impairment of goodwill –6.1
Items affecting comparability in EBIT –8.4 –6.1
Capital gain 5.6
Items affecting comparability in profit before tax –8.4 –0.4
Deferred tax assets for tax losses carried forward 1.0
Income taxes on items affecting comparability 1.6
Items affecting comparability in profit for the period –6.7 0.5
Items affecting comparability in 2021 include restructuring costs of EUR 8.4 million.
Items affecting comparability in 2020 include impairment of goodwill of EUR 6.1 million, capital gain of EUR 5.6 million from the disposal of Sulake companies and a recognised deferred tax
asset of EUR 1.0 million of for tax losses carried forward.
2.2 Items aecting comparability
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ELISA FINANCIAL STATEMENTS 2021
EUR million 2021 2020
Comparable EBITDA
I/S
EBITDA 697.4 685.2
Items affecting comparability in EBITDA 8.4
705.7 685.2
Comparable EBIT
I/S
EBIT 430.8 409.0
Items affecting comparability in EBIT 8.4 6.1
439.2 415.0
Comparable profit before taxes
I/S
Profit before taxes 418.4 398.3
Items affecting comparability in profit before taxes 8.4 0.4
426.8 398.8
Comparable profit for the period
I/S
Profit for the period 343.5 328.1
Items affecting comparability in profit for the period 6.7 –0.5
350.2 327.6
Comparable profit for the period attributable to equity holders of the parent
Comparable profit for the period 350.2 327.6
Non-controlling interests –0.2 0.1
350.4 327.5
Comparable earnings per share, EUR
Comparable profit for the period attributable to equity holders of the parent 350.4 327.5
Average number of outstanding shares, diluted (1,000 shares) 160,174 160,066
2.19 2.05
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ELISA FINANCIAL STATEMENTS 2021
Cash ow
EUR million 2021 2020
Investment in shares and business combinations 16.2 56.5
Proceeds from disposal of subsidiaries and businesses –5.1
Items affecting comparability in cash flow before financing 16.2 51.3
The main items affecting comparability in 2021 was the acquisition of SedApta for EUR 9.7 million and TenForce NV for EUR 3.4 million.
The most significant items affecting comparability in 2020 were the acquisition of camLine GmbH and its sister companies of EUR 45.4 million, the contingent consideration related to the
acquisition of Polystar Osix AB of EUR 5.0 million and the acquisition of Sutaria Services Inc. of EUR 3.0 million.
Comparable cash flow after investments
C/F Cash flow before financing 321.6 300.0
Items affecting comparability in cash flow before financing 16.2 51.3
337.8 351.3
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ELISA FINANCIAL STATEMENTS 2021
20212020201920182017
Development of revenue, EUR million
0
500
1,000
1,500
2,000
1,787
1,832
1,844
1,895
1,998
2.3 Revenue
Division of Group's revenue
EUR million 2021 2020
Rendering of services 1,642.0 1,569.1
Sale of equipment 356.0 325.5
I/S
1,997.9 1,894.6
EUR million 2021 2020
Mobile telecommunications 1,179.7 1,123.3
Fixed-network broadband and others 818.3 771.3
I/S
1,997.9 1,894.6
2.3 Revenue
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ELISA FINANCIAL STATEMENTS 2021
Accounting Principles – Revenue from contracts with customers:
The revenue of consumer customers mainly consists of fixed and mobile subscriptions with supplementary digital services, cable-tv subscriptions, Elisa Viihde entertainment service and
Elisa Kirja e-reading service. Consumer customer contracts are typically standard contracts that are treated as separate performance obligations.
Customer contract may include several performance obligations, and Elisa may agree on the delivery or rendering of several products, services or access rights (service bundle). In that case,
prices specified in the contract are used as transaction price, which is allocated to performance obligations on a relative stand-alone selling price basis.
The revenue of corporate customers mainly consists of fixed and mobile subscriptions with supplementary digital services, IT and communication solutions for the digital environment,
video conferencing services, solutions for automation of network management and operation for mobile operators and IoT solutions for industry. Contracts with corporate customers
typically meet the criteria laid down for a contract negotiated as a single package, in which case the revenue will be allocated to the goods and services based on the prices agreed with each
customer.
A performance obligation may be fulfilled and revenue recognised over time or at certain points of time. The key criterion for the revenue recognition is the transfer of control. For
performance obligations that are satisfied at a certain point of time, such as equipment, the customer is deemed to gain control at the entry to contract and revenue is recognised when
the equipment is transferred to the customer. Service contracts mainly comprise performance obligations that are satisfied over time. The performance is carried out, and revenue is
recognised over time as the services are provided.
Fixed-term service contracts are recognised over the contract period and the opening fees and related expenses, as well as discounts granted, are allocated to the entire contract
period. Incremental costs of obtaining a fixed-term contract such as sales and represent commissions are capitalised and accrued as an expense during the contract period when these
commissions relate directly to a contract that can be specifically identified. Service contracts valid until further notice are recognised over time. The opening fees and related expenses are
recognised at the time when the service is connected.
The Group provides consumer customers with the various payment methods granting possibility to purchase equipment on 12–36 months credits. Revenue for equipment is recognised
at the time of the sale regardless of whether the customer pays for the device fully at the time of sale or by monthly payments. Based on management's judgement, the contracts do not
include a significant financing component.
Revenue from prepaid mobile phone cards is recognised over the period of realised use of the cards. Service fees invoiced from a customer on behalf of a third-party content service
provider are not recognised as revenue.
As a rule, the customer has 4 weeks to cancel the service contract made at a distance sale and return the purchased equipment. In principle, there is no right of cancellation for equipment
bought from an Elisa shop. Based on historical experience the number of refunds is expected to be low due to which the Group has not recognised a refund liability for the amounts
expected to be refunded and revenue has not been adjusted by the estimated number of refunds.
Customers participating in loyalty programmes are entitled to certain discounts on services and products provided by the Group. Discounts earned by the customers are recognised as
reduction of revenue. The Group does not currently have any valid loyalty programmes.
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ELISA FINANCIAL STATEMENTS 2021
2.4 Other operating income
EUR million 2021 2020
Gain on disposals of property, plant and equipment 1.9 0.2
Gain on disposal of subsidiaries and businesses
(1
0.5
Other items
(2
7.1 3.4
I/S
9.0 4.1
1)
Includes a capital gain of EUR 0.5 million from the divestment of remote measurement business for corporate customers.
2)
Other items include rental income from the real estate and other income not associated with ordinary operating activities.
Accounting Principles – Other operating income:
Other operating income includes non-operating income, such as capital gain on the disposal of tangible and intangible assets, subsidiaries and businesses, and rental income from real
estate.
Government grants associated with development projects are recognised as other operating income when the related costs are recognised as expenses. Government grants associated
with capitalised development costs are recorded as a reduction of capital expenditure.
2.4 Other operating income
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ELISA FINANCIAL STATEMENTS 2021
2.5 Operating expenses
Materials and services
EUR million
2021 2020
Materials, supplies and goods 522.3 468.5
Change in inventories –10.6 1.0
External services 251.2 244.2
Foreign exchange gains and losses 0.6 0.0
I/S
763.6 713.7
Gains and losses arising from foreign currency translations are recognised in accordance with their nature either in materials and services or financial income and expenses.
Employee expenses
More detailed analysis of employee expenses is included in Note 4.
Auditor fees
EUR million
2021 2020
Auditing 0.4 0.3
Tax advisory services 0.0 0.1
Other services 0.1 0.0
0.4 0.4
In 2021, non-audit fees charged by KPMG Oy Ab were EUR 0.1 (0.1) million.
Research and development costs
EUR million
2021 2020
Research and development costs recognised as expenses 9.5 2.4
Capitalised development costs 6.6 8.0
16.1 10.4
The focus areas for the research and development activities in 2021 were of the development of a customer relationship management system, production and quality management software
for the manufacturing industry, as well as the development of network software solutions for telecom operators.
Accounting Principles – Research and development:
Research costs are recorded as expenses in the income statement. Development costs are capitalised from the date the product is technically feasible, it can be utilised commercially
and the asset is expected to generate future economic benefit and the Group has both intention and the resources to complete the development and use or sell the asset. Capitalised
development costs include those material, labour and testing costs and any capitalised borrowing costs that are directly attributable to bringing the asset to its working condition for its
intended use. Otherwise, development costs are recorded as an expense. Development costs initially recognised as expenses cannot be capitalised subsequently.
2.5 Operating expenses
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ELISA FINANCIAL STATEMENTS 2021
2.6 Earnings per share
Earnings per share, basic 2021 2020
I/S
Net profit for the period attributable to equity holders of the parent (EUR million) 343.6 328.0
Weighted average number of shares outstanding (1,000 shares) 160,174 160,066
Earnings/share, basic (EUR/share) 2.15 2.05
Accounting principles – Earnings per share:
Basic earnings per share are calculated by dividing the net profit for the period attributable to the parent company's equity holders by the weighted average number of shares outstanding
during the period.
Diluted earnings per share are calculated on the same basis as earnings per basic share, except for the dilutive effect of converting all dilutive potential shares into basic shares.
The Group had no material dilutive effect on the number of shares during the financial years 2021 and 2020.
3. Business acquisitions and disposals
Acquired businesses in 2021
Acquisition of TenForce NV
On 31 August 2021, Elisa acquired a majority stake of 50.1 per cent in Belgian TenForce NV. TenForce is a provider of environmental, health, safety and quality performance (EHSQ) and
operational risk management software. TenForce primarily serves large global industrial customers with a SaaS model. The acquisition is consistent with Elisa’s strategy to grow digital
businesses internationally and to accelerate the Elisa IndustrIQ business. TenForce provides Elisa with cross-selling opportunities across its customer base and brings a complementary
offering and skills, especially with its deep understanding of process industries and their critical features.
The price paid for the acquisition carried out as directed share issue was EUR 15.1 million, of which EUR 10 million was carried out as a directed share issue. EUR 0.8 million of the total
acquisition price was allocated to the customer base, which will be amortised over four years, and EUR 0.6 was allocated to software, which will also be amortised over four years. The
acquisition resulted in EUR 8.9 million of goodwill relating to Group's growth in digital services internationally and strengthening Elisa IndustIQ business. The calculation of the allocation of the
acquisition price is preliminary, as the valuation of the acquired net assets has not been fully completed.
The acquisition generated a non-controlling interest amounting to EUR 5.1 million, which is included in the Non-controlling interest balance sheet item. The non-controlling interest is
measured at a proportionate share of the acquiree’s identifiable net assets.
The acquisition contract includes an option for Elisa to redeem and for non-controlling interests conditional right to sell the remaining 49.9 per cent of the shares in 2026. The liability for the
redemption of the remaining shares has been recognised in the financial statements. The initial recognition of the liability and any changes in it will be treated as equity transactions.
The acquired company has been consolidated from 1 September 2021 onwards. External revenue after the acquisition was EUR 1.9 million, and the impact on Group’s profit for the period
was EUR –0.4 million. Had the acquisition been made as of the beginning of the year 2021, the impact on Group revenue would have been EUR 5.5 million and the effect on profit for the
period EUR –0.6 million.
2.6 Earnings per share
3. Business acquisitions and disposals
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ELISA FINANCIAL STATEMENTS 2021
Consideration transferred
EUR million Preliminary
Cash paid 15.1
Total acquisition 15.1
Analysis of net assets acquired
EUR million
Tangible assets 0.1
Right-of-use assets 1.0
Customer base 0.8
Intangible assets 1.6
Trade and other receivables 1.0
Cash and cash equivalents 11.7
Deferred tax liabilities –0.3
Interest-bearing liabilities –0.3
Lease liabilities –1.0
Trade payables and other liabilities –3.2
Tax liabilities –0.1
11.3
Eects of acquisition on cash ow
EUR million
Acquisition price paid in cash –15.1
Cash and cash equivalents of the acquired entity 11.7
–3.4
Goodwill arising from business combination
EUR million
Consideration transferred 15.1
Identifiable net assets of the acquired entity 11.3
Non-controlling interest's proportionate share of identifiable net assets acquired –5.1
Goodwill 8.9
EUR 0.2 million of acquisition-related costs, such as professional fees, is recorded in other operating expenses.
Acquisition of Process Data Control Corp
In November 2021, TenForce NV's subsidiary TenForce USA LLC, acquired Process Data Control Corp. The acquisition price was EUR 1.5 million. The acquisition resulted in EUR 1.5 million of
goodwill. The calculation of the allocation of the acquisition price is preliminary, as the valuation of the acquired net assets has not been fully completed. The acquisition does not have a material
impact on the Group.
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ELISA FINANCIAL STATEMENTS 2021
Acquired businesses in 2020
Acquisition of P-OSS Solutions S.L.U.
On 18 May 2020, Elisa's subsidiary Polystar OSIX AB acquired a software development company P-OSS Solutions S.L.U. The acquisition strengthens Polystar's network performance
management and analytics solutions for telecommunications networks offered to international operators.
The debt-free acquisition price paid for the company shares was EUR 1.1 million. EUR 1.1 million of acquisition price was allocated to software, which will be amortised over five years. EUR 0.0
million of acquisition-related costs, such as professional fees, is recorded in other operating expenses. The acquisition does not have a material impact on the Group.
Acquisition of Sutaria Services Inc.
On 1 October 2020, Elisa acquired 56.5 per cent of Sutaria Services Inc., a U.S.-based supply chain software provider for the electronics manufacturing services. The trade name of the
company is CalcuQuote. The acquisition is consistent with Elisa’s strategy to grow digital businesses internationally and to accelerate the Elisa Industrial Software business.
The price paid for the acquisition carried out as directed share issue was EUR 5.1 million. EUR 0.4 million of the total acquisition price was allocated to software, which will be amortised over
five years. The acquisition resulted in EUR 3.7 million of goodwill relating to strengthening Group's industrial software business.
The acquisition generated a non-controlling interest amounting to EUR 0.9 million, which is included in the Non-controlling interest balance sheet item. The non-controlling interest is
measured at a proportionate share of the acquiree’s identifiable net assets.
The acquisition contract includes an option for Elisa to redeem and for non-controlling interests to sell the remaining 43.5 per cent of the shares in 2023. The liability for the redemption of
the remaining shares has been recognised in the financial statements. The initial recognition of the liability and any changes in it will be treated as equity transactions.
The acquired company has been consolidated from 1 October 2020 onwards. External revenue after the acquisition was EUR 0.3 million, and the impact on Group's profit for the period was
EUR –0.2 million. Had the acquisition been made as of the beginning of the year 2020, the impact on Group revenue would have been EUR 1.1 million and the effect on profit for the period
EUR –0.4 million, respectively.
Disposals of businesses in 2021 and 2020
There were no significant disposals during reporting periods.
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ELISA FINANCIAL STATEMENTS 2021
Consideration transferred
EUR million Carrying amount
Cash paid 5.1
5.1
Analysis of net assets acquired
EUR million
Intangible assets 0.6
Trade and other receivables 0.1
Cash and cash equivalents 2.1
Deferred tax liabilities –0.1
Trade payables and other liabilities –0.4
2.3
Eects of acquisition on cash ow
EUR million
Acquisition price paid in cash –5.1
Cash and cash equivalents of the acquired entity 2.1
–3.0
Goodwill arising from business combination
EUR million
Consideration transferred 5.1
Identifiable net assets of the acquired entity 2.3
Non-controlling interest's proportionate share of identifiable net assets acquired –0.9
Goodwill 3.7
EUR 0.5 million of acquisition-related costs, such as professional fees, is recorded in other operating expenses.
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ELISA FINANCIAL STATEMENTS 2021
Acquisition of camLine group
On 23 December 2020, Elisa acquired a German camLine GmbH with its group of companies. camLine is a software solution provider for manufacturing industry with strong focus on
manufacturing execution systems (MES), quality and operational excellence. The company has a global customer base, including semiconductor and electronics manufacturers, and medical
devices. The transaction is consistent with Elisa’s strategy to grow digital businesses internationally, and it strengthens Elisa's industrial software business growth.
The acquisition price paid was EUR 63.8 million including the contingent consideration of EUR 4.4 million. EUR 7.8 million of total acquisition price was allocated to the customer base, which
will be amortised over five years. The acquisition resulted in EUR 43.6 million of goodwill relating to the Group's growth in digital services internationally and strengthening the Group's
Industrial software business.
Elisa's holding in camLine companies is 100 per cent, except for camLine Hungary Kft, for which holding is 60 per cent. The acquisition generated a non-controlling interest amounting to
EUR 0.1 million, which is included in the Non-controlling interest balance sheet item. The non-controlling interest is measured at a proportionate share of the acquiree’s identifiable net assets.
The acquired company has been consolidated on 31 December 2020. The financial results have been consolidated from 1 January 2021 onwards.
Consideration transferred
EUR million Carrying amount
Cash paid 59.4
Contingent consideration 4.4
Total acquisition price 63.8
Analysis of net assets acquired
EUR million
Tangible assets 5.7
Right-of-use assets 0.2
Customer base 7.8
Intangible assets 0.2
Inventories 0.3
Trade and other receivables 4.6
Tax receivables 0.1
Cash and cash equivalents 14.4
Deferred tax liabilities –2.4
Interest-bearing liabilities –3.1
Lease liabilities –0.2
Advances received –0.2
Trade payables and other liabilities –7.2
Tax liabilities –0.1
20.2
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ELISA FINANCIAL STATEMENTS 2021
Eects of acquisition on cash ow
EUR million
Acquisition price paid in cash –59.4
Cash and cash equivalents of the acquired entity 14.4
–45.1
Goodwill arising from business combination
EUR million
Consideration transferred 63.8
Identifiable net assets of the acquired entity 20.2
Non-controlling interest's proportionate share of identifiable net assets acquired –0.1
Goodwill 43.6
EUR 0.6 million of acquisition-related costs, such as professional fees, is recorded in other operating expenses.
Changes in ownership interests
On 4 June 2020, the Group acquired an additional 20.0 per cent of shares in Kiinteistö Oy Rinnetorpa. The acquisition price was EUR 0.1 million. Following the acquisition, the Group owns the
entire share capital of the company. Due to the acquisition the share of non-controlling interests decreased by EUR 0.1 million and the Group's retained earnings increased by EUR 0.0 million.
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ELISA FINANCIAL STATEMENTS 2021
Accounting principles – Business acquisitions and disposals:
Subsidiaries are consolidated from the date the Group obtains control, and divested companies until the loss of control.
Acquisitions are measured at amortised costs. Identifiable assets acquired and assumed liabilities are measured at their fair value on the acquisition date.
Possible investments in non-controlling interests are measured either at a proportionate share of the acquiree's identifiable net assets or at fair value. The method to be used is selected on
a case-by-case basis. Subsequent changes in non-controlling interests are treated as equity transactions.
In business combinations carried out in stages, previously held equity share in the acquiree is measured at fair value and the resulting gain or loss is recognised through profit or loss.
The acquisition price consists of the fair value of cash and contingent consideration transferred. The amount of the acquisition price that exceeds the fair value of the acquired net assets is
recognised as goodwill. Additional information regarding valuation and impairment testing of goodwill is available under note 5.4.1.
The changes in contingent consideration are expensed through profit and loss. Acquisition-related costs, such as consulting fees and transfer tax, are accounted for as expenses for the
periods, when the costs were incurred and the services received. The costs are presented as Other operating expenses in the income statement.
In connection with loss of control, any investment retained in a former subsidiary is measured at fair value through profit or loss at the date of transaction. Changes in ownership interest
that do not result in a loss of control are accounted for as equity transactions.
Accounting policies that require management's judgements – Acquisitions:
The identifiable assets and liabilities acquired in a business combination are measured at fair value at the acquisition date. When determining the fair value of the acquired net assets,
consideration and estimates may be required. Estimates and judgement are based on the management's best view of the situation at the time of the acquisition.
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ELISA FINANCIAL STATEMENTS 2021
4 Personnel
4.1 Employee expenses
EUR million
2021 2020
Salaries and wages
304.7
267.0
Share-based payments
8.0
6.8
Pension expenses - defined contribution plans
40.4
33.6
Pension expenses - defined benefit plans
0.2
0.4
Other employee costs
20.5
18.0
I/S
373.8
325.7
Number of personnel at the end of the reporting period
2021 2020
Consumer Customers
2,845
2,914
Corporate Customers
2,526
2,257
5,371
5,171
20212020201920182017
2 424 1 877
2 793 1 922
2 754 2 033
2 736 2 148
2 914 2 257
Corporate Customers
Consumer Customers
Number of personnel at the year end
0
1,000
2,000
3,000
4,000
5,000
6,000
1,922
2,033
2,148
2,257
2,793
2,754
2,736
2,914
2,526
2,845
4. Personnel 4.1 Employee expenses
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ELISA FINANCIAL STATEMENTS 2021
Employee bonus and incentive schemes
All employees are included in the scope of performance, incentive, commission or provision-based bonus schemes. The Group also has a personnel fund. The costs of the performance-based
bonus scheme and personnel fund are recognised on an accrual basis and the costs are based on the best available estimate of realised amounts.
Performance-based bonus scheme
Rewards are based on financial and operational metrics of Elisa Corporation and its units. Targets are set, and the maximum amount of reward is confirmed semi-annually. Some of the
Group’s key personnel also participated in the share-based compensation plan in 2021.
Personnel fund
The objective of the personnel fund is to secure the commitment of the personnel to Elisa’s long-term objectives and to reinforce their interest in the company’s financial success and its
metrics.
The evaluation metrics for the performance-based bonus schemes are earnings per share (EPS) and achievement of defined strategic goals. The Board of Directors decides on the
performance-based bonus schemes and sets the earning criteria for the profit share reward annually.
The members of the personnel fund are the employees of Elisa Group, with the exception for those employees who are part of the share incentive plan. In 2021, the Group's personnel fund
contribution was EUR 2.7 (1.6) million.
Management remuneration
EUR million
2021 2020
Managing Directors
8.1
8.1
Members and deputy members of Boards of Directors
0.7
0.6
Employment benets for key management
Key management consists of Elisa's Board of Directors, the CEO and the Executive Board.
Management remuneration is described under parent company’s Note 4.
Annual employee benets recognised on the income statement
EUR million
2021 2020
Remunerations and other short-term employee benefits
4.6
4.6
Post-employment benefits
0.3
0.4
Share-based compensation
(1
2.8
2.1
7.7
7.1
1)
In 2021, the share-based compensation expenses were EUR 8.0 (6.8) million, of which EUR 0.7 (0.5) million is allocated to the CEO and EUR 2.1 (1.6) million to the Executive Board. The terms and conditions of share-based incentive plans are de-
scribed under Note 4.2.
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ELISA FINANCIAL STATEMENTS 2021
Benets paid
EUR million
2021 2020
Board of Directors
0.7
0.6
CEO
0.9
0.9
Executive Board
2.9
3.1
Share-based compensations
(1
3.3
9.8
7.9
14.3
1)
The reward paid to the CEO under the share-based compensation plans was EUR 0.9 (2.3) million and to the Executive Board members EUR 2.5. (7.5) million.
If the service contract is terminated by the Group, the period of notice for the CEO is six months, and if the contract is terminated by the CEO, the period of notice is three months. If the
service contract is terminated by the Group, the CEO is entitled to a severance payment equalling the total salary of 24 months less the salary for the period of notice.
The period of notice for members of the Executive Board is six months, if the service contract is terminated by the Group and three months from the member's side. Should the contract be
terminated by Elisa, the member of the Executive Board entitled to receive a severance payment that equals the total salary of 15 months less the salary for the period of notice.
Managing Directors' pension commitments
In 2020, the Board of Directors agreed with the CEO of Elisa Corporation Veli-Matti Mattila that he will continue as CEO until further notice. Under previous executive agreement, the Group
CEO would have retired at the age of 60. The defined benefit pension plan includes vested rights. The company is liable for the pension until the age of 63 and the related accumulated liability
of EUR 2.3 million is included in pension obligations on the balance sheet. The pension is accrued annually by 5.1 per cent of the annual earnings under Employees Pensions Act (TyEL), and
annually by EUR 120,000 during the period 2017–2020. In the management's cash-based supplementary pension insurance, the pension is accrued from 20.7 per cent of the annual earnings
under the Employees Pensions Act (TyEL) starting from the age of 62. The pension arrangement of the CEO is a cash-based plan, and it covers an increase in the statutory retirement age.
The executive agreements of the Group Management Board members appointed before year 2013 expire mainly at the age of 62, when they have the right to retire. Pension provisions are
cash-based, and they are covered by management supplementary pension insurance, which includes vested rights.
Share-based compensation granted to the management
The reward paid in 2021 to the CEO under the 2017 plan's 2018–2020 performance period equals the value of 8,258 shares and for the rest of the Executive Board 25,752 shares.
The reward paid in 2020 to the CEO under the 2014 plan's 2017–2019 performance period equals the value of 41,283 shares and for the rest of the Executive Board 136,095 shares.
The maximum reward granted to the CEO under the 2017 plan's 2019–2021 performance period equals the value of 39,000 shares and for the rest of the Executive Board 107,100 shares.
The reward will be paid after the publication of the 2021 financial statements.
The maximum reward granted to the CEO under the 2017 plan's 2020–2022 performance period equals the value of 32,000 shares and for the rest of the Executive Board 97,500 shares. The
reward will be paid after the publication of the 2022 financial statements.
The maximum reward granted to the CEO under the 2021 plan's 2021–2023 performance period equals the value of 32,000 shares and for the rest of the Executive Board 94,500 shares. The
reward will be paid after the publication of the 2023 financial statements.
The maximum reward granted to the CEO under the 2021 plan's 2022–2024 performance period equals the value of 32,000 shares and for the rest of the Executive Board 89,500 shares. The
reward will be paid after the publication of the 2024 financial statements.
Elisa shares held by key members of the management
The members of Elisa's Board of Directors, the CEO, the members of the Executive Board and their related parties held a total of 304,229 shares and votes, corresponding to 0.18 per cent of
all shares and votes.
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4.2 Share-based incentives
The Group has share-based incentive plans in place. The aim of the plans is to align the objectives of the shareholders and the key employees in increase the value of the Company in the
long-term, to retain the key employees at the Company, and to offer them a competitive reward plan that is based on earning and accumulating the Company´s shares. The potential rewards
are based on the accomplishment of the goals set.
4.2.1 Share-based incentive plan 2021
On 4 March 2021, the Board of Directors of Elisa Corporation has appoved a share-based incentive plan for the Group key employees for years 2021–2025.
The Performance Share Plan includes three three-year performance periods, calendar years 2021–2023, 2022–2024 and 2023–2025. The Board of Directors decided the performance criteria
for the plan and required performance levels for each criterion at the beginning of a perfomance period. After the end of the performance period, the reward is paid as a combination of
company shares and cash after the completion of financial statements. The cash proportion is intended to cover taxes and tax-related costs arising from the reward to the participant. As a
rule, no reward will be paid, if a participant’s employment or service ends before the reward payment.
The performance criteria for the performance period 2022–2024 are based on Group's Earnings per Share (EPS), on the International Digital services growth, on Employee Engagement and
annual progress in specific key business growth targets. The rewards to be paid on the basis of the performance period 2022–2024 correspond to the value of a maximum total of 360.500
Elisa Corporation shares.
The earnings criteria for the performance period 2021–2023 are based on Group's Earnings per Share (EPS), on the International Digital services growth and on annual progress in specific key
business growth targets. The rewards to be paid on the basis of the performance period 2022–2024 correspond to the value of a maximum total of 410.700 Elisa Corporation shares.
The CEO of the Company and a member of the Corporate Executive Board must hold a minimum of 50 per cent of the net shares given on the basis of the plan, until the CEO’s shareholding in
the Company in total corresponds to the value of his annual salary and, respectively, the member’s shareholding in the Company in total corresponds to the value of half of his or her annual
salary.
Amount of share incentives and terms and assumptions in the fair value calculation
Performance period
2022–2024
Performance period
2021–2023
Maximum number of shares granted, pcs 360,500 410,700
Grant date 31.12.2021 31.12.2020
Fair value of the share at the grant date, EUR
(1
48.27 44.15
Share price at the grant date, EUR 54.12 49.70
Estimated realisation of share price after performance period
(2
58.89 53.09
Performance period starts 1.1.2022 1.1.2021
Performance period ends 31.12.2024 31.12.2023
Estimated realisation of earning criteria at the beginning of performance period, % 44 46
Estimated realisation of earning criteria at the closing date, % 44 69
Number of participants in the plan at the closing date 186 166
1)
The fair value of the share is the share price at the grant date, less estimated dividend. Estimated dividend used in the calculation equals the dividend for the previous period.
2)
The estimated realisation of share price is calculated using the CAP model (Capital Asset Pricing Model). The basic variables in the model are interest rate level, general risk premium and the so-called beta risk on the Elisa share. The assumed dividend
equals the dividend for the previous period.
4.2 Share-based incentives
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ELISA FINANCIAL STATEMENTS 2021
4.2.2 Share-based incentive plan 2017
On 15 December 2017, Elisa's Board of Directors decided on the share-based incentive plan for key personnel for 2018–2022.
The new performance-based incentive plan has three performance periods: the calendar years 2018–2020, 2019–2021 and 2020–2022. The Board of Directors decides the performance
criteria for the plan and required performance levels for each criterion at the beginning of a performance period. After the end of the performance period, the reward is paid as a combination
of company shares and cash after the completion of financial statements. The cash portion intends to cover the tax obligations resulting from the share-based payment. As a rule, no reward
will be paid, if a participant’s employment or service ends before the reward payment.
The earnings criteria for the performance period 2020–2022 are based on earnings per share (EPS), on development of new businesses and other key objectives. The total maximum amount
to be paid for the performance period 2020–2022 equals the value of 407,600 Elisa shares.
The earnings criteria for the performance period 2019–2021 are based on earnings per share (EPS), on development of new businesses and other key objectives. The total maximum amount
to be paid for the performance period 2019–2021 equals the value of 536,000 Elisa shares.
The earnings criteria for the performance period 2018–2020 are based on earnings per share (EPS), on development of new businesses and other key objectives. The total maximum amount
to be paid for the performance period 2018–2020 equals the value of 550,000 Elisa shares.
The CEO of the Company and a member of the Corporate Executive Board must hold a minimum of 50 per cent of the net shares given on the basis of the plan, until the CEO’s shareholding
in the Company in total corresponds to the value of his annual salary and, respectively, the member’s shareholding in the Company in total corresponds to the value of half of his or her
annual salary.
Amount of share incentives and terms and assumptions in the fair value calculation
Performance
period 2020–2022
Performance
period 2019–2021
Performance
period 2018–2020
Maximum number of rewards granted, pcs 407,600 536,000 550,000
Grant date 31.12.2019 31.12.2018 31.12.2017
Fair value of share at the grant date, EUR
(1
44.00 31.13 28.22
Share price at the grant date, EUR 49.25 36.08 32.72
Estimated realisation of share price after performance period
(2
54.62 38.63 35.57
Performance period starts 1.1.2020 1.1.2019 1.1.2018
Performance period ends 31.12.2022 31.12.2021 31.12.2020
Estimated realisation of earning criteria at the beginning of performance period, % 61 74 85
Estimated realisation of earning criteria at the closing date, % 62 31
Realisation of earning criteria, % 39
Distributed number, pcs 95,241
Volume weighted average share price at distribution date, EUR 49.39
Distributed number out of the maximum number of share rewards granted, % 17
Number of participants in the plan at the closing date 177 175 164
1)
The fair value of the share is the share price at the grant date, less estimated dividend. Estimated dividend used in the calculation equals the dividend for the previous period.
2)
The estimated realisation of share price is calculated using the CAP model (Capital Asset Pricing Model). The basic variables in the model are interest rate level, general risk premium and the so-called beta risk on the Elisa share. The assumed dividend
equals the dividend for the previous period.
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ELISA FINANCIAL STATEMENTS 2021
4.2.3 Committed share-based incentive plan 2019
On 31 January 2019, Elisa's Board of Directors decided on a new committed share-based incentive plan for 2019–2025.
The rewards granted under the plan have a restriction period of 1–3 years. The potential reward is based on the validity of the key person’s contract of employment. The maximum number of
rewards paid under the plan equals the value of 500,000 Elisa shares.
Amount of share incentives and terms and assumptions in the fair value calculation 2019–2020
Maximum number of rewards granted, pcs 22,500
Grant date 10.6.2019
Fair value of the share at the grant date, EUR
(1
38.00
Share price at the grant date, EUR 41.50
Estimated realisation of share price after the performance period
(2
43.38
Restriction period started 10.6.2019
Restriction period ends 10.6.2021
Estimated realisation of earnings criteria at the beginning of performance period, % 100
Earning criteria, realised % 100
Shares transferred, pcs 9,152
Average exchange rate on the day of transfer, EUR 51.00
Amount distributed as shares of the maximum amount of share rewards granted, % 41
1)
The fair value of the share is the share price at the grant date, less estimated dividend. Estimated dividend used in the calculation equals the dividend for the previous period.
2)
The estimated realisation of share price is calculated using the CAP model (Capital Asset Pricing Model). The basic variables in the model are interest rate level, general risk premium and the so-called beta risk on the Elisa share. The assumed dividend
equals the dividend for the previous period.
Expenses of share-based incentive plans
In 2021, EUR 8.0 (6.8) million of expenses were recognised for the share incentive plans.
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41
ELISA FINANCIAL STATEMENTS 2021
Accounting principles – Share-based payments:
In the share-based payment scheme, the total reward amount is the gross earning of shares granted less the applicable withholding tax, with the remaining net amount being paid to
the reward recipient in shares. Compensation costs for the share-based incentive plans are entirely recognised as equity-settled arrangements. As a result, share-based incentive costs,
recognised in equity, also include a cash component that is equal to the value of the shares paid to cover the taxes and tax-like costs incurred under the reward. The Group settles a cash
payment of a portion, required to meet withholding tax obligations, to the Tax Administration. The withholding tax paid to the Tax Administration is recognised directly in equity.
Share-based incentive plans are measured at the fair value at the grant date. If the assumption regarding the realised number of shares changes, an adjustment will be recorded through
profit and loss. The share-based incentive plans do not include any other non-market based terms and conditions. Transfer restrictions related to the share-based incentive plans are out of
the scope of the fair value measurement and expense recognition.
Accounting policies that require management's judgements – Share-based payments:
The expense recognition for the share-based incentive plans is based on an estimate of the fulfilment of the share incentive plan criteria and the development of Elisa Group’s share price.
The fulfilment of the share incentive plan criteria and the development of the share price might deviate from the estimates.
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ELISA FINANCIAL STATEMENTS 2021
4.3 Pension obligations
The Group's pension obligations are classified as either defined contribution plans or defined benefit plans. Under a defined contribution plan, the Group pays fixed contributions to pension
insurance companies. If the pension insurance company does not hold sufficient assets to pay all employees the benefits in question, the Group will have no legal or constructive obligation to
pay further contributions. The contributions for defined contribution pension plans are recognised as expenses during the financial year, in which the payment obligation has arisen. All other
plans not meeting the above criteria are classified as defined benefit plans.
The pension schemes for the Group's personnel in Finland are covered by the Employees Pensions Act (TyEL) and are arranged through pension insurance companies. The Finnish Employees
Pensions Act (TyEL) is a defined contribution plan. Supplementary pensions are arranged through life insurance companies. Some supplementary pension plans and pension plans under
the responsibility of some group companies have been classified as defined benefit plans. The defined benefit plans are mainly funded by yearly contributions to the insurance companies,
based on actuarial valuation. Local tax and other legislation are applied to the pension plans' arrangements. Only Elisa Corporation has defined benefit plans. The pension plans in foreign
subsidiaries are defined contribution plans.
Post-employment benefits of key management are described in Note 4.1.
The net dened benet related to pension liability
EUR million 2021 2020
Present value of unfunded obligations –3,6 –2.9
Present value of funded obligations –59,0 –61.1
Fair value of plan assets 48,2 52.9
B/S Net pension liability (-) / receivable (+) in the statement of financial position –14,4 –11.0
Pension expenses recognised in the statement of comprehensive income
EUR million 2021 2020
Expense recognised in profit or loss
Service cost 0.1 0.2
Net interest 0.1 0.1
0.2 0.4
Remeasurements 3.5 –5.7
Tax effect of the remeasurements –0.7 1.1
I/S
2.8 –4.5
4.3 Pension obligations
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Reconciliation of the net dened benet obligations in the statement of nancial position
EUR million 2021 2020
Net defined benefit obligation at the beginning of the period 11.0 16.7
Pension expenses recognised in profit or loss 0.2 0.4
Remeasurements 3.5 –5.7
Contributions paid by the employer –0.3 –0.4
Net defined benefit obligation at the end of period 14.4 11.0
Changes in the present value of the dened benet obligations
EUR million 2021 2020
Obligation at the beginning of the period –63.9 –71.3
Current service cost –0.1 –0.2
Interest expenses –0.3 –0.5
Remeasurements
Actuarial gain (+) or loss (-) arising from changes in economic assumptions –3.5 3.5
Gain (+) or loss (-) arising from experience adjustments 0.8 –0.3
Benefits paid 4.5 4.8
Obligation at the end of period –62.6 –63.9
Changes in the fair value of plan assets
EUR million 2021 2020
Fair value of plan assets at the beginning of the period 52.9 54.6
Interest income 0.3 0.4
Remeasurements, gain (+) or loss (-) –0.7 2.4
Benefits paid –4.5 –4.8
Contributions paid by the employer 0.3 0.4
Fair value of plan assets at the end of period 48.2 52.9
The principal actuarial assumptions used 2021 2020
Discount rate, % 0.7 0.6
Future pension increase, % 1.9 1.3
Inflation, % 1.8 1.0
Sensitivity analysis of net dened benet obligation
Effect on the net defined
benefit obligation, EUR million
Change in actuarial assumptions 2021 2020
Discount rate + 0.5% –1.2 –0.9
Future pension increase +0.5% 3.9 4.0
Expected mortality +1 year 0.8 0.6
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ELISA FINANCIAL STATEMENTS 2021
When calculating a change in one assumption of the sensitivity analysis, the other assumptions are assumed to remain unchanged. In practice, this is not likely to happen, and some changes
in the assumptions may correlate with each other. The figures in the sensitivity analysis have been calculated using the same method which is applied when calculating defined benefit
obligations.
Defined benefit obligations expose the Group to various risks. Decreases in the gain of corporate bonds, higher inflation and higher expected retirement age may predispose the Group to the
growth of defined benefit obligations. On the other hand, since the fair value of assets is calculated using the same discount rate which is used when calculating the obligation, the change in
the discount rate will only affect the net defined benefit obligation. Similarly, a rise in life expectancy will increase the assets and affect the net defined benefit obligation.
Weighted average duration of the obligation is 12.8 (12.6) years.
The Group expects to contribute EUR 0.4 (0.7) million to defined benefit pension plans in 2022.
The assets of the defined benefit obligations are 100 per cent acceptable insurances.
Accounting principles – Pension obligations:
The Group's defined benefit obligation has been calculated separately from each plan using the projected unit credit method. Pension expenses calculated by authorised actuaries are
recognised in profit or loss over the employees’ working lives. The rate used to discount the present value of the defined benefit obligation is determined by reference to market yields
of high-quality corporate bonds. If such information is not available, the market yields on government bonds are used. The maturity of corporate bonds and government bonds are
substantially consistent with the maturity of pension obligations. The present value of defined benefit obligation is reduced by the fair value of the plan assets at the end of the reporting
period. The net defined benefit pension liability is recognised in the statement of financial position.
Current service cost and net interest of the net defined benefit liability are recorded in employee expenses on the income statement. The remeasurements of the net defined benefit
liability, for example actuarial gains and losses and the return on plan assets, are recognised in other comprehensive income during the financial period in which they incur.
Accounting policies that require management's judgements – Pension obligations:
The book value of defined pension obligations is based on actuarial valuations. Assumptions and estimates used in the valuations include, among others, the discount rate used on the
valuation of the pension obligation and plan assets as well as the development of inflation and salary levels.
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ELISA FINANCIAL STATEMENTS 2021
5 Tangible and intangible assets
5.1 Depreciation, amortisation and impairment
EUR million 2021 2020
Tangible assets
Land and water areas
Right-of-use assets 1.0 1.0
Buildings and constructions
Owned buildings and constructions 12.4 12.6
Right-of-use assets 17.6 17.1
Telecom devices, machinery and equipment
Owned telecom devices, machinery and equipment 173.2 178.7
Right-of-use assets 3.1 3.9
Other tangible assets 0.1 0.0
207.5 213.2
Intangible assets
Goodwill 6.1
Customer base 6.6 6.6
Other intangible assets 52.5 50.2
59.1 63.0
I/S
266.6 276.2
Impairment losses were EUR 0.0 (6.1) million.
5. Tangible and Intangible assets 5.1 Depreciation, amortisation and
impairment
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5.2 Property, plant and equipment
2021
EUR million
Land and
water
areas
Buildings
and
structures
Telecom devices,
machinery and
equipment
Other
tangible
assets
Tangible assets
under
construction Total
Acquisition cost at 1 Jan. 11.1 298.9 3,781.9 35.7 28.5 4,156.1
Business acquisitions 1.1 –0.4 1.2 0.7 0.2 2.8
Additions 0.1 12.7 162.6 0.1 26.5 201.8
Disposals 0.0 –0.5 –15.0 0.0 –15.4
Reclassifications 0.0 5.3 18.3 –21.3 2.3
Translation differences 0.0 0.0 0.1 0.0 0.0 0.1
Acquisition cost at 31 Dec. 12.3 316.0 3,949.0 36.5 33.9 4,347.7
Accumulated depreciation and impairment at 1 Jan. 0.0 183.7 3,202.2 35.1 3,421.0
Depreciation and impairment 12.4 173.2 0.1 185.7
Accumulated depreciation on business acquisitions 0.1 1.0 0.6 1.7
Accumulated depreciation on disposals and
reclassifications –0.3 –13.1 –13.5
Translation differences 0.0 0.0 0.0 0.1
Accumulated depreciation and impairment at 31 Dec. 0.0 195.9 3,363.3 35.8 3,595.0
B/S Book value at 1 Jan. 11.1 115.2 579.7 0.7 28.5 735.1
B/S Book value at 31 Dec. 12.3 120.0 585.7 0.8 33.9 752.7
5.2 Property, plant and equipment
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ELISA FINANCIAL STATEMENTS 2021
2020
EUR million
Land and
water
areas
Buildings
and
structures
Telecom devices,
machinery and
equipment
Other
tangible
assets
Tangible assets
under
construction Total
Acquisition cost at 1 Jan. 10.9 280.5 3,619.5 35.7 31.7 3,978.3
Business acquisitions 2.7 0.3 0.0 1.9 5.0
Additions 0.2 14.2 158.6 0.0 16.4 189.3
Business disposals 0.0 0.0
Disposals –13.2 0.1 –13.1
Reclassifications 0.0 1.5 16.8 0.0 –21.5 –3.2
Translation differences 0.0 –0.2 0.0 –0.2
Acquisition cost at 31 Dec. 11.1 298.9 3,781.9 35.7 28.5 4,156.1
Accumulated depreciation and impairment at 1 Jan. 0.0 171.2 3,040.3 35.0 3,246.5
Depreciation and impairment 0.0 12.6 178.7 0.0 191.3
Accumulated depreciation on business acquisitions 0.0 0.0
Accumulated depreciation on disposals and
reclassifications –0.1 –16.6 0.0 –16.7
Translation differences 0.0 –0.1 0.0 –0.1
Accumulated depreciation and impairment at 31 Dec. 0.0 183.7 3,202.2 35.1 3,421.0
B/S Book value at 1 Jan. 10.9 109.3 579.2 0.6 31.7 731.8
B/S Book value at 31 Dec. 11.1 115.2 579.7 0.7 28.5 735.1
On 31 December 2021, the investment commitments for tangible and intangible assets were EUR 55.7 (46.9) million.
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Accounting principles – Property, plant and equipment:
Property, plant and equipment are recognised in the statement of financial position at the original cost. Property, plant and equipment are valuated at acquisition cost less accumulated
depreciation and impairments. Depreciation is recorded on a straight-line basis over the useful lives of tangible assets. The residual value and the useful life of an asset is reviewed at year-
end and adjusted, if necessary.
Subsequent costs, such as renewals and major renovation projects, are capitalised when it is probable that future economic benefit will flow to the Group. Ordinary repair, service and
maintenance costs are recognised as expenses during the financial period in which they incur.
Government grants, such as grants received in connection with the acquisition of fixed assets, are recorded as a deduction from the carrying amount of the fixed assets. Government grants
are recognised in profit and loss in the form of lower depreciation over the useful life of the fixed asset.
Expected useful life of property, plant and equipment:
Buildings and structures 25–40 years
Machinery and equipment in buildings 10–25 years
Telecommunications network
(line, backbone, area, subscription, cable TV) 8–15 years
Exchanges and concentrators (fixed and mobile core) 6–10 years
Equipment for the network and exchanges 3–8 years
Telecommunication terminals 2–4 years
Other machinery and equipment 3–5 years
Land and water areas are not depreciated.
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5.3 Right-of-use assets
2021
EUR million
Land and
water
areas
Buildings
and
structures
Telecom devices,
machinery and
equipment Total
Acquisition cost at 1 Jan. 14.0 114.0 131.7 259.7
Business acquisitions 0.8 0.3 1.2
Additions 1.5 14.3 2.1 18.0
Disposals –1.1 –1.1
Reclassifications –2.8 –2.9
Translation differences 0.0 0.0 0.0
Acquisition cost at 31 Dec. 15.5 129.1 130.3 274.9
Accumulated amortisation and impairment at 1 Jan. 1.9 38.8 124.4 165.1
Depreciation and impairment 1.0 17.6 3.1 21.8
Accumulated amortisation on disposal and reclassifications –0.2 –2.8 –3.0
Translation differences 0.0 0.0
Accumulated depreciation and impairment at 31 Dec. 2.9 56.3 124.7 183.9
B/S Book value at 1 Jan. 12.1 75.2 7.3 94.6
B/S Book value at 31 Dec. 12.6 72.8 5.5 91.0
5.3 Right-of-use assets
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2020
EUR million
Land and
water
areas
Buildings
and
structures
Telecom devices,
machinery and
equipment Total
Acquisition cost at 1 Jan. 12.8 96.0 129.7 238.4
Business acquisitions 0.1 0.1
Additions 1.2 18.2 2.0 21.5
Reclassifications –0.2 –0.1 –0.3
Translation differences 0.0 0.0 0.0
Acquisition cost at 31 Dec. 14.0 114.0 131.7 259.7
Accumulated depreciation and impairment at 1 Jan. 0.9 21.9 120.6 143.4
Depreciation and impairment 1.0 17.1 3.9 22.0
Accumulated depreciation on disposal and reclassifications –0.2 –0.2 –0.3
Translation differences 0.0 0.0 0.0
Accumulated depreciation and impairment at 31 Dec. 1.9 38.8 124.4 165.1
B/S Book value at 1 Jan. 11.9 74.0 9.1 95.0
B/S Book value at 31 Dec. 12.1 75.2 7.3 94.6
On 31 December 2021, the lease commitments for lease contracts commencing in the future in accordance with IFRS 16 were EUR 4.8 (1.0) million.
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Accounting principles – Right-of-use assets:
A lease contract is a contract or a part of a contract that conveys the right to use the underlying asset for a specified period in exchange for consideration. When a new contract is made,
Elisa assesses whether the contract in question is a lease contract or contains a lease contract.
The Group's leases mainly consist of leases for business premises, telecom and equipment premises, retail facilities and vehicles. Last mile rentals from other operators and indefeasible
right to use (IRU) contracts mainly do not fulfil the definition of a lease.
The right-of-use assets and lease liabilities recognised in the balance sheet are measured at present value of future lease payments at the time of initial recognition. The lease payments
are discounted using industry-specific interest rates considering the length of the lease contracts. The depreciation costs of the right-of-use assets and the interest portion of the lease
liabilities are expensed. The depreciation of right-of-use assets is recorded on a straight-line basis starting on the commencement of the agreement over the useful life of the right-of-use
asset or over the lease period, depending on which of these is shorter.
The right-of-use asset is adjusted in certain cases with remeasurements of the lease liability. Lease liabilities are mainly remeasured when future payments change due to index or interest
rate changes or when the Group's assessment of using a possible extension option changes. When a lease liability is remeasured, the book value of the right-of-use asset is usually
adjusted accordingly.
Short term and low value leases are recognised in the income statement and presented as off-balance sheet commitments. Leases with the lease term of 12 months or less are short term
leases and leases for which the underlying asset is of low value are low value leases. Rental expenses for short term and low value leases are described under Note 8.4 Off-balance sheet
leases and other commitments.
The Group separates the service components included in the lease agreements of business premises, retail facilities and vehicles and recognises their share as an expense in the income
statement.
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5.4 Intangible assets
2021
EUR million Goodwill
Customer
base
Other
intangible
assets
Intangible
assets under
construction Total
Acquisition cost at 1 Jan. 1,152.5 126.9 801.7 10.2 2,091.4
Business acquisitions 8.6 0.8 3.6 13.0
Additions 34.4 10.9 45.3
Disposals 0.0 0.0
Reclassifications –82.5 5.3 –7.7 –84.9
Translation differences –0.5 –0.2 0.1 –0.7
Acquisition cost at 31 Dec. 1,160.6 45.0 845.1 13.4 2,064.1
Accumulated amortisation and impairment at 1 Jan. 21.1 110.5 618.3 749.9
Depreciation and impairment 6.6 52.5 59.1
Accumulated depreciation on business acquisitions 2.0 2.0
Accumulated amortisation on disposal and reclassifications –82.5 –1.9 –84.4
Translation differences 0.2 –0.1 0.0 0.1
Accumulated depreciation and impairment at 31 Dec. 21.2 34.5 671.0 726.7
Book value at 1 Jan. 1,131.4 16.4 183.4 10.2 1,341.5
Book value at 31 Dec. 1,139.4 10.5 174.2
(1
13.4 1,337.4
5.4 Intangible assets
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2020
EUR million Goodwill
Customer
base
Other
intangible
assets
Intangible
assets under
construction Total
Acquisition cost at 1 Jan. 1,101.2 118.8 758.3 13.0 1,991.3
Business acquisitions 49.0 7.8 3.2 60.0
Additions 47.8
(2
7.7 55.5
Disposals –0.9 0.0 –0.9
Reclassifications –6.6 –10.5 –17.0
Translation differences 2.3 0.4 0.0 2.6
Acquisition cost at 31 Dec. 1,152.5 126.9 801.7 10.2 2,091.4
Accumulated depreciation and impairment at 1 Jan. 15.0 103.7 583.9 702.6
Depreciation and impairment 6.1 6.6 50.2 63.0
Accumulated depreciation on business acquisitions 1.1 1.1
Accumulated depreciation on disposals and reclassifications –16.9 –16.9
Translation differences 0.0 0.2 0.0 0.2
Accumulated depreciation and impairment at 31 Dec. 21.1 110.5 618.3 749.9
Book value at 1 Jan. 1,086.1 15.1 174.4 13.0 1,288.7
Book value at 31 Dec. 1,131.4 16.4 183.4
(1
10.2 1,341.5
1)
Includes software in carrying amount of EUR 85.1 (91.3) million.
2)
Includes 26 GHz spectrum licence in carrying amount of EUR 7.0 million.
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Accounting principles – Intangible assets:
An intangible asset is recognised only if it is probable that the expected future economic benefits attributable to the asset will flow to the Group and the cost of the asset can be measured
reliably. Subsequent costs related to the intangible assets are capitalised only if the future economic benefits that will flow to the Group exceed the level of performance originally assessed.
In other cases, the costs are recognised the expense is incurred.
In connection with the business combinations, intangible assets, such as customer base and brand, are measured at fair value. Other intangible assets are measured at original acquisition
cost and amortised on a straight-line basis over their estimated useful life.
Amortisation periods for intangible assets:
Customer base 3–5 years
Brand 10 years
Development expenses 3 years
IT software 5 years
Other intangible assets 3–10 years
Research costs are recorded as expenses in the income statement. Development expenses are capitalised from the date the product is technically feasible, it can be utilised commercially
and the asset is expected to generate future economic benefit. Otherwise, development costs are recorded as an expense. Development costs initially recognised as expenses cannot be
capitalised subsequently.
Public grants related to research and development projects are recognised as other operating income, when research and development costs are recognised as an annual expense. If the
public grant relates to the product development cost to be capitalised, the grant received reduces the capitalised acquisition costs.
The Group assesses at each balance sheet date whether there is any indication that an asset may be impaired. If such evidence exists, the recoverable amount of the asset is assessed.
Additionally, regardless of any existence of impairment indications, the recoverable amount of intangible assets under construction is assessed annually. The Group does not have any
intangible assets with an indefinite useful life.
The recoverable amount of the asset is its fair value less cost of disposal or its value in use, if it is higher. Value in use is a discounted present value of future net cash flows expected to be
derived from an asset. An impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. An impairment loss is recognised immediately in the income
statement. An impairment loss is reversed, if there are indications that a change in circumstances has taken place, and the asset’s recoverable amount has changed since the impairment
loss was recognised. However, the reversal of an impairment loss will never exceed the carrying amount of the asset had no impairment loss been recognised.
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5.4.1 Goodwill
Goodwill is allocated to the Group’s cash generating units as follows:
EUR million 2021 2020
Consumer Customers 641.0 641.0
Corporate Customers 498.4 490.4
B/S 1,139.4 1,131.4
The reported operating segments based on Elisa's organisational and management structure are Consumer Customers and Corporate Customers.
Impairment testing:
In annual impairment tests, the recoverable amount of the segments is determined based on the value in use, which is calculated on the basis of projected discounted cash flows (DCF
model). Covering a five-year period, the cash flow projections are based on plans approved by the management. The projections are mostly consistent with information from external
sources and reflect actual development. The used discount rate before taxes is 5.3 per cent (6.3 per cent in comparison period ). Cash flows after five years have been projected by
estimating the change in future cash flows as 2 per cent growth.
As a result of the performed impairment tests, there was no need for impairment of the segments’ goodwill.
Usage of the DCF model requires forecasts and assumptions concerning market growth, prices, volume development, investment needs and general interest rate. The major sensitivities in
the performance are associated with forecast revenue and profitability levels.
Recognition of impairment losses in comparison period:
In addition to the Group's annual impairment test, a separate impairment test was performed on the businesses of Banana Fingers Ltd and Videra Oy, Corporate Customers segment, as
part of the assessment of strategic alternatives. Based on the separate impairment test, a EUR 6.1 million impairment of goodwill was recognised.
The main cause of the impairment was a lower revenue than previously expected.
As a result of the performed impairment tests, there was no need for impairment of the segments’ goodwill.
Sensitivity analysis
Projection parameters applied
Consumer
Customers
2021
Corporate
Customers
2021
Consumer
Customers
2020
Corporate
Customers
2020
Amount in excess of CGU carrying value, EUR million 7,973 3,871 7,497
(2
3,640,
(3
EBITDA margin on average, %
(1
38.4 31.7 38.4 30.7
Horizon growth, % 2.0 2.0 2.0 2.0
Pre-tax discount rate, % 5.3 5.3 5.3 5.3
1)
On average during a five-year projection period.
2)
After the recognition of impairment of the goodwill relating to the Banana Fingers business, the amount by which the book value of the Consumer Customers unit is exceeded is EUR 7,500 million.
3)
After the recognition of impairment of the goodwill relating to the Videra Oy business, the amount by which the book value of the Corporate Customers unit is exceeded is EUR 3 643 million.
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Change in projection parameters that makes the fair value equal to book value
Consumer
Customers
2021
Corporate
Customers
2021
Consumer
Customers
2020
Corporate
Customers
2020
EBITDA margin on average, % –20.9 –16.0 –20.0
(4
–15.6
(5
Horizon growth, % –35.5 –29.0 –28.7
(4
–28.7
(5
Pre-tax discount rate, % 19.9 16.6 22.0
(4
21.7
(5
4)
After the recognition of goodwill impairment loss relating to the Banana Fingers business the change in EBITDA margin should be approximately –20.0 per cent, the change in horizon growth –28.8 per cent, and the change in pre-tax discount rate 16.7
per cent.
5)
After the recognition of goodwill impairment loss relating to the Videra Oy business the change in EBITDA margin should be approximately –15.6 per cent, the change in horizon growth –29.0 per cent, and the change in pre-tax discount rate 16.5 per
cent.
Accounting principles – Goodwill:
Goodwill arising from business combinations prior to 2004 is accounted for in accordance with the previous financial statements regulations and the book value is the assumed
acquisition cost in accordance with IFRS. Business combinations incurred between 1 January 2004 and 31 December 2009 have been accounted for in accordance with IFRS 3 (2004).
Goodwill arising from business combinations incurred after 1 January 2010 represents the excess of the consideration transferred over the Group’s interest in the net fair value of the
identifiable net assets acquired and the amount of non-controlling interest, and in a business combination achieved in stages, the acquisition-date fair value of the equity interest.
Goodwill is not amortised. Goodwill is tested for impairment annually, or more frequently, if there is any indication of a potential impairment. For the purpose of impairment testing,
goodwill is allocated to the cash-generating units (CGU’s) – Consumer Customers and Corporate Customers. Goodwill is carried at its cost less any accumulated impairment losses.
An impairment loss is recognised, when the carrying amount of an asset exceeds its recoverable amount. An impairment loss is recognised immediately in the income statement. If an
impairment loss is allocated to a cash-generating unit, it is first allocated to reduce the carrying amount of any goodwill allocated to the cash-generating unit, and then to the other assets
of the unit on a pro rata basis. An impairment loss recognised for goodwill is never reversed under any circumstances.
Accounting policies that require management's judgements – Goodwill impairment testing:
The recoverable amount of cash-generating units is determined by calculations based on value in use, the preparation of which requires estimates and assumptions. The main
uncertainties are associated with the estimated levels of revenue and profitability and the discount rate. Any changes may lead to the recognition of impairment losses.
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6 Inventories, trade and other receivables, trade and other liabilities
6.1 Inventories
EUR million 2021 2020
Materials and supplies 23.7 21.6
Finished goods 59.1 46.4
B/S 82.8 67.9
An impairment on inventories of EUR 2.1 (1.5) million was recognised during the financial period.
6.2 Trade and other receivables
6.2.1 Current receivables
EUR million 2021 2020
Trade receivables 395.7 373.3
Impaired trade receivables –5.4 –13.3
Contract assets related to revenue 4.3 2.6
Contract assets related to costs 5.7 5.7
Accrued income 79.5 70.1
Finance lease receivables 11.9 9.4
Loan receivables 0.1 0.1
Receivables from associated companies 0.1 0.1
Other receivables 14.3 9.9
B/S 506.3 457.8
Accrued income includes interest receivables and cost accruals from the operating activities.
6. Inventories, trade and other receivables, trade and other lia-
bilities
6.1 Inventories
6.2 Trade and other receivables
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Aging of trade receivables 2021 2020
EUR million
Nominal
value Impairment
Carrying
amount
Nominal
value Impairment
Carrying
amount
Not past due 354.0 –0.3 353.8 326.9 –0.3 326.6
Past due
Past due less than 30 days 28.2 –0.2 28.0 26.0 –1.0 24.9
Past due 31–60 days 5.3 –0.4 4.9 5.8 –0.8 5.0
Past due 61–90 days 2.7 –0.3 2.4 2.6 –0.6 2.0
Past due 91–180 days 2.3 –1.5 0.8 3.2 –2.9 0.4
Past due more than 181 days 3.2 –2.7 0.5 8.8 –7.8 1.0
395.7 –5.4 390.3 373.3 –13.3 360.0
The book value of trade receivables approximates their fair value. The credit risk associated with trade receivables is described in note 7.1. The maximum exposure to credit risk is the carrying
amount of the trade receivables on the closing date, EUR 390.3 million.
6.2.2 Non-current receivables
EUR million 2021 2020
Loan receivables 0.0 0.0
Trade receivables 92.0 87.3
Finance lease receivables 6.2 3.9
Accrued income 3.1 3.0
Non-current derivatives 1.6 0.4
Other non-current receivables 0.4 0.3
B/S 103.2 94.9
The effective interest rate on receivables (current and non-current) was 0.00 (0.00) per cent.
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Gross finance lease receivables – maturity of minimum lease receivables
EUR million 2021 2020
Within one year 12.1 9.5
Later than one year, not later than five years 6.3 4.0
18.4 13.5
Future finance income –0.3 –0.2
Present value of finance lease receivables 18.1 13.3
Maturity of present value of future minimum lease receivables
EUR million 2021 2020
Within one year 11.9 9.4
Later than one year, not later than five years 6.2 3.9
18.1 13.3
Lease periods vary from one to five years, and conditions vary in terms of index clauses.
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6.3 Trade and other liabilities
EUR million 2021 2020
Non-current
Trade payables
(1
8.1 14.7
Advances received 4.4 4.9
Derivative instruments 0.0
Other liabilities
(2
28.5 12.5
B/S 41.0 32.2
Current
Trade payables 203.8 179.3
Advances received 9.3 8.2
Contract liabilities, from revenue 27.7 13.4
Accrued employee-related expenses 60.8 54.3
Other accruals 8.4 21.4
Liabilities to associated companies 0.0 0.0
Other liabilities 91.6 79.8
B/S 401.6 356.3
442.6 388.5
1)
Non-current trade payables include liabilities of EUR 5.3 (10.5) million for 3540–3670 MHz spectrum licence, EUR 2.8 (4.2) million for 26 GHz spectrum licence. Current trade payables include liabilities of EUR 5.3 (5.3) million for a 3540–3670 MHz
spectrum licence, EUR 1.4 (1.4) million for a 26 GHz spectrum licence and EUR 0.0 (4.4) million for 700 MHz spectrum licence.
2)
Other non-current liabilities include contingent considerations and contingent redemption obligations of non-controlling interests of EUR 21.4 (6.9) million from the business acquisitions.
Other accruals consist of accrued interest expenses and other cost accruals.
6.3 Trade and other liabilities
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Accounting principles – Inventories, trade and other receivables, trade and other liabilities:
Inventories:
Inventories are measured at their acquisition cost or at the net realisable value, if lower than the cost. In ordinary course of business net realisable value is the estimated selling price less
necessary estimated costs associated with the eventual sale. The cost is determined using a weighted average price.
Receivables:
Receivables are valued at amortised cost and recognised at the original invoiced amount. The Group records the provision for the impairment losses arising from trade receivables based
on historical default rates over the expected life and recognises the impairment loss when the trade receivables are stated as lost. The impairment loss is adjusted by the amount of
factored receivables.
Trade receivables and other receivables are classified as non-current receivables, if they mature in more than 12 months. In other cases, they are classified as current receivables.
The Group offers the consumer customers various payment methods granting possibility to purchase equipment on 12–36 months credits. At the time of the sale of the equipment, such
transactions are recorded as revenue and trade receivable. The trade receivables are classified as non-current, if their maturity exceeds 12 months.
Finance lease receivables:
The Group acts as a lessor in the lease arrangements for video conferencing and data terminal equipment, which is accounted for as finance leases. At the time of the sale of the
equipment, the proceeds is recorded as revenue and receivables at present value. Rental income received is recorded as financial income and a reduction of the receivables, reflecting a
constant periodic rate of return on the net investment.
Trade payables:
The current value of trade payables and other liabilities is a reasonable estimate of their fair value. The payment terms of the Group's trade payables correspond to conventional corporate
payment terms.
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7 Capital structure
7.1 Financial risk management
Elisa's central treasury department manages the exchange rate, interest rate, liquidity and refinancing risks for the entire Group. The financing policies, covering funding and investment
principles, are annually discussed and ratified by the Audit Committee of the Board of Directors. Funding risks are monitored as a part of the regular business monitoring procedure.
Market risks
7.1.1 Interest rate risk
Elisa is exposed to interest rate risk mainly through its financial liabilities. In order to manage interest rate risk, the Group’s borrowings and investments are diversified in fixed and variable-
rate instruments. Derivative financial instruments may also be used in managing interest rate risk. The purpose is to minimise the negative effects caused by changes in the interest rate
level.
Timing of interest rate changes for interest-bearing financial liabilities (EUR million) 31 Dec. 2021, at nominal value
Time of interest rate change
Less than
1 year
Between
1 and 5 years
Over
5 years Total
Variable-rate financing instruments
Bank loans 100.0 100.0
Schuldschein loan
(1
100.0 100.0
Fixed-rate financing instruments
Bonds 600.0 300.0 900.0
Bank loans 150.0 3.5 153.5
Lease liabilities 18.1 32.1 41.3 91.6
218.1 782.1 344.8 1,345.1
1)
On 30 March 2021, Elisa issued a EUR 100 million Schuldschein loan for short-term financing. The loan matures on 4 May 2022. The loan was arranged by Landesbank Baden-Württemberg.
On 31 December 2021, the Group's interest-bearing financial assets consisted of commercial papers and bank deposits amounting to EUR 0.0 million and cash in the bank amounting to
EUR 114.1 million.
Lease contracts contain index-linkages, which affect the amounts of lease liabilities, right-of-use assets and depreciation.
The sensitivity analysis includes the financial liabilities at the balance sheet date. The change in interest rate level is assumed to be one percentage point and the effect on income is
calculated before taxes. The interest rate position is assumed to include interest-bearing financial liabilities and receivables, as well as interest rate swaps on the balance sheet date,
assuming that all the contracts will be valid and stay unchanged for the entire year.
EUR million 2021 2020
Change in interest rate level +/- 1% –1.8/+0.0 –1.3/+0.1
7. Capital structure 7.1 Financial risk management
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7.1.2 Foreign exchange risk
Most of Elisa Group’s cash flows are denominated in euros, which means that the company's exposure to exchange rate risk (economic risk and transaction risk) is low. Business related
exchange rate risks arise from Polystar Osix Ab and its subsidiaries, international interconnection traffic and, to a minor extent, other acquisitions. The most essential currencies are the
US dollar (USD), Swedish Krona (SEK), the Canadian dollar (CAD, the British pound (GBP), the Australian dollar (AUD) and the Norwegian Krone (NOK). The impact of other currencies is
insignificant.
During the financial year, exchange rate hedges have been used against changes in the value of the Swedish Krona. Elisa Corporation has hedged Swedish Krona denominated expenses with
foreign currency forward contracts. The Group's financial liabilities do not include exchange rate risk.
The translation difference exposure from the foreign subsidiaries included in consolidated equity mainly consists of Polystar subgroup. The translation difference exposure has not been
hedged during the reporting period.
Foreign currency position 2021 2020
EUR million Trade receivables Trade payables Trade receivables Trade payables
USD 11.8 5.3 3.6 9.0
SEK 4.9 0.4 3.2 0.3
CAD 1.1 0.0 1.1 0.0
GBP 0.4 0.5 0.4 0.4
RUB 0.1 0.0 0.1 0.0
CHF 0.1 0.0 0.3 0.0
NOK 0.5 0.0 0.3 0.0
AUD 0.0 0.1 0.0
SGD 0.0 0.1 0.1
HKD 0.1 0.0
The Group level currency exposure is the basis for the sensitivity analysis of foreign exchange risk. Assuming euro to appreciate or depreciate 20 percent against all other currencies, the
impact on cash flows would be:
EUR million 2021 2020
USD +/-,1.3 -/+,1.1
SEK +/-,0.9 +/-,0.6
CAD +/-,0.2 +/-,0.2
GBP -/+,0.0 +/-,0.0
RUB +/-,0.0 +/-,0.0
CHF +/-,0.0 +/-,0.0
AUD -/+,0.0 +/-,0.0
Other +/-,0.1 +/-,0.1
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7.1.3 Liquidity risk
The objective of liquidity risk management is to ensure the Group’s financing under all circumstances. The Group’s most important financing arrangement is an EMTN programme of
EUR 1,500 million, under which the Company issued bonds for EUR 900 million. Furthermore, the Company has a EUR 350 million commercial paper programme and committed credit limit of
EUR 300 million, out of which EUR 130 million credit limit will fall due on 22 September 2026 and EUR 170 million will fall due on 7 July 2024. Both credits were fully undrawn on 31 December
2021. The loan margin is determined based on the Company’s credit rating.
As part of ensuring its financing, Elisa has acquired international credit ratings. Moody’s Investor Services have rated Elisa’s long-term commitments as Baa2 (outlook stable). Standard & Poor
Global has rated the company's long-term commitments as BBB+ (outlook stable) and short-term commitments as A–2.
Cash and undrawn committed limits
EUR million 2021 2020
Cash and cash equivalents 114.1 220.1
Credit limits 300.0 300.0
414.1 520.1
On 31 December 2021, cash and cash equivalents, as well as undrawn committed credit limits less commercial papers issued by Elisa, were EUR 414.1 (500.6) million.
Contract-based cash flows for financial liabilities are presented under Note 7.4.2.
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7.1.4 Credit risk
Financial instruments contain an element of risk of the respective parties failing to fulfil their obligations. Liquid assets are invested within confirmed limits in investment targets with good
credit ratings. Investments and the limits specified for them are reviewed annually, or more often, if necessary. Derivative contracts are only signed with Finnish and foreign banks with
good credit ratings.
The business units are liable for credit risk associated with trade receivables. The units have written credit policies that are mainly consistent with uniform principles. The credit ratings
of new customers are always reviewed from external sources when selling products or services invoiced in arrears. In case of additional sales to existing customers, creditworthiness is
reviewed on the basis of the company's own accounts. The Group may also collect advance or guarantee payments in accordance with its credit policy.
Credit risk concentrations in trade receivables are minor, as the Group's customer base is wide; the ten largest customers represent approximately 6 per cent of customer invoicing. EUR
5.4 (13.3) million of uncertain receivables have been deducted from consolidated trade receivables. The Group’s previous experience in the collection of trade receivables corresponds to
the recognised impairment. Furthermore, the Group regularly sells the past due trade receivables of defined customer groups. Based on these facts, the management is confident that
the Group’s trade receivables do not involve any substantial credit risk. The maximum credit risk is the value of trade receivables, which on 31 December 2021 was EUR 390.3 million. The
aging of trade receivables is described in note 6.2.1.
7.1.5 Commodity risks
Elisa hedges electricity purchases with physical purchase contracts and derivatives. The electricity price risk is assessed for a five-year period. Hedge accounting is applied to contracts
hedging future purchases. The effective portion of derivatives that qualify for hedge accounting is recognised in the revaluation reserve of equity and the ineffective portion is recognised
in the income statement under other operating income or expenses. The change in the revaluation reserve, recognised in equity, is presented in the statement of comprehensive income
under Cash flow hedge.
At the end of the year, the ineffective portion of hedge accounting was EUR 0.0 (0.0) million.
The hedging rate for purchases in the following years, % 2021 2020
0–1 years 93.1 87.9
1–2 years 30.6 64.7
If the market price of electricity derivatives changed by +/- 10 per cent from the balance sheet date (31 December 2021), it would contribute EUR +2.0/–1.2 (+0.5/–0.2) million to equity. The
impact has been calculated before tax.
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ELISA FINANCIAL STATEMENTS 2021
7.2 Capital management
Elisa's capital consists of equity and liabilities. To develop its business, Elisa may carry out expansion investments and acquisitions that may be financed through equity or liabilities, directly or
indirectly.
The target for the company's equity ratio is over 35 per cent and comparable net debt / EBITDA 1.5 to 2.0.
The company's distribution of profit to shareholders consists of dividends, capital repayment and acquisition of treasury shares. Effective profit distribution is 80 per cent to 100 per cent
of profit for the period. Furthermore, additional profit distribution to the shareholders may occur. When proposing or deciding on the profit distribution, the Board takes into account the
company's financial position, future financing needs, and set financial objectives.
7.2.1 Capital structure and key indicators
EUR million 2021 2020
Interest-bearing net debt 1,219.1 1,206.8
B/S Total equity 1,204.1 1,184.2
Total capital 2,423.2 2,391.0
Gearing ratio, % 101.2 101.9
Net debt / EBITDA 1.7 1.8
Equity ratio, % 39.9 39.1
7.2.2 Available sources of nancing
With regard to capital financing, the company's objective is to maintain sufficient flexibility for the Board of Directors to issue shares. The Annual General Meeting 2021 authorised the Board
of Directors to pass a resolution concerning the share issue, right of assignment of treasury shares and/or granting of special rights referred to in the Limited Liability Companies Act. The
authorisation entitles the Board of Directors to issue the shares in a proportion other than that of the current shareholdings (directed share issue). A maximum aggregate of 15 million of the
company’s shares can be issued under the authorisation. In 2021, the authorisation has been used in executing share-based incentive plans.
Shareholders’ equity 2021 2020
Treasury shares, 1,000 pcs 7,148 7,252
Share issue authorisation, 1,000 pcs 14,991 14,815
On 31 December 2021, the maximum amount of the share issue authorisation at the share closing price was EUR 811.3 (664.7) million.
With regard to capital financing, the company maintains loan programmes and credit arrangements that allow quick issuance. The arrangements are committed and non-committed, and allow
issuances for different maturities.
Debt capital 2021 2020
Commercial paper programme (non-committed)
(1
350.0 330.5
Revolving credits (committed)
(2
300.0 300.0
EMTN programme (non-committed)
(3
600.0 426.0
Total, EUR million 1,250.0 1,056.5
On the closing date, the share issue authorisation as well as committed and non-committed credit arrangements totalled EUR 2,061.3 (1,721.3) million.
1)
The commercial paper programme amounted to EUR 350 million, of which EUR 0.0 million was in use on 31 December 20201.
2)
Elisa has two committed revolving credit facilities of EUR 300 million in total. Both credits were undrawn on 31 December 2020.
3)
Elisa has a European Medium Term Note programme (EMTN) for a total of EUR 1,500 million, of which EUR 900.0 million was in use on 31 December 2021. The programme was updated on 27 July 2021, and it is valid for one year as of the update.
7.2 Capital management
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ELISA FINANCIAL STATEMENTS 2021
7.3 Equity
7.3.1 Share capital and treasury shares
EUR million
Number of
shares
(thousands)
Share
capital
Treasury
shares
1 Jan. 2020 167,335 83.0 –132.2
Disposal of treasury shares 3.8
B/S 31 Dec. 2020 167,335 83.0 –128.4
Disposal of treasury shares 2.3
B/S 31 Dec. 2021 167,335 83.0 –126.1
At the end of the reporting period, the company's paid-in share capital registered in the Trade Register was EUR 83,033,008 (83,033,008).
According to its Articles of Association, Elisa Corporation has only one series of shares, each share entitling to one vote. All issued shares have been paid for. Shares do not have a
nominal value.
Treasury shares include the acquisition cost of treasury shares held by the Group, and they are deducted from shareholder's equity in the consolidated financial statements.
Treasury shares
Shares,
pcs
Accounting
countervalue,
EUR
Holding, %
of shares
and votes
Treasury shares held by the Group at 1 Jan. 2020 7,437,277 3,690,437 4.44
Disposal of treasury shares –185,112
Treasury shares held by the Group at 31 Dec. 2020 7,252,165 3,598,583 4.33
Disposal of treasury shares –104,393
Treasury shares held by the Group at 31 Dec. 2021 7,147,772 3,546,782 4.27
7.3 Equity
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ELISA FINANCIAL STATEMENTS 2021
7.3.2 Dividends
The Annual General Meeting has proposed a total dividend of EUR 2.05 per share to be paid for the 2021 result. A dividend of EUR 1.95 per share was paid for the 2020 result.
7.3.3 Other reserves
EUR million
Reserve for
invested
non-re-
stricted
equity
Contingency
reserve
Fair
value
reserve
Other
reserves Total
1 Jan. 2020 90.9 3.4 –13.6 381.0 461.7
Cash flow hedge 0.4 0.4
Remeasurements of the net defined benefit liability 4.5 4.5
B/S 31 Dec. 2020 90.9 3.4 –8.7 381.0 466.6
Cash flow hedge 0.9 0.9
Remeasurements of the net defined benefit liability –2.8 –2.8
B/S 31 Dec. 2021 90.9 3.4 –10.6 381.0 464.8
The reserve for invested non-restricted equity includes the proportion of share subscription prices that was not recognised as share capital in accordance with the share issue
terms.
The contingency reserve includes the amount transferred from distributable equity under the Articles of Association or by General Meeting decision. The fair value reserve includes
changes in the fair value of other investments, the remeasurements of the net defined benefit liability and the effective portion of the changes in the fair values of derivatives
designated as cash flow hedges. Other reserves were formed through share issues in business acquisitions by the amount exceeding the par value of the share received by the
Company.
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ELISA FINANCIAL STATEMENTS 2021
7.4 Financial assets and liabilities
7.4.1 Financial income and expenses
EUR million 2021 2020
Financial income
Dividend income on other financial assets 0.6 0.5
Interest and financial income on loans and other receivables 1.9 2.1
Gain on disposal of financial assets
(1
0.1 5.7
Foreign exchange gain 2.0 0.2
Other financial income 0.1 0.2
I/S
4.6 8.7
Financial expenses
Interest expenses on financial liabilities measured at amortised cost –10.1 –14.5
Interest expenses on lease liabilities –2.7 –2.8
Other financial expenses on financial liabilities measured at amortised cost –2.5 –1.9
Other interest expenses –0.2 –0.3
Foreign exchange loss –0.6 –1.4
Other financial expenses –0.3 –0.2
I/S
–16.5 –21.2
1)
The comparable period includes a capital gain of EUR 5.6 million from the sale of the shares in Sulake companies.
Interest income and expenses are recognised using the effective interest rate method, and dividend income is recognised when the right to dividend is incurred.
Foreign exchange rate gains and losses are recognised in accordance with their nature either in materials and services or in financial income and expenses.
7.4 Financial assets and liabilities
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ELISA FINANCIAL STATEMENTS 2021
7.4.2 Financial liabilities
2021 2020
EUR million
Balance
sheet values Fair values
Balance
sheet values Fair values
Non-current
Bonds 888.1 913.1 884.5 927.6
Bank loans 253.3 253.3 252.3 252.3
Lease liabilities 73.4 73.4 78.8 78.8
B/S 1,214.8 1,239.8 1,215.7 1,258.7
Current
Bonds 174.0 174.2
Bank loans 100.2 100.2
Lease liabilities 18.1 18.1 17.7 17.7
Commercial papers 19.5 19.5
B/S 118.4 118.4 211.2 211.5
1,333.2 1,358.2 1,426.9 1,470.2
The nancial liabilities include a total of EUR 91.6 (96.5) million of secured lease liabilities. In practice, lease liabilities are secured liabilities, as the rights to the leased property will revert to the lessor if the payments are
neglected.
All nancial liabilities are denominated in euros. Financial liabilities are measured at amortised cost. The fair values of nancial liabilities are based on quoted market prices.
The average maturity of non-current liabilities was 3.7 (4.1) years and the eective average interest rate was 0.7 (1.0) per cent.
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ELISA FINANCIAL STATEMENTS 2021
Contract-based cash flows on the repayment of financial liabilities and costs
2021
EUR million 2022 2023 2024 2025 2026 2027– Total
Bonds 6.8 6.8 306.8 4.1 304.1 300.8 929.3
Financial costs 6.8 6.8 6.8 4.1 4.1 0.8 29.3
Repayments 300.0 300.0 300.0 900.0
Bank loans 1.1 151.0 0.4 100.4 0.3 2.1 255.4
Financial costs 0.8 0.8 0.1 0.1 0.0 0.1 1.9
Repayments 0.3 150.3 0.3 100.3 0.3 2.0 253.5
Schuldschein loan 100.0 100.0
Financial costs
Repayments 100.0 100.0
Lease liabilities 20.6 16.5 13.3 11.3 8.7 66.3 136.6
Financial costs 2.4 5.6 4.6 4.1 3.2 25.0 45.1
Repayments 18.1 10.9 8.7 7.2 5.4 41.3 91.6
Derivatives –1.6 –1.6
Electricity derivatives –1.6 –1.6
Currency derivatives 0.0 0.0
Trade payables 203.8 203.8
Total 330.6 174.3 320.5 115.9 313.1 369.2 1,623.5
Financial costs 8.4 13.1 11.5 8.4 7.4 25.9 74.6
Repayments 322.3 161.2 309.0 107.5 305.7 343.3 1,548.9
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ELISA FINANCIAL STATEMENTS 2021
2020
EUR million 2021 2022 2023 2024 2025 2026– Total
Bonds 185.5 6.8 6.8 306.8 4.1 604.9 1,114.7
Financial costs 11.5 6.8 6.8 6.8 4.1 4.9 40.8
Repayments 174.0 0.0 0.0 300.0 0.0 600.0 1,074.0
Bank loans 1.0 1.1 151.0 0.4 100.4 1.0 254.9
Financial costs 0.8 0.8 0.8 0.1 0.1 0.0 2.5
Repayments 0.2 0.3 150.3 0.3 100.3 0.9 252.3
Commercial papers 19.5 19.5
Financial costs 0.1 0.1
Repayments 19.4 19.4
Lease liabilities 20.5 15.5 13.6 11.7 10.1 73.0 144.5
Financial costs 2.8 5.4 4.9 4.3 3.8 26.8 48.0
Repayments 17.7 10.1 8.7 7.4 6.4 46.2 96.5
Derivatives 0.4 0.4
Electricity derivatives 0.4 0.4
Currency derivatives 0.1 0.1
Trade payables 179.3 179.3
Total 406.2 23.3 171.4 318.9 114.7 678.8 1,713.4
Financial costs 15.6 12.9 12.4 11.2 8.0 31.7 91.8
Repayments 390.6 10.4 159.0 307.7 106.7 647.2 1,621.6
Future financial costs of variable-rate financial liabilities have been calculated at the interest rate prevailing on the period end date.
The company has EUR 300 million in credit facilities, of which EUR 130 million matures in 2026 and EUR 170 million in 2024. Both credits were undrawn on 31 December 2021.
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ELISA FINANCIAL STATEMENTS 2021
Bonds
In the framework of its bond programme, the parent company has issued the following bonds:
31 Dec. 2021
Fair value
EUR million
Balance
sheet value
EUR million
Nominal
value
EUR million
Nominal
interest
rate, %
Effective
interest
rate, %
Maturity
date
EMTN programme 2001 / EUR 1,000 million
I/2017 305.4 295.7 300.0 0.875 0.974 17.3.2024
I/2019 310.7 294.6 300.0 1.125 1.236 26.2.2026
I/2020 297.0 297.8 300.0 0.250 0.322 15.9.2027
913.1 888.1 900.0
The fair value of bonds is based on market quotes.
Maturity of lease liabilities' cash flows
EUR million 2021 2020
Within one year 18.1 17.7
Later than one year, but not later than five years 32.1 32.6
Later than five years 41.3 46.2
91.6 96.5
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ELISA FINANCIAL STATEMENTS 2021
7.4.3 Financial assets and liabilities recognised at fair value
Carrying amounts of financial assets and liabilities by category
2021
EUR million
Financial
assets/liabilities
measured at
fair value through
profit or loss
Financial
assets/liabilities
measured at fair value
through other
comprehensive income
Financial
assets/liabilities
measured at
amortised
cost
Book
values
Fair
values Note
Non-current financial assets
Other financial assets
(1
0.8 15.6 16.4 16.4
Trade and other receivables 1.6 101.6 103.2 103.2 6.2.2
Current financial assets
Trade and other receivables 506.3 506.3 506.3 6.2.1
0.8 1.6 623.5 625.9 625.9
Non-current financial liabilities
Financial liabilities 1,214.8 1,214.8 1,239.8 7.4.2
Trade and other liabilities
(2
3.3 0.0 33.3 36.6 36.6 6.3
Current financial liabilities
Financial liabilities 118.4 118.4 118.4 7.4.2
Trade and other liabilities
(2
392.3 392.3 392.3 6.3
3.3 0.0 1,758.8 1,762.1 1,787.1
1)
Other investments contain the Group's listed and unlisted equity investments
2)
Excluding advances received
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ELISA FINANCIAL STATEMENTS 2021
2020
EUR million
Financial
assets/liabilities
measured at
fair value through
profit or loss
Financial
assets/liabilities
measured at fair value
through other
comprehensive income
Financial
assets/liabilities
measured at
amortised
cost
Book
values
Fair
values Note
Non-current financial assets
Other financial assets
(1
15.6 15.6 15.6
Trade and other receivables 0.4 94.5 94.9 94.9 6.2.2
Current financial assets
Trade and other receivables 457.8 457.8 457.8 6.2.1
0.4 567.9 568.3 568.3
Non-current financial liabilities
Financial liabilities 1,215.7 1,215.7 1,258.7 7.4.2
Trade and other liabilities
(2
4.4 22.9 27.3 27.3 6.3
Current financial liabilities
Financial liabilities 211.2 211.2 211.5 7.4.2
Trade and other liabilities
(2
348.1 348.1 348.1 6.3
4.4 1,797.9 1,802.3 1,845.6
1)
Other investments contain the Group's unlisted equity investments
2)
Excluding advances received
The fair values of financial asset and liability items are presented in detail under the specified note number.
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Financial assets and liabilities recognised at fair value
EUR million 2021 Level 1 Level 2 Level 3
Financial assets and liabilities measured at fair value through other comprehensive income
Electricity derivatives 1.6 1.6
Currency derivatives 0.0 0.0
Financial assets and liabilities measured at fair value through profit or loss
Listed equity investments 0.8 0.8
Contingent considerations in business combinations –3.3 –3.3
–0.9 0.8 1.6 –3.3
EUR million 2020 Level 1 Level 2 Level 3
Financial assets and liabilities measured at fair value through other comprehensive income
Electricity derivatives 0.4 0.4
Currency derivatives 0.1 0.1
Financial assets and liabilities measured at fair value through profit or loss
Contingent considerations in business combinations –4.4 –4.4
–3.9 0.4 –4.4
Items measured at fair value are categorised using a three-level value hierarchy. Level 1 includes financial instruments with quoted prices in active markets, such are listed shares owned
by the Group. Level 2 includes instruments with observable prices based on market data, such are electricity and currency derivatives. Level 3 includes instruments with prices that are not
based on observable market data, but instead, on the company’s internal information, such are Group's contingent considerations relating to business combinations.
Level 3 reconciliation
Contingent considerations related to business acquisitions
EUR million 2021 2020
At the beginning of the period 4.4 5.9
Increase in contingent consideration 4.4
Payment of contingent consideration –1.1 –5.0
Reversals of contingent consideration –0.9
At the end of the period 3.3 4.4
According to the management’s estimation for the financial instruments valued at Level 3, replacing one or more of the pieces of fair value measurement data with a possible alternative
assumption would not significantly change the fair value of the items, considering the small total amount of underlying liabilities.
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ELISA FINANCIAL STATEMENTS 2021
Accounting principles – Financial assets and liabilities:
Financial assets:
Acquisition and sale of financial assets are recognised on the settlement date. The Group derecognises financial assets when its contractual rights to the cash flows from the financial asset
expire or when it has transferred substantially all the risks and rewards to an external party.
Cash and cash equivalents include cash at hand and bank deposits as well as highly liquid short-term investments with maturities up to 3 months.
Investments in shares, excluding investments in associated companies and mutual real-estate companies, are classified as other financial assets and generally measured at fair value.
Investments in unlisted companies are recognised at original acquisition cost less any impairment. Investments in listed companies are measured at fair value, based on share transactions.
Equity investments are included in non-current assets. On 31 December 2021, Group's equity investments consisted mainly of investments in unlisted companies.
Financial liabilities:
Financial liabilities are initially recognised at fair value equalling the net proceeds received and subsequently measured at amortised cost, using the effective interest rate method. The
transaction costs are included in the original acquisition cost of financial liabilities. Financial liabilities are recognised in non-current and current liabilities, and they may be non-interest-
bearing or interest-bearing.
In cases where the terms of the financial liability measured at amortised cost are amended in such a way that the change does not result in derecognition of the liability from the balance
sheet, the Group must nevertheless recognise the profit or loss in the income statement. The profit or loss is calculated as the difference between the original contractual cash flows and
the cash equivalents, discounted at the original effective interest rate of amended agreements.
Lease liabilities:
Lease liabilities are initially measured at present value of future lease payments. The estimated lease term includes the non-cancellable period of the lease together with periods covered by
termination and extension options, if exercise of these options is reasonably certain. Company has discounted the future lease payments using the borrowing rate based on duration of the
estimated lease term. The lease liability is initially measured using the actual value of an index at the commencement date. The lease liabilities are remeasured if the changes are reflected in
the cash flow or if the Group reassesses whether it is reasonably certain to exercise a possible option.
Classification of assets and liabilities:
The Group’s financial assets and liabilities are classified as financial assets and liabilities measured at amortised cost, financial assets and liabilities measured at fair value through other
comprehensive income, and financial assets and liabilities measured at fair value through profit or loss. Financial assets and liabilities measured at amortised cost include fixed-term
contracts the cash flow of which include payments of principal and interest on the principal amount outstanding. Financial assets and liabilities measured at fair value through other
comprehensive income include financial items that are expected both to collect contractual cash flows and to sell financial assets/liabilities. Financial assets and liabilities measured at fair
value through profit or loss include items that do not meet the criteria of the other groups.
The Group categorises electricity and currency derivatives that qualify for hedge accounting as financial assets or liabilities measured at fair value through other comprehensive income.
Contingent considerations in business combinations and listed equity investments are recognised as financial assets or liabilities measured at fair value through profit or loss. Other
financial assets and liabilities are measured at amortised cost.
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ELISA FINANCIAL STATEMENTS 2021
7.4.4 Derivative instruments
Nominal values of derivatives
2021 2020
Period of validity Period of validity
EUR million
Less than
1 year 1–5 years Over 5 years
Less than
1 year 1–5 years Over 5 years
Electricity derivatives 1.9 1.1
Currency derivatives 3.5 3.2
5.5 4.2
Fair values of derivatives
2021 2020
EUR million
Positive
fair value
Negative
fair value Total
Positive
fair value
Negative
fair value Total
Electricity derivatives 1.6 1.6 0.4 0.4
Currency derivatives 0.0 0.0 0.1 0.1
1.6 0.0 1.6 0.4 0.4
Determination of fair value and categorisation
The fair value of derivative instruments is determined using quoted prices in active markets.
The Group recognises the derivative instruments at the fair value hierarchy Level 2. Please see note 7.4.3.
Accounting principles – Derivative instruments:
Derivatives are recognised at fair value as financial assets or liabilities on the date of acquisition. Gains and losses arising from the fair value remeasurements are recognised in accordance
with the nature of derivative contracts. Outstanding derivatives that do not qualify for hedge accounting are measured at fair value at the end of the reporting period and the fair value
changes are immediately recognised in financial items on the income statement. The fair value of derivatives is expected to approximate the quoted market prices or, if the quoted market
prices are not available, the value is estimated using commonly used valuation methods.
The Group applies hedge accounting for electricity price risk and the Swedish krona, and treats electricity derivative contracts as cash flow hedges. The change in fair value of effective
portion of derivatives that qualify for hedge accounting is recognised in other comprehensive income and presented in the equity hedge revaluation reserve (as a part of “Other reserves”).
Gains or losses on derivative instruments accumulated in equity are expensed when any hedged item affects profit or loss. The ineffective portion of the derivatives is recognised in other
operative income and expenses on the income statement. The hedge accounting is discontinued when the hedge contract is expired, sold, terminated or completed. Any cumulative gain or
loss arising from the hedge instrument remains in equity until the expected transaction is realised.
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79
ELISA FINANCIAL STATEMENTS 2021
8 Other notes
8.1 Taxes
8.1.1 Income taxes
EUR million 2021 2020
Taxes for the period –77.0 –71.0
Taxes for previous periods 0.0 –0.1
Deferred taxes 2.1 0.8
I/S
–74.9 –70.2
Income taxes recognised directly in comprehensive income:
2021 2020
EUR million
Before
taxes
Tax
effect
After
taxes
Before
taxes
Tax
effect
After
taxes
Remeasurements of the net defined benefit liability –3.5 0.7 –2.8 5.7 –1.1 4.5
Cash flow hedge 1.1 –0.2 0.9 0.5 –0.1 0.4
–2.3 0.5 –1.9 6.1 –1.2 4.9
Translation differences do not include a tax effect.
Reconciliation of the tax expense on the income statement and taxes calculated at the Group's domestic statutory tax rate 20 (20):
EUR million 2021 2020
I/S
Profit before tax 418.4 398.3
Tax according to the domestic tax rate –83.7 –79.7
Tax effects of the following:
Tax-free income 0.3 1.5
Non-deductible expenses –0.2 –1.7
Tax effect related to the foreign subsidiaries 8.6 8.6
Usage of tax losses, for which no deferred tax was recognised 0.8
Deferred tax assets from previously unrecognised tax losses 1.0
Taxes for previous periods 0.0 –0.1
Other items 0.1 –0.6
I/S
Taxes on the income statement –74.9 –70.2
Effective tax rate, % 17.9 17.6
Accounting principles – Income taxes for the period and deferred taxes:
Taxes recognised on the income statement include current and deferred taxes. Income taxes for the financial year are calculated on the net profit for the period at the current tax rate and
are adjusted by taxes for the prior periods.
The reporting period as well as prior reporting periods may be subject to a tax audit, which may subsequently result in a change in tax decisions, additional tax payments or refunds.
Deferred taxes are calculated from all temporary differences arising between the tax bases of assets and liabilities and their carrying values in the consolidated financial statements. Please
refer to the next note 8.1.2 for details.
8. Other notes 8.1 Taxes
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80
ELISA FINANCIAL STATEMENTS 2021
8.1.2 Deferred tax assets and liabilities
The change in deferred tax assets and liabilities during 2021
Deferred tax assets
EUR million
1 Jan.
2021
Recognised
on the income
statement
Recognised on
consolidated
statement of
comprehensive
income
Translation
differences
31 Dec.
2021
Provisions 0.7 0.5 1.2
Confirmed losses 1.0 –0.3 0.7
Right-of-use assets 1.5 0.0 1.6
Internal margins 2.6 0.2 2.8
Share-based incentive plans 2.5 0.4 3.0
Pension obligations 2.6 –0.3 0.7 3.0
Other temporary differences 1.0 0.1 –0.2 0.0 0.9
B/S 11.9 0.8 0.5 0.0 13.1
Deferred tax liabilities
EUR million
1 Jan.
2021
Recognised
on the income
statement
Business
combinations
Translation
differences
31 Dec.
2021
Fair value measurement of tangible and intangible assets in business combinations 4.9 –1.4 0.4 3.9
Accumulated depreciation differences 16.0 0.4 16.4
Finance lease agreements 0.8 –0.2 0.6
Customer contracts 1.8 0.1 1.9
Bonds 0.9 –0.1 0.8
Other temporary differences 1.7 –0.1 0.0 1.6
B/S 26.2 –1.3 0.4 0.0 25.3
Deferred income tax assets recognised for tax losses are carried forward to the extent that the realisation of the related tax benefit through future profits is probable. On 31 December 2021,
EUR 0.7 (1.0) million deferred tax asset was recognised for confirmed losses, that will expire in 2025–2026. At the end of the reporting period, the Group had EUR 14.0 (12.6) million of unused
tax losses for which no tax assets have been recognised.
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ELISA FINANCIAL STATEMENTS 2021
The change in deferred tax assets and liabilities during 2020
Deferred tax assets
EUR million
1 Jan.
2020
Recognised
on the income
statement
Recognised on
consolidated
statement of
comprehensive
income
Translation
differences
31 Dec.
2020
Provisions 1.0 –0.4 0.7
Tax losses carried forward 1.0 1.0
Right-of-use assets 1.4 0.2 1.5
Internal margins 2.4 0.1 2.6
Share-based incentive plans 4.7 –2.2 2.5
Pension obligations 3.7 –1.1 2.6
Other temporary differences 1.1 0.1 –0.1 0.0 1.0
B/S 14.4 –1.2 –1.2 0.0 11.9
Deferred tax liabilities
EUR million
1 Jan.
2020
Recognised
on the income
statement
Business
combinations
Translation
differences
31 Dec.
2020
Fair value measurement of tangible and intangible assets in business combinations 3.3 –1.0 2.6 4.9
Accumulated depreciation differences 17.1 –1.1 16.0
Finance lease contracts 0.6 0.2 0.8
Customer contracts 1.8 0.1 1.8
Bonds 1.0 –0.1 0.9
Other temporary differences 1.8 –0.1 0.0 1.7
B/S 25.6 –2.0 2.6 0.0 26.2
Accounting principles – Deferred tax assets and liabilities:
Deferred taxes are calculated from the temporary differences arising between carrying amount and the tax base. The temporary tax liabilities are not recognised if they arise from initial
recognition of goodwill or from the initial recognition of an asset/liability other than in a business combination which, at the time of the transaction, does not affect either the accounting or
the taxable profit. No deferred tax is recognised on valuation differences of shares for which the sales profit would be tax-deductible.
Deferred income tax assets are recognised only to the extent that it is probable that they can be utilised against future taxable income. Deferred tax liabilities are recognised on the balance
sheet in total, with the exception for Estonian subsidiaries where no tax liability has been recognised for the untaxed retained earnings EUR 345.2 million, as no profit distribution decision
or plans for profit distribution exist for the time being.
Deferred tax liabilities and assets are not offset.
Accounting policies that require management's judgements – Deferred tax assets:
Particularly at the end of each financial period, the Group assesses the probability of subsidiaries generating taxable income against which unused tax losses can be utilised. The
appropriateness for recognising other deferred tax assets is also determined at the end of each financial period. Changes in the estimates may lead to the recognition of significant tax
expenses.
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82
ELISA FINANCIAL STATEMENTS 2021
8.2 Provisions
EUR million
Termination
benefits Other Total
1 Jan. 2020 3.3 1.7 5.0
Increase in provisions 0.7 0.7
Release of unused provisions –0.2 –0.2
Utilised provisions –2.1 –2.1
31 Dec. 2020 1.7 1.7 3.4
Increase in provisions 7.6 7.6
Release of unused provisions –1.6 –1.6
Utilised provisions –3.5 –3.5
31 Dec. 2021 4.3 1.7 5.9
EUR million 2021 2020
B/S Long-term provisions 2.8 2.9
B/S Short-term provisions 3.1 0.5
5.9 3.4
Termination benets
As a part of the Group's rationalisation, Elisa has carried out statutory employee negotiations leading to personnel reductions in 2021. The restructuring provision includes provisions for
both unemployment pensions and other expenses due to redundancies. The provisions associated with redundancies will be realised during 2022–2023 and the provision associated with
unemployment pensions will be realised in 2022–2024.
Other provisions
Other provisions include environmental provisions made for telephone poles.
Accounting principles – Provisions and contingent liabilities:
A provision is recognised when the Group has a legal or constructive obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation,
and the amount of the obligation can be reliably estimated.
Contingent liabilities are potential liabilities arising from past events that may occur depending on the outcome of uncertain future events which are beyond the control of the Group. Also
a present obligation that is unlikely to require settlement of a payment obligation or the amount of which cannot be reliably measured is a contingent liability. Contingent liabilities are not
recognised in the statement of financial position. Contingent liabilities are presented in note 8.4.
8.2 Provisions
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83
ELISA FINANCIAL STATEMENTS 2021
8.3 Related party details
The Group's related parties include the parent company, subsidiaries, associates and joint ventures. The related parties also include Elisa's Board of Directors, the CEO, the Executive Board as
well as entities controlled by them and close members of their family.
Transactions carried out with related parties:
2021
EUR million Revenue Purchases Receivables Liabilities
Associates and joint arrangements 0.5 0.8 0.1 0.0
2020
EUR million
Associates and joint arrangements 0.7 0.9 0.1 0.0
The employee benefits of the Group's related parties are presented in Note 4.1.
8.3.1 Group companies
The parent company of the Group is Elisa Corporation.
Subsidiaries Domicile
Group's
ownership, %
Banana Fingers Limited Bristol, UK 100
Digiset Oy Helsinki, Finland 100
Elisa IndustriQ Oy Helsinki, Finland 100
Elisa camLine Holding GmbH Petershausen, Germany 100
camLine GmbH Petershausen, Germany 100
camLine Dresden GmbH Dresden, Germany 100
camLine Solutions S.r.l. Iași, Romania 100
camLine USA Inc. Atlanta GA, USA 100
camLine Hungary Kft. Szombathely, Hungary 60
camLine Pte. Ltd. Singapore, Singapore 100
camLine Taiwan New Taipei City, Taiwan 100
camLine sdn. Bhd. Bayan Lepas, Malaysia 100
TenForce NV Leuven, Belgium 50
TenForce USA LLC Houston TX, USA 50
Process Data Control Corporation Arlington TX, USA 50
Elisa Deutschland GmbH Aachen, Germany 100
Elisa Finance Oü Tallinn, Estonia 100
Elisa France SAS Les Sorinieres, France 100
Elisa Hong Kong Limited Hong Kong, Hong Kong 100
Elisa Santa Monica Oy Helsinki, Finland 100
8.3 Related party details
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ELISA FINANCIAL STATEMENTS 2021
Elisa Teleteenused AS Tallinn, Estonia 100
Elisa Eesti AS Tallinn, Estonia 100
Santa Monica Networks AS Tallinn, Estonia 100
Elisa Videra Oy Helsinki, Finland 100
Elisa Videra Inc. Los Angeles CA, USA 100
Elisa Videra Italy S.r.l San Genesio, Italia 100
Elisa Videra Norge As Oslo, Norway 100
Elisa Videra Singapore PTE Ltd. Singapore, Singapore 100
Elisa Videra Spain S.L Madrid, Spain 100
Elisa Videra UK Ltd. London, UK 100
Elistar AB Stockholm, Sweden 100
Polystar Egypt LLC Cairo, Egypt 100
Polystar Instruments Canada Inc. Toronto, Kanada 100
Polystar Instruments Inc. Frisco,TX, USA 100
Polystar Osix AB Stockholm, Sweden 100
Polystar Asia Private Ltd. Singapore, Singapore 100
Polystar Australia Pty Sydney, Australia 100
P-OSS Solutions S.L.U. Bilbao, Spain 100
Polystar Ryssland LLC Moscow, Russia 100
Enia Oy Helsinki, Finland 100
Epic TV SAS Sallanches, France 100
Fenix Solutions Oy Turku, Finland 100
Fonum Oy Helsinki, Finland 100
Karelsat Oy Joensuu, Finland 100
Kepit Systems Oy Vaasa, Finland 70
Kiinteistö Oy Raision Luolasto Espoo, Finland 100
Kiinteistö Oy Rinnetorppa Kuusamo, Finland 100
Kiinteistö Oy Tapiolan Luolasto Espoo, Finland 100
LE-Kuitu Oy Salo, Finland 100
LNS Kommunikation AB Stockholm, Sweden 100
Preminet Oy Helsinki, Finland 100
OOO LNR St. Petersburg, Russia 100
Sutaria Services Inc. Murphy TX, USA 57
Watson Nordic Oy Vaasa, Finland 100
Joint arrangements
Kiinteistö Oy Brahenkartano Turku, Finland 60
Significant changes in ownership of subsidiaries are presented in note 3.
Subsidiaries Domicile
Group's
ownership, %
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85
ELISA FINANCIAL STATEMENTS 2021
Accounting principles – Consolidation principles, subsidiaries:
The consolidated financial statements include the parent company, Elisa Corporation, and those subsidiaries over which the Group has control. The group controls an entity when the group
is exposed to, or has rights to, variable returns from its involvement with the entity, and has the ability to affect those returns through its power over the entity.
Subsidiaries are consolidated from the date the Group obtains control and divested companies until the loss of control. Acquisition method is used in the accounting for the elimination of
internal ownership. All intra-group transactions, gains on the sale of inventories and fixed assets, intra-group receivables, payables and dividends are eliminated.
Profit for the period attributable to the equity holders of the parent and non-controlling interests is presented separately in the consolidated income statement. Non-controlling interests
are presented separately from the equity of the owners of the parent in the consolidated statement of financial position. Losses of subsidiaries are allocated to non-controlling interests
even if they exceed their share of ownership.
Accounting principles – Consolidation principles, joint arrangements:
Joint arrangements are arrangements over which the Group exercises joint control with one or more parties. A joint arrangement is either a joint venture or a joint operation. A joint venture
is a joint arrangement, where the Group has rights to the net assets of the arrangement. A joint operation is a joint arrangement where the Group has rights to the assets and obligations
for the liabilities relating to the arrangement.
The only joint arrangement owned by the Group, Kiinteistö Oy Brahenkartano, is a joint operation, which is consolidated using the proportional consolidation method. 60 per cent of the
assets, liabilities, income and expenses of the joint operation are consolidated to the Group's financial statements. The company owns and manages a building and a site in Turku. Elisa is
mainly entitled to manage office and telecom facilities with the shares owned.
THE REPORT OF THE BOARD
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86
ELISA FINANCIAL STATEMENTS 2021
8.3.2 Investments in associated companies
Aggregated financial information of associates
EUR million 2021 2020
I/S
Group's share of profit –0.5 1.9
B/S Transactions carried out with related parties 10.6 1.4
EUR million 2021 2020
Balance at the beginning of the period 1.4 2.4
Additions 9.8
Disposals –2.6
Reclassifications –0.1
Share of profits for the period –0.5 1.9
Dividends received –0.2
Impairment –0.1
B/S Balance at the end of the period 10.6 1.4
On 29 March 2021, Elisa acquired 19 per sent of Italian industrial software provider specialised in innovative IT solutions for Digital Supply Chain and Smart Manufacturing, sedApta Group.
The companies are consolidated as associates on the basis of significant influence.
During comparison period, Elisa divested its holdings in Sulake companies. The sale profit of EUR 5.6 is included in other financial income.
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CONSOLIDATED
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87
ELISA FINANCIAL STATEMENTS 2021
Associates Domicile
Group's
ownership,%
FNE-Finland Oy Kontiolahti, Finland 46
Kiinteistö Oy Helsingin Sentnerikuja 6 Helsinki, Finland 50
Kiinteistö Oy Herrainmäen Luolasto Tampere, Finland 50
Kiinteistö Oy Lauttasaarentie 19 Helsinki, Finland 42
Kiinteistö Oy Pohjanplassi Lapua, Finland 39
Kiinteistö Oy Riihimäen Maisterinkatu 9 Riihimäki, Finland 35
Kiinteistö Oy Runeberginkatu 43 Helsinki, Finland 30
Kiinteistö Oy Stenbäckinkatu 5 Helsinki, Finland 40
sedApta Group Milan, Italy 19
Suomen Numerot NUMPAC Oy Helsinki, Finland 33
Tele Scope Oy Espoo, Finland 22
Accounting principles – Consolidation principles, associated companies
Associated companies are entities over which the Group exercises significant influence. Significant influence is presumed to exist when the Group owns over 20 per cent of the voting rights
of the company or when the Group otherwise exercises significant influence, but does not exercise control. Associated companies are consolidated in accordance with equity method.
If the Group’s share of losses of an associated company exceeds its interest in the associated company, the investment is recognised on the balance sheet at zero value and the Group
discontinues recognising its share of further losses unless the Group has other obligations for the associated company. Associated companies are consolidated from the date the Group
obtains significant influence and divested associated companies are consolidated until the loss of significant influence.
THE REPORT OF THE BOARD
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DISTRIBUTION
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ELISA FINANCIAL STATEMENTS 2021
8.4 O-balance sheet leases and other commitments
,
Leases
Group as a lessee
Lease payments related to off-balance sheet lease commitments:
EUR million 2021 2020
Lease payments associated with short-term leases 32.8 31.6
Lease payments associated with low-value assets 4.2 3.5
37.0 35.1
Future minimum lease payments under non-cancellable off-balance sheet leases:
EUR million 2021 2020
Within one year 12.5 11.7
Later than one year, but not later than five years 4.7 5.1
Later than five years 1.2 1.1
18.4 17.9
Group as a lessor
Future minimum lease receivables under non-cancellable operating leases:
EUR million 2021 2020
Within one year 2.5 2.4
Later than one year, but not later than five years 0.9 0.7
3.3 3.1
8.4 O-balance sheet leases and other commitments
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89
ELISA FINANCIAL STATEMENTS 2021
Accounting principles – Leases:
The group as a lessee
The Group recognises rental expenses for short-term leases and low-value assest in the income statements and presents such contracts as off-balance sheet liabilities.
Rental liabilities are exclusive of value added tax.
The group as a lessor
The Group acts as a lessor in two different types of lease arrangements that are accounted for as operating leases: rental income from telecom premises and carrier services is recognised
as revenue over the lease period, and rental income from real estate is recognised as other operating income. The lease contract periods are mainly short with durations of 1–6 months.
Rental income is recognised over the lease period.
Collateral, commitments and other liabilities
EUR million
2021 2020
On behalf of own commitments
Mortgages 3.8
Guarantees 0.4
Deposits 0.4
0.4
4.6
0.4
Other contractual obligations
Venture Capital investment obligation 0.8
1.3
Repurchase obligations 0.0
0.0
0.8 1.3
Real estate investments
VAT refund liability for real estate investments indicates the amount that may become completely non tax-deductible if the intended use of the property was to change.
On 31 December 2021, VAT refund liability for real estate investments was EUR 33.2 (31.7) million.
8.5 Events after the end of the reporting period
There were no significant events after the balance sheet date.
8.5 Events after the end of the reporting period
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90
ELISA FINANCIAL STATEMENTS 2021
9 Key indicators
The key indicator tables are unaudited.
9.1 Key indicators describing the Group’s nancial development
2021 2020 2019 2018 2017
INCOME STATEMENT
Revenue, EUR million 1,998 1,895 1,844 1,832 1,787
Change of revenue, % 5.5 2.8 0.7 2.5 9.3
EBITDA, EUR million 697 685 661 640 608
EBITDA as % of revenue 34.9 36.2 35.8 34.9 34.0
EBIT, EUR million 431 409 395 404 378
EBIT as % of revenue 21.6 21.6 21.4 22.0 21.2
Profit before tax, EUR million 418 398 372 381 403
Profit before tax as % of revenue 20.9 21.0 20.2 20.8 22.6
Return on equity (ROE), % 28.8 28.1 26.6 29.2 33.5
Return on investment (ROI), % 16.9 16.7 17.2 18.3 19.9
Research and development costs, EUR million 16 10 8 8 10
Research and development costs as % of revenue 0.8 0.5 0.4 0.5 0.6
BALANCE SHEET
Gearing ratio, % 101.2 101.9 103.0 94.8 103.2
Current ratio 1.4 1.3 1.2 1.0 1.0
Equity ratio, % 39.9 39.1 41.0 42.4 40.5
Non-interest bearing liabilities, EUR million 491 430 428 393 423
Interest bearing net debt 1,219 1,207 1,184 1,068 1,073
Balance sheet total, EUR million 3,028 3,041 2,814 2,669 2,580
INVESTMENTS
Investments in shares and business combinations, EUR million 28 70 83 14 104
CAPITAL EXPENDITURE
Gross investments, EUR million 265 266 256 254 246
Gross investments as % of revenue 13.3 14.1 13.9 13.9 13.8
PERSONNEL
Average number of employees during the period 5,391 5,097 4,882 4,814 4,614
Revenue/employee, EUR 1,000 371 372 378 380 387
The order book is not presented, as the information is not relevant due to the nature of the Group's business.
9. Key indicators
9.1 Key indicators describing the Group’s nancial development
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ELISA FINANCIAL STATEMENTS 2021
FORMULAE FOR FINANCIAL SUMMARY INDICATORS
EBITDA EBIT + depreciation, amortisation and impairment
EBIT
Profit for the period + income taxes + financial income and expenses + share of associated companies’ profit
Return on equity (ROE), %
Profit for the period
X 100
Total shareholders’ equity on average
Return on investment (ROI), %
Profit before taxes + interest and other financial expenses
X 100
Total equity + interest-bearing liabilities on average
Gearing ratio, %
Interest-bearing liabilities - cash and cash equivalents and financial assets at
fair value through profit or loss
X 100
Total shareholders’ equity
Current ratio
Current assets
Current liabilities - advance payments received
Equity ratio, %
Total shareholders’ equity
X 100
Balance sheet total - advance payments received
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CONSOLIDATED
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92
ELISA FINANCIAL STATEMENTS 2021
9.2 Alternative performance measures
(1
2021 2020 2019 2018 2017
INCOME STATEMENT
Comparable EBITDA, EUR million 706 685 668 639 613
Comparable EBITDA as % of revenue 35.3 36.2 36.2 34.9 34.3
Comparable EBIT, EUR million 439 415 402 403 384
Comparable EBIT as % of revenue 22.0 21.9 21.8 22.0 21.5
Comparable profit before tax, EUR million 427 399 379 380 364
Comparable profit before tax as % of revenue 21.4 21.0 20.5 20.8 20.4
Comparable return on equity (ROE), % 29.3 28.1 27.1 28.8 29.5
Comparable return on investment (ROI), % 17.2 16.7 17.5 18.3 18.0
Comparable earnings per share (EPS) 2.19 2.05 1.93 1.95 1.86
1)
other than the financial indicators defined by IFRS
9.2 Alternative performance measures
THE REPORT OF THE BOARD
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ELISA FINANCIAL STATEMENTS 2021
FORMULAE FOR ALTERNATIVE PERFORMANCE MEASURES
Comparable EBITDA EBIT + depreciation, amortisation and impairment +/- items affecting comparability
Comparable EBIT
Profit for the period + income taxes + financial income and expenses +
share of associated companies’ profit +/- items affecting comparability
Comparable profit for the period Profit for the period +/- items affecting comparability
Profit attributable to owners of the parent company
+/- items affecting comparability
Comparable EPS
Average number of shares during the period adjusted for share issues
Comparable return on equity (ROE), %
Profit for the period +/- items affecting comparability
X 100
Total shareholders' equity on average
Comparable return on investment (ROI), %
Profit before taxes + interest and other financial expenses
+/- items affecting comparability
X 100
Total equity + interest-bearing liabilities on average
Comparable cash flow after investments
Net cash flow from operating activities - net cash used in investing activities
+/- items affecting comparability
THE REPORT OF THE BOARD
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DISTRIBUTION
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CONSOLIDATED
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94
ELISA FINANCIAL STATEMENTS 2021
9.3. Per-share indicators
(1
2021 2020 2019 2018 2017
Share capital, EUR 83,033,008 83,033,008 83,033,008 83,033,008 83,033,008
Number of shares at year-end 160,187,301 160,082,908 159,897,796 159,723,252 159,533,676
Average number of shares 160,174,453 160,065,712 159,880,581 159,736,826 159,606,603
Number of shares at year-end, diluted 160,187,301 160,082,908 159,897,796 159,723,252 159,533,676
Average number of shares, diluted 160,174,453 160,065,712 159,880,581 159,736,826 159,606,603
Market capitalisation, EUR million
(2
9,056 7,508 8,241 6,037 5,475
Earnings per share (EPS), EUR 2.15 2.05 1.90 1.98 2.11
Dividend per share, EUR 2.05
(6
1.95 1.85 1.75 1.65
Payout ratio, % 95.6 95.1 97.6 88.5 78.2
Equity per share, EUR 7.48 7.39 7.19 7.05 6.52
P/E ratio 25.2 21.9 26.0 18.2 15.5
Effective dividend yield, %
(3
3.8 4.3 3.8 4.9 5.0
Share performance on Nasdaq Helsinki
Mean price, EUR 51.00 51.08 42.26 36.34 33.74
Closing price at year-end, EUR 54.12 44.87 49.25 36.08 32.72
Lowest price, EUR 45.10 40.79 35.51 31.68 30.42
Highest price, EUR 56.18 58.88 49.91 41.95 36.94
Trading of shares on Nasdaq Helsinki
(4
Total trading volume, 1,000 shares 81,557 122,497 96,662 104,879 104,467
Percentage of shares traded
(5
49 73 58 63 62
1)
The numbers of shares are presented without treasury shares held by Elisa Group.
2)
Calculated on the basis of the closing price on the last trading day of the year and the total number of shares at the end of the period (167 335 073).
3)
Calculated on the basis of the closing price on the last trading day of the year.
4)
Elisa share is also traded in alternative marketplaces. According to Bloomberg and the Fidessa Fragmentation report, the trading volumes in these markets in 2021 were approximately 205 (216) per cent of Nasdaq Helsinki's volumes.
5)
Calculated in proportion to the total number of shares at the end of the period.
6)
The Board of Directors proposes a dividend payment of EUR 2.05 per share.
9.3 Per-share indicators
THE REPORT OF THE BOARD
OF DIRECTORS
PARENT COMPANY
FINANCIAL STATEMENTS
BOARD’S PROPOSAL FOR PROFIT
DISTRIBUTION
AUDITOR’S REPORT
SHARES AND
SHAREHOLDERS
CONSOLIDATED
FINANCIAL STATEMENTS
95
ELISA FINANCIAL STATEMENTS 2021
FORMULAE FOR PER-SHARE INDICATORS
Earnings per share (EPS)
Profit for the period attributable to the equity holders of the parent
Average number of shares during the period adjusted for share issues
Dividend per share
(1
Dividend adjusted for share issues
Number of shares at the balance sheet date adjusted for share issues
Effective dividend yield, %
(1
Dividend per share
X 100
Share price at the balance sheet date adjusted for share issues
Payout ratio, %
(1
Dividend per share
X 100
Earnings per share
Equity per share
Equity attributable to equity holders of the parent
Number of shares at the balance sheet date adjusted for share issues
P/E ratio (price/earnings)
Share price on the balance sheet date
Earnings per share
1)
The calculation formulae apply also to the capital repayment indicators.
THE REPORT OF THE BOARD
OF DIRECTORS
PARENT COMPANY
FINANCIAL STATEMENTS
BOARD’S PROPOSAL FOR PROFIT
DISTRIBUTION
AUDITOR’S REPORT
SHARES AND
SHAREHOLDERS
CONSOLIDATED
FINANCIAL STATEMENTS
96
ELISA FINANCIAL STATEMENTS 2021
EUR million Note 2021 2020
Revenue 1 1,657.8 1,604.4
Other operating income 2 8.8 3.3
Materials and services 3 –642.8 –617.6
Personnel expenses 4 –253.4 –235.4
Depreciation and amortisation 5 –265.8 –267.0
Other operating expenses –156.9 –162.0
Operating profit 347.6 325.7
Financial income and expenses 7 –15.2 –16.5
Profit before tax and appropriations 332.3 309.2
Appropriations 8 –5.2 5.0
Income taxes 9 –73.9 –69.0
Profit for the period 253.2 245.2
Income statement, parent company, FAS
PARENT COMPANY FINANCIAL STATE-
MENTS
Parent company operational results
Income statement
THE REPORT OF THE BOARD
OF DIRECTORS
CONSOLIDATED
FINANCIAL STATEMENTS
BOARD’S PROPOSAL FOR PROFIT
DISTRIBUTION
AUDITOR’S REPORT
SHARES AND
SHAREHOLDERS
PARENT COMPANY
FINANCIAL STATEMENTS
97
ELISA FINANCIAL STATEMENTS 2021
EUR million Note 31 Dec. 2021 31 Dec. 2020
ASSETS
Fixed assets
Intangible assets 10 304.5 354.1
Property, plant and equipment 10 682.1 661.3
Investments 11 861.0 860.4
1,847.6 1,875.8
Current assets
Inventories 12 56.1 48.1
Non-current receivables 13 122.0 112.4
Current receivables 14 419.3 367.3
Cash and bank receivables 72.7 181.9
670.3 709.7
TOTAL ASSETS 2,517.9 2,585.5
SHAREHOLDERS’ EQUITY AND LIABILITIES
Shareholders’ equity 15
Share capital 83.0 83.0
Treasury shares –125.9 –128.2
Reserve for invested non-restricted equity 77.8 77.8
Contingency reserve 3.4 3.4
Retained earnings 334.2 403.3
Profit for the period 253.2 245.2
625.7 684.5
Accumulated appropriations 77.8 75.2
Provisions for liabilities and charges 16 6.9 4.1
Liabilities
Non-current liabilities 17 1,163.8 1,170.4
Current liabilities 18 643.7 651.3
1,807.5 1,821.7
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 2,517.9 2,585.5
Balance sheet, parent company, FAS
Balance sheet
THE REPORT OF THE BOARD
OF DIRECTORS
CONSOLIDATED
FINANCIAL STATEMENTS
BOARD’S PROPOSAL FOR PROFIT
DISTRIBUTION
AUDITOR’S REPORT
SHARES AND
SHAREHOLDERS
PARENT COMPANY
FINANCIAL STATEMENTS
98
ELISA FINANCIAL STATEMENTS 2021
EUR million
2021 2020
Cash flow from operating activities
Profit before appropriations and taxes
332.3
309.2
Adjustments:
Depreciation and amortisation
265.8
267.0
Other income and expenses with no payment relation
1.9
1.4
Other financial income (-) and expenses (+)
15.3
22.0
Gains (-) and losses (+) on the disposal of fixed assets
–1.7
0.0
Gains (-) and losses (+) on the disposal of investments
–0.1
–5.5
Change in provisions in the income statement
2.8
–1.6
Cash flow before changes in working capital
616.5
592.5
Change in working capital
Increase (-) / decrease (+) in current non-interest-bearing trade receivables
–29.0
3.4
Increase (-) / decrease (+) in inventories
–10.0
–1.6
Increase (+) / decrease (-) in trade and other payables
38.0
–0.7
Cash flow before financial items and taxes
615.5
593.5
Dividends received
0.9
0.9
Interests received
1.9
1.7
Interests paid
–19.8
–21.7
Income taxes paid
–72.4
–66.2
Net cash flow from operating activities
526.1
508.1
Cash flow statement, parent company, FAS
Cash ow statement
THE REPORT OF THE BOARD
OF DIRECTORS
CONSOLIDATED
FINANCIAL STATEMENTS
BOARD’S PROPOSAL FOR PROFIT
DISTRIBUTION
AUDITOR’S REPORT
SHARES AND
SHAREHOLDERS
PARENT COMPANY
FINANCIAL STATEMENTS
99
ELISA FINANCIAL STATEMENTS 2021
EUR million
2021 2020
Cash flow from investing activities
Capital expenditure
–248.3
–236.6
Proceeds from disposal of property, plant and equipment and intangible assets
2.4
0.0
Investments in shares and other investments
–0.5
–25.6
Proceeds from disposal of shares and other investments
0.1
20.6
Loans granted
–38.4
–3.5
Repayment of loan receivables
3.1
–0.5
Net cash flow used in investing activities
–281.7
–245.5
Cash flow after investing activities
244.4
262.6
Cash flow from financing activities
Increase in long-term borrowings (+)
100.0
300.0
Decrease in long-term borrowings (-)
–174.0
Increase (+) / decrease (-) in short-term borrowings
31.2
–122.2
Group contributions received (+) / paid (-)
0.0
–1.8
Dividends paid
–310.8
–295.7
Net cash flow used in financing activities
–353.6
–119.7
Change in cash and cash equivalents
–109.2
142.9
Cash and cash equivalents at the beginning of the period
181.9
39.0
Cash and cash equivalents at the end of the period
72.7
181.9
Cash flow statement, parent company, FAS
THE REPORT OF THE BOARD
OF DIRECTORS
CONSOLIDATED
FINANCIAL STATEMENTS
BOARD’S PROPOSAL FOR PROFIT
DISTRIBUTION
AUDITOR’S REPORT
SHARES AND
SHAREHOLDERS
PARENT COMPANY
FINANCIAL STATEMENTS
100
ELISA FINANCIAL STATEMENTS 2021
ACCOUNTING PRINCIPLES
Elisa Corporation’s nancial statements have been prepared
in accordance with the accounting principles based on Finnish
accounting legislation.
Foreign currency items
Transactions denominated in foreign currencies are recorded
at the exchange rates prevailing on the dates of transactions.
At the end of the reporting period assets and liabilities
denominated in foreign currencies are valued at the exchange
rates quoted by the European Central Bank on the closing
date.
Fixed assets
The carrying value of intangible and tangible assets is stated
at cost less accumulated depreciation, amortisation and
impairment. Internally generated xed assets are measured at
variable costs.
The dierence between depreciation according to plan and
total depreciation is presented under appropriations of the
parent company’s income statement and the accumulated
depreciation dierence is presented under accumulated
appropriations in shareholders’ equity and liabilities on the
balance sheet. Depreciation according to plan is recognised
on a straight-line basis over the useful life from the original
acquisition cost.
The useful life according to plan for the dierent asset groups:
Intangible rights 3–5 years
Goodwill 5–20 years
Other expenditure with long-term eects 5–10 years
Buildings and structures 25–40 years
Machinery and equipment in buildings 10–25 years
Telephone exchanges 6–10 years
Cable network 8–15 years
Telecommunication terminals 2–4 years
Other machines and equipment 3–5 years
Inventories
Inventories are stated at the lowest of variable cost, acquisition
price or the likely disposal or repurchase price. Cost is
determined using a weighted average price.
Marketable securities
Investments in money market funds are recognised at the
repurchase price. Investments in certicates of deposit and
commercial paper are recognised at the acquisition cost, as the
dierence between the repurchase price and cost of acquisition
is not signicant.
Revenue recognition principles
Revenue from deliverables is recognised at the time of
ownership transfer and revenue from services is recognised
when the services have been performed.
Interconnection fees that are invoiced from the customers
and paid as such to other telecommunication companies are
presented as an adjustment to revenue (Finnish Accounting
Standards Board 1995/1325).
The prot from the sale of business operations and xed
assets, subsidies received and rental income from premises are
presented under other operating income. The loss from the sale
of xed assets is presented under other operating expenses.
The prot or loss from the sale of shares is presented in nancial
income and expenses.
Research and development
Research costs are expensed as they incur, with the exception
of development costs, which are capitalised. The capitalisation
criteria are met when the product is technically and commercially
feasible, and it is expected to generate future economic benet.
Development costs initially recognised as expenses cannot be
capitalised subsequently.
Public grants associated with development projects are
recognised as other operating income when the related costs
are recognised as expenses. Public grants, associated with
capitalised development costs, are recorded as a reduction of
cost.
Future expenses and losses
Probable future expenses and losses related to the reported
or a prior nancial period without corresponding income are
recognised on the income statement. Such items are recognised
on the balance sheet under provisions, if a reliable estimate
of the amount or timing of the obligation cannot be made.
Otherwise the obligation is recognised as accrual.
Income taxes
Income taxes for the nancial year are recognised on the income
statement. No deferred tax liabilities or receivables have been
recognised in the nancial statements.
Notes to the financial statements of the parent company
Notes to the nancial statements of
the parent company
Accounting principles
THE REPORT OF THE BOARD
OF DIRECTORS
CONSOLIDATED
FINANCIAL STATEMENTS
BOARD’S PROPOSAL FOR PROFIT
DISTRIBUTION
AUDITOR’S REPORT
SHARES AND
SHAREHOLDERS
PARENT COMPANY
FINANCIAL STATEMENTS
101
ELISA FINANCIAL STATEMENTS 2021
1. Revenue
EUR million 2021 2020
Revenue 1,721.0 1,667.7
Interconnection fees and other adjustments –63.2 –63.3
1,657.8 1,604.4
Geographical distribution
Finland 1,640.7 1,582.5
Rest of Europe 16.1 20.1
Other countries 1.0 1.8
1,657.8 1,604.4
2. Other operating income
EUR million 2021 2020
Gain on disposals of fixed assets 1.7 0.0
Other income
(1
7.1 3.3
8.8 3.3
1)
Other income include rental income from the real estate, management fee income charged from subsidiaries and other income not associated with ordinary operating activities.
3. Materials and services
EUR million 2021 2020
Materials, supplies and goods
Purchases during reporting period 340.2 299.1
Change in inventories –8.1 –0.3
332.2 298.9
External services 310.7 318.8
642.8 617.6
1. Revenue
2. Other operating income 3. Materials and services
Notes to the income statement
THE REPORT OF THE BOARD
OF DIRECTORS
CONSOLIDATED
FINANCIAL STATEMENTS
BOARD’S PROPOSAL FOR PROFIT
DISTRIBUTION
AUDITOR’S REPORT
SHARES AND
SHAREHOLDERS
PARENT COMPANY
FINANCIAL STATEMENTS
102
ELISA FINANCIAL STATEMENTS 2021
4. Personnel expenses
EUR million 2021 2020
Salaries and wages 213.7 203.4
Pension costs 33.8 27.2
Other social security costs 5.9 4.8
253.4 235.4
Personnel on average 3,280 3,242
CEO remuneration, EUR 2021 2020
Fixed salaries 661,180.00 661,180.00
Performance-based bonus 251,030.79 198,238.35
Fringe benefits 23,363.00 22,965.81
Share-based payments
(1
865,204.04 2,269,493.25
1,800,777.83 3,151,877.41
1)
The maximum award allocated to the CEO under the share-based compensation plans equals the value of 135,000 shares. For more details, please refer to Note 4.1.
In 2020, the Board of Directors agreed with the CEO of Elisa Corporation Veli-Matti Mattila that he will continue as CEO until further notice. Under previous executive agreement, the Group
CEO would have retired at the age of 60. The defined benefit pension plan includes vested rights. See Note 4.1 of the consolidated financial statements.
The remuneration of the Board members, EUR 2021 2020
Clarisse Berggårdh 95,050.00 91,600.00
Maher Chebbo 81,800.00
Kim Ignatius 81,650.00 78,100.00
Petteri Koponen 2,100.00
Topi Manner 80,850.00 76,000.00
Leena Niemistö 2,100.00
Eva-Lotta Sjöstedt 82,450.00 73,750.00
Seija Turunen 96,650.00 93,100.00
Anssi Vanjoki 133,900.00 130,400.00
Antti Vasara 80,050.00 76,600.00
732,400.00 623,750.00
For year 2021, following remuneration were decided by the Annual General Meeting to the Members of the Board: annual remuneration fee for the Chair EUR 126,000, for Deputy Chair and
the Chairs of the Committees EUR 84,000, and other Board members EUR 69,000; in addition a meeting fee of EUR 800 per meeting of the Board and of a Commetee. However, if a Board
member lives permanently outside Finland and is physically present in the Board or Committee meeting, which is held in a country other than his/her permanent home country, the meeting
fee is EUR 1,600. In accordance with the decision of the Annual General Meeting on 8 April 2021, the annual remuneration was paid in Company shares on 26 April 2021. The outstanding
remuneration amounts were paid net of tax, 60 per cent.
4. Personnel expenses
THE REPORT OF THE BOARD
OF DIRECTORS
CONSOLIDATED
FINANCIAL STATEMENTS
BOARD’S PROPOSAL FOR PROFIT
DISTRIBUTION
AUDITOR’S REPORT
SHARES AND
SHAREHOLDERS
PARENT COMPANY
FINANCIAL STATEMENTS
103
ELISA FINANCIAL STATEMENTS 2021
6. Auditor fees
EUR million 2021 2020
Auditing 0.1 0.1
Tax advisory services 0.0 0.1
Other services 0.1 0.0
0.2 0.2
7. Financial income and expenses
EUR million 2021 2020
Interest income and other financial income
Dividends received
From the Group companies 0.3 0.2
From associated companies 0.2
From others 0.6 0.5
0.9 0.9
Other interest and financial income
From the Group companies 0.2 0.1
Capital gains from investments
(1
0.1 7.0
From others 1.6 2.0
1.9 9.1
2.8 10.0
Interest costs and other financial expenses
To the Group companies –5.5 –5.5
Impairment of investments in subsidiaries –3.0
To others –12.6 –18.1
–18.1 –26.6
–15.2 –16.5
1)
In 2020, the gains on disposals mainly consisted of divestments of shares in Sulake companies.
5. Depreciation and amortisation
EUR million 2021 2020
Intangible assets 91.2 88.3
Property, plant and equipment 174.7 178.7
265.8 267.0
Specification of depreciation by balance sheet items is included in note 10.
5. Depreciation and amortisation
6. Auditor fees
7. Financial income and expenses
THE REPORT OF THE BOARD
OF DIRECTORS
CONSOLIDATED
FINANCIAL STATEMENTS
BOARD’S PROPOSAL FOR PROFIT
DISTRIBUTION
AUDITOR’S REPORT
SHARES AND
SHAREHOLDERS
PARENT COMPANY
FINANCIAL STATEMENTS
104
ELISA FINANCIAL STATEMENTS 2021
9. Income taxes
EUR million 2021 2020
Income taxes for the reporting period –73.9 –68.9
Taxes for previous periods 0.0 0.0
–73.9 –69.0
10. Intangible assets and property, plant and equipment
Intangible assets
2021
EUR million
Development
costs
Intangible
assets Goodwill
Other
intangible
assets
Intangible
assets under
construction Total
Acquisition cost at 1 Jan. 53.5 154.0 886.3 540.4 10.2 1,644.4
Additions 3.9 3.0 24.4 10.8 42.0
Reclassifications 2.1 0.2 4.9 –7.7 –0.4
Acquisition cost at 31 Dec. 59.6 157.2 886.3 569.7 13.3 1,686.1
Accumulated depreciation and amortisation at 1 Jan. 44.0 78.3 716.0 452.2 1,290.4
Amortisation and depreciation for the period 6.6 8.3 42.7 33.7 91.2
Accumulated depreciation and amortisation at 31 Dec. 50.5 86.5 758.6 485.9 1,381.5
Book value at 31 Dec. 9.1 70.7 127.7 83.8 13.3 304.5
8. Appropriations
EUR million 2021 2020
Change in appropriations –2.5 5.0
Group contributions received 4.2 4.2
Group contributions paid –6.8 –4.3
–5.2 5.0
8. Appropriations
9. Income taxes
Notes to the balance
sheet
10. Intangible and tangible
assets
THE REPORT OF THE BOARD
OF DIRECTORS
CONSOLIDATED
FINANCIAL STATEMENTS
BOARD’S PROPOSAL FOR PROFIT
DISTRIBUTION
AUDITOR’S REPORT
SHARES AND
SHAREHOLDERS
PARENT COMPANY
FINANCIAL STATEMENTS
105
ELISA FINANCIAL STATEMENTS 2021
Property, plant and equipment
2021
EUR million
Land and
water areas
Buildings and
structures
Machinery and
equipment
Other
assets
Assets under
construction Total
Acquisition cost at 1 Jan. 9.9 216.6 3,766.6 35.1 25.1 4,053.3
Additions 0.0 11.3 163.2 20.7 195.2
Disposals 0.0 –0.5 0.0 –0.5
Reclassifications 0.0 0.3 14.1 –14.0 0.4
Acquisition cost at 31 Dec. 10.0 227.7 3,943.8 35.1 31.8 4,248.4
Accumulated depreciation at 1 Jan. 135.0 3,222.4 34.5 3,392.0
Accumulated depreciation on disposals and reclassifications –0.3 0.0 –0.3
Depreciation for the period 8.5 166.1 0.0 174.7
Accumulated depreciation at 31 Dec. 143.2 3,388.6 34.5 3,566.3
Book value at 31 Dec. 10.0 84.5 555.3 0.6 31.8 682.1
THE REPORT OF THE BOARD
OF DIRECTORS
CONSOLIDATED
FINANCIAL STATEMENTS
BOARD’S PROPOSAL FOR PROFIT
DISTRIBUTION
AUDITOR’S REPORT
SHARES AND
SHAREHOLDERS
PARENT COMPANY
FINANCIAL STATEMENTS
106
ELISA FINANCIAL STATEMENTS 2021
Intangible Assets
2020
EUR million
Development
costs
Intangible
rights Goodwill
Other
intangible
assets
Intangible
assets under
construction Total
Acquisition cost at 1 Jan. 45.3 142.2 886.3 505.4 12.3 1,591.5
Additions 4.7 11.2 29.3 7.7 52.9
Disposals 0.0 0.0
Reclassifications 3.6 0.6 5.7 –9.8 0.0
Acquisition cost at 31 Dec. 53.5 154.0 886.3 540.4 10.2 1,644.4
Accumulated depreciation and amortisation at 1 Jan. 38.6 70.5 673.2 419.7 1,202.1
Amortisation and depreciation for the period 5.4 7.7 42.7 32.4 88.3
Accumulated depreciation and amortisation at 31 Dec. 44.0 78.3 716.0 452.2 1,290.4
Book value at 31 Dec. 9.6 75.8 170.3 88.2 10.2 354.1
Property, plant and equipment
2020
EUR million
Land and
water areas
Buildings and
structures
Machinery and
equipment
Other
assets
Assets under
construction Total
Acquisition cost at 1 Jan. 9.8 204.1 3,604.4 35.1 30.0 3,883.5
Additions 0.1 11.4 154.1 0.0 13.9 179.6
Disposals –9.8 0.1 –9.7
Reclassifications 0.0 1.0 18.0 0.0 –19.0 0.0
Acquisition cost at 31 Dec. 9.9 216.6 3,766.6 35.1 25.1 4,053.3
Accumulated depreciation at 1 Jan. 125.9 3,060.9 34.5 3,221.3
Accumulated depreciation on disposals and reclassifications –8.0 –8.0
Depreciation for the period 9.1 169.5 0.0 178.7
Accumulated depreciation at 31 Dec. 135.0 3,222.4 34.5 3,392.0
Book value at 31 Dec. 9.9 81.5 544.1 0.6 25.1 661.3
THE REPORT OF THE BOARD
OF DIRECTORS
CONSOLIDATED
FINANCIAL STATEMENTS
BOARD’S PROPOSAL FOR PROFIT
DISTRIBUTION
AUDITOR’S REPORT
SHARES AND
SHAREHOLDERS
PARENT COMPANY
FINANCIAL STATEMENTS
107
ELISA FINANCIAL STATEMENTS 2021
11. Investments
Investments in Receivables from
2021
EUR million Subsidiaries Associates
Other
companies
Group
companies
Other
companies Total
Acquisition cost at 1 Jan. 837.5 6.2 22.5 1.6 0.1 867.9
Additions 0.2 0.4 0.6
Disposals 0.0 0.0 0.0
Acquisition cost at 31 Dec. 837.7 6.2 22.9 1.6 0.1 868.5
Impairment at 1 Jan. –3.3 –0.1 –4.1 –7.5
Impairment at 31 Dec. –3.3 –0.1 –4.1 –7.5
Book value at 31 Dec. 834.4 6.1 18.8 1.6 0.1 861.0
A list of the Group and associated companies is available under Note 8.3 of the consolidated financial statements.
Investments in Receivables from
2020
EUR million Subsidiaries Associates
Other
companies
Group
companies
Other
companies Total
Acquisition cost at 1 Jan. 831.5 7.5 22.3 1.6 0.1 862.9
Additions 24.9 2.4 0.0 27.4
Disposals –18.9 –1.2 –2.2 –22.3
Acquisition cost at 31 Dec. 837.5 6.2 22.5 1.6 0.1 867.9
Impairment at 1 Jan. –0.4 –4.1 –4.5
Additions –2.9 –0.1 –3.0
Impairment at 31 Dec. –3.3 –0.1 –4.1 –7.5
Book value at 31 Dec. 834.2 6.1 18.4 1.6 0.1 860.4
11. Investments
THE REPORT OF THE BOARD
OF DIRECTORS
CONSOLIDATED
FINANCIAL STATEMENTS
BOARD’S PROPOSAL FOR PROFIT
DISTRIBUTION
AUDITOR’S REPORT
SHARES AND
SHAREHOLDERS
PARENT COMPANY
FINANCIAL STATEMENTS
108
ELISA FINANCIAL STATEMENTS 2021
12. Inventories
EUR million 2021 2020
Materials and supplies 13.9 13.3
Finished goods 42.2 34.8
56.1 48.1
13. Non-current receivables
EUR million 2021 2020
Receivables from the Group companies
Loan receivables
24.6
14.5
Receivables from others
Trade receivables
81.8
80.7
Prepayments and accrued income
(1
15.7
17.2
97.4
97.9
122.0
112.4
1)
Breakdown of prepayments and accrued income
Rent advances
8.7
7.6
Transaction costs and losses related to loan issuance
6.9
9.5
Others 0.1
15.7
17.2
12. Inventories
13. Non-current receivables
THE REPORT OF THE BOARD
OF DIRECTORS
CONSOLIDATED
FINANCIAL STATEMENTS
BOARD’S PROPOSAL FOR PROFIT
DISTRIBUTION
AUDITOR’S REPORT
SHARES AND
SHAREHOLDERS
PARENT COMPANY
FINANCIAL STATEMENTS
109
ELISA FINANCIAL STATEMENTS 2021
14. Current receivables
EUR million 2021 2020
Receivables from the Group companies
Loan receivables
28.1
3.0
Trade receivables
2.3
2.4
Prepayments and accrued income
1.3
0.6
Other receivables
4.2
4.8
35.8
10.7
Receivables from the associated companies
Trade receivables
0.1
0.1
0.1
0.1
Receivables from others
Trade receivables
309.9
293.7
Loan receivables 0.0
Prepayments and accrued income
(1
60.7
53.6
Other receivables
12.9
9.2
383.5
356.5
419.3
367.3
1)
Breakdown of prepayments and accrued income
Interests 0.0
Rent advances
1.4
1.4
Transaction costs and losses related to loan issuance
3.1
3.0
Other business expense advances paid
56.2
49.2
60.7
53.6
14. Current receivables
THE REPORT OF THE BOARD
OF DIRECTORS
CONSOLIDATED
FINANCIAL STATEMENTS
BOARD’S PROPOSAL FOR PROFIT
DISTRIBUTION
AUDITOR’S REPORT
SHARES AND
SHAREHOLDERS
PARENT COMPANY
FINANCIAL STATEMENTS
110
ELISA FINANCIAL STATEMENTS 2021
15. Shareholders’ equity
EUR million 2021 2020
Share capital at 1 Jan. 83.0 83.0
Share capital at 31 Dec. 83.0 83.0
Treasury shares at 1 Jan. –128.2 –132.0
Disposal of treasury shares 2.3 3.8
Treasury shares at 31 Dec. –125.9 –128.2
Reserve for invested non-restricted equity at 1 Jan. 77.8 77.8
Reserve for invested non-restricted equity at 31 Dec. 77.8 77.8
Contingency reserve at 1 Jan. 3.4 3.4
Contingency reserve at 31 Dec. 3.4 3.4
Retained earnings at 1 Jan. 648.5 702.5
Dividend distribution –312.3 –296.2
Withdrawal of dividend liabilities 0.3 0.7
Disposal of treasury shares –2.3 –3.8
Retained earnings at 31 Dec. 334.2 403.3
Profit for the period 253.2 245.2
Total shareholder's equity 625.7 684.5
Distributable earnings
Retained earnings 334.2 403.3
Treasury shares –125.9 –128.2
Reserve for invested non-restricted equity 77.8 77.8
Development costs –12.3 –12.6
Profit for the period 253.2 245.2
526.9 585.6
15. Shareholders’ equity
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16. Provisions
EUR million 2021 2020
Provision for unemployment pensions 4.3 3.6
Other provisions
(1
2.6 0.5
6.9 4.1
1)
Other provisions consist of salaries, including related statutory employee costs for employees not required to work during their severance period and a provision for other operating expenses.
Provisions of EUR 3,5 (2,1) million were used and EUR 1,6 (0,2) million were reversed as unused in 2021.
17. Non-current liabilities
EUR million 2021 2020
Interest-bearing
Liabilities to others
Bonds 900.0 900.0
Loans from the financial institutions 250.0 250.0
1,150.0 1,150.0
Non-interest bearing
Liabilities to others
Trade payables 8.1 14.7
Accruals and deferred income
(1
5.7 5.7
13.8 20.4
1,163.8 1,170.4
Liabilities maturing after five years
Bonds 300.0 600.0
Loans from the financial institutions
300.0 600.0
1)
Breakdown of accruals and deferred income
Rent advances 5.7 5.7
16. Provisions
17. Non-current liabilities
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ELISA FINANCIAL STATEMENTS 2021
18. Current liabilities
EUR million 2021 2020
Interest-bearing
Liabilities to the Group companies
Cash Pool account 219.6 169.0
219.6 169.0
Liabilities to others
Loans from the financial institutions 100.0
Bonds 174.0
Commercial paper 19.5
100.0 193.5
319.6 362.4
Non-interest bearing
Liabilities to the Group companies
Trade payables 7.2 7.2
Other liabilities 7.0 4.5
14.2 11.6
Liabilities to the associates
Trade payables 0.0 0.0
0.0 0.0
Liabilities to others
Advances received 4.9 4.4
Trade payables 174.8 152.3
Accrued liabilities
(1
54.7 53.0
Other liabilities 75.4 67.6
309.9 277.2
324.1 288.8
643.7 651.3
1)
Breakdown of accrued liabilities
Salaries, wages and social security costs 45.5 41.1
Interests 5.5 9.8
Direct taxes 1.9 0.3
Rent advances 0.9 1.2
Income received in advance 0.5 0.5
Others 0.4
54.7 53.0
18. Current liabilities
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ELISA FINANCIAL STATEMENTS 2021
19. Lease commitments and other liabilities
Collateral
EUR million
2021 2020
On behalf of own commitments
Bank deposits
0.3
0.3
0.3
0.3
Lease commitments
EUR million
2021 2020
Lease commitments on telecom networks
(1
Within one year 0.1
Other lease commitments
(2
Within one year
3.8
4.3
Later that one year, but not later that five years
3.8
3.7
7.5
8.0
Venture Capital investment obligation
0.8
1.3
Repurchase obligations 0.0 0.0
0.8
1.3
Real estate leases
(3
Within one year
27.7
23.7
Later that one year, but not later that five years
47.6
46.1
Later than five years
63.6
70.2
138.9
140.0
Total leases
147.3
149.3
1)
Consist of certain individualised mobile network equipment and access fees for backbone connections.
2)
Lease liabilities consist mainly of car and IT equipment leases.
3)
Real estate leases comprise rental contracts relating to business, oce and telecom premises.
Real estate leases are presented at nominal values.
Rental liabilities are exclusive of value added tax, except for vehicle lease liabilities.
19. Lease commitments and other liabilities
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ELISA FINANCIAL STATEMENTS 2021
Derivative instruments
EUR million 2021 2020
Currency derivatives
Nominal value 3.5 3.2
Fair value 0.0 0.1
Electricity derivatives
Nominal value 1.9 1.1
Fair value 1.6 0.4
Elisa hedges electricity purchases through physical purchase agreements and derivatives. The electricity price risk is assessed at a five-year period. Electricity derivatives are subject to hedge
accounting.
The hedging rate for purchses during following years, % 2021 2020
0–1 years 93.1 87.9
1–2 years 30.6 64.7
If the market price of electricity derivatives changes by +/- 10 per cent from the balance sheet date of 31 December 2021, it would contribute EUR +2.0/- 1.2 (+0.5/–0.2) million to 2022 equity.
The impact has been calculated before tax.
Real-estate investments
On 31 December 2021, the VAT refund liability of real-estate investments was EUR 33.2 (31.7) million.
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ELISA FINANCIAL STATEMENTS 2021
1. Share capital and shares
The company’s paid-up share capital registered in the Trade
Register stood at EUR 83,033,008 at the end of the nancial
year.
At the end of the nancial year, the number of Elisa
Corporation shares was 167,335,073, all within one share
series.
2. Authorisations of the Board of Directors
On 8 April 2021, the Annual General Meeting authorised
the Board of Directors to decide on a new share issue,
transfer of treasury shares owned by the company and/or
granting of special rights referred to in Chapter 10, Section
1 of the Finnish Companies Act subject to the following: The
authorisation allows the Board of Directors to issue a maximum
of 15,000,000 shares in one or several issues. The share issue
and shares granted by virtue of special rights are included in
the aforementioned maximum number. The maximum number
is approximately 9 per cent of the entire stock. The share issue
can be free or for consideration and can also be directed to the
Company itself. The authorisation entitles the Board to make
a directed issue. The authorisation may be used for making
acquisitions or implementing other arrangements related to
the Company’s business, to nance investments, to improve the
Company’s nancial structure, or for other purposes decided
by the Board of Directors. The Board of Directors shall have
the right to decide on all other matters related to the share
issue. The authorisation is valid for 18 months, and it annuls
the authorisation given by the Annual General Meeting to the
Board of Directors on 2 April 2020.
On 8 April 2021, the Annual General Meeting also
authorised the Board of Directors to decide on the acquisition
of treasury shares subject to the following: The Board of
Directors may decide to acquire or pledge on non-restricted
equity a maximum of 5,000,000 treasury shares. The
acquisition may take place as one or several blocks of shares.
The consideration payable for the shares shall not be more
than the ultimate market price. In purchasing the Company’s
own shares derivative, share lending and other contracts
customary in the capital market may be concluded pursuant
to law and the applicable legal provisions. The authorisation
entitles the Board of Directors to pass a resolution to
purchase the shares by making an exception to the purchase
of shares relative to the current holdings of the shareholders.
The treasury shares may be used for making acquisitions or
implementing other arrangements related to the Company’s
business, to nance investments, to improve the Company’s
nancial structure, to be used as part of the incentive
compensation plan, or for the purpose of otherwise assigning
or cancelling the shares. The Board of Directors shall have the
right to decide on all other matters related to the acquisition
of the Company’s own shares. The authorisation is valid for
18 months, and it annuls the respective authorisation given
by the Annual General Meeting to the Board of Directors on 2
April 2020.
3. Treasury shares, share
issues and cancellations
At the beginning of the nancial period, Elisa held 7,252,165
treasury shares.
The Annual General Meeting held on 8 April 2021
authorised the Board of Directors to acquire and assign
treasury shares. The authorisation applies to a maximum of
5,000,000 treasury shares. On the basis of the authorisation,
Elisa has not acquired any treasury shares.
A total of 104,393, treasury shares were disposed during
the nancial year.
At the end of the nancial period, Elisa held 7,147,772
treasury shares.
The treasury shares held by Elisa Corporation do not
have any substantial impact on the distribution of holdings
and votes in the Company. They represent 4.27 per cent of all
shares and votes.
4. Management interests
The aggregate number of shares held by Elisa’s Board of
Directors and the CEO on 31 December 2021 was 115,459
shares and votes, which represented 0.07 per cent of all
shares and votes.
5. Share performance
The Elisa share closed at EUR 54,12 on 31 December 2021.
The highest quotation of the year was EUR 56.18 and
the lowest EUR 45.10. The average price was EUR 51.00.
Information is based on the share trades made on Nasdaq
Helsinki stock exchange.
At the end of the nancial year, the market capitalisation
of Elisa’s total number of shares was EUR 9,056.2 million.
6. Quotation and trading
The Elisa share is quoted on the Main List of the Nasdaq
Helsinki with the ticker ELISA. The aggregate volume of trading
on the Nasdaq Helsinki between 1 January and 31 December
2021 was 81,556,921 shares for an aggregate price of
EUR 4,159 million. The trading volume represented 48.7 per
cent of the total number of shares at the end of the nancial
year.
Shares and shareholders
SHARES AND SHAREHOLDERS
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ELISA FINANCIAL STATEMENTS 2021
7. Distribution of holding by shareholder groups at 31 December 2021
Number of shares
Proportion of all
shares, %
1 Private companies 3,763,718 2.25
2 Financial and insurance institutions 4,059,986 2.43
3 Public corporations 29,501,049 17.63
4 Non-profit organisations 5,771,344 3.45
5 Households 37,845,388 22.62
6 Foreign 719,263 0.43
7 Nominee registered 78,526,553 46.93
Elisa Group, treasury shares 7,147,772 4.27
167,335,073 100.00
8. Distribution of holding by amount at 31 December 2021
Size of holding
Number of
shareholders %
Number of
shares %
1–100 47,633 24.42 2,111,439 1.26
101–1,000 128,196 71.10 28,227,334 16.87
1,001–10,000 4,229 2.35 10,003,189 5.98
10,001–100,000 217 0.12 5,612,489 3.35
100,001–1,000,000 27 0.02 7,178,787 4.29
1,000,001– 7 0.00 28,382,149 16.96
Nominee registered 78,526,553 46.93
180,310 100.00
Elisa Common Clearing account
(1
145,361 0.09
Elisa Corporation, treasury shares 7,147,772 4.27
Issued amount 167,335,073 100.00
1)
Shares on the Common Clearing account include shares that had not been transferred to the share owners' book-entry accounts at the time of, or after, entering the shares into the Finnish book-entry system.
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ELISA FINANCIAL STATEMENTS 2021
9. Largest shareholders at 31 December 2021
Name
Number of
shares %
1 Solidium Oy 16,802,800 10.04
2 Ilmarinen Mutual Pension Insurance Company 3,759,118 2.25
3 Varma Mutual Pension Insurance Company 3,671,976 2.19
4 Elo Mutual Pension Insurance Company 1,923,565 1.15
5 City of Helsinki 1,124,690 0.67
6 State Pension Fund 1,100,000 0.66
7 Föreningen Konstsamfundet r.f. 700,000 0.42
8 OP-Finland mutual fund 554,885 0.33
9 Nordea Pro Finland Fund 553,910 0.33
10 Åbo Akademi University Foundation sr 531,723 0.32
11 Seligson & Co Equity Fund 362,610 0.22
12 Sigrid Juselius Foundation 348,800 0.21
13 Keva 318,479 0.19
14 Samfundet Folkhälsan i svenska Finland r.f. 315,263 0.19
15 Andra AP-Fonden 304,971 0.18
16 Evli Finland Select Fund 265,000 0.16
17 City of Vantaa 258,738 0.15
18 OP-Life Insurance 248,628 0.15
19 Finnish Cultural Foundation 224,056 0.13
20 SEB Finlandia Optimized Low Carbon 223,592 0.13
33,592,804 20.08
Elisa Corporation, treasury shares 7,147,772 4.27
Elisa Personnel Fund 71,910 0.04
Elisa Common Clearing account
(1
145,361 0.09
Nominee registered
(2
78,526,553 46.93
Shareholders not specified above 47,850,613 28.60
167,335,073 100.00
1)
Shares in Common Clearing account include shares which have not been transferred to the share owners' book-entry accounts at the time of, or after, entering the shares into the Finnish book-entry system.
2)
On 27 February 2017, BlackRock, Inc gave a notice in accordance with Chapter 9, Section 5 of the Finnish Securities Market Act, that the direct share ownership of Elisa Corporation shares owned by BlackRock, Inc. was 8,533,440 and by its funds 1,232,577
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ELISA FINANCIAL STATEMENTS 2021
Share trading volumes are based on the trades made on Nasdaq Helsinki.
Elisa share is also traded in alternative marketplaces.
11. Trading volume
Shares per month (million)
10. Daily price development
Closing price in EUR
1)
Rebalanced to Elisa share.
45
50
55
60
Elisa
OMX Helsinki 25 -index
(1
Elisa share price development in 2021
1/2021
2/2021
3/2021
4/2021
5/2021
6/2021
7/2021
8/2021
9/2021
10/2021
11/2021
12/2021
1)
Rebased on Elisa's share price
0
2
4
6
8
10
Osakevaihto
milj. kpl/kk
1/2021
8.5
2/2021
3/2021
4/2021
5/2021
6/2021
7/2021
8/2021
9/2021
10/2021
11/2021
12/2021
7.5
9.0
8.9
7.3
7.9
6.0
4.2
5.5
5.8
5.4
5.6
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ELISA FINANCIAL STATEMENTS 2021
SIGNATURES TO THE BOARD OF DIRECTORS’ REPORT AND FINANCIAL STATEMENTS
Helsinki, 26 January 2022
Anssi Vanjoki Clarisse Berggårdh Maher Chebbo
Chairman of the Board of Directors
Kim Ignatius Topi Manner Eva-Lotta Sjöstedt
Seija Turunen Antti Vasara Veli-Matti Mattila
President and CEO
According to the consolidated balance sheet of
31 December 2021, the parent company’s shareholders’
equity is EUR 625,704,294.52, of which distributable funds
account for EUR 526,946,424.16.
The parent company’s prot for the period from 1 January to
31 December 2021 was EUR 253,213,705.95.
Board’s proposal for profit distribution
The Board of Directors proposes to the General Meeting of
Shareholders that the distributable funds be used as follows:
• a dividend of EUR 2.05 per share shall be paid for a total of
EUR 328,383,967.05
• no dividend shall be paid on shares in the parent
company’s possession
• EUR 198,562,457.11 shall be retained in shareholders’
equity.
BOARD’S PROPOSAL FOR THE PROFITS DISRIBUTION
SIGNATURES
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ELISA FINANCIAL STATEMENTS 2021
To the Annual General Meeting
of Elisa Corporation
Report on the Audit of the
Financial Statements
Opinion
We have audited the nancial statements of Elisa Corporation
(business identity code 0116510–6) for the year ended
31 December 2021. The nancial statements comprise the
consolidated balance sheet, income statement, statement
of comprehensive income, statement of changes in equity,
statement of cash ows and notes, including a summary of
signicant accounting policies, as well as the parent company’s
balance sheet, income statement, statement of cash ows and
notes.
In our opinion
• the consolidated nancial statements give a true and fair
view of the group’s nancial position, nancial performance
and cash ows in accordance with International Financial
Reporting Standards (IFRS) as adopted by the EU
• the nancial statements give a true and fair view of the
parent company’s nancial performance and nancial
position in accordance with the laws and regulations
governing the preparation of nancial statements in Finland
and comply with statutory requirements.
Our opinion is consistent with the additional report submitted
to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with good auditing
practice in Finland. Our responsibilities under good auditing
practice are further described in the Auditor’s Responsibilities
for the Audit of the Financial Statements section of our report.
We are independent of the parent company and of the group
companies in accordance with the ethical requirements that
are applicable in Finland and are relevant to our audit, and we
have fullled our other ethical responsibilities in accordance
with these requirements.
In our best knowledge and understanding, the non-audit
services that we have provided to the parent company and
group companies are in compliance with laws and regulations
applicable in Finland regarding these services, and we have
not provided any prohibited non-audit services referred to in
Article 5(1) of regulation (EU) 537/2014. The non-audit services
that we have provided have been disclosed in note 2.5 to the
consolidated nancial statements.
We believe that the audit evidence we have obtained is
sucient and appropriate to provide a basis for our opinion.
Materiality
The scope of our audit was inuenced by our application
of materiality. The materiality is determined based on our
professional judgement and is used to determine the nature,
timing and extent of our audit procedures and to evaluate
the eect of identied misstatements on the nancial
statements as a whole. The level of materiality we set is based
on our assessment of the magnitude of misstatements that,
individually or in aggregate, could reasonably be expected
to have inuence on the economic decisions of the users of
the nancial statements. We have also taken into account
misstatements and/or possible misstatements that in our
opinion are material for qualitative reasons for the users of
the nancial statements.
Auditor’s Report
AUDITOR’S REPORT
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ELISA FINANCIAL STATEMENTS 2021
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most signicance in our audit of the nancial statements of the current period. These matters were addressed in the
context of our audit of the nancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The signicant risks of material misstatement
referred to in the EU Regulation No 537/2014 point (c) of Article 10(2) are included in the description of key audit matters below.
We have also addressed the risk of management override of internal controls. This includes consideration of whether there was evidence of management bias that represented a risk of material
misstatement due to fraud.
THE KEY AUDIT MATTER HOW THE MATTER WAS ADDRESSED IN THE AUDIT
Valuation of goodwill, € 1 139.4 million
(Consolidated accounting principles 1.2 and note 5.4)
• The goodwill balance in the consolidated statement of nancial position is signicant due to the
acquisitions carried out in the previous years. As regard to the amount, the goodwill balance is
comparable to the consolidated equity.
• Goodwill is tested for impairment annually and the company prepares impairment tests for the
nancial statements or when needed on a discounted cash ow basis with sensitivity analyses.
• Estimating future cash ows underlying the impairment tests involves a signicant amount of
management judgment, particularly in respect of growth in net sales, protability and discount
rates.
• Due to management judgments about the estimates used in the impairment tests, as well
as the signicant carrying amount involved, impairment of goodwill is considered a key audit
matter.
• We assessed critically those management judgments and the assumptions made, which were
used to prepare the cash ow projections for the coming years. In addition, we compared
previous years’ estimates to the actual amounts to be able to evaluate the reliability of the
estimating methods applied.
• We used KPMG valuation specialists when considering the appropriateness of the discount rate
used and the technical correctness of the calculations, as well as comparing the assumptions
used to market and industry-specic information.
• In addition, we assessed the adequacy of the sensitivity analyses and the appropriate
presentation of the notes related to impairment tests in the consolidated nancial statements.
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ELISA FINANCIAL STATEMENTS 2021
Revenue recognition, € 1 997.9 million
(Consolidated accounting principles 1.2 and note 2.3)
• Revenues are recognized once the service has been rendered to the customer or once the
signicant risks and rewards related to the ownership of the goods have been transferred to
the buyer.
• The IT system environment related to billing transactions is complex and the volume of billing
data is large containing wide variety of dierent products. The industry is also marked by price
and contract changes in the short run.
• Due to large volumes of data, revenue recognition involves the risk of revenue being recognized
in an incorrect period as well as the risk that all transactions are not recorded as complete.
• Revenue recognition accrual is partially based on estimates from the management’s past
experience.
• We evaluated the sales-related IT control environment and the key controls in the billing
process over the completeness and accuracy of revenue.
• The majority of the company’s billing data is processed in a single IT system. We evaluated the
reliability of the associated IT control environment by assessing, among others, the processes
related to the user authorization management and back-up and recoveries, as well as by testing
the key application controls over the billing process.
• We also evaluated the company’s internal control procedures over the control environment in
the billing process, as well as assessed the company’s monthly revenue monitoring procedures
at business unit level.
• In addition to control testing, we performed substantive procedures to sales accruals to assess
the completeness and the accuracy of the recognized revenues.
Capital expenditures
(Consolidated accounting principles 1.2 and note 5)
• The company invests heavily especially in its own telecommunication network and IT
environments as well as new technology to remain competitive.
• The company’s capital expenditures (investments) amount to € 265.1 million in 2021, and
therefore capital expenditures comprise a signicant part of the consolidated statement of
nancial position.
• We observed the company’s investment budget for the year 2021 and followed up
developments quarterly.
• We evaluated the company’s internal control environment. We also tested the controls over
the approval of investment projects; over the authorization process when placing individual
orders under an investment project; over the associated approval process when approving
purchase invoices; and over recording transactions in the asset register (for property, plant and
equipment and intangible assets).
• Our substantive procedures focused on assessing the appropriateness of the accounting
treatment in respect of the most signicant investment projects. In addition, we tested whether
the assets under construction met the capitalization requirements and assessed whether they
were disclosed appropriately in the nancial statements.
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ELISA FINANCIAL STATEMENTS 2021
Responsibilities of the Board of
Directors and the Managing Director
for the Financial Statements
The Board of Directors and the Managing Director are
responsible for the preparation of consolidated nancial
statements that give a true and fair view in accordance with
International Financial Reporting Standards (IFRS) as adopted
by the EU, and of nancial statements that give a true and fair
view in accordance with the laws and regulations governing
the preparation of nancial statements in Finland and
comply with statutory requirements. The Board of Directors
and the Managing Director are also responsible for such
internal control as they determine is necessary to enable the
preparation of nancial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the nancial statements, the Board of Directors
and the Managing Director are responsible for assessing the
parent company’s and the group’s ability to continue as going
concern, disclosing, as applicable, matters relating to going
concern and using the going concern basis of accounting. The
nancial statements are prepared using the going concern
basis of accounting unless there is an intention to liquidate
the parent company or the group or cease operations, or
there is no realistic alternative but to do so.
Auditor’s Responsibilities for the
Audit of Financial Statements
Our objectives are to obtain reasonable assurance on whether
the nancial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue
an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with good auditing
practice will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in aggregate, they could
reasonably be expected to inuence the economic decisions
of users taken on the basis of the nancial statements.
As part of an audit in accordance with good auditing practice,
we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the
nancial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks,
and obtain audit evidence that is sucient and appropriate
to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose
of expressing an opinion on the eectiveness of the parent
company’s or the group’s internal control.
• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and
related disclosures made by management.
• Conclude on the appropriateness of the Board of Directors’
and the Managing Director’s use of the going concern basis
of accounting and based on the audit evidence obtained,
whether a material uncertainty exists related to events or
conditions that may cast signicant doubt on the parent
company’s or the group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor’s report
to the related disclosures in the nancial statements or, if
such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or
conditions may cause the parent company or the group to
cease to continue as a going concern.
• Evaluate the overall presentation, structure and content
of the nancial statements, including the disclosures, and
whether the nancial statements represent the underlying
transactions and events so that the nancial statements
give a true and fair view.
• Obtain sucient appropriate audit evidence regarding the
nancial information of the entities or business activities
within the group to express an opinion on the consolidated
nancial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and signicant audit ndings, including
any signicant deciencies in internal control that we identify
during our audit.
We also provide those charged with governance with a
statement that we have complied with relevant ethical
requirements regarding independence, and communicate
with them all relationships and other matters that may
reasonably be thought to bear on our independence, and
where applicable, related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
signicance in the audit of the nancial statements of the
current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benets of such
communication.
THE REPORT OF THE BOARD
OF DIRECTORS
CONSOLIDATED
FINANCIAL STATEMENTS
PARENT COMPANY
FINANCIAL STATEMENTS
BOARD’S PROPOSAL FOR PROFIT
DISTRIBUTION
SHARES AND
SHAREHOLDERS
AUDITOR’S REPORT
124
ELISA FINANCIAL STATEMENTS 2021
Other Reporting Requirements
Information on our audit engagement
We were rst appointed as auditors by the Annual General
Meeting on 31 March 2004, and our appointment represents
a total period of uninterrupted engagement of 18 years. The
current auditor in charge, Toni Aaltonen, Authorised Public
Accountant, KHT, was elected on 6 April 2017.
Other Information
The Board of Directors and the Managing Director are
responsible for the other information. The other information
comprises the report of the Board of Directors and the
information included in the Annual Report, but does not
include the nancial statements and our auditor’s report
thereon. We have obtained the report of the Board of
Directors prior to the date of this auditor’s report, and the
Annual Report is expected to be made available to us after
that date. Our opinion on the nancial statements does not
cover the other information.
In connection with our audit of the nancial statements, our
responsibility is to read the other information identied above
and, in doing so, consider whether the other information
is materially inconsistent with the nancial statements or
our knowledge obtained in the audit, or otherwise appears
to be materially misstated. With respect to the report of
the Board of Directors, our responsibility also includes
considering whether the report of the Board of Directors has
been prepared in accordance with the applicable laws and
regulations.
In our opinion, the information in the report of the Board of
Directors is consistent with the information in the nancial
statements and the report of the Board of Directors has
been prepared in accordance with the applicable laws and
regulations.
If, based on the work we have performed on the other
information that we obtained prior to the date of this auditor’s
report, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We
have nothing to report in this regard.
Helsinki, 26 January 2022
KPMG Oy Ab
Toni Aaltonen
Authorised Public Accountant, KHT
THE REPORT OF THE BOARD
OF DIRECTORS
CONSOLIDATED
FINANCIAL STATEMENTS
PARENT COMPANY
FINANCIAL STATEMENTS
BOARD’S PROPOSAL FOR PROFIT
DISTRIBUTION
SHARES AND
SHAREHOLDERS
AUDITOR’S REPORT
125
ELISA FINANCIAL STATEMENTS 2021
To the Board of Directors of Elisa Oyj
We have undertaken a reasonable assurance engagement on
the iXBRL marking up of the consolidated nancial statements
for the year ended 31 December, 2021, included in the Elisa
Oyj’s digital les [743700TU2S3DXWGU7H32-2021-12-31-en.
zip] prepared in accordance with the requirements of Article 4
of EU
Delegated Regulation 2018/815 (ESEF RTS).
The Responsibility of the Board of
Directors and Managing Director
The Board of Directors and Managing Director are responsible
for preparing the report of the Board of Directors and nancial
statements (ESEF nancial statements) that comply with the
requirements of ESEF RTS. This responsibility includes:
• preparation of ESEF nancial statements in XHTML format in
accordance with Article 3 of the ESEF RTS
• marking up the consolidated nancial statements included in
the ESEF nancial statements with iXBRL tags in accordance
with Article 4 of the ESEF RTS; and
• ensuring consistency between ESEF nancial statements and
audited nancial statements.
The Board of Directors and the Managing Director are also
responsible for such internal control as they deem necessary to
prepare the ESEF nancial statements in accordance with the
requirements of the ESEF RTS.
Auditor’s Independence and Quality Control
We are independent of the company in accordance with the
ethical requirements applicable in Finland, which apply to
the engagement we have performed, and we have fullled
our other ethical obligations in accordance with these
requirements.
The auditor applies International Standard on Quality Control
1 and accordingly maintains a comprehensive system of
quality control including documented policies and procedures
regarding compliance with ethical requirements, professional
standards and applicable legal and regulatory requirements.
Auditor’s Responsibility
In accordance with the Engagement Letter our responsibility
is to express an opinion on whether the marking up of the
consolidated nancial statements included in the ESEF
nancial statements comply in all material respects with
the Article 4 of the ESEF RTS. We conducted our reasonable
assurance engagement in accordance with International
Standard on Assurance Engagements 3000.
The engagement involves procedures to obtain evidence
whether;
• the consolidated nancial statements included in the ESEF
nancial statements are, in all material respects, marked up
with iXBRL tags in accordance with Article 4 of the ESEF RTS,
and;
• the ESEF nancial statements and the audited nancial
statements are consistent with each other.
The nature, timing and the extent of procedures selected
depend on practitioner’s judgement. This includes the
assessment of the risks of material departures from the
requirements set out in the ESEF RTS, whether due to fraud
or error.
We believe that the evidence we have obtained is sucient
and appropriate to provide a basis for our opinion.
Opinion
In our opinion, the consolidated nancial statements included
in the ESEF nancial statements of Elisa Oyj identied as
[743700TU2S3DXWGU7H32-2021-12-31-en.zip] for the year
ended 31 December, 2021 are marked up, in all material
respects, in compliance with the ESEF Regulatory Technical
Standard.
Our audit opinion relating to the consolidated nancial
statements of Elisa Oyj’s for the year ended
31 December, 2021 is set out in our Auditor’s Report dated
26 January, 2022. In this report, we do not express an audit
opinion, review conclusion or any other assurance conclusion
on the consolidated nancial statements.
Helsinki 15 February, 2022
KPMG OY AB
Toni Aaltonen
Authorised Public Accountant, KHT
Independent Auditor’s Reasonable Assurance Report
on Elisa Oyj’s ESEF Financial Statements
AUDITOR’S REASONABLE ASSURANCE REPORT ON ELISA OYJ’S ESEF
FINANCIAL STATEMENTS
THE REPORT OF THE BOARD
OF DIRECTORS
CONSOLIDATED
FINANCIAL STATEMENTS
PARENT COMPANY
FINANCIAL STATEMENTS
BOARD’S PROPOSAL FOR PROFIT
DISTRIBUTION
SHARES AND
SHAREHOLDERS
AUDITOR’S REPORT
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