Hello, everyone, and welcome to Elisa's Q2 2026 analyst conference call. I'm Vesa Sahivirta, Head of Investor Relations, and here we have a very familiar team: CEO Topi Manner and CFO Kristian Pullola.

We also follow the normal practice, and we start with the presentation followed by the Q&A. Topi will go through the highlights of the report, and Kristian will elaborate more on finances.

Now we are ready to start, I give word to Topi. Please go ahead.

Thank you, Vesa, and welcome everybody to this Elisa Q2 earnings call. Let's go right down to the main points of our Q2.

During Q2, revenue was effectively flat, and comparable EBITDA was up by 1.4%, especially driven by successful execution of cost measures. We were still weighed down by last year's competition in terms of mobile service service revenue, but that was partly offsetted by a good progress in fixed service revenue, which grew 2.2%.

The overall telecom service revenue decreased 0.77%. In international software services, the comparable organic revenue increased by 0.6%.

This was largely due to the fact that customers were cautious in proceeding in their projects given the geopolitical uncertainties and higher energy energy prices, and with that, we saw some license deals being postponed further further to H2. What you should also note that in IndustrIQ, we sold earlier a a small business in Brazil impacting the comparable numbers.

In comparable cash flow, the comparison quarter was exceptionally strong, and during this quarter, the cash flow was solid at €71 million, decreasing due to higher financial expenses and less favorable working capital development. We were happy to note that the postpaid churn normalized during the quarter, further decreasing from Q1 levels, and landed at 16.7%, in line with our long-term average for Q2 churn.

In mobile postpaid subscriptions, we increased with 21,000, of which 15,000 were 15,000 subs were related to IoT and M2M. With these numbers, our market share in terms of mobile subs remained stable during the quarter, as we wanted it to be.

The fixed broadband subscription base is increasing nicely in this quarter with 3,500 subscriptions, and we do experience good demand, improving demand in terms of fiber business. As mentioned, our cost measures were successful during the quarter, indicating also clearly that our transformation program is proceeding according to plan.

At the start of the year, we moved to quarterly dividend, and following that, the Board of Directors now decided for the second installment of the dividend, namely 60 cents, and that will be paid to shareholders on the 29th of July. Looking into the revenue development, the revenue landed at €551 million.

As stated, mobile services weighed down given the last year's competition. Also, divestment of Epic TV is something to note in in this one, and during the quarter, we also ramped down and discontinued our public switched telephone network, impacting the revenue a bit.

Fixed services, as stated, and equipment sales were were supporting the revenue revenue growth during the quarter. We're happy to note that EBITDA margin improved during the quarter to 36.5%, and the whole EBITDA landed at €201 million.

This was driven by efficiency measures, the transformation program as stated, and then in part also by reduced sales and marketing cost. In terms of telecom service revenue, I already mentioned that we were weighed down by last year's competition in terms of mobile service mobile service revenue.

It is important to note, though, that the mobile service revenue started to grow on quarterly quarterly basis in comparing with Q Q1. It is also noteworthy that in Q2 last year, we started the rollout of the so-called security features hard-bundled with our mobile subs, and we started that rollout with a large cohort of back-book price changes, and that was supporting the Q2 '25 comparison quarter in terms of mobile service revenue.

In line with the quarterly growth in MSR, the ARPU started to increase a bit during the quarter and landed at €24 €24. When we look at our mobile KPIs now, the key message is that they returned to normalized levels.

In Q2 this year, the new sales prices actually continued to increase from Q1 and exceeded the level of Q2 last year. This was a positive development on the market.

However, we need to note that on the market, the share of fixed-term mobile contracts has exceeded increased significantly, and that means that there is a longer time lag than previously in terms of the new sales prices moving to book. This means that, for example, if we acquire today a customer from our competitor, that customer might be moving into our book with a delay of three to four months, depending on when the customer's fixed-term contract ends with the previous service service provider.

This also means that the new sales prices impact to service revenue will come in with a delay, and it will be more visible in Q4 in particular. Churn, as stated, decreased from Q1 levels and landed at 16.7%, which is a tad below our 10-year average of Q2 churn, which is 16.99%.

Also, the mobile sales and marketing cost, including the voucher costs, have been normalizing during the quarter, and there was a bit of a decrease from Q1 levels. All in all, good to see normalized levels in in the mobile business, in the forward-looking in indicators, and in the past with these levels, we have been able to deliver solid MSR growth, and as stated, that growth will follow with a time lag, assuming that the market stays on on these normalized levels.

When we look at our business segment by segment, in Consumer business, the revenue was impacted by the divestment and the mentioned phenomenon in terms of mobile business. It was good to see support coming from fixed services and equipment sales, and then the cost measures were successful in Consumer business, and the segment EBITDA improved with 2.1%, EBITDA margin hitting 43%.

In Corporate Customers, overall a very solid quarter. Revenue weighed down a bit by equipment sales and also the discontinuation of the PSTN network, supported by fixed services, and in digital services, in in particular by high-margin hybrid cloud services and data data services, which was encouraging to see.

The cost management was successful in this segment, and EBITDA improved with a very solid 4.2% for for that segment. In International Software Services, in turn, a more challenging quarter.

Comparable revenue growth was 0.6%. Here we need to remember that Q2 is seasonally typically the weakest in Elisa IndustrIQ business and overall in software software industry.

We did see some license deals being postponed to H2 during the quarter. However, it is important to note that we did not lose any any deals.

Nevertheless, with the new CEO, Mikko Soyerla, we will be starting now specific measures to improve the profitability of Elisa IndustrIQ business, looking into sales, looking into boosting revenue, as well as capturing synergies on on the cost cost side of things. In Estonia, in Estonian market, we saw solid progress, revenue increasing 3% on the back of mobile and fixed services, also some support from equipment sales.

EBITDA increased by 13%, driven by the mentioned service revenue growth, and then also an accounting alignment internally in in in Elisa. Good work, solid progress in Estonia.

We continue to be focused on implementing our strategy, and now especially in terms of 5G and fiber. As stated, in 5G and mobile services, we see normalized mobile indicators, improving the outlook, and with fiber business, we are seeing good organic demand in fiber to the home as well as fiber to the building, and then as a new category of fiber business, the data center connectivity comes in offering longer-term revenue support.

I will come back to that in a in a minute. In International Software Services, as stated, we will be starting specific measures to boost the revenue, take home synergies, to boost profitability.

In simplicity and productivity, the cost measures have been successful, transformation program is proceeding according according to to the plan. We will be staying focused to implementing our initiatives related to all of these focus areas.

In mobile business, 5G penetration grew during this quarter more than normally during the quarter. This was on the back of a focused sales activity, we should not expect this 5G penetration to increase at this rate on quarters quarters to come.

As stated, in fiber business, we are seeing some good momentum. The fiber subscription base continues to grow.

At the beginning of July, we acquired in Lapland area in Finland a fiber network provider with some 8,000 customers, a bolt-on acquisition in that space, and then related to the fiber to the building, we announced a customer win, a partner win from DNA. The largest rental housing company, Lumo Plc, having 44,000 apartments in Finland, chose us as their fiber to the building provider.

Good to see that progress in in in the fiber business. Related to the overall fixed services, during the quarter, we ramped down successfully our PSTN network.

That network has been serving us well for 140 40 years, and now customers have been moving to new technologies. For our fixed service business, this also means that now the drag of decreasing PSTN revenue will cease to exist, and with that, we will be having a clean sheet for fixed service revenue growth going going forward.

This quarter marks the start of our large-scale data center connectivity business. During the quarter, we signed first large-scale data center connectivity deals, and when we talk about large-scale data centers, we talk about newly constructed above 100 megawatt data data centers.

On the overall in Finland, the data center market is growing. We see more and more projects materializing, and the ultimate size of the market will depend on many many variables.

One of them is the overall AI supercycle development and the investments of especially the hyperscalers. Electricity availability and electricity cost will be impacting the investment levels, and so will the regulatory environment.

It is very clear that Finland is an attractive place for data center operators. We have an optimal climate, seismically stable land, one of the most reliable and best electricity grids in the world, low electricity prices, and very developed telecom infrastructure.

We as Elisa, we have clear competitive advantages in in this market. We have a strongest and widest backbone network in Finland and to and from Finland.

We are the market leader with excellent capabilities to build fiber connections on time, and timely delivery is really important for for the data data center operators. Then, of course, we also have a strong track record in operating networks efficiently and reliably.

Clear strengths on on on this category of of business. Then when we look at the data center connectivity business characteristics, the way that business is emerging, as stated, the market is emerging, but it holds significant future potential for us.

At the same time, it is important to note that we are focusing on data center connectivity business, meaning the fiber connections to the data center, potentially supplemented by optics in some cases. That means that that connectivity bit is only a small part of the overall data center investments that the data center operators are are looking at.

Based on the deals that we have now signed and based of on the deals that we are now in discussions of, we see attractive capital returns, and importantly, we see attractive cash flow characteristics. We think that this will present a notable positive EPS impact to Elisa over time.

It is important to understand that this is a long-term business. When we enter into a deal, the construction periods vary.

Smaller deals might involve a construction period of some months, and the larger deals include a construction period up to 12 24 months. A long-term business in in nature.

The CapEx needs that will arise from these deals will be handled outside of our 12% CapEx to sales envelope. Let me re-emphasize that what we see is that the cash flow characteristics of the business are attractive.

Going forward, we do not plan to disclose individual deals in in this this category category of of business. As stated, an emerging business opportunity that has now reached an important milestone with first large-scale data center connectivity deals being signed during the quarter.

Looking into other aspects of our business, in Home Services, during the quarter, we reached a new agreement with MTV, a Finnish commercial TV company, after lengthy negotiations, which also in included a blackout period for for our customers. Nevertheless, it's now good to see that this agreement is in place.

We will be deepening the collaboration with MTV over time, also developing our offering to customers together with MTV. When we go into the corporate space, we clearly see an increased need for security solutions.

During the quarter, we entered into a pilot agreement with Finnish Border Guard and a drone company called SensoFusion, testing a drone monitoring and drone jamming solution, which is an important and intriguing entry to mission-critical defense business related to related to drones. As stated, in international software business in Elisa IndustrIQ, the revenue and profitability was below our expectations due to the delays that we saw on on the market.

It is important to note that the order intake developed positively, and the order backlog as such was strengthened. In this part of the business going forward during the this calendar year, we now expect to see revenue growth in the range of 5% to 10% 10%, and as mentioned, we will be doing these specific measures to improve profitability and secure an improving profitability from last year's levels.

We also had a good customer win during the during the quarter in Spain. MasOrange, big telco, chose our software solutions, and and that demonstrates the quality and the competitiveness of the solutions that that we are having in the telco space.

In terms of sustainability, Time Magazine and Statista once again selected us to the list of 100 most sustainable companies in the world. This time around, we ended up on on number 60 on on the 61st place, and this was indeed third time in in a row, demonstrating our long-term commitment to sustainability work.

Then when we go into outlook and guidance, our guidance for this year remains unchanged. Revenue, we expect to be at the same level or slightly higher than in '25, and comparable EBITDA we expect to be within the range of €815 million to €845 million, the midpoint there being €830 million million euros.

In terms of assumptions related to the guidance, we now expect the telecom service revenue to grow within the range of 0% to 2%, and please note that this is related to the outlook for calendar year of '26. We do see the mobile indicators normalizing, and with those indicators, in the past, we have been delivering solid mobile service revenue growth, but it comes in with a delay, being especially visible in Q4.

The same postponement phenomenon is visible in in Elisa IndustrIQ. At the same time, the totality of this means that our cost measures are progressing well, and then what is noteworthy also is that the data center connectivity opportunity will offer long-term support for the telecom service revenue development.

With that, I will hand over to Kristian to cover the rest of Q2. Thank you.

Thank you, Topi, and good day also from my behalf. In Q2, group revenue was essentially flat year-on-year at €551 million.

Within that, we saw expected mix effects. Mobile services, the Epic TV divestment, consumer digital services, as well as the traditional fixed PSTN continued to weigh on the top line, while fixed services, equipment sales, and energy software services supported revenue.

Despite the slightly crying in revenue, comparable EBITDA increased by €3 million to €201 million, and the EBITDA margin improved to 36.5% from the 35.8% in last year. The main driver here was really the operating cost savings, which came both from the ongoing transformation program as well as from disciplined cost controls more broadly.

Comparable EPS increased from 59 euro cents to 59 euro cents from 57 euro cents, and all in all, we delivered solid profitability and better EBITDA margins even with the slight revenue decline. When it comes to the second-half development, we did see positive development in the mobile indicators in Q2, as Topi discussed.

However, as said, the financial impact will be coming in with a lag and will be especially visible only in Q4. This will have an impact on the normal seasonality that we have seen over the years, where Q3 EBITDA has been stronger than Q4.

This is not going to be expected this year. Q4 is expected to be stronger this year.

CapEx for the quarter was €72 million, down from €76 million last year. The allocation was very consistent with our strategy, main investment areas remaining 5G coverage expansion, fiber buildout, and IT systems that support simplification, customer experience, and productivity.

Some part of the fiber CapEx was implemented through the JV that we established last year. You might recall from Q1 that we emphasized strict CapEx discipline and focus on technology leadership.

That approach continues. We are investing where we see clear long-term value and attractive returns, while avoiding discretionary and low-return spend, especially lowering CapEx for older technologies and older systems.

All in all, we are maintaining disciplined investment levels while funding infrastructure and IT that underpin the future growth. Comparable cash flow in Q2 was solid at €71 million, down from an exceptionally strong €130 million in the prior-year quarter, which represents a 37% decline.

There are three three main drivers behind this. First, lower CapEx compared to last year was a positive for cash flow.

Second, higher paid interest costs weighed on cash flow, reflecting both higher interest rate environment as well as the fact that we this year paid a larger portion of the whole-year interest costs in Q2. Then thirdly, and most importantly, net working capital development was less favorable than in Q2 '25, and that quarter benefited from very strong positive net working capital movements, especially on payables.

In Q1, we highlighted that net working capital had developed positively for five consecutive quarters. In Q2, we saw flat development.

We continue to focus on working capital efficiency and managing interest costs to support cash flow in the second half and beyond. All in all, solid cash conversion in a tougher comparison quarter, with room to improve in working capital and a normalized cash interest impact going forward.

Our capital structure remains efficient and clearly within our target ranges. Net debt at the end of the quarter was slightly down from the year-end.

Net debt to comparable EBITDA was at 1.8 times, which is well inside our target range of 1.5 to 2.0 times. Equity ratio was 39.1%, above our minimum target of 35%.

We have a well-balanced maturity profile with bonds, loans, and undrawn revolving credit facilities. As indicated earlier this year, we are focusing on proactively refinancing our '27 maturities to maintain cost-efficient and diversified funding.

Both S&P and Moody's reconfirmed our strong investment-grade ratings during Q2. Return ratios remain at good levels.

Return on equity and return on invested capital are both running in the high teens, consistent with our ambition to deliver industry-leading returns through strict CapEx discipline and strong focus on cash flow. All in all, Elisa's balance sheet is strong, our leverage is comfortably within targets, and we are well-positioned to continue investing in growth, paying dividends, and maintaining solid returns to shareholders.

With that, I hand back the call to Vesa for Q&A.

Thank you, Kristian. Now we move on to Q&A part, and we ask first question from the conference call lines, please.

Hello, everyone. I had two questions, and apologies, the first one is a little wordy, but just wanted to dig in on your telecom revenue growth visibility.

Just to check, it looks like or it sounds like the downgrade on your guidance for telecom revenue growth this year is due to you seeing a greater degree of these 12-month fixed-term contracts that were signed during the second half of 2025, that mean that first-half '26 improvement in the market you're seeing just isn't translating to better growth until those fixed-term contracts end towards the end of 2026. That's how I understand it at least.

The question is, why weren't you aware of the degree of importance of those 12-month contracts that have been sold during the second half of '25? How confident are you now that you have a good enough grip on the market dynamics and tariff structures?

If you are now confident, can you tell us if that mobile service revenue growth could come in positively in the third quarter of '26, or do we have to wait until the fourth quarter? It's just a question around the visibility that you have on what's going on in the market, and your confidence to now guide to that improvement in the back end of the year.

Then the second question is much shorter, it's just on the ISS growth. Are you totally sure that the lower revenue growth you're seeing is not at all structural in terms of headwinds, and is all macro-related?

Just wondering if there's a risk here that you're just missing out on some AI-related revenues as your customers reallocate spend towards that, and that's just not being spent with you. Thank you.

Thank you, Andrew. If Kristian, you start with the first one, and I follow with the second.

Yeah.

On the TSR, there has been a bigger lag impact from the competitive environment than what we anticipated and modeled at the beginning of the year, and that is why we updated this year's outlook for revenue growth there. The positive impact from the market stabilization and the price increases that we have seen will be more visible in Q4 and not as much visible in Q3.

Yeah.

To add to that, I think that the market phenomenon in this one has been that on the whole market, all players included, it seems that the share of fixed-term contracts has been increasing quite a bit, and that share with competitors is something that they do not disclose and have not disclosed. This has been sort of an unknown factor to all players on the market during the year.

Now the empirical evidence points to the share of fixed-term contracts being clearly increased on the overall market, increasing the time lag that we are seeing in this part of business. Eventually, with the normalized levels of mobile indicators, the revenue will follow.

Related to the IndustrIQ part of the business, whether the revenue slowing down is structural, we are of course observing this very, very closely, and we are listening to our customers very, very closely in this one, and we do not see AI-related impacts in this one. We are dealing with mission-critical software for our customers, be that telecom software or be that industrial automation software, and with that, we have a clear moat in our software business.

The delays that we have now experienced with the license revenue are clearly related to more practical matters, like production customers projects related to investing in new production facilities being postponed. We do not see deals being lost, and that is important to note related to your question.

Thanks, both of you. Just a quick follow-up, kind of surprised by the amount of the fixed-term contracts.

Understand that you don't see the contracts signed by your competitors, but surely you saw the amount of fixed-term contracts you guys were signing in your commercial offers, etc., know what's going on in the market and where the competition is. Understand that there was a change in market dynamics, but given that there's been some volatility in market dynamics, how confident are you that you have a firm grip on the tariff structures, etc., that's being signed by your competitors now, given that so much of the price engagement in Finland is below the counter?

Just gauge that degree of confidence that investors can have in that fourth quarter improvement.

I think that if we go back and look at what has happened in the last 12 months, since last summer in the Finnish mobile market, clearly the phenomenon of the share of fixed-term contracts increasing significantly starting from last year has been impacting the way revenue comes in for all players. That is clear as such.

What we do see now is that the important indicators in mobile business are normalizing, as you saw from our presentation, and therefore, we do have a line of sight to clearly improving MSR going forward.

Thank you.

Q4.

Thanks.

Oh, that's great. Thank you.

Good morning, everyone. I also had two questions, please.

First one really following up from Andrew's question on Finnish mobile. You've made it clear in the past few quarters that it's not acceptable for you to lose market share, and I just wondered, have you seen the competition back off because of this stance over the past few quarters?

Is that why the market environment has improved, because you've taken this stance and pushed back on promotional activity? Do you intend this stance from Elisa to continue going forward, or would you consider giving the market a bit more room to breathe?

Is the first question. Then just secondly, I was intrigued by the fiber acquisition that you've in Lapland.

It's obviously very small, 8,000 customers, but are you seeing that the regional fiber players starting to really struggle given that they really lack scale, and is there opportunities going forward to make more of these bolt-on acquisitions that are obviously very value-creating? Thank you.

If I start from the fiber part, I think that the regional fiber players are open to discussions related to consolidation, and we see fiber assets at play on the market. We have strict conditions for value creation and for geographical location, but if we see assets on the market that are meeting our strict criteria, then we are willing to do similar bolt-on acquisitions that we did in Lapland in this case.

Then, could you please repeat the mobile service question so that I'm completely sure that what was your main point related to that?

Sure. It's just that you've made it very clear that you're not prepared to lose market share, and heavily pushed back in the second half of last year on the competition that you faced.

I was just wondering, do you think that the improvement we're seeing is because you've pushed back, and is that a stance you expect to continue going forward?

I think that of course the overall market dynamic is an equation of all the actions that all players are taking on the market. I think that what is worthwhile to note in this regard is that we do not see the mobile virtual network operators having a big impact on the market.

The competitive dynamic has been especially a dynamic between the three established players on the market. When it comes to market shares, when you look at the postpaid mobile subs during this quarter, Consumer and Corporate included, our market shares were stable.

We are keeping our market shares. Clearly, the market has returned to normalized levels, at least in our case.

We have not seen competitors disclosing their numbers of Q2 yet, but the bottom line is that when we look at our mobile indicators, no matter whether we look at new sales price, whether we look at churn, or whether we look at sales and marketing cost, whether we look at the net adds, we see normalized levels, and of course that is very encouraging.

That's great. Thank you.

Could I just have a quick follow-up, please? You mentioned returns when you're talking about acquisitions, and clearly the data center projects have got to make an acceptable return.

Have you disclosed or could you give us an idea about what the hurdle rate is for these projects and acquisitions?

We will make sure that the capital returns are attractive, and cash flow profile is attractive. Nothing more to add there.

Perfect. Appreciate your time.

Thank you.

Yes, good morning, everyone. Thank you for the presentation.

I have also got two questions, please. One also on the especially mobile service revenues, but coming from I guess a bit of the opposite angle.

What we know is that last year, the competitive environment started deteriorating in the third quarter, then was the worst in the fourth quarter. What we also know is that a lot of the people who got on promotions at that time have these promotions for 12 months, and after 12 months, they should be kind of rolling off of these discounts onto regular pricing.

I think previously, you expected something like a three-month lag in terms of the kind of full pricing to ARPU translation due to these contractual issues that you pointed out. Now you seem to be more in line with the peers saying that's going to be a bit longer than that, and I think all of that is clear.

At the same time, you're flagging that there is an expected improvement in 4Q '26, and this is where I struggle to understand the situation a bit, because if the worst promotions were given in 4Q '25, and there is, as you say, something like a four-month delay in terms of when you sign the contract up until when the pricing is actually effective, then shouldn't it mean that 3Q '26 is when things deteriorate further, given this lag, then the impact of those 12-months promotions actually lasts for a year, and only mid-2027 is when ARPU starts to really pick up again as people roll off of these promotions? I guess I'm just confused with kind of trying to put all of those pieces of information together, if you can help me out, please.

Yeah. If we decompose that a bit, first of all, if we look at the price levels of new sales as of now, we are significantly on significantly higher levels than we were during the most fierce campaigning in Q3 and Q4 last year.

There's a big difference. That, of course, if that moves even partly to the price level of those fixed-term contracts being renewed during the fall of this year, then that will be very supportive of of Q3 of Q4 mobile service revenue.

That is something that we need to keep in mind. I think that the time lag especially comes from this one-time effects of our share of fixed-term contracts as well as competitors' share of fixed-term contracts rapidly increasing during the fall of of last last year.

That also means that the overall volume of number transfers between between competitors on the Finnish market during the first half has been little lower, and therefore, the weight is smaller in terms of impacting impacting the MSR when it comes to new sales.

Thank you, Topi. I guess what you're saying is that the step down from the promotional activity will be in the base kind of 3Q, but then the underlying trends, which are still the healthy kind of 4G to 5G upsell and so forth, will eventually kind of be the higher impact, and overall a positive one, combining those two things together starting 4Q.

Then as we progress in 2027, potentially best-case scenario, you continue to have the positive underlying trends, and as people roll off these kind of 12-month discounts with that four or whatever months delay, there should be a double positive starting kind of say mid or 2Q '27 or something, mid-'27. Is that roughly the correct understanding?

Maybe rather than confirming your kind of thinking, maybe the way to think about this is that the lag on transfers is actually longer than the lag on renewals. That's, in a way, maybe the dynamic to reflect here.

When it comes to renewing the one-year contracts that were entered into last year, there will not be a similar lag there as there was when we had transfers to us, some of which were fixed-term contract transfers, they didn't kick in at sales, they only kicked in when those contracts ended. That's what is creating this dynamic where we are feeling the headwind now, and there will be a tailwind then going into the second half, especially visible in Q4.

Thank you. If I may, a second question.

Just on the flow-through of the cost savings, I think we're seeing that on a gross basis, if I kind of break things out, obviously in the past two quarters, you had high-single-digit million savings year-over-year in employee costs, and I guess some underlying cost savings in other areas, including the commercial costs. The net translation into positive EBITDA growth on a stable top line is still pretty limited.

I was just trying to understand if that is primarily the responsibility of the top line in terms of the dilution of these efficiency gains, or is there something else going on maybe under the hood in terms of reinvestment, etc., that we cannot really kind of appreciate from the outside?

Maybe a couple of dynamics. When we talked about €40 million cost savings, that was across the board, kind of CapEx and OpEx, and clearly the OpEx is more visible in the P&L.

Yes, there is an element of reinvestment here also, and the flow-through to EBITDA from those cost savings is impacted by the headwinds that we are seeing from the revenue line. It is, in a way, a mixture of all of the above that you listed.

The program is on track. Most of the savings are in, and in that sense, that has been a great help when it comes to being able to grow EBITDA both in Q1 and Q2, even in this revenue environment.

Appreciate that. Thank you.

Thanks very much. Thank you for taking my questions.

I have a few small detail questions. The PTSN that you're closing down, do you foresee any further costs relating to that in coming quarters, or do you have everything behind you now in terms of cost, or do you have any write-offs or something to do on old equipment?

Would be interesting to hear. The second question on data centers and your investments, I appreciate you are careful on sort of the return metrics and all that stuff, but can you give us some timeline on when you do your CapEx work and when you foresee your positive cash flow to contribute to the group?

What's the time lag between those two? Thank you.

On the PSTN, this is now kind of materially behind us. It will not be a drag to our revenue compare anymore in a similar way as it has during the ramp-up period, and the material parts of the costs have been booked and we are now against those kind of provisions dismantling some of the air cables and so on.

Don't expect us to refer a lot to that anymore as we go forward. When it comes to the data centers, I will not give you much more detail.

I will only repeat what we said earlier, that the overall return, capital returns, and the cash flow profile from those deals is attractive. Again, when we say that, we look at both inflows and outflows.

Then we made a separate statement that the outflows, when it relates to CapEx, will be done outside of the 12 and 1/2 12 12% CapEx envelope that we have, but the cash flow attractive comment refers to both inflows and outflows.

Perfect. Great, thank you.

Yes, good afternoon, and thank you for taking my questions. I will actually ask one by one.

Maybe the first one, I just wanted to double check comments that was made actually by Kristian earlier at the call. Do you really expect that EBITDA in Q4 will be higher compared to Q3 this year?

Because I think looking at historical seasonality, the difference has been opposite, roughly by close to €10 million. Q3 always been better.

Is this year really so much Q4 loaded in terms of growth outlook?

Remarks, that is what I said. That was the intention of the communication.

Q4 is, as we see it, given the dynamics this year, going to be better than Q3, and in the past, it's been the other way around.

Very good. Maybe then the second question, what's relating to some nice first deals what you have done around data centers.

Maybe in terms of business opportunity, could you somehow frame it? You mentioned about deals covering at least 100 megawatt capacity data center investments.

How much this type of projects could contribute to your revenues, what is the business opportunity? Maybe the other general phenomenon what we see on Finnish data center market is that many of these mega projects are actually built over long period of time and in many, many phases.

How it works in terms of connectivity CapEx being done? Is everything done basically upfront, or are those investments also gradual over longer time period in these bigger projects?

If I start with the overall sort of business dynamics, and then Kristian, you can come in with the CapEx timing. What we do need to acknowledge is that this market related to data centers is emerging.

As stated, it holds significant future potential for us. The business is very, very long term of nature.

We see long deals on the market, up to 15 years of contracts after a construction period. The long-term nature of the business really needs to be acknowledged.

Therefore, our bottom line in the communication is that when we frame it, we see attractive capital returns, we see attractive cash flow characteristics, and over time, we see notable EPS support for Elisa. That is where we are in this one.

As we will have more deals, when we learn more about the market, then certainly we will be specifying our view in this one. This quarter marks the start of this large-scale contact center connectivity business for us with the first deals being signed.

I think just on the CapEx profile of each deal, as Topi said, early days. I'm sure every deal will be somewhat different.

We actually don't have enough data points to be able to say what will this typically look like other than, as said, we think, these are deals that are attractive both from capital returns and cash flow point of view. Maybe with that, let's move on, and I would like to ask people to limit themselves to one question only so that we get through the queue on time here.

Thank you.

Hi, guys. Thanks for taking my question.

I'll use my one question on cost efficiency matters. I think on top of the €40 million savings program, you've also communicated that you see incremental opportunities to improve efficiency relating to AI.

Can you sort of provide an update on how that progress is going and how successfully have you been implement AI into your operations and hence gain additional potential cost savings avenues? Thank you.

Kristian can follow on the operations bit. Generally related to the AI, I would like to emphasize that the way we look at AI is that we see a growth opportunity.

We can leverage AI in digital services, in software business, in connectivity business to generate growth, profitable growth. Then certainly, we will look into all the usual suspects related to improving productivity, automating processes, looking into AI-assisted coding, and then we are already a technology frontrunner globally in network automation, and we are moving forward toward autonomous networks gradually with the help of sophisticated AI tools.

The long-term picture is that we do see upside in this one.

I think when it comes to maturity, we are at different maturity levels in different parts of the organization. When it comes to leveraging AI for running the networks efficiently, we are very very much mature.

When it comes to some process areas, it's early days, and we have put in fundamental building blocks to be able to leverage that going forward. In that sense, I don't think it's that different from what you see in the market in general.

I do see that this is a big opportunity that will give Elisa a lever over the long term, and we are working on it in a focused manner.

Got it. Thank you.

Good afternoon. Thank you for taking my question.

Back to these fixed contracts, I would like to know what makes you confident that when these fixed contracts that was taken last year in the sort of competition bonanza, when they expire, how confident are you that that will not trigger new increased competition and higher churn? Just understanding, because there is little room now for you to be able to reach the more long-term target of revenue growth above 4%.

Just trying to understand how you model this going forward. Thank you.

As stated, the mobile indicators have normalized already, when you look at the forward-looking indicators, there has been a notable change on the market already, and when we look at the new sales levels as of now in Q2 and compared to last fall, there's a big difference, as one of our investor presentation slides indicates. This competition bonanza, as you referred to, last fall, was a market phenomenon.

That means that all of the players on the market have a lot of fixed-term contracts to renew. Everybody will be busy, first and foremost, taking care of their own customer base.

Then I think that when we look at the market now, we see sort of a stable environment in terms of competition dynamics. That is reassuring related to your question.

Thank you.

Hi. My question would be on the dispute with MTV.

What financial impact should we assume from this, and I'm sort of thinking impacts on future revenues, costs, and then customer churn?

The one-word answer would be neutral. We are happy to have the renewed contract with MTV as of now.

We will be deepening our collaboration with them. We will be coming forward with new offerings to customers over time.

That's where we are currently. When you look at the financial impact during the course of this year and beyond, it will be neutral.

We did receive customer feedback during the blackout. I'm sure MTV did as well.

When we look at our churn numbers in our entertainment services and so forth, we do not see a big impact. Neutral is the answer.

Thanks.

Hi, guys. Thanks for taking my question.

Just a quick one on ISS EBITDA growth. I think as people have mentioned previously, maybe structurally the double-digit growth is becoming more challenging, and so does this make it more difficult to materially step up your EBITDA here when I look at H1 OpEx for ISS, it was up 6%, and revenues are lagging this.

Just wanted to understand your outlook here for EBITDA growth in this business.

What we will need to remember related to the software business that software business with the license income is inherently more volatile than our classic telco business. That's one aspect to keep in mind.

Another one is that Q2 typically in software business is seasonally the weakest. We do see a way forward to improve our EBITDA gradually in IndustrIQ business, and on the back of the bolt-on acquisitions that we have been doing in the past, we do have synergies that we can capture, cost synergies that we can capture in this part of the business.

As mentioned, we will be doing specific measures to boost the revenue in IndustrIQ as well as take home synergies in terms of cost.

Great, thank you.

Thanks very much. I wanted to go back to the data center investments there.

These are very big projects for the people building them, I would assume that they are quite keen to get some help with the financing. Is there anything unusual in the contract structures that you're negotiating in terms of risk sharing, in terms of I don't know, payment schedules, anything of that sort that would make the connectivity business in the data center sort of fundamentally different to, I don't know, connecting a big building, a new building, anything of that sort?

Is there anything that you're faced with in these negotiations that is actually different from quote/unquote "normal" connectivity business? Thank you.

Yes, I would maybe say rather the opposite, and what I mean with that is that the data center investments for the investor and the operator are huge investments, and for those, I'm sure they are having financing discussions with the vendors that provide the majority of the CapEx going in. The connectivity part is relatively small, but it's super critical for being able to operate the data center.

Because of that, they want a vendor who is reliable, who can deliver on time, and thus our strengths actually come through there. I think that is also then visible in the kind of asks that we have been seeing when it comes to contract terms and so on.

I think that we are in a good position here because they need us, they see our strengths, and our portion out of the totality is a relatively small portion.

Very clear. Thanks.

Yes, hello. Good morning, and thanks for taking my question.

I had a question around dividends and cash flows, please. I guess if we look at recent years and if you see your comparable cash flow and sort of strip out positive working capital impact, you've not really covered your dividend payments in recent years.

This year again in H1, you mentioned the working cap headwind, but again, ex-working capital also cash flow is basically flat year-on-year if we compare H1 this year versus H1 last year. Cash flow hasn't really grown on an underlying basis.

In this context, would just be interested to hear your thoughts on how you think about your dividend growth going forward. Are you just sort of comfortable sort of not covering dividends with cash flow and continuing to link it with earnings per share, or do you think it's important to have the dividend sort of covered by underlying cash generation?

Thank you.

Again, I think we have a strong focus on driving cash flow. The reason why we have been able to pay somewhat higher dividends than what the earnings would have allowed for is because of the strong cash flow.

I don't see that there is any change in that dynamics, and that's how we're going to continue to manage the business and also generate the ability to continue to pay dividends. I'm not sure I fully understand where you're coming from with the question.

Yeah.

Just to reconfirm, our dividend policy is intact, and we see also levers in our disposal to positively impact cash flow.

Thank you. Just to clarify, can you maybe give us any color around working capital, please?

Obviously last year it was quite a big positive boost, I think around €45 million for the full year, which was more than 10% of your final sort of cash flow for last year. This year we've seen a reversal during Q2.

How do you sort of see that evolving through the second half of the year, please, when it comes to working cap?

We didn't see a reversal in networking capital during Q2. We saw flat development in Q2, we didn't get the exceptional benefit that we saw in Q2 last year, but development was still stable.

I've talked about this now each quarter that we've done a lot of work on inventories. That's from where the majority of benefits have been coming from.

I do see further opportunities for us to improve on both the payables as well as on the receivables side, in that sense we'll continue to work on those levers when it comes to the operating cash flow. Then, when it comes to releasing capital from the business, that's another story where we are also actively looking at all the levers that we have, and that builds to Topi's answer that we have levers within our control that we can drive better cash and capital performance going forward.

That supports in a way the ability to pay dividends.

Okay. Thank you very much.

Hi. Thank you for taking the time to speak to us today.

My question is regarding ISS. I wonder whether M&A has contributed to the deterioration of organic performance and if too much M&A has left the division a bit unwieldy and unsuited.

At the front of my mind are the acquisitions made in 2024, especially the large SedApta acquisition. Any color you can provide on the performance of these businesses acquired in 2024 would be really useful, as they were quite material to the growth of the division.

Would you also be open to further disposals of non-core ISS assets, I guess the non-telco operations of ISS? Thank you.

When we look at the M&A in general in ISS and SedApta acquisition in particular, we do not see causality between those deals and the current postponement of deals that is driven by geopolitical and economic uncertainties. We are happy with the acquisitions, and we are well on our way in terms of integrating them.

That's where we are related to that question. Then if your latter part of your question was pointing to whether we would be open to bolt-on acquisitions in ISS space going forward, the answer would be yes.

If we have a clear strategic fit, and we see a value-creation possibility, then we are ready to allocate some capital to bolt-on acquisitions in ISS, but we are clearly in the bolt-on category in that space.

Maybe just tackling your question on, are we kind of pruning the portfolio? I would say that that is the mandate of Mikko to see that, okay, it's always optimal.

There might be kind of certain elements that don't belong there and there might be certain needs to do bolt-ons. It kind of goes both ways, but the kind of the bulk is correct and something for us to leverage in a more synergistic manner going forward.

Yes.

Brilliant. Thank you very much.

Yes, thank you, and thank you for all your questions. Unfortunately, we couldn't take more questions during the Q&A session because of the time restrictions here.

Now we wish you all very, very nice summertime and until the next event. Thank you.

Bye-bye.

Thank you. Bye-bye.

Bye-bye.