Elisa Oyj (ELISA) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to Elisa's Capital Markets Day 2025. I'm Vesa Sahivirta, the Head of Investor Relations. It's great to see you all here, and we have a full house. So thanks for coming. Elisa has been characterized with expressions, stable, continuous growth, predictable, reliable and even more in a positive sense. But importantly, what we say we deliver. Today, we are seeing very interesting things based on our new updated strategy and keeping in mind that what we say we deliver. We have 5 presentations today. We start with a CEO presentation, followed by consumer customers and corporate customers. And after a short break, we continue with our international software businesses. And finally, we have a CFO presentations. After each presentation, we have time for a couple of questions. And at the end of the day, we spent more with the Q&A. But now let me welcome our first speaker. Topi, please.

Thank you, Vesa, and good morning, everybody. Welcome to Elisa Capital Markets Day. It seems that the most of you decided to take the cheap seats back there. But nevertheless, really good to see you all great participation today. So today, we will be telling you about next phase of Elisa's strategy. And in all of its simplicity, it is about faster profitable growth. Earlier this morning, we sent out a press release outlining our new midterm targets. And in those midterm targets, we are doubling our revenue growth target from more than 2% to more than 4% going forward. And we want our revenue growth and profitability to develop hand in hand. So with that, we are increasing our EBITDA target from more than 3% to more than 4%. In the press release, we also announced that we will be reporting going forward, International Software Services as a separate segment. So International Software Services, was previously known as International Digital Services. And the change of the name underscores that it is indeed a software business that we are building. We have now created growth momentum in that part of the business and we have reached a new level of maturity in that business. So we want to increase transparency. We want to improve understanding around that business. And in connection of doing this, we are also introducing Elisa Industriq as our international brand for software business. And as you might have figured out, Elisa Industriq is a marriage of 2 words, Industry and IQ industry, shortened a bit. And with that name, we want to underscore that it is operational intelligence software that we are offering to our -- our customers. Based on data, based on advanced analytics based on machine learning, we enable our customers to improve their quality in their production and we enable them to improve their efficiency in the production. But before we start to look at what fast profitable growth is all about, let me just spend a brief moment looking into how we have delivered in the past. Starting with customer satisfaction. In Elisa, we have a very focused and consistent way of working with customer satisfaction. And as the graph shows that has been bearing fruit over the years. And at the end of year. We were at all-time high levels in terms of customer satisfaction, measured with Net Promoter Score. So this score combines consumers and corporates alike. And it clearly showcases our overall competitiveness out there in the marketplace. As a company, we are also known of innovation improving the quality of -- for our customers. And our world-leading network automation capability is the case in point. So today, that means that we can preemptively detect 99% of various faults and disturbances related to our network. I mean, be that denial of service attacks, be that disturbances in the electricity supply. And we cannot only detect those disturbances preemptively, we can take care of them preemptively with automation without any significant manual labor. And that translates to pay the quality to our customers, leading to better customer satisfaction. And in the process, we will be reducing our OpEx. We have been reducing the number of incidents in our network with 81% over these years. At the same time, when the data volume has been increasing tremendously, and incidence cost money. So this lower OpEx is a source of competitiveness for us. So this network automation capability rooted in software capability is now something that we have translated into a software product, and we are selling that product in our international software business to other telcos and to other manufacturing companies. So these 2 graphs are great examples of the bedrock of Elisa's differentiation as a company. We are known of making some unique strategic choices network automation capability is one. Our unlimited data offering, speed-based pricing is another. We are known for strict CapEx prioritization. And we have been steering clear from big transformative M&A that oftentimes has not been that value creative for our European peers. So taking those unique strategic choices and combining that with our culture of excellence, continuous improvement culture, innovation and experimentation has been leading to industry-leading returns. Return on capital employed for us being 18.5%, which is roughly twice the median of our European peer group. So if we take a look at how we have performed during the last couple of years, since the previous Capital Markets Day, our revenue CAGR has been 1.4%. Our EBITDA on the back of the cost savings measures has been developing better plus 3.2% CAGR. Earnings per share, 0.2% CAGR, impacted by increasing interest rates and also some changes in the tax regulation. So summarizing all of this is that we have been performing in a solid fashion, but we need to accelerate. We need to accelerate. And this is exactly what we are addressing with our strategy of faster profitable growth. Our vision is that we want to be the global benchmark for generating value in communication and digital services. And all of this is founded on the bedrock that I mentioned; our pursuit of excellence, our desire to be better every day. So if I look at the vision, I think that we have great examples of being the global benchmark in communication, network automation, a great example unlimited data offering, speed-based pricing, resulting 5G monetization being another. But I believe that in digital services, including software, we have the possibility and opportunity to develop to the next level. And that is indeed something that we are addressing as part of this strategy. So when we go forward in realizing this vision, this is what we will be delivering in terms of number as stated, doubling the revenue growth to more than 4%, increasing EBITDA growth to more than 4%. Keeping our strict CapEx visibly. So after a couple of years of being at the levels of 13% or even a little bit higher in terms of CapEx to sales, we will come back to the level of 12% in terms of CapEx to sales going forward, keeping the discipline of strict CapEx prioritization. We will keep our balance sheet ratios intact. Net debt to EBITDA within the range of 1.5 to 2 multiple equity ratio above 35%. And we will also reiterate our profit distribution policy. Now we have 11 years of continuously increasing dividend on our back. That is appreciated by our shareholders, and we certainly want to continue on that trend in the future. So then what is the faster profitable growth all about? It starts with customers focused value creation, enabled by our team, engaged people, motivated people, competent people. Our spearheads for growth, our growth areas, if you will, include 5G and fiber. 5G and fiber is our bread and butter. Today, the 5G penetration in our customer base is less than 50%. So that means that more than half of the 5G up sales potential is still out there for grabs. So we have plenty of runway for continued 5G up sales for years to come that continues with the linear trend that we have been seeing in the past. And then that 5G up sales will be supplemented by new opportunity around mobile value-added services. I will come back to that a little bit later. Then we have a profitable growth opportunity in fiber, enhanced by proven cross-sales. We also have another opportunity of penetrating further into the space of home-related digital services. In this page, we already have a nice and profitable entertainment business in consumers' homes. And we have a possibility to broaden our offering. For example, we have launched a new solution, an energy solution for consumers to minimize their energy bills. The residential energy storage AI-driven, Elisa Battery. We have a possibility to introduce a new offering around physical security for homes. So in this category, we can broaden our offering by being better at cross sales. We will deepen the relationships with our customers. We will be having multiproduct relationships with our customers. And in the process of doing so, we will be generating new revenue and we will be improving the loyalty of our customers with more product links. And that, in turn, will impact churn positively for us. In corporate IT and cyber, we have an established business today, and we enjoy good growth momentum today. We are growing faster than the market. We are capturing market share. We are improving profitability in this business. We have a differentiated offering enabled by AI and automation. In this business, of course, we will need to be mindful of profitability characteristics of the business. This is a lower margin business. But at the same time, it is capital light. So return on capital employed can be attractive. If and when we make sure that with automation, with AI, we have the kind of one to many concept that will be ensuring upper quartile profitability in this category. And that is indeed something that we aim to do. In international Software Services, we can utilize the strong product offering that we have now. And we can expand that to new geographical markets with the repeatable model that we have developed recently. So all of these spearheads for growth, the growth areas will be enabled by our focus on simplicity and productivity. In terms of simplicity, we will be starting a multiyear journey in measured steps to renew our IT stack, simplify the IT architecture, sunset some of the old IT applications. We will be ramping down our legacy networks like PSTN. We will be simplifying our digital front end. For example, today, we have multiple web shops. We have multiple mobile apps for consumers, for corporates, for various customers' segments. We will go for one web shop. We will go for 1 mobile app, simplifying, getting productivity to the development work. And while we are doing this. We also take steps from the current network automation point of departure, which is world leading towards more autonomous self-driving networks. In addition to these measures, we will be putting focus on day-to-day cost management, and I will come back to that a little later. This means that in the future, we will be having 3 business segments, and we will be having one group operating model, meaning that our functions, our production, including IT, will be servicing all of these businesses in our home markets, consumers and corporates and internationally the software business. And from this group operating model, we especially expected to take home scale benefits in the international software business. In our home market of Finland and Estonia, we will be operating with one brand for consumers as well as for B2B. That is the Elisa brand. And as stated, then we will be introducing Elisa Industriq as our international brand for the software business. So when you look at Elisa today, we have some 6,800 employees across the world in more than 20 countries. 35% or even more of these employees are outside of Finland today. So this underscores that as a company, we are becoming more diverse, and we are becoming more international. And software business is our way of becoming more international. Then let's talk about AI for a moment. I mean, if you take the strategy of faster profitable growth, if you peel the onion, what you will find at the core of that onion is software capability. Software capability drives the strategy. And we are using that software capability, including automation, including AI, to drive growth across our business. And we are in software capability to drive productivity across our business. And we are not talking about this just because AI happens to be the flavor of the day. We have a long track record of using data and AI. Our network automation journey started actually almost 15 years back. The first step there was automated service monitoring. From that, we moved to automated network optimization back in 2015, 10 years ago, later to cloud native automation. Now more recently to generative AI. And we are using data. We are using AI across our business. And the examples that I have here, they are live examples, something that we are using to no plans, something that we are using today. In 5G and upsells in 5G business with mobile subscriptions, we are using AI in marketing automation to personalize the offers for churn prevention. For B2B business, we have very intriguing seamless mobile solution that basically transcribes voice to text and connect that with customers' CRM systems, enabling great productivity in customers' processes. In home space, the residential energy solution that enables customers to minimize their energy bill is AI driven. So what it basically means is that when customers are buying their electricity from the daily stock exchange, Electricity Stock Exchange, the AI solution buys the electricity, when the daily price is low, stores it in the battery and uses it to when the price is high, enabling customers to minimize their electricity bill. And then also automatically tapping into the reserve market of the electricity grid, creating completely new revenue stream for the consumers, AI at the core of the solution. In Corporate IT, we have a differentiated value proposition for customers in digital workplace management. So we take care of your laptops, we take care of your phones. With AI agents, we have differentiated the offering from competitors in terms of helpdesks. The whole business of international software is founded on data, advanced analytics and machine learning. So the earlier generations of AI. And then in terms customer service in terms of processing, we have multiple use cases for taking home productivity in customer service and in various types of case management. So the bottom line here is that we are using the software capabilities across our business to drive growth and across our business to drive productivity. So then let's look a little bit deeper into the growth areas. As stated, our penetration in terms of 5G is currently lower than 50%. So we have plenty of runway for 5G upsells. And as we have discussed with you guys so many times before, whenever we upgrade customers from 4G to 5G, 2 things happen: customer satisfaction improves, and our average monthly billing increases with more than EUR 3 per month. Customers have need for speed. And we see that, that customers are constantly moving toward higher speed tiers. And today, if you look at the highest speed tier between 600 megabit and 1 gig, customer penetration in that category is now more than 10%. Customers have need for speed. And whenever they move to higher speeds, our revenue increases. So when you break down the mobile service revenue, the single biggest lever going forward will be 5G upsells, continued 5G upsells. The new thing in this one is mobile value-added services. So here, we are talking about mobile value-added services that are very, very tightly connected to the mobile subscription. We are talking about solutions like mobile ID that enable you to authenticate yourself in various online services in e-commerce. We are talking about DNS filters that prevent you to enter unwanted Internet sites. We are talking about our solution to prevent scam calls. And these days, customers have concerns around digital security. And because of these concerns, they are willing to pay for digital security. So we have seen an increase of 11% CAGR in this category of mobile value-added services, but the category is still small. Our penetration, for example, to mobile ID is only 8% of our mobile subscriptions. And we see this category to increase growth significantly going forward. We can develop our offering, we can bring new value to customers, and we can price that value accordingly. This opportunity with mobile value added services is here and now. And we will be seeing during the course of this year, these services being supportive to our mobile service revenue. The new element will be 5G Advanced, 5.5G. As late as last week, actually, as the first operator in the world, we introduced 5.5G for our customers, for consumers in limited commercial deployment. And what 5.5G brings to customers is better uplink speeds. And the more there are AI capabilities in end devices, the more there will be apps that will be using AI, the more there will be need for uplink speeds from data from data flows, from end devices, to cloud and edge cloud. And we feel that we are well positioned to monetize this with our speed-based pricing. So we have started. And during the next couple of years, this will be increasing. So while the mobile value-added services opportunity is here and now the opportunity with UpLink and 5.5G is around the corner and logical continuation for our mobile service revenue story. Then profitable growth in fiber. We will be building fiber based on customer demand and in those places, where the customer demand business case meet. We will be disciplined with our CapEx. We will be focusing this field on those areas where we have higher market share, more population dense areas. Today, our fiber availability market share, FTTH market share is 23% in a fragmented markets. So going forward, we will be building fiber organically. We will be open to regional collaborations, if they will be improving our foothold on the market and we will be also open to buy smaller fiber assets, if they meet our strict criteria. But in the grand scheme of things, this won't be a big capital allocation. The reason to believe the faster profitable growth related to fiber is the proven cross-sells that we have. For those customers that took fiber 3 years ago, when we look at these customers today, their ARPU has been increasing 20% with the cross-sells. For example, entertainment, and when we broaden our offering to home energy solutions, physical security solutions, we feel that there is a further opportunity in terms of cross sales that we can capture. So this brings me to the home services and corporate IT and Cyber. Here, we are talking about broadening the offering for consumers and corporates, deepening the relationship with our customers. And in the process, generating new revenue, improving the loyalty of our customers, reducing churn, especially in consumer business. Vesa-Pekka and Timo will be talking about these 2 categories more in their respective presentations, but the right to win, as we see it in these 2 categories for us, is based on our existing differentiators: Our trusted brand, our customer base, distribution power and sales power that we have and the mentioned AI and cyber security capabilities. This brings me to the international software services, last, but definitely not least. As stated, we have developed a growth momentum in this business. Amidst market headwinds during the last couple of years, globally, if you look at the contribution of industrial output to GDP, it has been on the negative. And we will need to remember that we are dealing with industrial customers here impacting their buying behavior. So in this environment last year, we delivered more than 10% organic growth, supported by bolt-on acquisitions, creating the growth momentum that you see in the graph. Going forward, the agenda is to grow organically, first and foremost, improve profitability of this business. We have a strong product offering, tested product offering, and we have developed a repeatable model to expand our geographical scope. And when we do that, we will be capturing scale benefits, improving the profitability of the business. So the bottom line is, and Henri will be talking more about this is that we see a path, a clear path in this business to attractive profitability level of 25% of EBITDA or even more. And this being a relatively capital light business. We see a path to attractive ROCE of around 20%, being in the same levels or roughly or even higher than the current ROCE of Elisa Group. As stated, all of this will be enabled by our focus on simplicity, productivity. And here, the main message is that we will improve our cost competitiveness short term and long term, while keeping the CapEx discipline of 12%. We have the structural multiyear steps that we will be taking that will be extending beyond the strategy period, the 3-year strategy period that we are talking about. And here, we talk about step-wise IT simplification, as I mentioned, unifying and simplifying the digital front ends, taking steps more autonomous networks by increasing the cloudification rate, moving to the Telco workloads to cloud as the first step. But then we will also capture more immediate opportunities related to efficiency and productivity. We will be taking a leap forward in terms of utilizing AI for marketing automation and for customer service for various processing things, you know, those examples. And then on top of this, we will be just very, very focused on good old-fashioned cost management. We will, for example, initiate a project to look into procurement, sharper procurement, effectively doing a procurements reset, reducing the number of vendors that we will be having scrutinizing the quality of purchases that we are doing, improving our processes in that one, realizing cost savings in the projects. We will be also doing people sourcing decisions. An example is that we are now in-sourcing 100 software developers recruiting them in our payroll and at the same reducing the usage of external providers and saving the premium that we have been paying for years to these external providers. So these will be examples of what we will be doing around cost efficiency. So we will improve cost efficiency short and long term and by simplifying the processes and the IT stack, we will be also increasing the clock speed of the organization. So this brings me to the end of the presentation. On a little bit more personal note, I have been having a contact with Elisa for 33 years. I mean I actually first entered the current Elisa headquarters 33 years ago at the age of 17. My father had an import business, and he had rented a media room in Elisa headquarters, a couple of meters away from where I'm sitting today. And he wanted to talk to his principal to Atlanta in U.S. That was the first ever remote meeting that I participated with long delays over the Atlantic. So since that day, I have been a customer of Elisa for decades as a consumer, then later as a corporate customer. I have been a Board member for 3 years in Elisa. And now I have been the CEO of Elisa for 1 year. And throughout these years, throughout these decades, the company has always delivered in whatever role I have been in. The company has always delivered. And that means that as a CEO, I will focus now on execution. We have had a comprehensive strategy process. We have put detailed implementation plans in place. We have cascaded those implementation plans to our organization. We have already started to implement some time ago. And now we are communicating the targets and the new strategy. So I will be very focused on execution. I will be focused on increasing the clock speed of the organization. So in the spirit of faster profitable growth, increasing the speed, faster speed in the organization. And this slide shows what we will be delivering. So it's simple. In Elisa, we say what we do and then we do what we say. Thank you. I think now we could take some questions.

My question was just around the financial targets. So what are you assuming around the competitive backdrop? Like if we see a continuation of the tough competition that we saw in the second half of 2024, how much have you factored that into coming up with your medium-term ambitions?

So absolutely, we have been considering the competitive landscape. And when it comes to mobile services, we think that the underlying rational nature of our market will prevail. There's competition. There's always fluctuation in competition. The market is tight, but so it has been in the past. So the underlying rational nature of the market, the 3-player markets that we have, will continue. At the same time, it is worthwhile to remember that we have growth areas, spearheads for growth across our business. In other parts of the business than mobile service revenue, and those are growing in weight. So that is, of course, reflected in the targets that we have been setting for ourselves. And then related to targets, what is worthwhile to mention is that these targets are based on organic growth. So we are not factoring in M&A into the targets. Andrew?

Sami Sarkamies, Danske Bank. Also on the targets looking back, Elisa has been able to achieve 3% EBITDA growth on the back of quite minimal top-line growth. Do you see this being different going forward? And if we assume lower than the targeted top-line growth, does it also mean that the targeted EBITDA growth wouldn't be there?

Well, of course, I mean, we will be managing business always on an ongoing basis. So we have plans, and we are following those plans, but we will be adjusting the plans as we go by. I mean, if you look back a couple of years, the revenue growth, because of subdued macro environment and so forth, materialized little bit differently than we expected, but we were able to mitigate with cost saving measures, when it comes to EBITDA. So of course, that analogy applies also going forward. But at the same time, we do believe that there is possibility for faster profitable growth. And that, of course, also means that, let's say, in the International Software Business, we will be doing investments to sales and marketing, and that will be impacting the cost side of things.

Maurice Patrick from Barclays. If I could dive into the CapEx side a little bit. I mean you've managed to run the business sort of around 12% CapEx to sales now for a very long time. Many of our European peers, when they go through new phases, the CapEx jumps out, it comes down. You've maintained it and you're still maintaining that 12% envelope. That's the time where simplifying the IT stack rolling out fiber, continuing 5G. I guess you are helped by the fact that mobile data growth is slowing in Finland now, but I'd love to get your thoughts in terms of the split of that CapEx, the extent to which CapEx is going on fiber, the extent to which is on IT, how it's changing, more or less radio? I would like to understand more on that.

So as I mentioned, we have been doing a comprehensive process, and we have been putting detailed plans in place. And this particular question that you are now addressing is 1 of the areas where we have been spending some considerable time in planning to strike the right balance. And just very quickly on that one, we are not really breaking down our CapEx envelope but with broad strokes, you could say that the investments on mobile network will be more or less stable going forward, while we are maintaining the technology leadership not like we are now doing with 5.5G. We will be investing in fiber. So fiber will be there. And then we will be fully investing also in IT and in digitalization. So these will be the 3 big buckets of CapEx going forward. But what you will need to remember that when I talk about IT simplification and these types of things, I talk about a multiyear journey, measured steps and extending beyond the strategy period that we are seeing here. So no big banks in this one.

First of all, thanks for stripping out ISS. That's a great step forward. 2 questions. First, just a question on the growth guidance is given that you highlighted that it's organic. And could you give us a sense of the core telco business growth within that, maybe stripping out ISS to the best extent that you can? And the phasing of that growth, is it back-end loaded? Or is it pretty linear? That would be really helpful. And then the second question is just on the cost cutting. Typically, what we've seen in telcos is less construct market structures in you, but you do cost cutting and then everyone else does cost cutting and it just gets lost in lower prices or less or lower price rises. How confident are you in your ability to keep those efficiencies and build your margins to a greater extent than in the past?

So I mean on the first one, separating the software business from the telco, I mean, we are not sort of soft guiding to telco separately. But in terms of mobile service revenue, we do expect going forward to mid-single-digit growth, driven by upsells, 5G upsells and then as the new opportunity, the mobile value-added services. A couple of years down the line to 5.5G uplink opportunity. Then we do see possibility also in fiber. Currently, we are more in the land grabbing game in terms of fiber. So the fiber growth will be more sort of back-end loaded during the period. And then to your question about how linear, well, we have guided this year, prudent guidance this year. So we will have to see how things develop and then we come back to that a little later. But we feel that these opportunities are tangible and not something that would be in distant future. So therefore, the midterm targets, the philosophy offsetting the targets that is such that they are realistic and they are -- they can be made real and visible in our performance relatively short.

Let's say you have a percentage point based from organic as well, I think on EBITDA growth. Is that.

If those opportunities occur.

And this is on the cost cutting?

On the cost cutting. Yes, I think that the cost cutting will be continuous improvement, will be continuous improvement is our DNA as a company, meaning that we will be moving forward in them gradually. But the good news is that when we do so, those cost savings are sticky in nature.

Okay, then one more question. Unfortunately, we have to continue so one quick one and we'll continue.

Felix Henriksson from Nordea. Perhaps just a follow-up to Andrew's question. You clearly now introduced the ambition for a faster profitable growth with upgraded growth targets, but do you have a stable to slightly increasing revenue and EBITDA guidance for 2025. What are the main reasons why growth possibly would be below those target levels for 2025? What are the sort of main uncertainties and headwinds?

I think, we have a long-standing practice of guiding like this. And there's a degree of prudency in that guidance at the start of the year. And we have been typically specifying the guidance over the year as things have been moving forward. The way we see this Capital Markets Day that this is entering into a new phase. And then, therefore, this is what we will be -- we will be starting with. And then, of course, as we do that, as things progress on the business side, then we will be looking into how -- to most optimally guide the market.

Okay. Thank you for your questions. So time is flying. And as I said at the end of the day or after all presentation, we spend more time with the Q&A. So now we move on and we move on to our Consumer Customer business with Vesa-Pekka, please.

Okay. Good morning, everybody. My name is Vesa-Pekka Nikula, and I head up Elisa's Consumer Customer business. Topi mentioned a lot about delivers, Elisa delivers. We deliver what we say, we deliver what we promise. As we speak, we now have 46 consecutive quarters of record financial results in consumer business. And I bet that many or some in the room are thinking that are we able to continue, continue and maintain such a track record in the future as well. My answer is simple. Yes. We can and we will, as I will present in my presentation. The very simple foundation of our business is to deliver value to deliver increasing value perceived by the customers, while being able to constantly capture our fair share of net value. Very simple principle, but that's what we are following in every business that we do. Now with Topi as our new CEO on board, we are set to stay on this course forward. For profitable growth, with some very exciting new opportunities as well. I will start my presentation with the deliveries, the performance update since the last CMD 2023. I will then go through the strategy of my 2 main businesses, telecom and home services, and I will end up my presentation with my management priorities with this business going forward. This is on deliveries. Despite the challenging economic conditions as we are aware of and a weak consumer sentiment, we have enjoyed a nice and steady yearly profitable growth of approximately 5%. This reflects our ability to deliver growing value to customers, which translates directly into sustained a financial success, as I mentioned earlier. We have enjoyed a healthy service revenue growth. The total revenue has impacted -- has been impacted somewhat due to our active portfolio optimization. Yes, we are continuing to implement in our Elisa led strategic priorities. And in my presentation, I will elaborate on these 2 growth pillars of the consumer business, 5G and fiber upsell and home services. But before diving deeper into the businesses, let me start with our customers. Elisa has the most satisfied customers in Finland, thanks to our unique business model and our genuine care for customers and customers' needs. Our service metrics, such as care and customer effort scores are world class. We are leveraging our cross-sell capabilities to build strong with customer. Satisfied customers buy more leading to higher ARPUs and lower churn rates, half, 50% of our customer, consumer customer base only have 1 product or service from Elisa, only 1 product or service from Elisa. So we have a room to continue an opportunity there. So we see further protection in cross-selling and expanding our offering to new areas in customers' homes. Last autumn, we began the first Nordic telco to launch a loyalty program we called Elisa [indiscernible] Finland, which rewards customer based on the tenure and spend. Customers are very enthusiastic about our program and early data shows that members are much more happier or satisfied and less likely to churn. We have a very strong #1 market position, both in the telecom services and in entertainment video services. And we will leverage our strong position to address new interesting growth areas in consumers' homes, residential -- energy storage area and home security area, as already were mentioned in Topi's presentation. But before going to this new areas, I will start with telecom services and focusing on 5G and fiber. Our track record in delivering growing mobile service revenues is solid. And we have good reasons to be confident that we'll continue delivering strongly in the future as well. As mentioned already, our unique feature base pricing model continues to bring value to customers and to Elisa. As our continued -- customers continue into the higher speed tiers. Average customers, who are switching from 4G to 5G, we enjoy a healthy boost of ARPU of over EUR 3 per month. And here is the fascinating insight of this business model. The more customers pay, more satisfied they are. More customers pay, more satisfied they are. Highlighting Elisa's pioneer position, we are the only operator in the market, who offer standalone and network slicing capable 5G services. And last week, as Topi mentioned, we launched the world's first 5.5 commercial service for early adopter customers. This allow our customers to enjoy even more reliable and faster connections with lower latencies. This means that we have further upselling opportunities also within 5G, not only when transferring customer base from 4G to 5G, but also within 5G. I believe that we are among the only of a few operators globally with such a positive 5G business case. And we have substantial potential to continue as commercial 5G cycle is expected to continue many years to come. Mobile value-added services are boosting our mobile service revenue growth further. We see -- we continue to see significant potential in highly profitable digital security services, as we all currently have the penetration rates of 15% and mobile ID services, where we have penetration rates are 80% in our subscription base. In Finland, Mobile ID is the recommended and the most secure authentication method by all government agencies. It's highly appreciated by our customers providing risk-free authentication for a monthly fee of EUR 2 to EUR 3. We see a great momentum to monitor this service among our mobile voice customer base. I will now move on to the home broadband business and especially to fiber. Some people may ask here as well as why Elisa is investing in fiber. Well, the answer is twofold. First, and utmost, there's a genuine customer interest and need for faster connection and with a preference to fiber. And second, it is a profitable business that opened us further opportunities in customers' and consumers' homes. Our fiber business case is strongly supported with a higher ARPU, significant lower churn and cross-selling capabilities. We have a vastly better business case than other fiber companies because of our large customer business -- customer base, and we are building fiber very selectively based on customer demand and only in our own traditional fixed network areas. Growing fiber investments enable further potential for our home services. For example, Elisa Viihde TV service is widely used on top of our broadband subscriptions as can be seen on the left-hand side. When people choose a fiber provider for their homes, they value trust and reliability above all. That is the brand. Elisa is by far the most preferred fiber provider among our customers with a 78% preference preferring Elisa. Our home broadband customers are steadily transferring to better and faster technologies from copper to fiber in fixed and from 4G to 5G in mobile. And just like with mobile voice, faster connections, happier customers. Faster connections, happier customers. As we can see, our telecom services revenue had continued to grow by an average of over 4% a year, driven both by mobile and fixed businesses. I'm confident that the growth will continue into the future as we keep on upgrading our customer base to 5G and fiber. Well, that's it for the telco services. I will move on to our second main consumer business, home services, starting with entertaining video services. Elisa's entertainment video services is a healthy, profitable business. We ended the Elisa Viihde Viaplay streaming service in 2023, so 2 years ago, which lowered our revenue somewhat as can be seen on the left, but had a very positive impact on profitability. Our Elisa Viihde TV service, which celebrated its 15th anniversary last year, has established itself as a preferred entertainment service in Finland with a 27% market share. And we compete well in the consumers' minds even against the global -- best global benchmarks, as you can see on the chart on the right. A key factor behind our success is our ability to aggregate content into a single, very user-friendly service with smart features. This make it easier for our customers to access a wide range of content like Disney+, which we introduced to the service last December. We now have a total of 650,000 subscriptions in the entertainment video services business. We are well positioned to reach customers with a strong cross-selling capabilities. Half of our households do not have Elisa Viihde TV services yet. And Elisa Viihde is not just about the technology. It's also about high-quality content. Our original series have received a lot of recognition, both in Finland and internationally. This highlights our commitment to producing top quality content in the future as well. Okay. So let me now show a short trailer of our upcoming original series, Icebreaker with a state-of-the-art virtual studio technology. Here we go. [Presentation]

That's an example of a content -- a high quality content that we are producing. It really was an impressing when visiting virtual studio first time last autumn. To see that how AI-powered tools can bring such a realism to the production in a very cost-effective manner without compromising on quality EBIT, a really, really an eye-opener. Okay. Let's move on then to a next exciting home opportunities at consumers' homes. First, on the left-hand side, residential energy storage, which Topi already mentioned in his presentation. So 31% of Finnish households have market price electricity contracts with high price volatility. We are introducing a service that helps our customers to manage and lower their energy bills. You can see a strings of our app in the middle of the slide. And although the market is still very young, we see significant business opportunities in years to come in this new business. Second home opportunity on the right. We have identified a market cap between self-installed do-it-yourself and premium priced do-it-for-me solutions. And we are building a modular security service for monitoring and surveillance. And why do we believe that Elisa will be the winner in these businesses? Above all, again, we see a very strong customer demand. Our trusted brand, large customer base, highly effective sales channel, data and AI capabilities give us a strong competitive edge in building these 2 exciting new businesses. That's it for the home -- for the telecom and home services businesses. Let me now move to the simplicity and productivity, which form the basis for our profitable growth. Automation and AI are creating significant potential for us to improve profitability. We have continued to automate a significant share of our processes. As you can see on the left-hand side, way over 90% of our customer contacts are already online and the number of human-to-human contacts continues to decline. We are further building foundations for AI agents in customer operations by implementing new Gen AI-powered automated bots. And our customers appreciate Elisa's online experience. We offer our customers easy and effortless service when and where it's relevant to them. As an evidence of this, we have been awarded for providing the best digital customer experience among large Finnish companies in 3 years in a row, as you can see on the right-hand side. Let me finish off with a summary of my management priorities with this business going forward. Our approach has proven to be successful. I am very confident that we have a strategy that will continue to deliver strong, solid results in the future as well. That's it for the consumers. I'm more than happy to take any questions if we do have a minute or 2.

Because of the limited time, unfortunately, we can take maybe 2 questions and then continue a little bit later. So here, these guys were the first ones.

Fredrik Lithell from Handelsbanken. Can you talk a little bit about your 5G stand-alone network and how you use that to differentiate your services? You talk about the speeds, and we have seen that for several years and appreciate how you have done it. But you're also ahead of the pack in terms of the technology and you can use that in several ways. So can you describe a little bit about that?

Thanks for the question. One quite obvious is that with the stand-alone technology, we get another kind of layer of higher speeds. So we are talking about the maximum speed level speed test of 1 gigabit per second. So with this new technology, that allows us to add another or 2 layers on top of the layer speed test we have at the moment. So that is the obvious thing that we kind of continue building our -- or bringing our customer base to the higher layers. So that's obviously kind of benefiting us in the future as well. Another one about SA technology is the slicing capabilities, which are further enhanced in the 5.5G as we introduced last week. So first time in the technology, we are now able to guarantee -- to provide a guaranteed bandwidth for our home broadband mobile homegrown customers. So we've taken a guaranteed a radio bandwidth that is not fluctuated. So that is another example that we can bring with the help of a 5G SA. So these are 2 concrete examples that we are bringing in.

It's Adam Fox-Rumley from HSBC. I wanted to talk about the adoption curve of 5G customers in your base. You've managed to sustain the EUR 3 premium through to almost 50% now very deeply into mass market adoption. What's in your plans? And how are you thinking about the 5G premium over 4G services as we move over the course of the next 3-year period? Do you think you can sustain that EUR 3 premium for that whole for that whole 3-year period?

Yes, that's our belief, honestly, is that that's kind of our track record is basing and putting evidence of that, that we have been able to kind of put that EUR 3 premium in when customers are upgrading from one speed to another one within the 4G, from 4G to 5G and also within the 5G. I think that is important to note that it -- this path does not end where the customers are first time in the 5G. As mentioned, with these new technologies, [ SI ] and 5.5G, there are rooms that we are able to provide and continue this upgrading, upselling to the higher speeds and also the uplink speed in the future as well within the 5G as well. So yes, we are confident that we can continue.

Okay. Thank you, Fredrik. Thank you, Adam. Now we need to move on, so to keep a little bit of schedule. And the next presentation is the corporate customers. And Timo, please.

Good morning. Now wasn't it energizing to hear the 2 previous presentations talking about the bedrock and the updating the medium-term targets going forward for faster profitable growth. Next, I'll take you through the same for B2B in our home markets. I will include the major growth areas that Topi went through already as a part of that presentation that I focus into. I will start with a quick recap of our past performance, then I'll move deeper into our businesses to look at how we will achieve faster profitable growth going forward. And I will finish with my management priorities. We have made clear progress in this area, 2% revenue growth and 0.8% in EBITDA. But if you take out and exclude the regulatory change that happened, it's around 3%, both revenue and EBITDA growth over this period of time. At the same time, our customer satisfaction has continued to grow and is really leading the path. It supports our future ambitions for growth well. But let me take you through what I feel is a bit different today in our customer meetings compared to previous years. We are now engaged more and more in deep strategic discussions with our customers on how we can help their larger strategic agendas with our AI capabilities. This has really shifted, and this is pretty unique in my mind what is happening in this industry at the moment. This is giving a good basis for and momentum for future growth. Our contribution to faster profitable growth falls into 2 areas. It's 5G and fiber and then corporate IT and cyber. In addition, we are obviously heavily pushing our simplicity and productivity measures. Now with our effective portfolio tapping into these growth areas, we will gain even more as the market outlook is good on this. So it offers a great tailwind for growth. I will examine next these growth areas more. As you can see, we have a fantastic growth rate of 5.1% in mobile. We are well positioned for future growth, utilizing 3 growth engines, 3 growth engines. First is speed-based upselling, which Elisa is well known for, and we went through very much. Second is different feature-based upgrades. These include familiar features like security as well as new AI-driven opportunities. And thirdly, we have a new growth engine from our acquisition of Moontalk, a company providing advanced communication solutions. This is clearly a differentiating factor and a unique service in the market. Next time, I will examine more of these. Speed-based upselling continues to work with an average increase of over EUR 3 regardless of the actual speed tier upgrade. And still today, there remains a good future potential. Regarding feature-based upgrades, mobile security is a great example with a revenue growth rate of 15%. We feel that there is substantial potential to increase our penetration among the other features with these and continue the good growth. Now I'll move to the third growth engine called advanced communication solutions. The logic is that customers use data in their processes through our communication platform. It's very much in the core in their operation. The necessary integrations can be made via standard APIs with customer systems like their CRM platform. Benefits are clear with lower costs for the customer as well as their end customer satisfaction. Now business value for us comes from several sources. Mobile subscriptions are embedded with the service, providing clearly significantly higher billing and more satisfied and loyal customers. With this service and future AI-driven services innovations, we are truly excited about this opportunity moving forward. Next, I'll move to the second area, managed network and cybersecurity. A growth rate of 4.3% is a good performance. It's generated from managed service networks -- managed networks, including fiber and security services as a whole. One noteworthy trend is the growth of managed services in SME sector as the complexity of technology and of using it has increased. More and more companies are opting for an easy managed solution. On top of this, we have made some great improvements and improvements in reinnovating and automating our processes. A good example is a 70% reduction in our lead time for change management, which is reflected in productivity. Now let's take a closer look to the cyber. Cybersecurity business is an outstanding business opportunity for us at the moment. We have achieved growth rate that is 3x the rate of already rapidly expanding cyber market. In this business area, we cater the needs of large customers with our unique modular AI-driven offerings, which include the services that you are able to see on the right-hand side among the others. Our global reach is an important part of this. Currently, we are serving customers in more than 50 countries. We have over 100 dedicated cyber specialists and professionals, and our Net Promoter Score is more than 90 in this business, a great platform for future growth. And then IT. This is yet another growth business we have outperformed the market. We have achieved revenue growth of -- growth rate of 7.3%, demonstrating a strong relative performance. The chart in the middle illustrates this showing an indexed revenue growth of our main competitors. In addition to revenue growth, we made significant strides in the improving productivity, as evidenced by 35% increase in revenue per FTE. With the market-leading growth and improved profitability and productivity we have translated -- this has translated, obviously, into better profitability. We have increased our EBITDA now 3 percentage points over this period of time. However, the true differentiator has been the AI in this business. It has impacted both positively into our top line as well as to the bottom line. We have moved early and quickly to utilize AI in IT as we have focused on pragmatic use cases to drive customer perceived value. As you can see, we have a growing number of use cases, delivering tangible results for our customers. For example, just to name one, we are eliminating routine tasks by letting AI read, answer and process dialogues with customers via e-mail channels. Based on the feedback from our customers, we are clearly leading the market with the capabilities we have to offer. The IT business is, therefore, in a strong position for faster profitable growth. Now we have already discussed several methods that we have employed to enhance simplicity and productivity. Now some more examples to complete the picture. We have successfully reinnovated and automated processes with AI. This has allowed us to reallocate 24% of our people in traditional telecom operations to new growth areas. We have also continued to increase the share of online sales. And moreover, we have numerous instances where we have increased our productivity of over 10% per year. Elisa's unique strategy is driving towards faster profitable growth. My management priorities are clear, and they will move us forward strongly. Personally, I want to reiterate 4 factors behind our success. In mobile, we have 3 growth engines that works. In networks, managed services and fiber are driving the growth. In cyber, we grew 40%, 3x the market with a fantastic customer satisfaction. And our IT is outperforming the market with the leading AI capabilities. Now together with our highly skilled people we will deliver faster profitable growth in a great way. Thank you, and ready for the questions.

It's Josh Mills at BNP Paribas Exane. There's obviously a lot in the press at the moment about increased defense spending across Europe and particularly in some of the Baltic regions. Could you give a bit of an insight into your current military exposure, defense contract exposure and how that might be an opportunity for you going forward as well if it is?

Thank you for the very good question. You are very right. Actually, that is happening. That's what we all see in the news. Now into the deals itself, I can't really go into. Those are typically kind of classified by information. But let me say that, that we are very much connected into the government of Finland into the defense forces in Finland, and we are very much as a part of that one with our services in question.

Fredrik Lithell from Handelsbanken again. I can continue on the 5G stand-alone your platform there. I know Tele has just initiated that they will also move to stand-alone core, and that sort of improve their abilities, but you're ahead of them, and it's interesting to see what you do also in terms of open gateway and all the APIs that you can facilitate from that or will be able to facilitate from that.

Well, there is numerous discussions within the industry players with that one. There is numerous discussions with the health care as we speak. And then I would say that the third area is the media professionals with the outbound capacity that it provides. These are the kind of areas that really are moving as a first one. Then there is specific applications, obviously, that we are talking about, but it goes very much to the slicing. It goes very much to the outbound and it goes very much to the applications of bringing the kind of usability first and connectivity first. Second, then we're doing certain AI-based applications with our IT capabilities.

It's Siyi He from Citigroup. I just want to ask a question about the market environment and 2 parts. First of all, if we look at the performance in '23 and '24, we see some delay in business decisions and that led to some slowdown in the top line growth. Wondering if you can comment on that, what you see the market currently performing now? And the second part of the question is really on the SME market. We heard your competitors commenting about their growth targets they were talking about potential market share growth in the SME market. Wondering if you can talk about where you see the competition currently develop.

Well, if I start with the competition itself, I would reiterate what Topi already said, it's a rational market in large and -- I mean, in the SME end in this respect. It's tighter every now and then not that much, but relatively tight all the time. But we are very confident on our capabilities, our competitiveness on this market. So both the bigger companies as well as the SMEs, we are not the one losing share. And then again, the first one was the...

[indiscernible] have returned...

The market in overall, the -- well, that goes pretty much what we've been saying already out loud earlier on. And yes, it was slower. We've said that some of it is still continuing, but we expect that one to that would be in a better level.

Maybe one more question before break. So there is...

[indiscernible] from Bernstein. Just maybe a clarification on that statement that you made on the defense sector. What's not quite clear to me is to what extent Elisa is really seen as a more trustworthy partner than, say, Telo or Telenor because they're still part of NATO, they're still part of the Nordic overall environment. And is it really true that Elisa is -- has a strong competitive advantage versus Tel and Telenor when it comes to talking to the government?

Well, not going into the details of it really, but let me say that we are very confident on our capabilities and competitiveness on that space. We are very trusted. We are domestic, local, very well connected in Finland, have delivered some of these services that we offer and have been offering for decades for governmental use that are very critical in nature, what comes to this. So I would say clearly that we have a good role to play there.

Okay. Thank you for the questions. Thank you, Timo. And now we have a 15 minutes break. [Break]

Okay. Welcome back. And now we move on to the next presentation, and it's our international software services. And Henri, please go ahead.

Thank you, Vesa, and good morning on my behalf as well. My name is Henri Korpi, and I lead International Software Services, meaning Elisa IndustriQ. And this is an exciting day for me as this is the first time ever that we discuss these plans or this plan of ours outside Elisa with external people. My presentation -- focus of my presentation is on faster profitable growth. But before that, I will discuss shortly our performance during the past 2 years. Then I move on to our plan, how we aim at accelerating our growth beyond where we are today by means of geographical expansion and how we aim at, at the same time, increase our profitability by capturing scale benefits. And before concluding, I will update you on the progress of our important internal start-up, distributed energy storage. As we all know, the macroeconomics hasn't been really favorable to us lately. Our customers have been forced to be more considerate than before when thinking their investments. And that is important for us as our business is driven by our customers' investments, investment in added yield, investment in new capacities and investment in higher quality, investments in operational efficiencies. However, in this challenging environment, our last year was solid. The competitiveness of our products enabled us to grow faster than the markets, faster than our competition and in many cases, faster than our customers. reaching a double-digit growth for the whole year, accelerating towards end of the year, as Topi presented. In addition, we were able to accelerate our growth further by continuing bolt-on acquisitions. Last year, we acquired 3 companies, Romaric, Leanware and at the end of the year, sedApta. And the acquisition of sedApta concluded the first phase of our longer-term strategy. We have now defined our position in the market. We have the products, the solutions, the customer verticals and the scale that we envisioned having when we embarked on this journey a couple of years ago. So we have now moved to the next phase of our strategy, and that phase is all about creating momentum for global scaling. As we have moved to this new phase of our strategy, we have reorganized our operations under one operative model under common brand name of Elisa IndustriQ. And as Elisa IndustriQ, we offer our customers operational intelligence software, enabling our customers to be significantly more efficient in their core operations. The market and demand for operational intelligence software is large and growing in our target customer verticals and in our target geographical markets. It's a EUR 5 billion market, growing more than EUR 0.5 billion a year. So there is ample room for us to grow. But growing at the pace of market is not enough for us. We aim at growing faster. We aim at taking market share in this market. And our means of taking market share is geographical expansion, putting our winning products, our competitive products available to many new customers in our target geographies. Talking about our products. Our products are a combination of deep industrial expertise in our target customer verticals that we've gained through acquiring those companies along our way and Elisa's own excellent capabilities in analytics, automation and AI. That unique combination of industrial expertise and AI creates a unique competitiveness for our products, unique differentiation and our products are capable of creating unique value to our customers. Our customers are typically leaders in their various industries. And our products enable them to solve the real problems in their core operations. So if you are in a situation where there is a growing demand for your product and your product is really competitive, uniquely differentiated, what do you do? You reach out to new customers, and that is exactly what we are aiming at doing. We are aiming at putting our products, our excellent products available to many, many, many new customers in our target markets. We aim at strengthening our position in key European manufacturing markets, Germany, France, the U.K. and Nordics. And at the same time, we aim at strengthening our position in U.S. for our high-tech vertical as the high-tech manufacturing is bound to grow significantly in the U.S. due to geopolitics. So our growth will be driven by geographical expansion. At the same time, we have a large opportunity for increasing our profitability by capturing scale benefits. We aim at continuing to grow our gross margin by increasing the share of high-margin software of our total revenues. And the key means of doing that is continuing to increase our recurring revenues faster than our overall revenues. During the past 2 years, we've been growing our recurring revenues more than 3x faster than our overall revenues, and we aim at continuing on that path. And over time, that will have a significant positive effect on our gross margins. Similarly, we are aiming at continuing to increase our sales through our extensive partner network. As our partners will be taking more and more role in low-margin delivery and support to our customers and our role will be delivering software licenses. That will also have a significant positive effect on our gross margin over time. And at the same time, we have a large and imminent opportunity for capturing synergies in our fixed cost base. As you know, we have created this business by acquiring and putting together smallish originally family-owned software companies. Those companies have had to develop their own software, all the features, all the functionalities from A to Z on their own. Now the value-creating applications on top of the software stack are and will continue to be different for different customer verticals and for different use cases within a vertical. But all the lower levels of the software stack towards infrastructure can and will be shared. We have embarked on a journey to develop or create a common software foundation on top of which the development of our value-creating applications will be faster, easier and cheaper. And that will, over time, enable us to lower our software development costs without compromising our competitiveness. Similarly, these companies have had all the corporate functions, finance, HR, IT, legal, you name it, they have it. Now that we have moved to a common operational model, created global functions under Elisa IndustriQ. Those functions will be able to serve the whole business. And those functions will be able to piggyback on the existing resources and functions of Elisa. And that sharing will enable us over time, reduce our admin costs very significantly. So growth acceleration, geographical expansion, profit enhancements, scale benefits. On top of that, we have an interesting opportunity created and brought by our internal start-up, DES distributed electricity storage. Here, we are partnering with owners of different energy storage assets, like telcos regarding the batteries in their network, like consumers installing batteries to their homes, like commercial businesses having adjustable electricity consumption in their facilities or like industrial players having heat storages in their factories. We are partnering with them. We are aggregating them together. We are optimizing them, and we are selling them to the electricity flexibility markets. We have been doing this in Finland now for 2.5 years operationally. And we've proven that, first of all, it can be done. And second of all, we have proven that it can be done profitably. So now it is time to start scaling this international. So we aim at partnering with owners of energy storage assets first in Northern European countries, aggregate those assets together, optimize them and trade them to local electricity flexibility markets and share the benefits with the owners of the assets. Copy what we are doing in Finland. These markets and demand for the electricity flexibility services are large and very fast growing. More than EUR 1 billion a year are added into these markets in Europe alone every year. The growth of the markets are driven by the increased use of solar and wind, renewables in electricity production. As those are fluctuating, production is fluctuating, and that needs to be balanced out with the flexibility services. And that is our play. There will be a lot of value to be captured in these markets. And one thing that we know from our experience is that we will be super cost competitive in these markets. Unlike our competition, we are not investing hundreds of millions of euros in specialized assets just to participate in these markets. Quite the opposite. We are piggybacking with already existing assets, assets that already exist for another reason, like in case of telcos for regulated resiliency. We partner with the owners of those assets, we aggregate them, we optimize them and we trade them to the local markets. And by doing so, our gross margin will be really, really high, almost 100%. And that makes us super cost competitive in these markets. So this is an exciting opportunity for us, for Elisa. But one needs to remember that this is still a start-up and it's early days. So to conclude, we aim at accelerating our growth beyond where we are today by means of geographical expansion, meaning putting our winning products available to many, many, many more customers that they are not available yet today. We aim at accelerating by continuing our bolt-on acquisitions to strengthen us in those target markets. And we aim at scaling our DES start-up internationally. And at the same time, we have a significant opportunity for increasing our profitability by capturing scale benefits by continuing to increase our gross margin and by capturing synergies in software development and in administration. And by doing this, we believe -- I do believe that we have a good chance of becoming a large contributor to Elisa's aim for faster profitable growth. Thank you. And if you have any questions, I'm ready to answer.

Felix Henriksson from Nordea. I have a question on the go-to-market. So how large of a percentage share of your sales goes through channel partners today, who are the channel partners? And can you describe a bit how the partners are incentivized to sell your products?

Okay. Today, the share of channel sales is a little bit below 15% of the total. We have 2 kinds of partners, we have OEM partners, typically machine builders who deliver our software with the machines like companies who make semiconductor machines, our quality systems are sold by them alongside the machines. And then we have both our consultancies in different countries, IT consultancies and IT integrators who are selling our software. And the model is pretty simple. We pay a small share of the license revenue to the partner if they are selling the license through or -- and then they making their money with the delivery and ongoing support services.

It's Adam from HSBC. There's quite a lot of history in the sector of companies looking to expand aggressively overseas, I wondered if you could talk a little bit about the guardrails that you're putting in place to ensure that your geographic expansion plans are working and the oversight to check when they might not be working?

Yes. Good question. As Topi mentioned, we've created now over the past something we think that is a replicable model to be addressing local markets. And it's a very stepwise approach, so increased resources as we see results. So we are not going to make any big bang investment, but we are gradually increasing our investment as we see results coming in.

Sami Sarkamies, Danske Bank. I would like to challenge you a bit on this geographic expansion, which was like the main way to gradually growth. You have already done that through a number of acquisitions. Usually that's a difficult part, wouldn't be easier to grow in the regions where you are present today, you have the first customer references and your market shares are quite small, wouldn't that be an easier way to achieve better margins in the short term?

I think you're absolutely right, that is exactly what we are doing. Germany, France, U.K., Nordics, U.S. are not new markets to us. And we have small operations in those markets, and we are aiming at strengthening our position in those markets.

It's Matti Riikonen, Carnegie. Two questions. First of all, how much of your business comes from telecom operators and how much from industrial customers?

That is information that we are not disclosing at this point.

All right. I forgot the second question. Sorry.

No problem. It will come.

Fredrik Lithell from Handelsbanken. Can you describe a little bit your competitive landscape? Who you're actually up against on the industrial part, not the telecom part when you compete?

Yes. We have 2 kinds of competitors. We are always up against guys like Siemens, SAP, Rockwell, in basically all the cases. And then we have small, smaller and specialized local competition is the other typical competition that we are facing. And our competitiveness against those is rooted from a little bit different angles, for Siemens and SAP and other large companies, they are generalists. They are trying to solve all the problems in all the verticals with the same software, and we are concentrating in a few verticals. And then the more specialized competition. They are typically smaller companies who don't have anything on AI analytics like we have coming from Elisa.

All right, second try. Matti Riikonen, Carnegie. It was about M&A. You have made some small positions recently during the year. What are your plans for the M&A going forward? Is it kind of an integral part of your growth path? Or are you just kind of seeing what comes on offer?

It is the first one. So -- and as it has been, this far, we have collected as said, the capabilities that we thought that we need to create this business. Now from this on, the main part of our acquisitions will be strengthening us in those target markets that I mentioned. So we are looking at finding complementary product companies and/or smaller consultancies from those target markets of ours and to accelerate our penetration in those markets.

So if you include consultancies, does it mean that you're kind of not focusing on the software products as such?

The control of consultancies it's more like [ acqui-hire ] type of things. So we are looking at teams that could complement our go-to-market.

[indiscernible] Bernstein again. First one, I have is maybe slightly heretical, but if you sort of look at your business and think about how much you really need and benefit from being part of the Elisa Group, could you just describe whether it would be possible and what the downside would be to actually run this business completely separately from Elisa? So that would be my first question.

I would answer in a way that being part of Elisa is a source of our long-term competitiveness. And it has been the source why we have embarked on this journey. It hasn't been just an investment for Elisa. But we took a really careful at what are Elisa's core capabilities. Where Elisa is really good at when we started this trend. And it was the software analytics, automation skills that Topi mentioned. And those are still continuing to be really, really important source of competitiveness for us. So without Elisa, we wouldn't be able to beat our competition. In growth, we wouldn't be able to expand to new customers as we do today. So I do think that Elisa is a source of competitiveness for us and continues to be so going forward.

Great. And then my second question would be, I'm not entirely clear about the role of your main products that you are selling into the telecom operators with regard to how deep it is integrated into the core functionality of the network. What I mean by that specifically is let's say, I'd switch off your systems in the networks where they are implemented. Would these networks still run or not? So what I'm trying to get at is how central are there? Are they essentially attachments that make it all better, which is, of course, your pitch. But are they crucial to the basic operation in a way that they wouldn't work without it?

They would work for a while. But the quality would take kind of deteriorate very soon as the systems are used for making changes in the network, detecting problems in the network. So the problem -- the network would continue to run, but the quality of service would deteriorate really, really fast. No telco can leave without this service.

And then my last question is just a clarification. You talked about the target to raise gross margin by increasing the mix of recurring revenues. Could you talk about the difference in gross margin between the recurring revenue streams and the sort of non-recurring ones?

The important point there is that the recurring part as it grows doesn't require any more delivery and not that much support services. that is very low margin operation. So the larger your recurring base is the higher your share of the software license revenue is, and that is a very high margin, 70% to 80%.

Okay. Thank you. Thank you for questions. Thank you, Henri. And now we move on to our last presentation. It's financials and Jari, please.

Yes, good morning. Jari Kinnunen, CFO of Elisa. A lot of exciting stuff in the previous presentations. And now also exciting stuff, how this translates to numbers. Let's focus on that next. Before going to actual presentation, I would like first to just go through the reporting change. So we will start reporting third segment, as was announced earlier today. International software services as a new segment from Q1 onwards, certain topics and Henri's presentation, there is a new strategic phase and new earnings momentum, EBITDA momentum and we thought this is now a good moment to a transparency for this business also going forward. Comparable numbers for last year in the slide, we also included this in now website like comparable numbers for corporate customer segment, excluding ISS numbers. And for the modeling purposes, it's worth mentioning that there's more seasonality with this business, typically first and fourth quarter revenue are higher. But now let's move to the actual presentation. First, I will talk about performance. The performance in the past, then moving to medium-term targets, how we are going to achieve those and then I will talk about capital allocation and finally, about my priorities. Let's start with the longer-term trends. So there is, I would claim excellent track record with many, many financial KPIs over the years and long term here, revenue, EBITDA, dividend more than 10 years growth. Also cash flow, stable growth. Many reasons behind this strategic choices, good execution of the strategy, customer focused approach in service offering or pricing, mobile speed-based pricing, mobile data, unlimited speed-based pricing, a very good example of that. And there is very strong culture, culture of excellence, culture of continuous improvement and long term, very systematic way how to improve productivity. And this all put together with very disciplined value-oriented capital allocation policies. So these results, very reliable, consistently improving financial results, and we are continuing with this part. Also in a peer comparison, many financial KPIs are among the best here period after last Capital Markets Day, EBITDA growth, EBITDA cash flow conversion among the top in comparison. And return on capital employed by far best in the sector, 18.5%, double of the peer medium. So we really get more out of the investments. With our new faster profitable growth strategy, we have raised ambition in the new medium-term targets. Revenue, EBITDA, more than 4% growth, maintaining, at the same time, efficient capital structure, 12% CapEx to sales and capital structure targets maintain at the same as they've been a long time also distribution policy payout ratio between 80% to 100% was reiterated today. And when looking at the achievement of -- against current targets end of last year, we were in green with EBITDA growth and capital structure targets. Revenue has been impacted by some divestments and regulative changes. CapEx was short time, not higher. And as we said a year ago, we will come back to 12%, and now we are doing that. So there is very exciting fast profitable growth and set of levers for that ambition, more than 4%. First of all, 80% of the total revenue is in high-quality service revenues. Transforming well to earnings to EBITDA when growing. Mobile service revenue is the biggest line, as said earlier presentation, upsell is working well. 5G important growth driver for years to come. Value-added services, new interesting growth contributor, mobile security or value -- other value-added services relating advanced communication services in B2B. And we will continue making product changes, adding more value to our customers and when doing such a change is capturing our share of that value. In fixed services, there is a wider portfolio of services and different trends, managed network, cyber security and security services, a certain the most presentation, growing well partly with high double-digit growth rates. Customer demand for fiber has increased and we are really well positioned to monetize that demand. There are also some declining legacy services. However, the negative impact is diminishing as we go on in the strategy period. In digital services, domestic digital services, corporate segment, IP is growing well and competitiveness is created. It is enhanced with our AI capability, which is one of Elisa's core capabilities overall and target to grow in IT services more than the market is growing. In Consumer segment, we have market-leading position in traditional telecom services, excellent customer base. And when we are sharpening our gross sales, new home services, giving a growth acceleration in Consumer segment. International software services, Henri covered very well, the growth levers geographical expansion, increasing recurring revenue share. So growth target is raised and there are many interesting growth levers for growing more than 4%. Apart from growth, faster profitable growth is similarly about improving productivity and cost efficiency. And we do have a very strong culture of continuous improvement, very deeply rooted in the organization. And that has delivered results in the past, and we'll continue to deliver also going forward. Now for very short term, we are currently seeking cost efficiency through even sharper procurement -- sharper procurement processes, also assessing where the work should be done location-wise or should it be done by our sales or third party partners. Simplifying operations is a very important productivity lever going forward, simplifying IT infrastructure, closing down legacy systems in networks and providing and replacing with new technologies. Also in Henri's presentation in IDS business, we will streamline the business processes and also company structures and taking the cost efficiencies out of that. And we are one of the leading operator, utilizing technology for productivity, long history through automation and AI in network management, network operations and later on, in multiple use cases with AI in different parts of the organization, improved productivity. Just a few examples in this page. In campaign management, 10% value improvement with AI, put it very bluntly better customer retention and better pricing or in incident management more than 20% improvement in customer contracts and manual work reduction. And the next generation AI or [indiscernible] AI will provide even new opportunities go to wider processes, autonomous operations and moving to new level of productivity. So increase in productivity, cost efficiency is directly contributing to EBITDA growth target, but it is also contributing to resource reallocation to growth. Revenue growth and to enhance growth levers. Now to summarize EBITDA growth coming from clear sources, service revenue growth, translating well to EBITDA productivity cost efficiency, as just described, contributing -- and third lever with the new momentum in earnings in international software services breakeven of EBITDA was reached Q4 last year. Now for this year -- for the whole year, positive EBITDA and years after that, we will have a clear contribution to group EBITDA from ISS business. Then if you look at the capital allocation. We will continue with our disciplined value creation-oriented capital allocation policies, CapEx to sales, 12%. We do have very customer demand-driven and value-oriented CapEx management and continuously priority -- making a prioritization and reallocations according these criteria. And as can be seen in the graph, long time, we've been clearly lower with the CapEx levels compared to peers. Same is with M&A policy. So we will continue with disciplined value creation-oriented M&A policy, looking ways to accelerate growth with bolt-on acquisitions with clear value creation sources and maintaining shareholder remuneration in intact. Now let's look at the cash flow. And obviously, EBITDA growth contributes well to cash flow growth. There are other positive levers as well as CapEx to sales when compared to last year, CapEx to sales is lower. Interest expenses year-on-year change this year, is better compared to what it was last year. There are no license payments this year. Last year, there was some. So all in all, growing EBITDA onwards to even better to cash flow compared to last year. As just discussed, we continue with our disciplined M&A policy and the current outlook for this year is that activity will be lower than what it was last year. So cash flow, all in all, solid growth expected going forward. Our balance sheet, capital structure remain solid -- capital structure targets. Net debt to EBITDA, 1.5 to 2x equity ratio 35% in the new medium-term targets, continuing the same as they've been a long time. The same is with credit ratings stable, long-time ratings and also going forward, we are targeting solid investment-grade ratings. So this has proven to be very efficient. It offers a great basis for faster profitable growth ambition. Now distribution track record is one of its kind, I would say, 11 years growing distributions in the new distribution policy. There is continuation of 80% to 100% payout ratio. And everything said before, higher growth ambition, disciplined capital allocation, continuing cash flow growth expectation, solid balance sheet, capital structure targets are pointing to good distribution capabilities also going forward. And now to conclude my priorities really for the faster profitable growth support growth, driving profitability while maintaining capital efficiency. And now we have perhaps some time for questions.

Terence here from Morgan Stanley again. Just on the topic of operating leverage. Can you talk about why you won't commit specifically to EBITDA growth being faster than total revenue growth, given that you reiterate mid-single-digit growth in Mobile Service revenues. What are the moving parts there? And then similarly on EPS, do you see kind of a similar midterm trajectory in EPS as you do you EBITDA growth?

Yes. So we are really targeting to profitable growth. So it's fast profitable growth. We are aiming to grow service revenue and good translation to EBITDA and higher than 4% target also in EBITDA. And the same drivers partly that I mentioned with the cash flow are also relevant for EPS and leverage of EBITDA growth to EPS. CapEx to sales is lower, what it was last year and year before. Interest expenses negative change is lower compared to what it was in the past. So that means that EBITDA translation to EPS is better going forward than what it was last year.

Matti Riikonen from Carnegie. One question related to the financial flexibility. Now you relaxed already the dividend payout ratio to allow more than 100% payout. And you are still foreseeing some M&A in the ISS business, perhaps also in Fiber. But you didn't touch the net debt-to-EBITDA range. I mean you currently at 1.9% and the range is from 1.5% to 2%. So why not also relax that a bit above 2%?

Well, we think this is a good range. So it has worked well in the past or so going forward, it will work well. As said, cash flow expectation is good, even improving compared to last year for the reasons mentioned. EBITDA higher than 4% growth also contributing to cash flow. And all in all, this together with a solid balance sheet allows us to continue with bolt-on acquisitions as that is M&A policy, is more doing the bolt-on acquisition size wise, they are not changing the balance sheet a lot. So it is a well thought combination of efficient balance sheet, flexibility to targeted growth, accelerating bolt-on acquisition and maintaining good capabilities also for distributions.

So if I may continue, -- so if -- is it so that you assume that your net cash flow would improve faster than the 4% growth in EBITDA?

Well, I said that expectation for the cash flow growth compared to last year is good, it's better.

Thank you. Good afternoon, [indiscernible] as well. Just a question on CapEx following up Maurice question before. Can you describe a little bit the process when you decide and prioritize various CapEx levers. Do you have certain requirements for the various investments? I understand the culture, but how do you maintain that culture of being CapEx disciplined?

Yes. So I think culture is also in this a good word. So the -- there are several things. It's a cultural thing, it's an active management. So we are actively going through the outlook and doing the reallocation and reallocation decisions and based what I just explained customer demand and value creation in mind, timing is very critical to it, right time -- not too late or not too early. And that impacts very much to returns which is important value creation point of view. And that is something that we do already many years, and it is a one of the processes in overall Elisa business system context that are enabling consistent development and continuous improvement.

You should productify it and sell to the others.

Ok, Andrew?

Just a question on the ISS bolt-on acquisitions. Can you give us just a sense of the size and scale of the bolt-on acquisitions? Will it be similar over the next 3 years to what you've done over the last 3 years. Can you reassure it won't be significantly larger, for example, just any kind of color on scale of ambition there. And then just also on the ISS disclosure, it's great that you were disclosing that separately. So thanks for that. Can you just take us through the exact line items that we'll be getting now on ISS, does that exceed EBITDA disclosure?

Right. So if I take the last one first. So like we are disclosing corporate consumer segment, so it's revenue, EBITDA -- EBIT. Lines, the acquisitions size-wise yes, bolt-on acquisitions like we've done in the past, ranging from typically from a couple of millions to tens of millions. So like Henri mentioned, in ISS business acquisitions that are enhancing go-to-market and this geographical expansion serving for that purposes or in domestic telecom business like we've done several fiber asset investments, let's say, EUR 10 million, EUR 20 million type of investments, such an opportunities arise.

Okay. May be we move on to a general Q&A part with all gentlemen. You can, of course, direct your questions, each of gentleman, whatever you want to ask. So but Please? Yes.

Paul Sidney from Berenberg. Really, it was one for you, Jari, just to follow on from the last presentation. Trying to bring together some of the questions that we've already had on capital allocation, CapEx how you choose to allocate that CapEx. Is it fair to assume that despite there being no firm ROTE target midterm. Is it fair to assume that that 18.3% is expected to grow over time?

Yes. So we will continue to maintain an efficient capital structure. And earnings growth target is there. EBITDA, more than 4% and certain items in better position below EBITDA and towards net results. So we intend to maintain good returns. And really look that we get returns from investments. We get our returns out of the investments also going forward.

And to add to that no, one of the reasons why we are in the international software business in the first place. In addition to us having the software capabilities that market providing attractive growth is that one scaled up over time, that business can be additive to our return levels, ROCE. .

Sorry, just a follow-up. Did I see that the target for the ISS division was to deliver returns above 20% over time?

Yes, we have a clear path infront of ourselves to attractive EBITDA levels of around 25% or more, and then ROCE being roughly on par with Elisa Group levels around that level of 20% or in that ballpark.

Okay. Ondrej, please.

Ondrej Cabejšek from UBS. I had a question referring back to the B2C presentation, specifically the mobile service revenue outlook. So you're basically in the presentation, I think you said that you're expecting the market to grow at 2% over the next 3 years. And I'm just wondering if that's maybe too low of a number because at this point, it's growing much faster -- has been very much faster. And so if you are expecting the market to grow at 2%, why should the market like you grow mid-single digits is my question?

So you are referring to the market share, I have a slide I have in the...

Yes. And there was exactly -- so you having EUR 1.1 billion of a EUR 3.5 billion market, and the market expected to grow at 2%. So if I may...

The total telco market, if I recall it correctly, telecom market.

Services market?

I think it was telecom market, if I'm on the right the same page as you are. So that was a telecom -- total telecom market. Also mobile is, of course, a substantial part of that. But that is a total telecom market. But I said it in mobile market, we are not really going for the market share. So we are going for the -- building the value for the market and keeping our share. The way that I explained in the -- with the upsell path going forward.

So the 2% market number includes, for example, fixed side. So cannot really be compared with mobile service revenue directly.

But then the -- just pushing back a bit, [the fixed market] at least like within your revenues, and I guess within Finland more broadly, is a very small part of the market. So is that 2% still may be a bit conservative with mobile, everyone talking about in the market, mobile growing maybe mid-single digits just like it has been and just like you're saying, so any -- you're presenting the growth opportunities around fiber, for example. So why would the fixed market be dragging the market down by -- or to such extent?

Not all of the competition -- not all of the competitors are growing mid-single digits in terms of mobile service revenue.

But -- okay. So then you expect basically that the underperformers to kind of behave rationally going forward? Is that the expectation and maybe the market growth rates within the -- among the 3 competitors to basically equalize over time because, obviously, you guys are somewhere in the middle, one competitor is growing way above that. The other competitor is growing below that. So how do you expect the market to kind of look like over the next 3 years when it comes to the...

Then we come back to the components of the mobile service revenue development as we see them. And of course, we see a great opportunity in mobile value-added services, stemming from customers' needs around digital security and their willingness to pay for it. So of course, this will be something that will be impacting the whole market. But as stated, we are stating how the market is today, we are not forecasting how the market will look like going forward. We are forecasting or we are soft guiding our own mobile service development.

Okay. And maybe one other question on value-added services. Like what are the margins on that for you specifically? Because we've heard from some companies this can be very high. From some companies -- I guess, depending on the service can be very low. So what are the assumptions in terms of accretion from -- or EBITDA accretion specifically from value-added services?

Yes. If you look at the margin of those mobile value-added services, the category, which is very closely related to mobile subscriptions, we are talking about profitability levels on par or better than the mobile subscriptions.

Ajay from JPMorgan. Just a couple of questions. The first was on value-added services. So I think you highlighted the revenue uplift of mobile ID was around EUR 2 to EUR 3. Do you have a number for the digital security service as well on that? And then the second question was just around EPS. So kind of softly said that you would grow faster than your EBITDA. So what has held you back from providing guidance on this line, given it's quite important towards your shareholder returns as well?

Okay. If I start on the first one. I mean, if we look at the stand-alone price on the mobile ID today, the monthly subscription price for that service would be EUR 2.99. So that's where we are at the present time. As an example, for that particular product. But then again, I mean, if we look at our value creation going forward, it is also dependent on how we develop our overall offering. How we potentially package things together a bit with the mobile subscription with the mobile value-added services, providing value to customers and with that pricing them accordingly. So this is part of our consideration set in terms of how to move forward.

So if I continue with the EPS question, so we are not guiding or giving outlook for EPS. We have revenue and EBITDA in our outlook and medium-term targets. But of course, if and when we are growing -- growing with more than 4% with the EBITDA. And as I said that the CapEx to sales is now lower compared to what it was 2 years before and interest expenses, negative impact is lower compared to what it was last year, then the translation from EBITDA growth to EPS growth is better compared to what it was last year. So the expectation for EPS growth is good.

Sami Sarkamies, Danske Bank. I'd like to address 2 topics. First one is the new value-added services like home security and battery storage for consumers. When would you expect revenues from these services? And how much do you need to invest into service creation and go to market? And would you consider M&A to speed things up?

Okay. Just to keep the terminology right here. I mean when we talk about value-added services, we talk about these mobile value-added services that are very tightly connected to mobile subscription. And then the home products would be more like digital products in different lines of the P&L, just to be very, very clear on that one. The opportunity related to the residential battery or the home physical security is more of a mid-term possibility. We see sort of that being something that we can scale up organically. And when it comes to investments, these won't be demanding any significant CapEx with the residential battery based on AI, we have the product already. We have the solution. We are selling it early days, but it's out there in the marketplace. With physical security, we will certainly have some offering development to do, but that is also a space where we can partner with different players. And with that, we can limit the original OpEx investment and especially the CapEx investment. And then I stated use our -- use our existing differentiators, the brand, the customer base, the distribution power to leverage these offerings out there in the marketplace.

Okay. And then my second question would be on renewal of the back-end IT systems. Can you be a bit more specific on what actually you're planning to renew and maybe timing for some of these investments? And how will that be visible in your financials when it happens?

So CapEx wise, they will all be within the limit of 12% CapEx. So we are talking about a multiyear journey, something that expands far beyond this 3-year strategy period that we are now talking about. We will be moving forward with measured steps. And that means that it will be gradual of nature. The first thing that we will be looking at is the renewal of the product catalog. And that is where we will be basically starting.

Just a couple of last questions for me. One on the fixed service revenue new disclosures, I think on your website now in terms of the fixed service revenue, and it's flat on a 2-year basis and a decline on a 1-year basis. Can you just help us understand what's behind that? Because obviously, there's been some business number impacts, et cetera, et cetera. Any kind of sense as the underlying, and I think, Topi you mentioned that you might see some acceleration in fiber growth, et cetera, through the period, your midterm guiding period, how should we think about that? And then just a second question on ISS. Does ISS always sit better within the Elisa Group? Obviously, you're spitting out the disclosure a bit, but could ever be an entirely spun-out entity?

If I take the first one. So like I said, corporate customer numbers, regulation change, I believe you hinted on that direction. So that is one thing that has impacted last year negatively if you take fixed services line alone. So that has, let's say, EUR 14 million, EUR 15 million type of negative impact than there are some legacy services, PSTN voice, ADSL services that are trending negatively. Now going forward, corporate customer or the corporate number, regulation change is not impacting any more this year. Also negative impact from PSTN, ADSL other legacies is becoming less when moving forward. This year, there are still some negatives and it's becoming then next year less than '27, even smaller impact.

And if I take the ISS question from Elisa group perspective, as Henri was alluding to, Elisa is a good owner for that business. I mean, the whole business is rooted in our software capability. And today, we are adding value to that business with that same software capability, improving the competitiveness of that business. And then it's value-adding for Elisa group. So part of the strategy here is that we are communicating ISS as a new segment, which also signifies our strategic commitment to building that business. So that software business is our way of becoming more international.

I had a question on the consumer business, which risk slightly embarrassing my knowledge, but I'm going to ask it anyway. My understanding is that Elisa doesn't have contract binding in Finland. Is that right? And is that sustain -- if I am right, is that sustainable? Is that something that you've looked at?

We don't have a contract binding offering. And that's -- that has been -- that has been a selection, a dream from a customer preference, so they really have -- customers do prefer to have a nonbinding contracts. Of course, we are open to say that if the situation changes that we have to experiment as well. But at the moment, it is exactly as you say.

Siyi He from Citigroup. I just have a question on your approach when it comes to market share. I think in Mobile, you have been very clear that you do not want to lose any market share. And you have been quite successfully defending on it. And -- but when I look at the fixed broadband market share, I think it has been ceding shares to competitors. I'm just wondering in the mid- to longer term, do you think it could be risk for market share fragmentation or you think that you could consider changing the approach in the fixed market?

So if you look at the Fiber market in Finland, it is a very fragmented marketplace, small market with almost 140 players out there. And if you look at the fiber availability, FTTx, based on national statistics, we are the player that has the biggest market share. We have 23% market share on this very, very fragmented market. So currently, as Vesa-Pekka was alluding to, we are focused on the land craft game. We will be building fiber in those densely populated areas where we have high market share already. We are open to regional collaborations to increase our foothold. And we are open to buy small fiber assets if needed. So this is, of course, our long-term play of making sure that we have a good hold of that market over time.

Thank you. It's Oscar Ronnkvist from ABG Sundal Collier. So I have 2 questions. So the first one, just a continuation on the operating leverage. So I mean, a lot of focus on cost discipline, of course, and also that your growth is coming from high-margin areas such as mobile 5G upselling and the increasing service or software services. So just on the operating leverage, again, I guess those items are accretive. So what would be sort of pulling back, what are diluting the operating leverage, the items, please?

Do you want to take that?

Yes. Yes, we understand this operating leverage question and discussion. We are targeting to grow EBITDA, we are targeting to grow earnings and -- and that's the main goal. And having said that, there are reasons also. I did go through those earlier that are contributing to operating leverage positively like CapEx to sales is now lower compared to what it was and interest expenses, track is lower compared to what it was in the past. But we want to maintain the focus on the growth, faster profitable growth with revenue, focusing on the growth lever, service revenue growth and at the same time, growing with EBITDA more than 4%. So that's the focus.

And yes, if I build on that one, on the ISS side, there's an interplay between revenue growth and OpEx. So in terms of investments to sales and marketing, there's an interplay between growth and sales and marketing investments. And to some extent, that same analogy applies to home category in those digital services and to corporate IT and cyber. So that is something that we will need to take to some extent, it applies.

All right. And just a final one. Given the decelerating mobile data usage, so on the mid- to long-term CapEx intensity on mobile network capacity spend you see that trending downwards over time, given the slowdown in mobile data traffic.

Yes. So 12% is the target and when the data uses if it's less than there is certain amount of capacity investments that is -- that are at the lower level. However, as I believe, Topi's presentation, there was main CapEx categories, they relate still to mobile network, fixed fiber and IT. And then the allocation between these different items may vary from time to time and year-to-year.

[indiscernible] from UBS. Just on the 5G penetration within the customer base. I wondered if you could give any color on when you expect to hit peak penetration, is growth in customer penetration going to be linear? And what was the profile with 4G. So roughly how long did it take to reach peak 4G penetration?

Yes. So Vesa-Pekka, if you take the 4G penetration bit. But as stated, I mean, our current 5G penetration in the customer base is below 50%. And we expect the upsells to continue with the linear trend that we have been seeing in the past. And there's no peak in sight in this one. So we expect that to continue for years to come.

Yes, just building on that. So we have this business model price since the 3G -- 3G era, 2006, 2007 something throughout the 4G or we are still in the middle of 4G and now into the 5G. So the main thing is really the speed during. So it's not about the technology play so much, but the thing is that within the 4G, when customers are operating to the high speed tiers. There's this, they say, revenue increase, and they are happier. And within the 5G -- so it's not a kind of a -- from that perspective, it's not kind of a -- that there's technology transfer is so important there. But we keep on kind of moving -- attracting our customer base into the highest speed tiers.

Maybe to add the development in 4G took, let's say, 6, 7 plus years to from, let's say, 0 to 80-plus percent penetration. And we see that 5G is -- and it was fairly stable development. 5G also is increasing fairly stable. It seems that it's a little bit longer curve. But very stable development and also 4G took, like I said, 6, 7-plus years from 0% to 80%.

And the longer curve related to 5G is, for example, related to AI and the 5G advanced and the uplink speeds.

[indiscernible], Bank of America. A quick question just on your M&A. So it's really important to have M&A for ISS and those key markets you mentioned, I believe it's the United States, Germany, France, a lot of Western Europe. What is a typical transaction size you'd be looking to target for M&A? And I mean, how does that fit in the context of your M&A guidance where it's going to decline year-over-year? For instance, is there a specific market that you're looking at with the biggest opportunity in 2025? And which would you look to sort of, I suppose, look at maybe further down the line, '26, '27, et cetera?

Yes. Well, First of all, this go-to-market of ISS doesn't necessarily require acquisitions. And we are looking possible targets to accelerate go-to-market. But it's not -- it must be suitable for that purpose and of course, the financial conditions need to be in place so that is value creative. But go-to-market plan is also actionable and is executed without acquisition, but there is certain -- could be certain timing benefit if good target is available. Size-wise, like I said, we've been doing in the past a couple of millions to a couple of tens of millions EUR 70 million, if I recall right, the biggest investment in ISS space over the years. So that kind of category. So it is not really changing awful lot in EUR 3 billion-plus balance sheet. And last year, there was more, let's say, several acquisitions happening in 1 year 5 or 6 approximately. And as I said now, currently, it looks that the activity is not necessarily at the same level this year. But going beyond this year, it is this bolt-on acquisition strategy and policy and -- so we think it's -- it makes sense if it's speeding up the development if the value creation sources are clear. Then we do and otherwise not.

Anything that you want to add?

Well, maybe the latter half of the question was that what are the target markets. Obviously, we are now looking at opportunities for acceleration in those target markets that I mentioned, Germany, France, U.K., some of the Nordic countries. Beyond that, there are good Western European countries that we might be looking at next, like Spain, Poland, but it's yet to be decided.

Sorry, just one follow-up. I know you mentioned the U.S. specifically just based on the theme of reshoring. I mean, is that a specific consideration heading into this year?

Yes, we are constantly looking. We acquired last year Romaric to complement [indiscernible] there, and that was a -- that was a good addition. Asset prices in U.S. are a bit high and we are looking at opportunities that make sense from a value creation point of view. So we are looking at opportunities and are having discussions in U.S. as well, but the likelihood of us doing something significant in the U.S. may be lower.

Fredrik Lithell from Handelsbanken again here. We've seen new fiber regulations in Norway being put in place, and Sweden is also working on it. Is that something that is ongoing in Finland? And if so and if looking at Norway and what Sweden is doing, would it be beneficial for you in your road map?

I'm not -- to be quite honest, I'm not quite familiar of the latest what is happening in Norway and Sweden, if you want to elaborate that, I'm happy to, of course, I elaborate from my side as well.

Fiber regulation is that they are splitting up the markets into smaller regional units. And in Sweden, they are talking about looking at dominant fiber networks, even though they are small as one market. So Sweden might go into tens of markets that can be regulated. So even smaller player can be seen as dominant players?

There's no -- I mean, that kind of regulation there's no discussion around that kind of regulatory changes in the Finnish market at this present time.

Yes, then we'll maybe take last question from -- before closing remarks.

[indiscernible] from HSBC. Just another quick question on the geographic expansion for the ISS business. I understand the strategy about growing presence in countries where Elisa already has presence across Western Europe and the United States. Would be interested just to hear your quick thoughts on potential opportunities in the Asian markets? And if so, perhaps in what verticals they may be?

Yes, Asia is fairly important for us already, especially for our high-tech vertical. There is a lot of customers we have presence in multiple countries around Asia. We're already experimenting, also bringing other products in the Asian markets in 5 countries, but it's still early days experimentation, building on the go-to-market model that we have built. So we are now concentrating on making sure that we capture the opportunities in Europe and U.S., but Asia as said, the phase of -- that we have now embarked on is about global scaling and building momentum for global scaling. So one could assume that we will follow up with other countries later on.

All right. Thank you for your questions. I think we have used our time. We are here available for discussions during the light lunch. We also ask you to fill the feedback form so that we can make the next even better. But now it's closing remarks and I give word to Topi.

Okay. Thank you. So just very, very shortly. Today, we told you about our strategy of faster profitable growth. And our habit of delivering. So we have been setting those new midterm targets for ourselves, increasing the bar for ourselves, they are realistic targets. As we see it, and we aim to deliver. The reason to believe the faster profitable growth in mobile service revenue is the continued upsells, plenty of runway. Mobile value-added services as the new opportunity, 5.5G around the corner. The right to win in the home space, in corporate and cybersecurity, corporate IT and cybersecurity is related to our existing differentiators. And then we have this growth momentum in ISS business, increasing their main as we have clear paths to attractive profitability levels, to attractive return levels. And all of this will be enabled by our focus on simplification and productivity. So we will take care of our cost competitiveness both short and long term, keeping the CapEx discipline of 12%. So with that, thanks a lot of very active participation, and hope to see you soon. Take care.