



FINANCIAL

STATEMENTS

annual reviewsustainabilitygovernanceremuneration

FINANCIAL STATEMENTS 2022

Contents

THE REPORT OF THE BOARD OF DIRECTORS 1

FINANCIAL STATEMENTS 9

 



 

 

 

 

Notes 16

1. General accounting principles 16

 

 

 

2. Operational result 19

 

 

 

 

 

 

3. Business acquisitions and disposals 28

4. Personnel 35

 

 

 

5. Tangible and Intangible assets 45

 

 

 

 

6. Inventories, trade and other receivables,

trade and other liabilities 57

 

 

 

7. Capital structure 62

 

 

 

 

8. Other notes 79

 

 

 

 

 

9. Key indicators 90



 

 

 

PARENT COMPANY FINANCIAL STATEMENTS 96

Parent company Financial Statements 96

 

 

 



company 100

 

Notes to the income statement 101

 

 

 

 

 

 

 

 

 

Notes to the balance sheet 104

 

 

 

 

 

 

 

 

 

 

SHARES AND SHAREHOLDERS 115

BOARD’S PROPOSAL FOR THE PROFITS DISTRIBUTION 119

SIGNATURES 119

AUDITOR’S REPORT 120

AUDITOR’S REASONABLE ASSURANCE REPORT

ON ESEF FINANCIAL STATEMENTS 125

Contents

FINANCIAL STATEMENTS 2022

Report of the board of directors 2022

THE REPORT OF THE BOARD OF DIRECTORS

Market situation





































EUR million 2022 2021 2020

 2,130  

 733  

 34.4%  





735  

 34.5%  

 470  

 22.1%  





472  

 22.2%  

 30.4%  





FINANCIAL STATEMENTS 2022





























EUR million 2022 2021 2020

 1,276  





1.7  

 101.9%  

 40.6%  





300  





321  































Changes in corporate structure



























FINANCIAL STATEMENTS 2022

Consumer Customers business

EUR million 2022 2021

2020

 1,301  

 496  

 38.1%  





497  

 38.2%  

 322  

 24.7%  





323  

 24.9%  

 191  



















Corporate Customers business

EUR million 2022 2021

2020

 829  

 238  

 28.7%  





238  

 28.7%  

 148  

 17.9%  





148  

 17.9%  

 99  





















FINANCIAL STATEMENTS 2022

Investments

EUR million

2022

2021 2020





 290  

 191  

 99  

 25  

 314  

 9 

 26  





 255  

 12  

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













2022 2021 2020

 2,939  

 2,684  

Total 5,623  







Key ESG indicators

4Q22

4Q21



 –5.7% 

 86.2% 

 29.6% 







337 

 12 







Financing arrangements and ratings

EUR million

Maximum

amount

In use on

31 Dec 2022

  

  

  

  

Long term credit ratings Rating Outlook



  Stable

  Stable

FINANCIAL STATEMENTS 2022





 2022 2021 2020

 71.2  





208.4  

 279.6  

 14,575.8  

 167.1,%  



Shares and market values 2022 2021 2020

 167,335,073  

Treasury shares 7,075,378  

 160,259,695  

 49.46  

 8,276  

 4.23,%  

   

 Total Treasury Outstanding

   





 

   























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







FINANCIAL STATEMENTS 2022



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





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



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





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



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

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

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

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

















FINANCIAL STATEMENTS 2022



















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







FINANCIAL STATEMENTS 2022























Corporate Governance Statement

and Remuneration Report







Events after the reporting period









































































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

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



FINANCIAL STATEMENTS 2022

Consolidated income statement
EUR million	Note	2022	2021
Revenue	2.1, 2.3	2,129.5	1,997.9
Other operating income	2.4	6.9	9.0
Materials and services	2.5	–820.8	–763.6
Employee expenses	4.1	–394.8	–373.8
Other operating expenses	2.5	–187.5	–172.2
EBITDA	2.1	733.3	697.4
Depreciation, amortisation and impairment	2.1, 5.1	–263.4	–266.6
EBIT	2.1	469.8	430.8
Financial income	7.4.1	5.6	4.6
Financial expenses	7.4.1	–18.7	–16.5
Share of associated companies’ profit		–0.7	–0.5
Profit before tax		456.0	418.4
Income taxes	8.1.1	–83.2	–74.9
Profit for the period		372.8	343.5
Attributable to Equity holders of the parent		374.1	343.6
Non-controlling interests		–1.3	–0.2
		372.8	343.5
Earnings per share (EUR)
Basic	2.6	2.33	2.15
Diluted	2.6	2.33	2.15
Average number of outstanding shares (1,000 shares)
Basic	2.6	160,253	160,174
Diluted	2.6	160,410	160,174

Contents

THE REPORT OF THE BOARD OF DIRECTORS

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS 2022

Consolidated statement of comprehensive income
EUR million	Note	2022	2021
Profit for the period		372.8	343.5
Other comprehensive income, net of tax
Items which may be reclassified subsequently to profit or loss
Cash flow hedge		–0.3	0.9
Translation differences		–4.7	–1.2
Items which are not reclassified subsequently to profit or loss
Remeasurements of the net defined benefit liability	4.3	0.4	–2.8
Other comprehensive income		–4.7	–3.0
Total comprehensive income		368.0	340.4
Total comprehensive income attributable to Equity holders of the parent		369.3	340.5
Non-controlling interests		–1.3	–0.1

FINANCIAL STATEMENTS 2022

Consolidated statement of financial position
EUR million	Note	31 Dec. 2022	31 Dec. 2021
ASSETS
Non-current assets
Property, plant and equipment	5.2	766.7	752.7
Right-of-use assets	5.3	90.4	91.0
Goodwill	5.4.1	1,157.3	1,139.4
Intangible assets	5.4	210.5	198.1
Investments in associated companies	8.3.2	9.9	10.6
Other financial assets	7.4.3	16.2	16.4
Trade and other receivables	6.2.2, 7.4.4	116.8	103.2
Deferred tax assets	8.1.2	13.1	13.1
		2,380.9	2,324.5
Current assets
Inventories	6.1	95.5	82.8
Trade and other receivables	6.2.1	537.1	506.3
Tax receivables		1.8	0.7
Cash and cash equivalents		85.4	114.1
		719.9	703.9
TOTAL ASSETS	2.1	3,100.8	3,028.4

Consolidated Financial Statements

FINANCIAL STATEMENTS 2022

Consolidated statement of financial position
EUR million	Note	31 Dec. 2022	31 Dec. 2021
EQUITY AND LIABILITIES
EQUITY
Share capital		83.0	83.0
Treasury shares		–124.5	–126.1
Reserve for invested non-restricted equity		90.9	90.9
Other reserves		373.9	373.9
Retained earnings		823.2	776.1
Equity attributable to equity holders of the parent	4.2, 7.3	1,246.5	1,197.8
Non-controlling interests		5.4	6.3
TOTAL EQUITY		1,251.9	1,204.1
LIABILITIES
Non-current liabilities
Deferred tax liabilities	8.1.2	25.7	25.3
Interest-bearing financial liabilities	7.4.2, 7.4.3	995.0	1,141.4
Lease liabilities, interest-bearing	7.4.2, 7.4.3	70.8	73.4
Trade payables and other liabilities	6.3, 7.4.3, 7.4.4	30.3	41.0
Pension obligations	4.3	12.9	14.4
Provisions	8.2	2.9	2.8
		1,137.7	1,298.3
Current liabilities
Interest-bearing financial liabilities	7.4.2, 7.4.3	275.0	100.2
Lease liabilities, interest-bearing	7.4.2, 7.4.3	20.4	18.1
Trade and other payables	6.3, 7.4.3	412.9	401.6
Tax liabilities		2.1	2.9
Provisions	8.2	0.8	3.1
		711.2	526.0
TOTAL LIABILITIES		1,848.9	1,824.3
TOTAL EQUITY AND LIABILITIES		3,100.8	3,028.4

FINANCIAL STATEMENTS 2022

Consolidated cash flow statement
EUR million	Liite	2022	202
Cash flow from operating activities
Profit before tax		456.0	418.4
Adjustments
Depreciation, amortisation and impairment	5.1	263.4	266.6
Financial income (-) and expenses (+)	7.4.1	13.1	11.9
Gains (-) and losses (+) on the disposal of fixed assets		–0.1	–1.8
Increase (+) / decrease (-) in provisions on the income statement		–2.2	2.6
Other adjustments		–16.0	–15.6
		258.2	263.7
Change in working capital
Increase (-) / decrease (+) in trade and other receivables		–16.2	–31.7
Increase (-) / decrease (+) in inventories		–13.3	–17.6
Increase (+) / decrease (-) in trade and other payables		2.0	52.6
		–27.5	3.3
Dividends received		0.4	0.6
Interest received		2.3	2.8
Interest paid		–12.6	–17.4
Taxes paid		–85.0	–75.7
Net cash flow from operating activities		591.8	595.7

Consolidated income statement and statement of comprehensive

income

FINANCIAL STATEMENTS 2022

Consolidated cash flow statement
EUR million	Liite	2022	2021
Cash flow from investing activities
Equity investments and business acquisitions	3	–20.5	–4.5
Contingent consideration of subsidiaries		–0.1	–1.1
Investments in associates		0.0	–9.7
Other investments		–0.3	–0.4
Capital expenditure		–270.9	–258.8
Loans granted	3		–0.5
Repayment of loan receivables		0.1
Proceeds from disposal of subsidiaries and businesses		–0.2
Proceeds from disposal of other investments		0.0	0.1
Proceeds from disposal of tangible and intangible assets		0.1	0.8
Net cash flow used in investing activities		–291.9	–274.1
Cash flow before financing activities		299.9	321.6
Cash flow from financing activities
Proceeds from long-term borrowings			100.4
Repayment of long-term borrowings		–100.3	–174.1
Increase (+) / decrease (-) in short-term borrowings		124.8	–19.6
Repayment of lease liabilities		–24.9	–23.1
Dividends paid		–328.1	–310.9
Net cash used in financing activities		–328.5	–427.4
Change in cash and cash equivalents		–28.6	–105.8
Translation differences		–0.1	–0.2
Cash and cash equivalents at the beginning of the period		114.1	220.1
Cash and cash equivalents at the end of the period		85.4	114.1

FINANCIAL STATEMENTS 2022

Consolidated statement of changes in equity
		Equity attributable to equity holders of the parent
			Reserve for
			invested				Non-
	Share	Treasury	non-restricted	Other	Retained		controlling	Total
EUR million	capital	shares	equity	reserves	earnings	Total	interests	equity
Balance at 1 January 2021	83.0	–128.4	90.9	375.7	761.5	1,182.7	1.5	1,184.2
Profit for the period					343.6	343.6	–0.2	343.5
Other comprehensive income
Translation differences					–1.2	–1.2	0.1	–1.2
Cash flow hedge				0.9		0.9		0.9
Remeasurements of the net defined benefit liability				–2.8		–2.8		–2.8
Total other comprehensive income				–1.9	–1.2	–3.1	0.1	–3.0
Total comprehensive income				–1.9	342.4	340.6	–0.1	340.4
Dividend distribution					–312.4	–312.4	–0.1	–312.5
Share-based compensation		2.3				2.3		2.3
Acquisition of subsidiary with non-controlling interests							5.1	5.1
Other changes					–15.5	–15.5		–15.5
Balance at 31 December 2021	83.0	–126.1	90.9	373.9	776.1	1,197.8	6.3	1,204.1
Profit for the period					374.1	374.1	–1.3	372.8
Other comprehensive income
Translation differences					–4.8	–4.8	0.0	–4.7
Cash flow hedge				–0.3		–0.3		–0.3
Remeasurements of the net defined benefit liability				0.4		0.4		0.4
Total other comprehensive income				0.0	–4.8	–4.7	0.0	–4.7
Total comprehensive income				0.0	369.3	369.3	–1.3	368.0
Dividend distribution					–328.5	–328.5	–0.1	–328.7
Share-based compensation		1.6				1.6		1.6
Acquisition of subsidiary with non-controlling interests							0.5	0.5
Other changes					6.4	6.4		6.4
Balance at 31 December 2022	83.0	–124.5	90.9	373.9	823.2	1,246.5	5.4	1,251.9



FINANCIAL STATEMENTS 2022

Notes to the consolidated financial statements

Contents

THE REPORT OF THE BOARD OF

DIRECTORS

FINANCIAL STATE-

MENTS

Consolidated Financial Statements

1 GENERAL ACCOUNTING PRINCIPLES

1.1 Basic information about the Group

Information about the parent company:

Elisa Corporation

Domicile: Helsinki, Finland

Registered address: Ratavartijankatu 5, 00520 Helsinki

Business ID: 0116510–6

Elisa Corporation (“Elisa” or “the Group”) engages in

telecommunications activities and provides ICT and online

services in Finland and in selected international market

areas.

The shares of the parent company, Elisa Corporation, have

been listed on the Nasdaq Helsinki since 1997.

On 26 January 2023, Elisa Corporation’s Board of Directors

accepted this financial statement for publication. A copy of

financial statement is available from Elisa’s head office at

Ratavartijankatu 5, Helsinki, or on the company’s website at

www.elisa.com.

1.2 Basis of preparation of

financial statements

Elisa’s consolidated financial statements are prepared

in accordance with International Financial Reporting

Standards (IFRS), including adherence to IAS and IFRS

standards and SIC and IFRIC interpretations valid as at

31 December 2022. In the Finnish Accounting Act and the

provisions issued pursuant to it, the Inter-national Financial

Reporting Standards refer to standards and interpretations

that have been approved for application in the EU according

to the procedures provided for in EU regulation (EC) No.

1606/2002 (“IFRS”). The notes to the consolidated financial

statements are also compliant with Finnish accounting and

corporate legislation.

The consolidated financial statements have been

prepared under the historical cost convention with the

exception of financial assets and liabilities, share-based

payments, pension liabilities and derivatives recognised

at fair value through profit or loss or statement of

comprehensive income. The financial statements are

presented in EUR million and the figures are rounded to

one decimal place.

1.2.1 Accounting principles,

structure and presentation of the

consolidated financial statements

The accounting policies and descriptions of management’s

judgment-based conclusions are mainly found in the notes

to the financial statements, which are listed in the table

below. Only some general accounting policies are described

in this section.



Summary of notes, related to accounting principles for

the consolidated financial statements of Elisa Group

Accounting principle Note

Operating segments 2.1

Revenue from contracts with customers 2.3

Other operating income 2.4

Research and development costs 2.5

Earnings per share 2.6

Business acquisitions and disposals 3

Share-based incentives 4.2

Pension obligations 4.3

Property, plant and equipment 5.2

Right-of-use assets 5.3

Intangible assets 5.4

Goodwill 5.4.1

Inventories, trade and other receivables,

trade and other liabilities 6

Financial assets and liabilities 7.4

Derivative instruments 7.4.4

Income taxes 8.1.1

Deferred tax assets and liabilities 8.1.2

Provisions 8.2

Consolidation principles, subsidiaries 8.3.1

Consolidation principles, joint arrangements 8.3.2

Off-balance sheet leases 8.4

The symbols below indicate the figures mentioned in the

notes that match the balances in the income statement,

statement of financial position and the cash flow statement.

I/S

= Income Statement

 B/S = Balance Sheet

C/F = Cash Flow Statement

FINANCIAL STATEMENTS 2022

Consolidated income statement and statement of com-

prehensive income

Consolidation principles

The consolidated financial statements include the parent

company, Elisa Corporation, subsidiaries, associates and

joint arrangements as described in detail in Notes 8.3.1 and

8.3.2.

Foreign currency items

Functional currency

The consolidated financial statements are presented in

euros, which is the functional and presentation currency of

the parent company.

Transactions in foreign currencies

Foreign currencies transactions are translated into

functional currency using the exchange rates prevailing on

the dates of the transactions. Monetary items have been

translated into the functional currency at the exchange

rates prevailing at the end of the reporting period.

Non-monetary items denominated in foreign currencies

are translated at the exchange rate at the date of the

transaction, excluding items measured at fair value that are

translated at the exchange rates prevailing on the valuation

date. Gain and losses arising from the currency translations

are recognised through profit or loss. Foreign exchange gain

and losses resulting from operating activities are included

in the respective items above operating profit. Foreign

exchange gain and losses from the liabilities denominated

in a foreign currency are included in financial income and

expenses, with the exception for exchange rate differences

on foreign currency items that constitute a part of the net

investment made in a foreign unit. These exchange rate

differences are recognised in other comprehensive income

and accumulated exchange rate differences are included in

the translation difference presented in shareholders’ equity.

Translation of foreign Group

companies’ financial statements

The income statements of foreign subsidiaries that use a

functional currency other than the Group’s presentation

currency have been converted into euro at the average

exchange rate prevailing during the year, and statements

of financial position at the exchange rate prevailing at

the end of the reporting period. The different exchange

rates applicable to the conversion of profit or loss on

the income statement and balance sheet result in a

translation difference recognised in shareholders’ equity

on the balance sheet, and any change in this difference is

recognised in other comprehensive income. Translation

differences arising from the elimination of the acquisition

cost of foreign subsidiaries, as well as translation

differences arising from equity items accumulated after the

acquisition, are recognised in other comprehensive income.

When a subsidiary is divested in full or in part, accumulated

translation differences are recognised in the income

statement as part of the sales gain or loss.

Goodwill arising from the acquisition of foreign entities

and the fair value adjustments made to the book values

of the assets and liabilities of such foreign entities upon

acquisition is treated as assets and liabilities belonging to

the foreign entities. These are converted into euro at the

exchange rate prevailing at the end of the reporting period.

1.2.2 Accounting principles that require

management’s judgement and key

sources of estimation uncertainty

Preparation of the financial statements requires the Group’s

management to make certain estimates and consideration.

In addition, judgement in applying the accounting policies

is required. This applies particularly to cases in which

valid IFRS standards provide for alternative methods of

recognition, measurement or presentation.

The estimates made in connection with the preparation

of financial statements are based on the management’s

best view at the end of the financial period, and the

outcome may differ from the estimates and assumptions.

Estimates are based on historical experience and

assumptions concerning the future that are believed

to be reasonable at the end of the financial period. The

Group regularly assesses the realisation of estimates and

assumptions, as well as changes in the underlying factors.

Any changes in estimates and assumptions are recorded for

the financial year during which the estimate or assumption

was adjusted, and for all subsequent periods.

Significant areas of estimation and uncertainty in

applying accounting policies that have the most significant

impact on amounts recognised in the financial statements

are related to business combinations (3), impairment

of intangible assets (5.4.1), share-based payments (4.2),

recognition of net defined pension liability (4.3) and

recognition of deferred tax assets (8.1.2).

The potential climate change-related risks and

opportunities to which the Group is exposed are disclosed

in the Group’s Sustainability 2022 report on pages 35 and

75. Management has exercised judgement in concluding

that there is no other material financial impact from

climate-related risks and opportunities that needs to

be recognised in the consolidated financial statements.

As the future impact of climate change will depend on

environmental, regulatory and other factors outside of the

Group’s control that are not currently known, management

will continue to monitor these estimates.

1.3 Applied new and revised standards

The consolidated financial statements have been prepared

in accordance with the same accounting policies used in

2021, with the exception for the following new standards,

interpretations and revisions to existing standards that

the Group has applied since 1 January 2022. Revisions did

not have a material impact on the consolidated financial

statements.

FINANCIAL STATEMENTS 2022

• Amendments to IAS 16 Property, Plant and Equipment.

Under the amendments, proceeds from selling items

before the related item of PPE is available for use should

be recognized in profit or loss, together with the costs of

producing those items.

• Amendments to IAS 37 Provisions, Contingent Liabilities

and Contingent Assets. When an onerous contract is

accounted for basing on the costs of fulfilling the contract,

the amendments clarify that these costs comprise both

the incremental costs and an allocation of other direct

costs.

• Annual Improvements to IFRS Standards 2018–2020

On 1 January 2023, the Group will adopt the following

new standard, providing this is approved by the EU by

the planned date of adoption. Revisions are not expected

to have a material impact on the consolidated financial

statements.

• IFRS 17 Insurance Contracts. The new standard for

insurance contracts will help investors and other parties

understand better insurers’ risk exposure, profitability

and financial position. This standard replaces IFRS 4

standard.

• Amendments to IAS 1 Presentation of Financial

Statements. The amendments are to promote

consistency in application and clarify the requirements

on determining if a liability is current or non-current.

The amendments clarify the application of materiality

to disclosure of accounting policies to help companies

provide useful accounting policy disclosures.

• Amendments to IAS 8 Accounting policies, Changes in

Accounting Estimates and Errors. The amendments clarify

how companies should distinguish changes in accounting

policies from changes in accounting estimates, with a

primary focus on the definition of and clarifications on

accounting estimates.

• Amendments to IAS 12 Income Taxes. The amendments

narrow the initial recognition exemption (IRE) and clarify

that the exemption does not apply to transactions such

as leases and decommissioning obligations which give

rise to equal and offsetting temporary differences.

On 1 January 2024, the Group will adopt the following

new standard, providing this is approved by the EU by

the planned date of adoption. Revisions are not expected

to have a material impact on the consolidated financial

statements.

• Amendments to IFRS 16 Leases. The amendments

introduce a new accounting model for variable payments

and will require seller-lessees to reassess and potentially

restate sale-and-leaseback transactions entered into

since 2019.

• Amendments to IAS 1 Presentation of Financial

Statements. The amendments specify that covenants to

be complied with after the reporting date do not affect

the classification of debt as current or non-current at

the reporting date. The amendments require to disclose

information about these covenants in the notes to the

financial statements.

FINANCIAL STATEMENTS 2022

2.1 Operating segments and geographical areas

The Group has two reporting segments: Consumer Customers and Corporate Customers. The organisational and management structure of Elisa Group is based on a customer-oriented operating

model. The reportable segments are based on the internal reporting provided to management.

The Consumer Customers segment provides consumers with telecommunications and communications services, such as fixed and mobile subscriptions with supplementary digital services, cable-

tv subscriptions, Elisa Viihde entertainment service and Elisa Kirja e-reading service.

The Corporate Customers segment provides corporate and public administration organisations with services such as IT and communication solutions for the digital environment as well as fixed

and mobile subscriptions. The Corporate Customers segment provides worlwide services such as video conferencing services, solutions for automation of network management and operation for

mobile operators, and IoT solutions for industry.

Operating segments:

2022

EUR million

Consumer

Customers

Corporate

Customers Unallocated

Group

Total

Revenue 1,300.9 828.6 2,129.5

EBITDA 495.7 237.6 733.3

Depreciation, amortisation and impairment –174.0 –89.5 –263.4

EBIT 321.7 148.1 469.8

Financial income 5.6 5.6

Financial expenses –18.7 –18.7

Share of associated companies' profit –0.7 –0.7

Profit before tax 456.0

Investments 190.6 99.1 289.7

Assets 1,891.9 1,082.4 126.5 3,100.8

2021

EUR million

Consumer

Customers

Corporate

Customers Unallocated

Group

Total

Revenue

1,242.5 755.4 1,997.9

EBITDA

476.0 221.4 697.4

Depreciation, amortisation and impairment

–174.0 –92.5 –266.6

EBIT

302.0 128.8 430.8

Financial income 4.6 4.6

Financial expenses –16.5 –16.5

Share of associated companies' profit –0.5 –0.5

Profit before tax 418.4

Investments 168.7 96.3 265.1

Assets 1,822.3 1,051.2 154.9 3,028.4

Allocation rules of the revenue and expenses allocated to the segments have been specified in 2022 and the comparable figures have been

updated to reflect the advanced allocations. In the comparison period 1–12/2021, Consumer Customers revenue was EUR 1,241.3 million;

EBITDA was EUR 475.1 million; depreciation, amortisation and impairment totalled EUR –160.7 million; and EBIT was EUR 314.4 million. In the

comparison period 1–12/2021, Corporate Customers revenue was EUR 756.6 million; EBITDA was EUR 222.3 million; depreciation, amortisation

and impairment totalled EUR –105.8 million; and EBIT was EUR 116.5 million.

Consolidated statement

of financial position

Consolidated cash flow statement

Revenue 2022

Consumer Customers 1,300.9

Corporate Customers 828.6

EBITDA 2022

Consumer Customers 495.7

Corporate Customers 237.6

2 Operational result

FINANCIAL STATEMENTS 2022

Geographical areas

2022

EUR million Finland

Rest of

Europe

Other

countries

Group

total

Revenue 1,782.2 295.7 51.7 2,129.5

Assets 2,578.7 489.3 32.8 3,100.8

2021

EUR million Finland

Rest of

Europe

Other

countries

Group

total

Revenue 1,702.5 251.2 44.2 1,997.9

Assets 2,551.3 446.5 30.6 3,028.4

Accounting Principles – Operating Segments:

The segments are controlled by segment-specific performance reporting that includes external revenue, EBITDA, EBIT and capital investments. Financial items, share of associated companies’

profit and income taxes are not allocated to operating segments. The costs of production and support functions are allocated to operating segments on the matching principle. Operations in

Estonia are divided into the Consumer Customers and Corporate Customers operating segments on the basis of customer accounts.

Segment assets consist of intangible and tangible assets, right-of-use assets, inventories, trade and other non-interest bearing receivables. Deferred tax assets, investments in associated

companies, other investments, interest-bearing receivables, financial items and income tax receivables are not included in segment assets. Liabilities are not allocated to operating segments.

The accounting principles of the segments are the same as those used in the preparation of the financial statements.

The reported geographical areas are Finland, Rest of Europe and Other Countries. Revenues are presented on the basis of customer location. The assets are presented on the basis of their

location.

FINANCIAL STATEMENTS 2022

2.2 Items affecting comparability

Elisa uses comparable key figures in its financial reporting to describe the financial development of its business and increase comparability between different periods.

Exceptional transactions outside the ordinary course of business are treated as items affecting comparability. Such items, as identified by the Group, are for example capital gains and losses from

divestments of the assets and businesses, acquisition costs of assets and businesses, impairments, restructuring expenses and costs of legislative changes, damages or litigations.

Income statement

EUR million 2022 2021

Restructuring costs –2.0 –8.4

Items affecting comparability in EBITDA, EBIT and profit before tax –2.0 –8.4

Income taxes on items affecting comparability 0.4 1.6

Items affecting comparability in profit for the period –1.6 –6.7

Consolidated statement of changes in equity

FINANCIAL STATEMENTS 2022

EUR million 2022 2021

Comparable EBITDA

I/S

EBITDA 733.3 697.4

Items affecting comparability in EBITDA 2.0 8.4

735.3 705.7

Comparable EBIT

I/S

EBIT 469.8 430.8

Items affecting comparability in EBIT 2.0 8.4

471.8 439.2

Comparable profit before tax

I/S

Profit before tax 456.0 418.4

Items affecting comparability in profit before tax 2.0 8.4

458.0 426.8

Comparable profit for the period

I/S

Profit for the period 372.8 343.5

Items affecting comparability in profit for the period 1.6 6.7

374.4 350.2

Comparable profit for the period attributable to equity holders of the parent

Comparable profit for the period 374.4 350.2

Non-controlling interests –1.3 –0.2

375.7 350.4

Comparable earnings per share, EUR

Comparable profit for the period attributable to equity holders of the parent 375.7 350.4

Average number of outstanding shares, diluted (1,000 shares) 160,253 160,174

2.34 2.19

FINANCIAL STATEMENTS 2022

Cash flow

EUR million 2022 2021

Investment in shares and business combinations 20.9 16.2

Items affecting comparability in cash flow before financing 20.9 16.2

The main item affecting comparability in 2022 was the acquisition of Frinx for EUR 12.5 million and Cardinality for EUR 8.2 million.

The main item affecting comparability in 2021 was the acquisition of sedApta for EUR 9.7 million and TenForce NV for EUR 3.4 million.

Comparable cash flow after investments

C/F  Cash flow before financing 299.9 321.6

Items affecting comparability in cash flow before financing 20.9 16.2

320.9 337.8

FINANCIAL STATEMENTS 2022

20222021202020192018

Development of revenue, EUR million

1,832

1,844

1,895

1,998

2,130

500

1,000

1,500

2,000

2,500

2.3 Revenue from contracts with customers

Division of Group’s revenue

EUR million 2022 2021

Rendering of services 1,726.8 1,642.0

Sale of equipment 402.7 356.0

I/S

2,129.5 1,997.9

EUR million 2022 2021

Mobile telecommunications 1,252.5 1,179.7

Fixed-network broadband and others 877.0 818.3

I/S

2,129.5 1,997.9

Notes

FINANCIAL STATEMENTS 2022

Accounting Principles – Revenue from contracts with customers:

The revenue of consumer customers mainly consists of fixed and mobile subscriptions with supplementary digital services, cable-tv subscriptions, Elisa Viihde entertainment service and Elisa

Kirja e-reading service. Consumer customer contracts are typically standard contracts that are treated as separate performance obligations.

Customer contract may include several performance obligations, and Elisa may agree on the delivery or rendering of several products, services or access rights (service bundle). In that case,

prices specified in the contract are used as transaction price, which is allocated to performance obligations on a relative stand-alone selling price basis.

The revenue of corporate customers mainly consists of fixed and mobile subscriptions with supplementary digital services, IT and communication solutions for the digital environment, video

conferencing services, solutions for automation of network management and operation for mobile operators and IoT solutions for industry. Contracts with corporate customers typically meet

the criteria laid down for a contract negotiated as a single package, in which case the revenue will be allocated to the goods and services based on the prices agreed with each customer.

A performance obligation may be fulfilled and revenue recognised over time or at certain points of time. The key criterion for the revenue recognition is the transfer of control. For performance

obligations that are satisfied at a certain point of time, such as equipment, the customer is deemed to gain control at the entry to contract and revenue is recognised when the equipment is

transferred to the customer. Service contracts mainly comprise performance obligations that are satisfied over time. The performance is carried out, and revenue is recognised over time as the

services are provided.

Fixed-term service contracts are recognised over the contract period and the opening fees and related expenses, as well as discounts granted, are allocated to the entire contract period.

Incremental costs of obtaining a fixed-term contract such as sales and represent commissions are capitalised and accrued as an expense during the contract period when these commissions

relate directly to a contract that can be specifically identified. Service contracts valid until further notice are recognised over time. The opening fees and related expenses are recognised at the

time when the service is connected.

The Group provides consumer customers with the various payment methods granting possibility to purchase equipment on 12–36 months credits. Revenue for equipment is recognised at the

time of the sale regardless of whether the customer pays for the device fully at the time of sale or by monthly payments. Based on management’s judgement, the contracts do not include a

significant financing component.

Revenue from prepaid mobile phone cards is recognised over the period of realised use of the cards. Service fees invoiced from a customer on behalf of a third-party content service provider

are not recognised as revenue.

As a rule, the customer has 4 weeks to cancel the service contract made at a distance sale and return the purchased equipment. In principle, there is no right of cancellation for equipment

bought from an Elisa shop. Based on historical experience the number of refunds is expected to be low due to which the Group has not recognised a refund liability for the amounts expected to

be refunded and revenue has not been adjusted by the estimated number of refunds.

Customers participating in loyalty programmes are entitled to certain discounts on services and products provided by the Group. Discounts earned by the customers are recognised as

reduction of revenue. The Group does not currently have any valid loyalty programmes.

FINANCIAL STATEMENTS 2022

1. General accounting principles

2.4 Other operating income

EUR million 2022 2021

Gain on disposals of property, plant and equipment 0.2 1.9

Government grants 0.4 0.3

Other items

6.3 6.9

I/S

6.9 9.0

Other items include rental income from the real estate and other income not associated with ordinary operating activities.

Accounting Principles – Other operating income:

Other operating income includes non-operating income, such as capital gain on the disposal of tangible and intangible assets, subsidiaries and businesses, and rental income from real estate.

Government grants associated with development projects are recognised as other operating income when the related costs are recognised as expenses. Government grants associated with

capitalised development costs are recorded as a reduction of capital expenditure.

FINANCIAL STATEMENTS 2022

2.5 Operating expenses

Materials and services

EUR million

2022 2021

Purchases of materials, supplies and goods 556.4 522.3

Change in inventories –8.8 –10.6

External services 272.9 251.2

Foreign exchange gains and losses 0.2 0.6

I/S

820.8 763.6

Gains and losses arising from foreign currency translations are recognised in accordance with their nature either in materials and services or financial income and expenses.

Employee expenses

More detailed analysis of employee expenses is included in Note 4.

Auditor fees

EUR million

2022 2021

Auditing 0.4 0.4

Tax advisory services 0.0 0.0

Other services 0.0 0.1

0.4 0.4

In 2022, non-audit fees charged by KPMG Oy Ab were EUR 0.0 (0.1) million.

Research and development costs

EUR million

2022 2021

Research and development costs recognised as expenses 13.4 9.5

Capitalised development costs 8.0 6.6

21.4 16.1

The focus areas for the research and development activities in 2022 were of the development of a customer relationship management system, production and quality management software for

the manufacturing industry, as well as the development of network software solutions for telecom operators.

Accounting Principles – Research and development:

Research costs are recorded as expenses in the income statement. Development costs are capitalised from the date the product is technically feasible, it can be utilised commercially and the

asset is expected to generate future economic benefit and the Group has both intention and the resources to complete the development and use or sell the asset. Capitalised development

costs include those material, labour and testing costs and any capitalised borrowing costs that are directly attributable to bringing the asset to its working condition for its intended use.

Otherwise, development costs are recorded as an expense. Development costs initially recognised as expenses cannot be capitalised subsequently.

1.1 Basic information about the Group

FINANCIAL STATEMENTS 2022

2.6 Earnings per share

Earnings per share, basic 2022 2021

I/S

Net profit for the period attributable to equity holders of the parent (EUR million) 374.1 343.6

Weighted average number of shares outstanding (1,000 shares) 160,253 160,174

Earnings/share, basic (EUR/share) 2.33 2.15

Diluted earnings per share

2022

2021

I/S

Net profit for the period attributable to equity holders of the parent (EUR million)

374.1

343.6

Weighted average number of shares outstanding (1,000 shares)

160,253

160,174

Impact of share-based incentive plans

157

Weighted average number of shares outstanding adjusted by dilutive effect (1,000 shares)

160,410

160,174

Diluted earnings per share (EUR/share)

2.33

2.15

Accounting principles – Earnings per share:

Basic earnings per share are calculated by dividing the net profit for the period attributable to the parent company’s equity holders by the weighted average number of shares outstanding

during the period.

Diluted earnings per share are calculated on the same basis as earnings per basic share, except for the dilutive effect of converting all dilutive potential shares into basic shares.

1.2 Basis of presentation of financial statements

FINANCIAL STATEMENTS 2022

3. Business acquisitions and disposals

Acquired businesses in 2022

Acquisition of Frinx s.r.o.

On 31 March 2022, Elisa Polystar acquired Frinx s.r.o., a telecom network automation software supplier based in Slovakia. Frinx’s products and software complement Elisa Polystar’s

zero touch automation and analytics offering that helps communication service providers automate the management process of telecom networks in a multi-vendor environment.

The acquisition price was EUR 14.4 million including the contingent consideration of EUR 1.1 million. EUR 0.5 million of the total acquisition price was allocated to software, which will be

amortised over four years.The acquisition resulted in EUR 12.9 million of goodwill relating to Group’s growth in digital services internationally and strengthening Elisa IndustIQ business.

The calculation of the purchase price allocation is preliminary, as the valuation of the acquired net assets has not been fully completed.

The acquired company has been consolidated from 1 April 2022 onwards. External revenue after the acquisition was EUR 2.3 million, and the impact on Group’s profit for the period

was EUR 0.5 million. Had the acquisition been made as of the beginning of the year 2022, the impact on Group revenue would have been EUR 2.7 million and the effect on profit for the

period EUR 0.3 million.

Consideration transferred

EUR million Preliminary

Cash paid 13.4

Contingent consideration 1.1

Total acquisition price 14.4

Analysis of net assets acquired

EUR million

Tangible assets 0.0

Intangible assets 0.5

Trade and other receivables 0.8

Cash and cash equivalents 1.0

Deferred tax liabilities –0.1

Trade payables and other liabilities –0.4

Tax liabilities –0.3

1.5

Effects of acquisition on cash flow

EUR million

Acquisition price paid in cash –13.4

Cash and cash equivalents of the acquired entity 1.0

–12.3

Goodwill arising from business combination

EUR million

Consideration transferred 14.4

Identifiable net assets of the acquired entity 1.5

Goodwill 12.9

EUR 0.2 million of acquisition-related costs, such as professional fees, is recorded in other operating expenses.

1.3 Applied new and revised standards

FINANCIAL STATEMENTS 2022

Acquisition of Cardinality group

On 4 August 2022, Elisa acquired a UK-based Cardinality Ltd. Cardinality is a supplier of cloud-native data management (DataOps), service assurance and customer experience analytics for

communications service providers (CSPs) globally.

The acquisition price was EUR 10.0 million including the contingent consideration of EUR 0.4 million. EUR 1.5 million of the total acquisition price was allocated to software, which will be

amortised over four years. The acquisition resulted in EUR 8.7 million of goodwill relating to the Group’s growth in digital services internationally and acceleration of its telecom software business

development under Elisa Polystar. The calculation of the purchase price allocation is preliminary, as the valuation of the acquired net assets has not been fully completed.

The acquired companies have been consolidated from 1 August 2022 onwards. External revenue after the acquisition was EUR 1.5 million, and the impact on Group’s profit for the period was EUR

–0.7 million. Had the acquisition been made as of the beginning of the year 2022, the impact on Group revenue would have been EUR 3.4 million and the effect on profit for the period EUR –2.1

million.

Consideration transferred

EUR million Preliminary

Cash paid 9.6

Contingent consideration 0.4

Total acquisition price 10.0

Analysis of net assets acquired

EUR million

Tangible assets 0.0

Intangible assets 1.5

Trade and other receivables 0.5

Tax receivables 0.5

Cash and cash equivalents 1.4

Deferred tax liabilities –0.3

Interest-bearing liabilities –0.3

Trade payables and other liabilities –2.1

1.2

Effects of acquisition on cash flow

EUR million

Acquisition price paid in cash –9.6

Cash and cash equivalents of the acquired entities 1.4

–8.2

Goodwill arising from business combination

EUR million

Consideration transferred 10.0

Identifiable net assets of the acquired entities 1.2

Goodwill 8.7

EUR 0.4 million of acquisition-related costs, such as professional fees, is recorded in other operating expenses.

FINANCIAL STATEMENTS 2022

Acquired businesses in 2021

Acquisition of TenForce NV

On 31 August 2021, Elisa acquired a majority stake of 50.1 per cent in Belgian TenForce NV. TenForce is a provider of environmental, health, safety and quality performance (EHSQ) and

operational risk management software. TenForce primarily serves large global industrial customers with a SaaS model. The acquisition is consistent with Elisa’s strategy to grow digital businesses

internationally and to accelerate the Elisa IndustrIQ business. TenForce provides Elisa with cross-selling opportunities across its customer base and brings a complementary offering and skills,

especially with its deep understanding of process industries and their critical features.

The price paid for the acquisition carried out as directed share issue was EUR 15.1 million, of which EUR 10 million was carried out as a directed share issue. EUR 0.8 million of the total acquisition

price was allocated to the customer base, which will be amortised over four years, and EUR 0.6 was allocated to software, which will also be amortised over four years. The acquisition resulted in

EUR 9.1 million of goodwill relating to Group’s growth in digital services internationally and strengthening Elisa IndustIQ business.

The acquisition generated a non-controlling interest amounting to EUR 4.9 million, which is included in the Non-controlling interest balance sheet item. The non-controlling interest is measured at

a proportionate share of the acquiree’s identifiable net assets.

The acquisition contract includes an option for Elisa to redeem and for non-controlling interests conditional right to sell the remaining 49.9 per cent of the shares in 2026. The liability for the

redemption of the remaining shares has been recognised in the financial statements. The initial recognition of the liability and any changes in it will be treated as equity transactions.

The acquired company has been consolidated from 1 September 2021 onwards. External revenue after the acquisition was EUR 1.9 million, and the impact on Group’s profit for the period was

EUR –0.4 million. Had the acquisition been made as of the beginning of the year 2021, the impact on Group revenue would have been EUR 5.5 million and the effect on profit for the period EUR

–0.6 million.

FINANCIAL STATEMENTS 2022

Consideration transferred

EUR million

Carrying

amount

Cash paid 15.1

Total acquisition 15.1

Analysis of net assets acquired

EUR million

Tangible assets 0.1

Right-of-use assets 1.0

Customer base 0.8

Intangible assets 1.6

Trade and other receivables 1.0

Cash and cash equivalents 11.7

Deferred tax liabilities –0.3

Interest-bearing liabilities –0.3

Lease liabilities –1.0

Trade payables and other liabilities –3.6

Tax liabilities –0.1

10.9

Effects of acquisition on cash flow

EUR million

Acquisition price paid in cash –15.1

Cash and cash equivalents of the acquired entity 11.7

–3.4

Goodwill arising from business combination

EUR million

Consideration transferred 15.1

Identifiable net assets of the acquired entity 10.9

Non-controlling interest's proportionate share of identifiable net assets acquired –4.9

Goodwill 9.1

EUR 0.2 million of acquisition-related costs, such as professional fees, were recorded in other operating expenses in 2021.

Acquisition of Process Data Control Corp

In November 2021, TenForce NV’s subsidiary TenForce USA LLC, acquired Process Data Control Corp. The acquisition price was EUR 1.5 million. The acquisition resulted in

EUR 1.5 million of goodwill. EUR 0.1 million of acquisition-related costs, such as professional fees, were recorded in other operating expenses in 2022.

FINANCIAL STATEMENTS 2022

Disposals of businesses in 2022

Withdrawal from business in Russia

Elisa sold OOO LNR in Russia on 7 July 2022.The divestment of Polystar Ryssland LLC is in progress. The costs of the withdrawal from the Russian operations, EUR 1.1 million, are presented in other

operating expenses.

Disposals of businesses in 2021

There were no significant disposals during the reporting period.

FINANCIAL STATEMENTS 2022

Accounting principles – Business acquisitions and disposals:

Subsidiaries are consolidated from the date the Group obtains control, and divested companies until the loss of control.

Acquisitions are measured at amortised costs. Identifiable assets acquired and assumed liabilities are measured at their fair value on the acquisition date.

Possible investments in non-controlling interests are measured either at a proportionate share of the acquiree’s identifiable net assets or at fair value. The method to be used is selected on a

case-by-case basis. Subsequent changes in non-controlling interests are treated as equity transactions.

In business combinations carried out in stages, previously held equity share in the acquiree is measured at fair value and the resulting gain or loss is recognised through profit or loss.

The acquisition price consists of the fair value of cash and contingent consideration transferred. The amount of the acquisition price that exceeds the fair value of the acquired net assets is

recognised as goodwill. Additional information regarding valuation and impairment testing of goodwill is available under note 5.4.1.

The changes in contingent consideration are expensed through profit and loss. Acquisition-related costs, such as consulting fees and transfer tax, are accounted for as expenses for the periods,

when the costs were incurred and the services received. The costs are presented as Other operating expenses in the income statement.

In connection with loss of control, any investment retained in a former subsidiary is measured at fair value through profit or loss at the date of transaction. Changes in ownership interest that

do not result in a loss of control are accounted for as equity transactions.

Accounting policies that require management’s judgements – Acquisitions:

The identifiable assets and liabilities acquired in a business combination are measured at fair value at the acquisition date. When determining the fair value of the acquired net assets,

consideration and estimates may be required. Estimates and judgement are based on the management’s best view of the situation at the time of the acquisition.

FINANCIAL STATEMENTS 2022

4.1 Employee expenses

EUR million

2022 2021

Salaries and wages

314.4

304.7

Share-based payments

14.0

8.0

Pension expenses - defined contribution plans

44.2

40.4

Pension expenses - defined benefit plans

0.3

0.2

Other employee costs

21.8

20.5

I/S

394.8

373.8

Number of personnel at the end of the reporting period

2022 2021

Consumer Customers

2,939

2,845

Corporate Customers

2,684

2,526

5,623

5,371

20222021202020192018

Corporate Customers

Consumer Customers

Number of personnel at the year end

1,000

2,000

3,000

4,000

5,000

6,000

2,033

2,148

2,257

2,754

2,736

2,914

2,526

2,845

2,684 2,939

2. Operational result 2.1 Operating segments and

geographical areas

4 Personnel

FINANCIAL STATEMENTS 2022

Employee bonus and incentive schemes

All employees are included in the scope of performance, incentive, commission or provision-based bonus schemes. The Group also has a personnel fund. The costs of the performance-based

bonus scheme and personnel fund are recognised on an accrual basis and the costs are based on the best available estimate of realised amounts.

Performance-based bonus scheme

Rewards are based on financial and operational metrics of Elisa Corporation and its units. Targets are set, and the maximum amount of reward is confirmed semi-annually. Some of the Group’s

key personnel also participated in the share-based compensation plan in 2022.

Personnel fund

The objective of the personnel fund is to secure the commitment of the personnel to Elisa’s long-term objectives and to reinforce their interest in the company’s financial success and its metrics.

The evaluation metrics for the performance-based bonus schemes are earnings per share (EPS) and achievement of defined strategic goals. The Board of Directors decides on the performance-

based bonus schemes and sets the earning criteria for the profit share reward annually.

The members of the personnel fund are the employees of Elisa Group, with the exception for those employees who are part of the share incentive plan. In 2022, EUR 2.2 (2.7) million was

recognised in the Group’s personnel fund.

Management remuneration

EUR million

2022 2021

Managing Directors

8.0

8.1

Members and deputy members of Boards of Directors

0.8

0.7

Employment benefits for key management

Key management consists of Elisa’s Board of Directors, the CEO and the Executive Board.

The remuneration of the Board members and CEO is presented under Parent company’s Note 4.

Benefits recognised on the income statement

EUR million

2022 2021

Remunerations and other short-term employee benefits

5.1

4.6

Post-employment benefits

0.3

Share-based compensation

5.1

2.8

10,5

7.7

In 2022, the share-based compensation expenses were EUR 14.0 (8.0) million, of which EUR 1.3 (0.7) million is allocated to the CEO and EUR 3.7 (2.1) million to the Executive Board. The terms and conditions

of share-based incentive plans are described under Note 4.2.

FINANCIAL STATEMENTS 2022

Benefits paid

EUR million

2022 2021

Board of Directors

0.8

0.7

CEO

1.1

0.9

Executive Board

3.2

2.9

Share-based compensations

2.7

3.3

7.8

7.9

The reward paid to the CEO under the share-based compensation plans was EUR 0.7 (0.9) million and to the Executive Board members EUR 2.0 (2.5) million.

The period of notice for the CEO is six months, if the service contract is terminated by Elisa, and three months, if the contract is terminated by the CEO. Should the service contract be terminated

by Elisa, the CEO is entitled to receive a severance payment equalling the total salary of 24 months less the salary for the period of notice.

The period of notice for other members of the Executive Board is six months, if the service contract is terminated by Elisa. Should the contract be terminated by Elisa, the member of the Executive

Board is entitled to receive a severance payment that equals the total salary of 15 months less the salary for the period of notice.

Managing Directors’ pension commitments

In 2020, the Board of Directors agreed with the CEO of Elisa Corporation Veli-Matti Mattila that he will continue as CEO until further notice. Under previous executive agreement, the Group CEO

would have retired at the age of 60. The defined benefit pension plan includes vested rights. The company is liable for the pension until the age of 63 and the related accumulated liability of EUR

2.1 million is included in pension obligations on the balance sheet. The pension is accrued annually by 5.1 per cent of the annual earnings under Employees Pensions Act (TyEL), and annually

by EUR 120,000 during the period 2017–2020. In the management’s cash-based supplementary pension insurance, the pension is accrued from 20.7 per cent of the annual earnings under the

Employees Pensions Act (TyEL) starting from the age of 62. The pension arrangement of the CEO is a cash-based plan, and it covers an increase in the statutory retirement age.

The executive agreements of the Group Management Board members appointed before year 2013 expire mainly at the age of 62, when they have the right to retire. Pension provisions are cash-

based, and they are covered by management supplementary pension insurance, which includes vested rights.

Share-based compensation granted to the management

The reward paid in 2022 to the CEO under the 2017 plan’s 2019–2021 performance period equals the value of 6,426 shares and for the rest of the Executive Board 17,642 shares.

The reward paid in 2021 to the CEO under the 2017 plan’s 2018–2020 performance period equals the value of 8,258 shares and for the rest of the Executive Board 25,752 shares.

The maximum reward granted to the CEO under the 2017 plan’s 2020–2022 performance period equals the value of 32,000 shares and for the rest of the Executive Board 97,500 shares.

The reward will be paid after the publication of the 2022 financial statements.

The maximum reward granted to the CEO under the 2021 plan’s 2021–2023 performance period equals the value of 32,000 shares and for the rest of the Executive Board 94,500 shares.

The reward will be paid after the publication of the 2023 financial statements.

The maximum reward granted to the CEO under the 2021 plan’s 2022–2024 performance period equals the value of 32,000 shares and for the rest of the Executive Board 89,500 shares.

The reward will be paid after the publication of the 2024 financial statements.

The maximum reward granted to the CEO under the 2021 plan’s 2023–2025 performance period equals the value of 38,430 shares and for the rest of the Executive Board 109,000 shares.

The reward will be paid after the publication of the 2025 financial statements.

Elisa shares held by key members of the management 

The members of Elisa’s Board of Directors, the CEO, the members of the Executive Board and their related parties held a total of 314,185 shares and votes, corresponding to 0.19 per cent of all

shares and votes.

FINANCIAL STATEMENTS 2022

4.2.1 Share-based incentive plan 2021

On 4 March 2021, the Board of Directors of Elisa Corporation has appoved a share-based incentive plan for the Group key employees for years 2021–2025.

The Performance Share Plan includes three three-year performance periods, calendar years 2021–2023, 2022–2024 and 2023–2025. The Board of Directors decided the performance criteria for

the plan and required performance levels for each criterion at the beginning of a perfomance period. After the end of the performance period, the reward is paid as a combination of company

shares and cash after the completion of financial statements. The cash proportion is intended to cover taxes and tax-related costs arising from the reward to the participant. As a rule, no reward

will be paid, if a participant’s employment or service ends before the reward payment.

The performance criteria for the performance period 2023–2025 are based on Group’s Earnings per Share (EPS), on the International Digital services growth, on Employee Engagement and

annual progress in specific key business growth targets. The rewards to be paid on the basis of the performance period 2023–2025 correspond to the value of a maximum total of 398,500 Elisa

Corporation shares.

The performance criteria for the performance period 2022–2024 are based on Group’s Earnings per Share (EPS), on the International Digital services growth, on Employee Engagement and

annual progress in specific key business growth targets. The rewards to be paid on the basis of the performance period 2022–2024 correspond to the value of a maximum total of 360,500 Elisa

Corporation shares.

The performance criteria for the performance period 2021–2023 are based on Group’s Earnings per Share (EPS), on the International Digital services growth and on annual progress in specific key

business growth targets. The rewards to be paid on the basis of the performance period 2022–2024 correspond to the value of a maximum total of 410,700 Elisa Corporation shares.

The CEO of the Company and a member of the Corporate Executive Board must hold a minimum of 50 per cent of the net shares given on the basis of the plan, until the CEO’s shareholding in the

Company in total corresponds to the value of his annual salary and, respectively, the member’s shareholding in the Company in total corresponds to the value of half of his or her annual salary.

Amount of share incentives and terms and assumptions in the fair value calculation

Performance period

2023–2025

Performance period

2022–2024

Performance period

2021–2023

Maximum number of shares granted, pcs 395,800 360,500 410,700

Grant date 31.12.2022 31.12.2021 31.12.2020

Share price at the grant date, EUR 49.46 54.12 49.70

Performance period starts 1.1.2023 1.1.2022 1.1.2021

Performance period ends 31.12.2025 31.12.2024 31.12.2023

Estimated realisation of earning criteria at the beginning of performance period, % 41 44 46

Estimated realisation of earning criteria at the closing date, % 41 78 73

Number of participants in the plan at the closing date 196 180 157

2.2 Items affecting comparability

4.2 Share-based incentives

The Group has share-based incentive plans in place. The aim of the plans is to align the objectives of the shareholders and the key employees to increase the value of the Company in the long-

term, to retain the key employees at the Company, and to offer them a competitive reward plan that is based on earning and accumulating the Company´s shares. The potential rewards are based

on the accomplishment of the goals set.

FINANCIAL STATEMENTS 2022

4.2.2 Share-based incentive plan 2017

On 15 December 2017, Elisa’s Board of Directors decided on the share-based incentive plan for key personnel for 2018–2022.

The performance-based incentive plan has three performance periods: the calendar years 2018–2020, 2019–2021 and 2020–2022. The Board of Directors decides the performance criteria for

the plan and required performance levels for each criterion at the beginning of a performance period. After the end of the performance period, the reward is paid as a combination of company

shares and cash after the completion of financial statements. The cash portion intends to cover the tax obligations resulting from the share-based payment. As a rule, no reward will be paid, if a

participant’s employment or service ends before the reward payment.

The earnings criteria for the performance period 2020–2022 are based on earnings per share (EPS), on development of new businesses and other key objectives. The total maximum amount to

be paid for the performance period 2020–2022 equals the value of 407,600 Elisa shares.

The earnings criteria for the performance period 2019–2021 were based on earnings per share (EPS), on development of new businesses and other key objectives. The total maximum amount to

be paid for the performance period 2019–2021 equals the value of 536,000 Elisa shares.

The earnings criteria for the performance period 2018–2020 were based on earnings per share (EPS), on development of new businesses and other key objectives. The total maximum amount to

be paid for the performance period 2018–2020 equals the value of 550,000 Elisa shares.

The CEO of the Company and a member of the Corporate Executive Board must hold a minimum of 50 per cent of the net shares given on the basis of the plan, until the CEO’s shareholding in the

Company in total corresponds to the value of his annual salary and, respectively, the member’s shareholding in the Company in total corresponds to the value of half of his or her annual salary.

Amount of share incentives and terms and assumptions in the fair value calculation

Performance period

2020–2022

Performance period

2019–2021

Performance period

2018–2020

Maximum number of rewards granted, pcs 407,600 536,000 550,000

Grant date 31.12.2019 31.12.2018 31.12.2017

Share price at the grant date, EUR 49.25 36.08 32.72

Performance period starts 1.1.2020 1.1.2019 1.1.2018

Performance period ends 31.12.2022 31.12.2021 31.12.2020

Estimated realisation of earning criteria at the beginning of performance period, % 61 74 85

Estimated realisation of earning criteria at the closing date, % 71

Realisation of earning criteria, % 31 39

Distributed number, pcs 72,394 95,241

Volume weighted average share price at distribution date, EUR 52.52 49.39

Distributed number out of the maximum number of share rewards granted, % 14 17

Number of participants in the plan at the closing date 164 175 164

FINANCIAL STATEMENTS 2022

4.2.3 Committed share-based incentive plan 2019

On 31 January 2019, Elisa’s Board of Directors decided on a new committed share-based incentive plan for 2019–2025.

The rewards granted under the plan have a restriction period of 1–3 years. The potential reward is based on the validity of the key person’s contract of employment. The maximum number of

rewards paid under the plan equals the value of 500,000 Elisa shares.

Amount of share incentives and terms and assumptions in the fair value calculation

Restriction period

2022–2023

Restriction period

2022–2023

Restriction period

2019–2020

Maximum number of rewards granted, pcs 8,000 3,000 22,500

Grant date 1.8.2022 1.8.2022 10.6.2019

Share price at the grant date, EUR 54.16 54.16 41.50

Restriction period started 1.8.2022 1.8.2022 10.6.2019

Restriction period ends 31.12.2023 31.8.2023 10.6.2021

Estimated realisation of earnings criteria at the beginning of performance period, % 100 100 100

Earning criteria, realised % 100

Shares transferred, pcs 9,152

Average exchange rate on the day of transfer, EUR 51.00

Amount distributed as shares of the maximum amount of share rewards granted, % 41

Number of participants in the plan at the closing date 4 5 8

Expenses of share-based incentive plans

In 2022, EUR 14.0 (8.0) million of expenses were recognised for the share incentive plans.

FINANCIAL STATEMENTS 2022

Accounting principles – Share-based payments:

In the share-based payment scheme, the total reward amount is the gross earning of shares granted less the applicable withholding tax, with the remaining net amount being paid to the

reward recipient in shares. Compensation costs for the share-based incentive plans are entirely treated as equity-settled arrangements. Share-based incentive costs are recognised based on

the number of gross shares issued, even though the employee ultimately receives only net shares. The Group settles a cash payment of a portion, required to meet withholding tax obligations,

to the Tax Administration. The withholding tax paid to the Tax Administration is recognised directly in equity.

Share-based incentive plans are measured at the fair value at the grant date. If the assumption regarding the realised number of shares changes, an adjustment will be recorded through profit

and loss. The share-based incentive plans do not include any other non-market based terms and conditions. Transfer restrictions related to the share-based incentive plans are out of the scope

of the fair value measurement and expense recognition.

Accounting policies that require management’s judgements – Share-based payments:

The expense recognition for the share-based incentive plans is based on an estimate of the fulfilment of the share incentive plan criteria and the development of Elisa Group’s share price. The

fulfilment of the share incentive plan criteria and the development of the share price might deviate from the estimates.

FINANCIAL STATEMENTS 2022

4.3 Pension obligations

The Group’s pension obligations are classified as either defined contribution plans or defined benefit plans. Under a defined contribution plan, the Group pays fixed contributions to pension

insurance companies. If the pension insurance company does not hold sufficient assets to pay all employees the benefits in question, the Group will have no legal or constructive obligation to pay

further contributions. The contributions for defined contribution pension plans are recognised as expenses during the financial year, in which the payment obligation has arisen. All other plans

not meeting the above criteria are classified as defined benefit plans.

The pension schemes for the Group’s personnel in Finland are covered by the Employees Pensions Act (TyEL) and are arranged through pension insurance companies. The Finnish Employees

Pensions Act (TyEL) is a defined contribution plan. Supplementary pensions are arranged through life insurance companies. Some supplementary pension plans and pension plans under the

responsibility of some group companies have been classified as defined benefit plans. The defined benefit plans are mainly funded by yearly contributions to the insurance companies, based on

actuarial valuation. Local tax and other legislation are applied to the pension plans’ arrangements. Only Elisa Corporation has defined benefit plans. The pension plans in foreign subsidiaries are

defined contribution plans.

Post-employment benefits of key management are described in Note 4.1.

The net defined benefit related to pension liability

EUR million 2022 2021

Present value of unfunded obligations –3.1 –3.6

Present value of funded obligations –47.5 –59.0

Fair value of plan assets 37.7 48.2

 B/S Net pension liability (-) / receivable (+) in the statement of financial position –12.9 –14.4

Pension expenses recognised in the statement of comprehensive income

EUR million 2022 2021

Expense recognised in profit or loss

Service cost 0.2 0.1

Net interest 0.1 0.1

0.3 0.2

Remeasurements –0.5 3.5

Tax effect of the remeasurements 0.1 –0.7

I/S

–0.4 2.8

2.3 Revenue

FINANCIAL STATEMENTS 2022

Reconciliation of the net defined benefit obligations in the statement of financial position

EUR million 2022 2021

Net defined benefit obligation at the beginning of the period 14.4 11.0

Pension expenses recognised in profit or loss 0.3 0.2

Remeasurements –0.5 3.5

Contributions paid by the employer –1.3 –0.3

Net defined benefit obligation at the end of period 12.9 14.4

Changes in the present value of the defined benefit obligations

EUR million 2022 2021

Obligation at the beginning of the period –62.6 –63.9

Current service cost –0.2 –0.1

Interest expenses –0.4 –0.3

Remeasurements

Actuarial gain (+) or loss (-) arising from changes in economic assumptions 8.0 –3.5

Gain (+) or loss (-) arising from experience adjustments 0.1 0.8

Benefits paid 4.5 4.5

Obligation at the end of period –50.6 –62.6

Changes in the fair value of plan assets

EUR million 2022 2021

Fair value of plan assets at the beginning of the period 48.2 52.9

Interest income 0.3 0.3

Remeasurements, gain (+) or loss (-) –7.7 –0.7

Benefits paid –4.5 –4.5

Contributions paid by the employer 1.3 0.3

Fair value of plan assets at the end of period 37.7 48.2

The principal actuarial assumptions used 2022 2021

Discount rate, % 3.3 0.7

Future pension increase, % 2.8 1.9

Inflation, % 2.6 1.8

Sensitivity analysis of net defined benefit obligation

Effect on the net defined benefit

obligation, EUR million

Change in actuarial assumptions 2022 2021

Discount rate + 0.5% –0.9 –1.2

Future pension increase +0.5% 0.9 3.9

Expected mortality +1 year 0.7 0.8

FINANCIAL STATEMENTS 2022

When calculating a change in one assumption of the sensitivity analysis, the other assumptions are assumed to remain unchanged. In practice, this is not likely to happen, and some changes in

the assumptions may correlate with each other. The figures in the sensitivity analysis have been calculated using the same method which is applied when calculating defined benefit obligations.

Defined benefit obligations expose the Group to various risks. Decreases in the gain of corporate bonds, higher inflation and higher expected retirement age may predispose the Group to the

growth of defined benefit obligations. On the other hand, since the fair value of assets is calculated using the same discount rate which is used when calculating the obligation, the change in the

discount rate will only affect the net defined benefit obligation. Similarly, a rise in life expectancy will increase the assets and affect the net defined benefit obligation.

Weighted average duration of the obligation is 13.6 (12.8) years.

The Group expects to contribute EUR 0.7 (0.4) million to defined benefit pension plans in 2023.

The assets of the defined benefit obligations are 100 per cent acceptable insurances.

Accounting principles – Pension obligations:

The Group’s defined benefit obligation has been calculated separately from each plan using the projected unit credit method. Pension expenses calculated by authorised actuaries are

recognised in profit or loss over the employees’ working lives. The rate used to discount the present value of the defined benefit obligation is determined by reference to market yields of

high-quality corporate bonds. If such information is not available, the market yields on government bonds are used. The maturity of corporate bonds and government bonds are substantially

consistent with the maturity of pension obligations. The present value of defined benefit obligation is reduced by the fair value of the plan assets at the end of the reporting period. The net

defined benefit pension liability is recognised in the statement of financial position.

Current service cost and net interest of the net defined benefit liability are recorded in employee expenses on the income statement. The remeasurements of the net defined benefit liability, for

example actuarial gains and losses and the return on plan assets, are recognised in other comprehensive income during the financial period in which they incur.

Accounting policies that require management’s judgements – Pension obligations:

The book value of defined pension obligations is based on actuarial valuations. Assumptions and estimates used in the valuations include, among others, the discount rate used on the

valuation of the pension obligation and plan assets as well as the development of inflation and salary levels.

FINANCIAL STATEMENTS 2022

5.1 Depreciation, amortisation and impairment

EUR million 2022 20 21

Tangible assets

Land and water areas

Right-of-use assets 1.1 1 .0

Buildings and constructions

Owned buildings and constructions 11.9 12 .4

Right-of-use assets 20.3 17 .6

Telecom devices, machinery and equipment

Owned telecom devices, machinery and equipment 168.8 173 .2

Right-of-use assets 3.0 3 .1

Other tangible assets 0.1 0 .1

205.2 20 7.5

Intangible assets

Customer base 4.3 6 .6

Other intangible assets 53.9 52 .5

58.2 5 9.1

I/S

263.4 26 6.6

EUR 0.0 (0.0) million of impairment losses have been recoded for the assets.

Contents THE REPORT OF THE BOARD OF DI-

RECTORS

5 Tangible and intangible assets

FINANCIAL STATEMENTS 2022

5.2 Property, plant and equipment

2022

EUR million

Land and

water areas

Buildings

and structures

Telecom devices,

machinery and

equipment

Other

tangible assets

Tangible assets

under construction Total

Acquisition cost at 1 Jan. 12.3 316.0 3,949.0 36.5 33.9 4,347.7

Business acquisitions 0.0 0.1 0.0 0.1

Additions 0.1 18.1 152.4 0.1 29.6 200.3

Business disposals –1.2 –1.2

Disposals –80.7 0.0 –80.8

Reclassifications –0.6 0.6 26.2 0.0 –30.8 –4.6

Translation differences 0.0 0.0 0.0 0.0 0.0 0.1

Acquisition cost at 31 Dec. 11.7 334.8 4,045.9 36.6 32.7 4,461.7

Accumulated depreciation and impairment at 1 Jan. 0.0 195.9 3,363.3 35.8 3,595.0

Depreciation and impairment –0.1 11.9 168.8 0.1 180.7

Accumulated depreciation on business acquisitions 0.1 0.1

Accumulated depreciation on disposals and

reclassifications –1.2 –78.9 0.0 –80.1

Accumulated depreciation on business disposals –0.7 –0.7

Translation differences 0.0 0.0 0.0 0.0

Accumulated depreciation and impairment at 31 Dec. –0.1 206.7 3,452.6 35.9 3,695.0

 B/S Book value at 1 Jan. 12.3 120.0 585.7 0.8 33.9 752.7

 B/S Book value at 31 Dec. 11.8 128.1 593.3 0.8 32.7 766.7

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS 2022

2021

EUR million

Land and

water areas

Buildings

and structures

Telecom devices,

machinery and

equipment

Other

tangible assets

Tangible assets

under construction Total

Acquisition cost at 1 Jan. 11.1 298.9 3,781.9 35.7 28.5 4,156.1

Business acquisitions 1.1 –0.4 1.2 0.7 0.2 2.8

Additions 0.1 12.7 162.6 0.1 26.5 201.8

Disposals 0.0 –0.5 –15.0 0.0 –15.4

Reclassifications 0.0 5.3 18.3 –21.3 2.3

Translation differences 0.0 0.0 0.1 0.0 0.0 0.1

Acquisition cost at 31 Dec. 12.3 316.0 3,949.0 36.5 33.9 4,347.7

Accumulated depreciation and impairment at 1 Jan. 0.0 183.7 3,202.2 35.1 3,421.0

Depreciation and impairment 12.4 173.2 0.1 185.7

Accumulated depreciation on business acquisitions 0.1 1.0 0.6 1.7

Accumulated depreciation on disposals and

reclassifications –0.3 –13.1 –13.5

Translation differences 0.0 0.0 0.0 0.1

Accumulated depreciation and impairment at 31 Dec. 0.0 195.9 3,363.3 35.8 3,595.0

 B/S Book value at 1 Jan. 11.1 115.2 579.7 0.7 28.5 735.1

 B/S Book value at 31 Dec. 12.3 120.0 585.7 0.8 33.9 752.7

On 31 December 2022, the investment commitments for tangible and intangible assets were EUR 70.1 (55.7) million.

FINANCIAL STATEMENTS 2022

Accounting principles – Property, plant and equipment:

Property, plant and equipment are recognised in the statement of financial position at the original cost. Property, plant and equipment are valuated at acquisition cost less accumulated

depreciation and impairments. Depreciation is recorded on a straight-line basis over the useful lives of tangible assets. The residual value and the useful life of an asset is reviewed at year-end

and adjusted, if necessary.

Subsequent costs, such as renewals and major renovation projects, are capitalised when it is probable that future economic benefit will flow to the Group. Ordinary repair, service and

maintenance costs are recognised as expenses during the financial period in which they incur.

Government grants, such as grants received in connection with the acquisition of fixed assets, are recorded as a deduction from the carrying amount of the fixed assets. Government grants are

recognised in profit and loss in the form of lower depreciation over the useful life of the fixed asset.

Expected useful life of property, plant and equipment:

Buildings and structures 25–40 years

Machinery and equipment in buildings 10–25 years

Telecommunications network (line, backbone, area, subscription, cable TV) 8–15 years

Exchanges and concentrators (fixed and mobile core) 6–10 years

Equipment for the network and exchanges 3–8 years

Telecommunication terminals 2–4 years

Other machinery and equipment 3–5 years

Land and water areas are not depreciated.

FINANCIAL STATEMENTS 2022

5.3 Right-of-use assets

2022

EUR million

Land and

water

areas

Buildings

and structures

Telecom devices,

machinery and

equipment Total

Acquisition cost at 1 Jan. 15.5 129.1 130.3 274.9

Business acquisitions 0.0 0.0

Additions 1.6 20.6 3.3 25.5

Disposals –1.6 –1.6

Reclassifications –4.3 –112.6 –117.0

Translation differences –0.2 0.0 –0.2

Acquisition cost at 31 Dec. 17.2 143.6 20.9 181.7

Accumulated amortisation and impairment at 1 Jan. 2.9 56.3 124.7 183.9

Depreciation and impairment 1.1 20.3 3.0 24.4

Accumulated amortisation on disposal and reclassifications –4.3 –112.6 –117.0

Translation differences –0.1 0.0 –0.1

Accumulated depreciation and impairment at 31 Dec. 4.0 72.2 15.1 91.3

 B/S Book value at 1 Jan. 12.6 72.8 5.5 91.0

 B/S Book value at 31 Dec. 13.2 71.4 5.9 90.4

Consolidated Financial Statements

FINANCIAL STATEMENTS 2022

2021

EUR million

Land and

water

areas

Buildings

and structures

Telecom devices,

machinery and

equipment Total

Acquisition cost at 1 Jan. 14.0 114.0 131.7 259.7

Business acquisitions 0.8 0.3 1.2

Additions 1.5 14.3 2.1 18.0

Disposals –1.1 –1.1

Reclassifications –0.1 –2.8 –2.9

Translation differences 0.0 0.0 0.0

Acquisition cost at 31 Dec. 15.5 129.1 130.3 274.9

Accumulated depreciation and impairment at 1 Jan. 1.9 38.8 124.4 165.1

Depreciation and impairment 1.0 17.6 3.1 21.8

Accumulated depreciation on disposal and reclassifications –0.2 –2.8 –3.0

Translation differences 0.0 0.0

Accumulated depreciation and impairment at 31 Dec. 2.9 56.3 124.7 183.9

 B/S Book value at 1 Jan. 12.1 75.2 7.3 94.6

 B/S Book value at 31 Dec. 12.6 72.8 5.5 91.0

On 31 December 2022, the lease commitments for lease contracts commencing in the future in accordance with IFRS 16 were EUR 0.1 (4.8) million.

FINANCIAL STATEMENTS 2022

Accounting principles – Right-of-use assets:

A lease contract is a contract or a part of a contract that conveys the right to use the underlying asset for a specified period in exchange for consideration. When a new contract is made, Elisa

assesses whether the contract in question is a lease contract or contains a lease contract.

The Group’s leases mainly consist of leases for business premises, telecom and equipment premises, retail facilities and vehicles. Last mile rentals from other operators and indefeasible right to

use (IRU) contracts mainly do not fulfil the definition of a lease.

The right-of-use assets and lease liabilities recognised in the balance sheet are measured at present value of future lease payments at the time of initial recognition. The lease payments are

discounted using industry-specific interest rates considering the length of the lease contracts. The depreciation costs of the right-of-use assets and the interest portion of the lease liabilities are

expensed. The depreciation of right-of-use assets is recorded on a straight-line basis starting on the commencement of the agreement over the useful life of the right-of-use asset or over the

lease period, depending on which of these is shorter.

The right-of-use asset is adjusted in certain cases with remeasurements of the lease liability. Lease liabilities are mainly remeasured when future payments change due to index or interest

rate changes or when the Group’s assessment of using a possible extension option changes. When a lease liability is remeasured, the book value of the right-of-use asset is usually adjusted

accordingly.

Short term and low value leases are recognised in the income statement and presented as off-balance sheet commitments. Leases with the lease term of 12 months or less are short term

leases and leases for which the underlying asset is of low value are low value leases. Rental expenses for short term and low value leases are described under Note 8.4 Off-balance sheet leases

and other commitments.

The Group separates the service components included in the lease agreements of business premises, retail facilities and vehicles and recognises their share as an expense in the income

statement.

FINANCIAL STATEMENTS 2022

5.4 Intangible assets

2022

EUR million Goodwill

Customer

base

Other

intangible

assets

Intangible

assets under

construction Total

Acquisition cost at 1 Jan. 1,160.6 45.0 845.1 13.4 2,064.1

Business acquisitions 22.5 2.1 24.6

Additions 51.4

12.5 63.9

Disposals –0.2 –0.2

Business disposals 0.0 0.0

Reclassifications 8.0 –6.9 1.1

Translation differences –4.7 –0.7 0.0 –5.4

Acquisition cost at 31 Dec. 1,178.4 44.3 906.4 19.0 2,148.1

Accumulated amortisation and impairment at 1 Jan. 21.2 34.5 670.9 726.7

Depreciation and impairment 4.3 53.9 58.2

Accumulated depreciation on business acquisitions 0.1 0.1

Accumulated amortisation on disposal and reclassifications –4.0 –4.0

Accumulated depreciation on business disposals 0.0 0.0

Translation differences –0.1 –0.5 0.0 –0.7

Accumulated depreciation and impairment at 31 Dec. 21.1 38.3 720.8 780.2

Book value at 1 Jan. 1,139.4 10.5 174.2 13.4 1,337.4

Book value at 31 Dec. 1,157.3 6.0 185.5

19.0 1,367.8

Consolidated income statement and state-

ment of comprehensive income

FINANCIAL STATEMENTS 2022

2021

EUR million Goodwill

Customer

base

Other

intangible

assets

Intangible

assets under

construction Total

Acquisition cost at 1 Jan. 1,152.5 126.9 801.7 10.2 2,091.4

Business acquisitions 8.6 0.8 3.6 13.0

Additions 34.4 10.9 45.3

Disposals 0.0 0.0

Reclassifications –82.5 5.3 –7.7 –84.9

Translation differences –0.5 –0.2 0.1 –0.7

Acquisition cost at 31 Dec. 1,160.6 45.0 845.1 13.4 2,064.1

Accumulated depreciation and impairment at 1 Jan. 21.1 110.5 618.3 749.9

Depreciation and impairment 6.6 52.5 59.1

Accumulated depreciation on business acquisitions 2.0 2.0

Accumulated depreciation on disposals and reclassifications –82.5 –1.9 –84.4

Translation differences 0.2 –0.1 0.0 0.1

Accumulated depreciation and impairment at 31 Dec. 21.2 34.5 670.9 726.7

Book value at 1 Jan. 1,131.4 16.4 183.4 10.2 1,341.5

Book value at 31 Dec. 1,139.4 10.5 174.2

13.4 1,337.4

Includes Estonian 3,5 GHz spectrum licence in a carrying amount of EUR 7.2 million and 2x10 MHz spectrum licence in carryng amount of EUR 2.11 million.

Includes software in carrying amount of EUR 89.6 (85.1) million.

FINANCIAL STATEMENTS 2022

Accounting principles – Intangible assets:

An intangible asset is recognised only if it is probable that the expected future economic benefits attributable to the asset will flow to the Group and the cost of the asset can be measured

reliably. Subsequent costs related to the intangible assets are capitalised only if the future economic benefits that will flow to the Group exceed the level of performance originally assessed. In

other cases, the costs are recognised the expense is incurred.

In connection with the business combinations, intangible assets, such as customer base and brand, are measured at fair value. Other intangible assets are measured at original acquisition cost

and amortised on a straight-line basis over their estimated useful life.

Amortisation periods for intangible assets:

AsCustomer base 3–5 years

Brand 10 years

Development expenses 3 years

IT software 5 years

Other intangible assets 3–10 years

Research costs are recorded as expenses in the income statement. Development expenses capitalised from the date the product is technically feasible, it can be utilised commercially and the

asset is expected to generate future economic benefit. Otherwise, development costs are recorded as an expense. Development costs initially recognised as expenses cannot be capitalised

subsequently.

Public grants related to research and development projects are recognised as other operating income, when research and development costs are recognised as an annual expense. If the public

grant relates to the product development cost to be capitalised, the grant received reduces the capitalised acquisition costs.

Implementation costs of SaaS arrangement are generally recognised as an expense and capitalised as an intangible asset only if the capitalisation conditions are met.

The Group assesses at each balance sheet date whether there is any indication that an asset may be impaired. If such evidence exists, the recoverable amount of the asset is assessed.

Additionally, regardless of any existence of impairment indications, the recoverable amount of intangible assets under construction is assessed annually. The Group does not have any

intangible assets with an indefinite useful life.

The recoverable amount of the asset is its fair value less cost of disposal or its value in use, if it is higher. Value in use is a discounted present value of future net cash flows expected to be

derived from an asset. An impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. An impairment loss is recognised immediately in the income

statement. An impairment loss is reversed, if there are indications that a change in circumstances has taken place, and the asset’s recoverable amount has changed since the impairment loss

was recognised. However, the reversal of an impairment loss will never exceed the carrying amount of the asset had no impairment loss been recognised.

FINANCIAL STATEMENTS 2022

5.4.1 Goodwill

Goodwill is allocated to the Group’s cash generating units as follows:

EUR million 2022 2021

Consumer Customers 641.0 641.0

Corporate Customers 516.3 498.4

 B/S 1,157.3 1,139.4

The reported operating segments based on Elisa’s organisational and management structure are Consumer Customers and Corporate Customers.

Impairment testing:

In annual impairment tests, the recoverable amount of the segments is determined based on the value in use, which is calculated on the basis of projected discounted cash flows (DCF model).

Covering a five-year period, the cash flow projections are based on plans approved by the management. The projections are mostly consistent with information from external sources and reflect

actual development. The used discount rate before taxes is 6.6 per cent (5.3 per cent in comparison period ). Cash flows after five years have been projected by estimating the change in future

cash flows as 2 per cent growth.

As a result of the performed impairment tests, there was no need for impairment of the segments’ goodwill.

Usage of the DCF model requires forecasts and assumptions concerning market growth, prices, volume development, investment needs and general interest rate. The major sensitivities in the

performance are associated with forecast revenue and profitability levels.

Sensitivity analysis

Projection parameters applied

Consumer

Customers

2022

Corporate

Customers

2022

Consumer

Customers

2021

Corporate

Customers

2021

Amount in excess of CGU carrying value, EUR million 5,446 2,452 7,973 3,871

EBITDA margin on average, %

38.5 30.0 38.4 31.7

Horizon growth, % 2.0 2.0 2.0 2.0

Pre-tax discount rate, % 6.6 6.6 5.3 5.3

On average during a five-year projection period.

Change in projection parameters that makes the fair value equal to book value

Consumer

Customers

2022

Corporate

Customers

2022

Consumer

Customers

2021

Corporate

Customers

2021

EBITDA margin on average, % –18.8 –13.3 –20.9 –16.0

Horizon growth, % –28.9 –22.8 –35.5 –29.0

Pre-tax discount rate, % 17.3 15.3 19.9 16.6

FINANCIAL STATEMENTS 2022

Accounting principles – Goodwill:

Goodwill arising from business combinations prior to 2004 is accounted for in accordance with the previous financial statements regulations and the book value is the assumed acquisition

cost in accordance with IFRS. Business combinations incurred between 1 January 2004 and 31 December 2009 have been accounted for in accordance with IFRS 3 (2004). Goodwill arising from

business combinations incurred after 1 January 2010 represents the excess of the consideration transferred over the Group’s interest in the net fair value of the identifiable net assets acquired

and the amount of non-controlling interest, and in a business combination achieved in stages, the acquisition-date fair value of the equity interest.

Goodwill is not amortised. Goodwill is tested for impairment annually, or more frequently, if there is any indication of a potential impairment. For the purpose of impairment testing, goodwill is

allocated to the cash-generating units (CGU’s) – Consumer Customers and Corporate Customers. Goodwill is carried at its cost less any accumulated impairment losses.

An impairment loss is recognised, when the carrying amount of an asset exceeds its recoverable amount. An impairment loss is recognised immediately in the income statement. If an

impairment loss is allocated to a cash-generating unit, it is first allocated to reduce the carrying amount of any goodwill allocated to the cash-generating unit, and then to the other assets of the

unit on a pro rata basis. An impairment loss recognised for goodwill is never reversed under any circumstances.

Accounting policies that require management’s judgements – Goodwill impairment testing:

The recoverable amount of cash-generating units is determined by calculations based on value in use, the preparation of which requires estimates and assumptions. The main uncertainties are

associated with the estimated levels of revenue and profitability and the discount rate. Any changes may lead to the recognition of impairment losses.

FINANCIAL STATEMENTS 2022

6.1 Inventories

EUR million 2022 2021

Materials and supplies 33.2 23.7

Finished goods 62.4 59.1

 B/S 95.5 82.8

An impairment on inventories of EUR 0.4 (2.1) million was recognised during the financial period.

Consolidated statement of financial position Consolidated cash flow state-

ment

Consolidated statement of

changes in equity

6 Inventories, trade and other receivables, trade and other liabilities

6.2.1 Current receivables

EUR million 2022 202 1

Trade receivables 421.9 395.7

Impaired trade receivables –4.7 –5.4

Contract assets related to revenue 2.0 4.3

Contract assets related to costs 5.7 5.7

Accrued income 79.8 79.5

Finance lease receivables 16.5 11.9

Loan receivables 0.1 0.1

Receivables from associated companies 0.1 0.1

Other receivables 15.6 14.3

 B/S 537.1 506.3

Accrued income includes interest receivables as well as income and cost accruals from the operating activities.

6.2 Trade and other receivables

FINANCIAL STATEMENTS 2022

6.2.2 Non-current receivables

EUR million 2022 2021

Loan receivables 0.0 0.0

Trade receivables 99.4 92.0

Finance lease receivables 12.7 6.2

Accrued income 2.4 3.1

Non-current derivatives 1.2 1.6

Other non-current receivables 1.1 0.4

 B/S 116.8 103.2

The effective interest rate on receivables (current and non-current) was 0.00 (0.00) per cent.

Aging of trade receivables 2022 2021

EUR million

Nominal

value Impairment

Carrying

amount

Nominal

value Impairment

Carrying

amount

Not past due 374.9 0.0 374.9 354.0 –0.3 353.8

Past due

Past due less than 30 days 32.8 –0.2 32.6 28.2 –0.2 28.0

Past due 31–60 days 5.1 –0.4 4.7 5.3 –0.4 4.9

Past due 61–90 days 3.0 –0.5 2.5 2.7 –0.3 2.4

Past due 91–180 days 2.7 –1.7 1.0 2.3 –1.5 0.8

Past due more than 181 days 3.4 –1.9 1.5 3.2 –2.7 0.5

421.9 –4.7 417.2 395.7 –5.4 390.3

The book value of trade receivables approximates their fair value. The credit risk associated with trade receivables is described in note 7.1. The maximum exposure to credit risk is the carrying

amount of the trade receivables on the closing date, EUR 417.2 million.

FINANCIAL STATEMENTS 2022

Gross finance lease receivables – maturity of minimum lease receivables

EUR million 2022 2021

Within one year 17.0 12.1

Later than one year, not later than five years 13.1 6.3

30.1 18.4

Future finance income –0.8 –0.3

Present value of finance lease receivables 29.3 18.1

Maturity of present value of future minimum lease receivables

EUR million 2022 2021

Within one year 16.5 11.9

Later than one year, not later than five years 12.7 6.2

29.3 18.1

Lease periods vary from one to five years, and conditions vary in terms of index clauses.

FINANCIAL STATEMENTS 2022

6.3 Trade and other liabilities

EUR million 2022 2021

Non-current

Trade payables

1.4 8.1

Advances received 4.3 4.4

Derivative instruments 0.0 0.0

Other liabilities

24.6 28.5

 B/S 30.3 41.0

Current

Trade payables

199.0 203.8

Advances received 10.3 9.3

Contract liabilities, from revenue 30.8 27.7

Accrued employee-related expenses 64.9 60.8

Other accruals 8.0 8.4

Liabilities to associated companies 0.0 0.0

Other liabilities

99.9 91.6

 B/S 412.9 401.6

443.2 442.6

Non-current trade payables include liabilities of EUR 0.0 (5.3) million for 3540–3670 MHz spectrum licence and EUR 1.4 (2.8) million for 26 GHz spectrum licence. Current trade payables include liabilities of

EUR 5.3 (5.3) million for a 3540–3670 MHz spectrum licence and EUR 1.4 (1.4) million for a 26 GHz spectrum licence.

Other non-current liabilities include EUR 18.1 (21.4) million and other current liabilities include EUR 6.9 (0.0) million of contingent considerations and contingent redemption obligations for non-controlling

interests related to business acquisitions.

Other accruals consist of accrued interest expenses as well as income and cost accruals from the operating activities.

Notes

FINANCIAL STATEMENTS 2022

Accounting principles – Inventories, trade and other receivables, trade and other liabilities:

Inventories:

Inventories are measured at their acquisition cost or at the net realisable value, if lower than the cost. In ordinary course of business net realisable value is the estimated selling price less

necessary estimated costs associated with the eventual sale. The cost is determined using a weighted average price.

Receivables:

Receivables are valued at amortised cost and recognised at the original invoiced amount. The Group records the provision for the impairment losses arising from trade receivables based on

historical default rates over the expected life and recognises the impairment loss when the trade receivables are stated as lost. The impairment loss is adjusted by the amount of factored

receivables.

Trade receivables and other receivables are classified as non-current receivables, if they mature in more than 12 months. In other cases, they are classified as current receivables.

The Group offers the consumer customers various payment methods granting possibility to purchase equipment on 12–36 months credits. At the time of the sale of the equipment, such

transactions are recorded as revenue and trade receivable. The trade receivables are classified as non-current, if their maturity exceeds 12 months.

Finance lease receivables:

The Group acts as a lessor in the lease arrangements for video conferencing and data terminal equipment, which is accounted for as finance leases. At the time of the sale of the equipment, the

proceeds is recorded as revenue and receivables at present value. Rental income received is recorded as financial income and a reduction of the receivables, reflecting a constant periodic rate

of return on the net investment.

Trade payables:

The current value of trade payables and other liabilities is a reasonable estimate of their fair value. The payment terms of the Group’s trade payables correspond to conventional corporate

payment terms.

FINANCIAL STATEMENTS 2022

7.1.1 Market risks

Interest rate risk

Elisa is exposed to interest rate risk mainly through its financial liabilities. In order to manage interest rate risk, the Group’s borrowings and investments are diversified in fixed and variable-rate

instruments. Derivative financial instruments may also be used in managing interest rate risk. The purpose is to minimise the negative effects caused by changes in the interest rate level.

Timing of interest rate changes for interest-bearing financial liabilities (EUR million) 31 Dec. 2022, at nominal value

Time of interest rate change

Less than

1 year

Between

1 and 5 years

Over

5 years Total

Variable-rate financing instruments

Commercial paper 125.0 125.0

Bank loans 100.0 100.0

Fixed-rate financing instruments

Bonds 600.0 300.0 900.0

Bank loans 150.0 3.2 153.2

Lease liabilities 20.4 30.5 40.4 91.2

245.4 780.5 343.6 1,369.4

On 31 December 2022, the Group’s interest-bearing financial assets consisted of commercial papers and bank deposits amounting to EUR 0.0 million and cash in the bank amounting to EUR

85.4 million.

Lease contracts contain index-linkages, which affect the amounts of lease liabilities, right-of-use assets and depreciation.

The sensitivity analysis includes the financial liabilities at the balance sheet date. The change in interest rate level is assumed to be one percentage point and the effect on income is calculated

before taxes. The interest rate position is assumed to include interest-bearing financial liabilities and receivables, as well as interest rate swaps on the balance sheet date, assuming that all the

contracts will be valid and stay unchanged for the entire year.

EUR million 2022 2021

Change in interest rate level +/- 1% –2.25/2.25 –1.8/+0.0

1. General account-

ing principles

1.1 Basic information about the

Group

7 Capital structure

7.1 Financial risk management

Elisa’s central treasury department manages the exchange rate, interest rate, liquidity and refinancing risks for the entire Group. The financing policies, covering funding and investment principles,

are annually discussed and ratified by the Audit Committee of the Board of Directors. Funding risks are monitored as a part of the regular business monitoring procedure.

FINANCIAL STATEMENTS 2022

Foreign exchange risk

Most of Elisa Group’s cash flows are denominated in euros, which means that the company’s exposure to exchange rate risk (economic risk and transaction risk) is low. Business related exchange

rate risks arise from Polystar Osix Ab and its subsidiaries, international interconnection traffic and, to a minor extent, other acquisitions. The most essential currencies are the US dollar (USD), the

Swedish Krona (SEK), the Canadian dollar (CAD), the British pound (GBP) and the Norwegian Krone (NOK). The impact of other currencies is insignificant.

During the financial year, exchange rate hedges have been used against changes in the value of the Swedish Krona. The Group has hedged Swedish Krona denominated expenses with foreign

currency forward contracts. The Group’s financial liabilities do not include exchange rate risk.

The translation difference exposure from the foreign subsidiaries included in consolidated equity mainly consists of Polystar subgroup. The translation difference exposure has not been hedged

during the reporting period.

Foreign currency position 2022 2021

EUR million

Trade receivables Trade payables Trade receivables Trade payables

USD 13.0 7.6 11.8 5.3

SEK 4.0 0.9 4.9 0.4

CAD 3.8 0.0 1.1 0.0

GBP 1.0 0.3 0.4 0.5

NOK 0.4 0.0 0.5 0.0

The Group level currency exposure is the basis for the sensitivity analysis of foreign exchange risk. Assuming euro to appreciate or depreciate 20 percent against all other currencies, the impact on

cash flows would be:

EUR million 2022 2021

USD +/- 1.1 +/- 1.3

SEK +/- 0.6 +/- 0.9

CAD +/- 0.7 +/- 0.2

GBP +/- 0.2 -/+ 0.0

NOK +/- 0.1 +/- 0.1

FINANCIAL STATEMENTS 2022

Commodity risks

Elisa is investing strongly in the use of renewable energy and has signed a wind power purchase agreement for the next 10 years for the Puutikankangas Wind -wind farm that is under

construction. The agreement covers about half of the electricity consumption of Elisa’s mobile network in Finland. Puutikankangas wind farm will be operational in 2023.

Elisa hedges electricity purchases with physical purchase contracts and derivatives. The electricity price risk is assessed for a five-year period. Hedge accounting is applied to contracts hedging future

purchases. The effective portion of derivatives that qualify for hedge accounting is recognised in the revaluation reserve of equity and the ineffective portion is recognised in the income statement

under other operating income or expenses. The change in the revaluation reserve, recognised in equity, is presented in the statement of comprehensive income under Cash flow hedge.

At the end of the year, the ineffective portion of hedge accounting was EUR 0.0 (0.0) million.

The hedging rate for purchases in the following years, % 2022 2021

0–1 years 86.6 93.1

1–2 years 60.1 30.6

2–3 years 38.9

3–4 years 37.8

4–5 years 36.7

If the market price of electricity derivatives changed by +/- 10 per cent from the balance sheet date 31 December 2022, it would contribute EUR +1.8/–0.5 (+2.0/–1.2) million to equity. The impact

has been calculated before tax.

7.1.2 Liquidity risk

The objective of liquidity risk management is to ensure the Group’s financing under all circumstances. The Group’s most important financing arrangement is an EMTN programme of EUR 1,500

million, under which the Company issued bonds for EUR 900 million. Furthermore, the Company has a EUR 350 million commercial paper programme and committed credit limit of EUR 300

million, out of which EUR 130 million credit limit will fall due on 22 September 2026 and EUR 170 million will fall due on 7 July 2024. Both credits were fully undrawn on 31 December 2022. The

loan margin is determined based on the Company’s credit rating.

Elisa issued EUR 100 million short-term financing under the credit facility, that was arranged by Landesbank Baden-Württemberg. The limit is non-committed and is valid until 31 May 2023. The

limit was fully undrawn on 31 December 2022.

On 3 February 2022, Elisa has established a Sustainability Finance Framework to support the company’s sustainability goals. Elisa can issue bonds and other financial instruments to finance or

refinance sustainable investments and projects in accordance with the Framework.

As part of ensuring its financing, Elisa has acquired international credit ratings. Moody’s Investor Services have rated Elisa’s long-term commitments as Baa2 (outlook stable). Standard & Poor

Global has rated the company’s long-term commitments as BBB+ (outlook stable) and short-term commitments as A–2.

Cash and undrawn committed limits

EUR million 2022 2021

Cash and cash equivalents 85.4 114.1

Credit limits 300.0 300.0

385.4 414.1

On 31 December 2022, cash and cash equivalents, as well as undrawn committed credit limits less commercial papers issued by Elisa, were EUR 260.4 (414.1) million.

Contract-based cash flows for financial liabilities are presented under Note 7.4.2

FINANCIAL STATEMENTS 2022

7.1.3 Credit risk

Financial instruments contain an element of risk of the respective parties failing to fulfil their obligations. Liquid assets are invested within confirmed limits in investment targets with good

credit ratings. Investments and the limits specified for them are reviewed annually, or more often, if necessary. Derivative contracts are only signed with Finnish and foreign banks with good

credit ratings.

The business units are liable for credit risk associated with trade receivables. The units have written credit policies that are mainly consistent with uniform principles. The credit ratings of new

customers are always reviewed from external sources when selling products or services invoiced in arrears. In case of additional sales to existing customers, creditworthiness is reviewed on

the basis of the company’s own accounts. The Group may also collect advance or guarantee payments in accordance with its credit policy.

Credit risk concentrations in trade receivables are minor, as the Group’s customer base is wide; the ten largest customers represent approximately 7 per cent of customer invoicing. EUR

4.7 (5.4) million of uncertain receivables have been deducted from consolidated trade receivables. The Group’s previous experience in the collection of trade receivables corresponds to the

recognised impairment. Furthermore, the Group regularly sells the past due trade receivables of defined customer groups. Based on these facts, the management is confident that the Group’s

trade receivables do not involve any substantial credit risk. The maximum credit risk is the value of trade receivables. On 31 December 2022 short-term trade receivables were EUR 417.2

(390.3) million and long-term trade receivables EUR 99.4 (92.0) million. The aging of short-term trade receivables is described in note 6.2.1.

FINANCIAL STATEMENTS 2022

7.2.2 Available sources of financing               

With regard to capital financing, the company’s objective is to maintain sufficient flexibility for the Board of Directors to issue shares. The Annual General Meeting 2021 authorised the Board

of Directors to pass a resolution concerning the share issue, right of assignment of treasury shares and/or granting of special rights referred to in the Limited Liability Companies Act. The

authorisation entitles the Board of Directors to issue the shares in a proportion other than that of the current shareholdings (directed share issue). A maximum aggregate of 15 million of the

company’s shares can be issued under the authorisation.

Shareholders’ equity 2022 2021

Treasury shares, 1,000 pcs 7,075 7,148

Share issue authorisation, 1,000 pcs 15,000 14,991

On 31 December 2022, the maximum amount of the share issue authorisation at the share closing price was EUR 741.9 (811.3) million.

With regard to capital financing, the company maintains loan programmes and credit arrangements that allow quick issuance. The arrangements are committed and non-committed, and allow

issuances for different maturities.

Debt capital 2022 2021

Commercial paper programme (non-committed)

225.0 350.0

Credit facility (non-committed) 100.0

Revolving credits (committed)

300.0 300.0

EMTN programme (non-committed)

600.0 600.0

Total, EUR million 1,225.0 1,250.0

On the closing date, the share issue authorisation as well as committed and non-committed credit arrangements totalled EUR 1,966.9 (2,061.3) million.

The commercial paper programme amounted to EUR 350 million, of which EUR 125 million was in use on 31 December 2022.

Elisa has two committed revolving credit facilities of EUR 300 million in total. Both credits were undrawn on 31 December 2022.

Elisa has a European Medium Term Note programme (EMTN) for a total of EUR 1,500 million, of which EUR 900 million was in use on 31 December 2022. The programme was updated on 21 July 2022, and it

is valid for one year as of the update.

1.2 Basis of presentation of financial

statements

7.2 Capital management

Elisa’s capital consists of equity and liabilities. To develop its business, Elisa may carry out expansion investments and acquisitions that may be financed through equity or liabilities, directly or

indirectly.

The target for the company’s equity ratio is over 35 per cent and comparable net debt / EBITDA 1.5 to 2.0.

The company’s distribution of profit to shareholders consists of dividends, capital repayment and acquisition of treasury shares. Effective profit distribution is 80 per cent to 100 per cent of profit

for the period. Furthermore, additional profit distribution to the shareholders may occur. When proposing or deciding on the profit distribution, the Board takes into account the company’s

financial position, future financing needs, and set financial objectives.

7.2.1 Capital structure and key indicators

EUR million 2022 2021

Interest-bearing net debt 1,275.8 1,219.1

 B/S Total equity 1,251.9 1,204.1

Total capital 2,527.7 2,423.2

Gearing ratio, % 101.9 101.2

Net debt / EBITDA 1.7 1.7

Equity ratio, % 40.6 39.9

FINANCIAL STATEMENTS 2022

1.3 Applied new and revised stan-

dards

7.3 Equity

7.3.1 Share capital and treasury shares

EUR million

Number of

(thousands)

capital

Treasury

1 Jan. 2021 167,335 83.0 –128.4

Disposal of treasury shares 2.3

 B/S 31 Dec. 2021 167,335 83.0 –126.1

Disposal of treasury shares 1.6

 B/S 31 Dec. 2022 167,335 83.0 –124.5

At the end of the reporting period, the company’s paid-in share capital registered in the Trade Register was EUR 83,033,008 (83,033,008).

According to its Articles of Association, Elisa Corporation has only one series of shares, each share entitling to one vote. All issued shares have been paid for. Shares do not have a nominal value.

Treasury shares include the acquisition cost of treasury shares held by the Group, and they are deducted from shareholder’s equity in the consolidated financial statements.

Treasury shares

Shares,

pcs

Accounting

countervalue,

EUR

Holding, %

of share s

and votes

Treasury shares held by the Group at 1 Jan. 2021 7,252,165 3,598,583 4.33

Disposal of treasury shares –104,393

Treasury shares held by the Group at 31 Dec. 2021 7,147,772 3,546,782 4.27

Disposal of treasury shares –72,394

Treasury shares held by the Group at 31 Dec. 2022 7,075,378 3,510,859 4.23

7.3.2 Dividends

The Annual General Meeting has proposed a total dividend of EUR 2.15 per share to be paid for the 2022 result. A dividend of EUR 2.05 per share was paid for the 2021 result.

FINANCIAL STATEMENTS 2022

7.3.3 Other reserves

EUR million

Reserve for

invested

non-

restricted

equity

Contingency

reserve

Fair

value

reserve

Other

reserves Total

1 Jan. 2021 90.9 3.4 –8.7 381.0 466.6

Cash flow hedge 0.9 0.9

Remeasurements of the net defined benefit liability –2.8 –2.8

 B/S 31 Dec. 2021 90.9 3.4 –10.6 381.0 464.8

Cash flow hedge –0.3 –0.3

Remeasurements of the net defined benefit liability 0.4 0.4

 B/S 31 Dec. 2022 90.9 3.4 –10.5 381.0 464.8

The reserve for invested non-restricted equity includes the proportion of share subscription prices that was not recognised as share capital in accordance with the share issue terms.

The contingency reserve includes the amount transferred from distributable equity under the Articles of Association or by General Meeting decision. The fair value reserve includes changes in the

fair value of other investments, the remeasurements of the net defined benefit liability and the effective portion of the changes in the fair values of derivatives designated as cash flow hedges.

Other reserves were formed through share issues in business acquisitions by the amount exceeding the par value of the share received by the Company.

FINANCIAL STATEMENTS 2022

7.4.1 Financial income and expenses

EUR million 2022 2021

Financial income

Dividend income on other financial assets 0.4 0.6

Interest and financial income on loans and other receivables 2.2 1.9

Gain on disposal from financial assets 0.1 0.1

Foreign exchange gain 2.8 2.0

Other financial income 0.0 0.1

I/S

5.6 4.6

Financial expenses

Interest expenses on financial liabilities measured at amortised cost –11.1 –10.1

Interest expenses on lease liabilities –2.6 –2.7

Other financial expenses on financial liabilities measured at amortised cost –2.0 –2.5

Other interest expenses –0.2 –0.2

Impairments –0.2

Foreign exchange loss –2.2 –0.6

Other financial expenses –0.5 –0.3

I/S

–18.7 –16.5

Accounting principles – Financial income and expenses:

Interest income and expenses are recognised using the effective interest rate method, and dividend income is recognised when the right to dividend is incurred.

Foreign exchange rate gains and losses are recognised in accordance with their nature either in materials and services or in financial income and expenses.

2. Operational result

7.4 Financial assets and liabilities

FINANCIAL STATEMENTS 2022

7.4.2 Financial liabilities

2022 2021

EUR million

Balance

sheet values

Fair

values

Balance

sheet values

Fair

values

Non-current

Bonds 891.8 819.9 888.1 913.1

Bank loans 103.2 103.2 253.3 253.3

Lease liabilities 70.8 70.8 73.4 73.4

 B/S 1,065.9 994.0 1,214.8 1,239.8

Current

Bank loans 150.0 150.0 100.2 100.2

Lease liabilities 20.4 20.4 18.1 18.1

Commercial paper 125.0 125.0

 B/S 295.4 295.4 118.4 118.4

1,361.2 1,289.3 1,333.2 1,358.2

The financial liabilities include a total of EUR 91.2 (91.6) million of secured lease liabilities. In practice, lease liabilities are secured liabilities, as the rights to the leased property will revert to the

lessor if the payments are neglected.

All financial liabilities are denominated in euros. Financial liabilities are measured at amortised cost. The fair values of financial liabilities are based on quoted market prices.

The average maturity of non-current liabilities was 2.7 (3.7) years and the effective average interest rate was 1.0 (0.7) per cent.

FINANCIAL STATEMENTS 2022

Contract-based cash flows on the repayment of financial liabilities and costs

2022

EUR million 2023 2024 2025 2026 2027 2028– Yhteensä

Bonds 6.8 306.8 4.1 304.1 300.8 922.5

Financial costs 6.8 6.8 4.1 4.1 0.8 22.5

Repayments 0.0 300.0 0.0 300.0 300.0 900.0

Bank loans 153.9 3.3 103.3 0.2 0.2 2.3 263.2

Financial costs 3.7 3.0 3.0 0.0 0.0 0.2 9.9

Repayments 150.3 0.3 100.2 0.2 0.2 2.1 253.2

Commercial paper 125.0 125.0

Financial costs 0.5 0.5

Repayments 124.5 124.5

Lease liabilities 23.4 17.8 14.2 9.8 5.3 66.0 136.5

Financial costs 3.1 5.8 5.0 3.8 2.0 25.6 45.2

Repayments 20.4 11.9 9.2 6.0 3.3 40.4 91.2

Derivatives –1.1 –1.1

Electricity derivatives –1.2 –1.2

Currency derivatives 0.0 0.0

Trade payables 199.0 199.0

Total 507.0 327.8 121.6 314.1 306.3 68.3 1,645.0

Financial costs 12.8 15.6 12.2 7.9 2.7 25.8 77.0

Repayments 494.2 312.2 109.4 306.2 303.5 42.5 1,568.0

FINANCIAL STATEMENTS 2022

2021

EUR million 2022 2023 2024 2025 2026 2027– Yhteensä

Bonds 6.8 6.8 306.8 4.1 304.1 300.8 929.3

Financial costs 6.8 6.8 6.8 4.1 4.1 0.8 29.3

Repayments 300.0 300.0 300.0 900.0

Bank loans 1.1 151.0 0.4 100.4 0.3 2.1 255.4

Financial costs 0.8 0.8 0.1 0.1 0.0 0.1 1.9

Repayments 0.3 150.3 0.3 100.3 0.3 2.0 253.5

Schuldschein loan 100.0 100.0

Financial costs

Repayments 100.0 100.0

Lease liabilities 20.6 16.5 13.3 11.3 8.7 66.3 136.6

Financial costs 2.4 5.6 4.6 4.1 3.2 25.0 45.1

Repayments 18.1 10.9 8.7 7.2 5.4 41.3 91.6

Derivatives –1.6 –1.6

Electricity derivatives –1.6 –1.6

Currency derivatives 0.0 0.0

Trade payables 203.8 203.8

Total 330.6 174.3 320.5 115.9 313.1 369.2 1,623.5

Financial costs 8.4 13.1 11.5 8.4 7.4 25.9 74.6

Repayments 322.3 161.2 309.0 107.5 305.7 343.3 1,548.9

Future financial costs of variable-rate financial liabilities have been calculated at the interest rate prevailing on the period end date.

The company has EUR 300 million in credit facilities, of which EUR 130 million matures in 2026 and EUR 170 million in 2024. Both credits were undrawn on 31 December 2022.

FINANCIAL STATEMENTS 2022

Bonds

In the framework of its bond programme, the parent company has issued the following bonds:

31 Dec. 2022

Fair value

EUR million

Balance

sheet value

EUR million

Nominal

value

EUR million

Nominal

interest

rate, %

Effective

interest

rate, %

Maturity

date

EMTN programme 2001 / EUR 1,000 million

I/2017 291.0 297.7 300.0 0.875 0.974 17.3.2024

I/2019 276.2 295.9 300.0 1.125 1.236 26.2.2026

I/2020 252.7 298.2 300.0 0.250 0.322 15.9.2027

819.9 891.8 900.0

The fair value of bonds is based on market quotes.

Maturity of lease liabilities’ cash flows

EUR million 2022 2021

Within one year 20.4 18.1

Later than one year, but not later than five years 30.5 32.1

Later than five years 40.4 41.3

91.2 91.6

FINANCIAL STATEMENTS 2022

7.4.3 Financial assets and liabilities recognised at fair value

Carrying amounts of financial assets and liabilities by category

2022

EUR million

Financial

assets/liabilities

measured at

fair value through

profit or loss

Financial

assets/liabilities

measured at fair value

through other

comprehensive income

Financial

assets/liabilities

measured at

amortised

cost

Book

values

Fair

values Note

Non-current financial assets

Other financial assets

0.6 15.6 16.2 16.2

Trade and other receivables 1.2 115.6 116.8 116.8 6.2.2

Current financial assets

Trade and other receivables 537.1 537.1 537.1 6.2.1

0.6 1.2 668.3 670.1 670.1

Non-current financial liabilities

Financial liabilities 1,065.9 1,065.9 994.0 7.4.2

Trade and other liabilities

4.6 0.0 21.4 26.0 26.0 6.3

Current financial liabilities

Financial liabilities 295.4 295.4 295.4 7.4.2

Trade and other liabilities

0.3 402.3 402.6 402.6 6.3

4.9 0.0 1,785.0 1,789.9 1,718.0

Other investments contain the Group’s listed and unlisted equity investments

Excluding advances received

FINANCIAL STATEMENTS 2022

2021

EUR million

Financial

assets/liabilities

measured at

fair value through

profit or loss

Financial

assets/liabilities

measured at fair value

through other

comprehensive income

Financial

assets/liabilities

measured at

amortised

cost

Book

values

Fair

values Note

Non-current financial assets

Other financial assets

0.8 15.6 16.4 16.4

Trade and other receivables 1.6 101.6 103.2 103.2 6.2.2

Current financial assets

Trade and other receivables 506.3 506.3 506.3 6.2.1

0.8 1.6 623.5 625.9 625.9

Non-current financial liabilities

Financial liabilities 1,214.8 1,214.8 1,239.8 7.4.2

Trade and other liabilities

3.3 0.0 33.3 36.6 36.6 6.3

Current financial liabilities

Financial liabilities 118.4 118.4 118.4 7.4.2

Trade and other liabilities

392.3 392.3 392.3 6.3

3.3 0.0 1,758.8 1,762.1 1,787.1

Other investments contain the Group’s listed and unlisted equity investments

Excluding advances received

The fair values of financial asset and liability items are presented in detail under the specified note number.

FINANCIAL STATEMENTS 2022

Financial assets and liabilities recognised at fair value

EUR million 2022 Level 1 Level 2 Level 3

Financial assets and liabilities measured at fair value through other comprehensive income

Electricity derivatives 1.2 1.2

Currency derivatives 0.0 0.0

Financial assets and liabilities measured at fair value through profit or loss

Listed equity investments 0.6 0.6

Contingent considerations in business combinations –4.9 –4.9

–3.1 0.6 1.1 –4.9

EUR million 2021 Level 1 Level 2 Level 3

Financial assets and liabilities measured at fair value through other comprehensive income

Electricity derivatives 1.6 1.6

Currency derivatives 0.0 0.0

Financial assets and liabilities measured at fair value through profit or loss

Listed equity investments 0.8 0.8

Contingent considerations in business combinations –3.3 –3.3

–0.9 0.8 1.6 –3.3

Items measured at fair value are categorised using a three-level value hierarchy. Level 1 includes financial instruments with quoted prices in active markets, such are listed shares owned by the

Group. Level 2 includes instruments with observable prices based on market data, such are electricity and currency derivatives. Level 3 includes instruments with prices that are not based on

observable market data, but instead, on the company’s internal information, such are Group’s contingent considerations relating to business combinations.

Level 3 reconciliation

Contingent considerations related to business acquisitions

EUR million 2022 2021

At the beginning of the period 3.3 4.4

Increase in contingent consideration 1.7

Payment of contingent consideration –0.1 –1.1

Translation differences 0.0

At the end of the period 4.9 3.3

According to the management’s estimation for the financial instruments valued at Level 3, replacing one or more of the pieces of fair value measurement data with a possible alternative

assumption would not significantly change the fair value of the items, considering the small total amount of underlying liabilities.

FINANCIAL STATEMENTS 2022

7.4.4 Derivative instruments

Nominal values of derivatives

2022 2021

Period of validity Period of validity

EUR million Less than 1 year 1–5 years Over 5 years Less than 1 year 1–5 years Over 5 years

Electricity derivatives 5.8 1.9

Currency derivatives 3.3 3.5

9.1 5.5

Fair values of derivatives

2022 2021

EUR million

Positive

fair value

Negative

fair value Total

Positive

fair value

Negative

fair value Total

Electricity derivatives 1.2 1.2 1.6 1.6

Currency derivatives 0.0 0.0 0.0 0.0

1.2 0.0 1.1 1.6 0.0 1.6

Determination of fair value and categorisation

The fair value of derivative instruments is determined using quoted prices in active markets.

The Group recognises the derivative instruments at the fair value hierarchy Level 2. Please see note 7.4.3.

Accounting principles – Derivative instruments:

Derivatives are recognised at fair value as financial assets or liabilities on the date of acquisition. Gains and losses arising from the fair value remeasurements are recognised in accordance with

the nature of derivative contracts. Outstanding derivatives that do not qualify for hedge accounting are measured at fair value at the end of the reporting period and the fair value changes are

immediately recognised in financial items on the income statement. The fair value of derivatives is expected to approximate the quoted market prices or, if the quoted market prices are not

available, the value is estimated using commonly used valuation methods.

The Group applies hedge accounting for electricity price risk and the Swedish krona, and treats electricity derivative contracts as cash flow hedges. The change in fair value of effective portion of

derivatives that qualify for hedge accounting is recognised in other comprehensive income and presented in the equity hedge revaluation reserve (as a part of “Other reserves”). Gains or losses

on derivative instruments accumulated in equity are expensed when any hedged item affects profit or loss. The ineffective portion of the derivatives is recognised in other operative income

and expenses on the income statement. The hedge accounting is discontinued when the hedge contract is expired, sold, terminated or completed. Any cumulative gain or loss arising from the

hedge instrument remains in equity until the expected transaction is realised.

FINANCIAL STATEMENTS 2022

Accounting principles – Financial assets and liabilities:

Financial assets:

Acquisition and sale of financial assets are recognised on the settlement date. The Group derecognises financial assets when its contractual rights to the cash flows from the financial asset

expire or when it has transferred substantially all the risks and rewards to an external party.

Cash and cash equivalents include cash at hand and bank deposits as well as highly liquid short-term investments with maturities up to 3 months.

Investments in shares, excluding investments in associated companies and mutual real-estate companies, are classified as other financial assets and generally measured at fair value.

Investments in unlisted companies are recognised at original acquisition cost less any impairment. Investments in listed companies are measured at fair value, based on share transactions.

Equity investments are included in non-current assets. On 31 December 2022, Group’s equity investments consisted mainly of investments in unlisted companies.

Financial liabilities:

Financial liabilities are initially recognised at fair value equalling the net proceeds received and subsequently measured at amortised cost, using the effective interest rate method. The

transaction costs are included in the original acquisition cost of financial liabilities. Financial liabilities are recognised in non-current and current liabilities, and they may be non-interest-bearing

or interest-bearing.

In cases where the terms of the financial liability measured at amortised cost are amended in such a way that the change does not result in derecognition of the liability from the balance sheet,

the Group must nevertheless recognise the profit or loss in the income statement. The profit or loss is calculated as the difference between the original contractual cash flows and the cash

equivalents, discounted at the original effective interest rate of amended agreements.

Lease liabilities:

Lease liabilities are initially measured at present value of future lease payments. The estimated lease term includes the non-cancellable period of the lease together with periods covered by

termination and extension options, if exercise of these options is reasonably certain. Company has discounted the future lease payments using the borrowing rate based on duration of the

estimated lease term. The lease liability is initially measured using the actual value of an index at the commencement date. The lease liabilities are remeasured if the changes are reflected in the

cash flow or if the Group reassesses whether it is reasonably certain to exercise a possible option.

Classification of assets and liabilities:

The Group’s financial assets and liabilities are classified as financial assets and liabilities measured at amortised cost, financial assets and liabilities measured at fair value through other

comprehensive income, and financial assets and liabilities measured at fair value through profit or loss. Financial assets and liabilities measured at amortised cost include fixed-term contracts

the cash flow of which include payments of principal and interest on the principal amount outstanding. Financial assets and liabilities measured at fair value through other comprehensive

income include financial items that are expected both to collect contractual cash flows and to sell financial assets/liabilities. Financial assets and liabilities measured at fair value through profit

or loss include items that do not meet the criteria of the other groups.

The Group categorises electricity and currency derivatives that qualify for hedge accounting as financial assets or liabilities measured at fair value through other comprehensive income.

Contingent considerations in business combinations and listed equity investments are recognised as financial assets or liabilities measured at fair value through profit or loss. Other financial

assets and liabilities are measured at amortised cost.

FINANCIAL STATEMENTS 2022

8.1.1 Income taxes

EUR million 2022 2021

Taxes for the period –83.0 –77.0

Taxes for previous periods –0.1 0.0

Deferred taxes –0.2 2.1

I/S

–83.2 –74.9

Income taxes recognised directly in comprehensive income:

2022 2021

EUR million

Before

taxes

Tax

effect

After

taxes

Before

taxes

Tax

effect

After

taxes

Remeasurements of the net defined benefit liability 0.5 –0.1 0.4 –3.5 0.7 –2.8

Cash flow hedge –0.4 0.1 –0.3 1.1 –0.2 0.9

0.0 0.0 0.0 –2.3 0.5 –1.9

Translation differences do not include a tax effect.

Reconciliation of the tax expense on the income statement and taxes calculated at the Group’s domestic statutory tax rate 20 (20):

EUR million 2022 2021

I/S

Profit before tax 456.0 418.4

Tax according to the domestic tax rate –91.2 –83.7

Tax effects of the following:

Tax-free income 0.2 0.3

Non-deductible expenses –0.7 –0.2

Tax effect related to the foreign subsidiaries 10.3 9.1

Usage of tax losses, for which no deferred tax was recognised 0.2

Loss for the period, for which no deferred tax asset is recognised –1.6 –0.5

Taxes for previous periods –0.1 0.0

Other items –0.4 0.1

I/S

Taxes on the income statement –83.2 –74.9

Effective tax rate, % 18.2 17.9

Accounting principles – Income taxes for the period and deferred taxes:

Taxes recognised on the income statement include current and deferred taxes. Income taxes for the financial year are calculated on the net profit for the period at the current tax rate and are

adjusted by taxes for the prior periods.

The reporting period as well as prior reporting periods may be subject to a tax audit, which may subsequently result in a change in tax decisions, additional tax payments or refunds.

Deferred taxes are calculated from all temporary differences arising between the tax bases of assets and liabilities and their carrying values in the consolidated financial statements. Please

refer to the next note 8.1.2 for details.

The global minimum tax regulation enters into force in 2024 and applies to Elisa. Elisa has started to analyse the impact of the regulation.

2.1 Operating seg-

ments and geograph-

ical areas

2.2 Items af-

fecting com-

parability

8 Other notes

8.1 Taxes

FINANCIAL STATEMENTS 2022

8.1.2 Deferred tax assets and liabilities

The change in deferred tax assets and liabilities during 2022

Deferred tax assets

EUR million 1 Jan. 2022

Recognised

on the income

statement

Recognised on

consolidated

statement of

comprehensive

income

Translation

differences 31 Dec. 2022

Provisions 1.2 –0.4 0.8

Confirmed losses 0.7 –0.4 0.3

Right-of-use assets 1.6 0.1 1.7

Internal margins 2.8 0.0 2.8

Share-based incentive plans 3.0 0.9 3.9

Pension obligations 3.0 –0.1 –0.1 2.8

Other temporary differences 0.9 –0.2 0.1 0.0 0.8

 B/S 13.1 0.0 0.0 0.0 13.1

Deferred tax liabilities

EUR million 1 Jan. 2022

Recognised

on the income

statement

Business

combinations

Translation

differences 31 Dec. 2022

Fair value measurement of tangible and intangible assets in business combinations 3.9 –1.2 0.4 0.0 3.0

Accumulated depreciation differences 16.4 1.0 17.4

Finance lease agreements 0.6 0.7 1.3

Customer contracts 1.9 –0.1 1.8

Bonds 0.8 –0.1 0.7

Other temporary differences 1.6 –0.1 1.6

 B/S 25.3 0.1 0.4 0.0 25.7

Deferred income tax assets recognised for tax losses are carried forward to the extent that the realisation of the related tax benefit through future profits is probable. On 31 December 2022, EUR

0.3 (0.7) million deferred tax asset was recognised for confirmed losses, that will expire in 2026. At the end of the reporting period, the Group had EUR 18.8 (14.0) million of unused tax losses for

which no tax assets have been recognised.

FINANCIAL STATEMENTS 2022

The change in deferred tax assets and liabilities during 2021

Deferred tax assets

EUR million 1 Jan. 2021

Recognised

on the income

statement

Recognised on

consolidated

statement of

comprehensive

income

Translation

differences 31 Dec. 2021

Provisions 0.7 0.5 1.2

Tax losses carried forward 1.0 –0.3 0.7

Right-of-use assets 1.5 0.0 1.6

Internal margins 2.6 0.2 2.8

Share-based incentive plans 2.5 0.4 3.0

Pension obligations 2.6 –0.3 0.7 3.0

Other temporary differences 1.0 0.1 –0.2 0.0 0.9

 B/S 11.9 0.8 0.5 0.0 13.1

Deferred tax assets

EUR million 1 Jan. 2021

Recognised

on the income

statement

Business

combinations

Translation

differences 31 Dec. 2021

Fair value measurement of tangible and intangible assets in business combinations 4.9 –1.4 0.4 3.9

Accumulated depreciation differences 16.0 0.4 16.4

Finance lease contracts 0.8 –0.2 0.6

Customer contracts 1.8 0.1 1.9

Bonds 0.9 –0.1 0.8

Other temporary differences 1.7 –0.1 0.0 1.6

 B/S 26.2 –1.3 0.4 0.0 25.3

Accounting principles – Deferred tax assets and liabilities:

Deferred taxes are calculated from the temporary differences arising between carrying amount and the tax base. The temporary tax liabilities are not recognised if they arise from initial

recognition of goodwill or from the initial recognition of an asset/liability other than in a business combination which, at the time of the transaction, does not affect either the accounting or the

taxable profit. No deferred tax is recognised on valuation differences of shares for which the sales profit would be tax-deductible.

Deferred tax assets are recognised only to the extent that it is probable that they can be utilised against future taxable income. Deferred tax liabilities are recognised on the balance sheet in

total, with the exception for Estonian subsidiaries where no tax liability has been recognised for the untaxed retained earnings EUR 196.9 million, as no profit distribution decision or plans for

profit distribution exist for the time being.

Deferred tax liabilities and assets are not offset.

Accounting policies that require management’s judgements – Deferred tax assets:

Particularly at the end of each financial period, the Group assesses the probability of subsidiaries generating taxable income against which unused tax losses can be utilised. The

appropriateness for recognising other deferred tax assets is also determined at the end of each financial period. Changes in the estimates may lead to the recognition of significant tax

expenses.

FINANCIAL STATEMENTS 2022

8.2 Provisions

EUR million

Termination

benefits Other Total

1 Jan. 2021 1.7 1.7 3.4

Increase in provisions 7.6 7.6

Utilised provisions –3.5 –3.5

Release of unused provisions –1.6 –1.6

31 Dec. 2021 4.3 1.7 5.9

Increase in provisions 2.0 2.0

Utilised provisions –3.8 –3.8

Release of unused provisions –0.5 –0.5

31 Dec. 2022 2.0 1.7 3.7

EUR million 2022 2021

 B/S Long-term provisions 2.9 2.8

 B/S Short-term provisions 0.8 3.1

3.7 5.9

Termination benefits

As a part of the Group’s rationalisation, Elisa has carried out statutory employee negotiations leading to personnel reductions in 2022. The restructuring provision includes provisions for

both unemployment pensions and other expenses due to redundancies. The provisions associated with redundancies will be realised during 2023–2024 and the provision associated with

unemployment pensions will be realised in 2023–2024.

Other provisions

Other provisions include environmental provisions made for telephone poles.

Accounting principles – Provisions and contingent liabilities:

A provision is recognised when the Group has a legal or constructive obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation,

and the amount of the obligation can be reliably estimated.

Contingent liabilities are potential liabilities arising from past events that may occur depending on the outcome of uncertain future events which are beyond the control of the Group. Also

a present obligation that is unlikely to require settlement of a payment obligation or the amount of which cannot be reliably measured is a contingent liability. Contingent liabilities are not

recognised in the statement of financial position. Contingent liabilities are presented in note 8.4.

2.3 Revenue

FINANCIAL STATEMENTS 2022

8.3 Related party details

The Group’s related parties include the parent company, subsidiaries, associates and joint ventures. The related parties also include Elisa’s Board of Directors, the CEO, the Executive Board as well

as entities controlled by them and close members of their family.

Transactions carried out with related parties:

2022

EUR million Revenue Purchases Receivables Liabilities

Associates 0.5 1.0 0.6 0.0

2021

EUR million

Associates 0.5 0.8 0.6 0.0

The employee benefits of the Group’s related parties are presented in Note 4.1

8.3.1 Group companies

The parent company of the Group is Elisa Corporation.

Subsidiaries Domicile

Group’s

ownership, %

Banana Fingers Limited Bristol, UK 100

Digiset Oy Helsinki, Finland 100

Elisa IndustrIQ Oy Helsinki, Finland 100

Elisa camLine Holding GmbH Petershausen, Germany 100

camLine GmbH Petershausen, Germany 100

camLine Dresden GmbH Dresden, Germany 100

camLine Solutions S.r.l. Iași, Romania 100

camLine USA Inc. Atlanta GA, USA 100

camLine Hungary Kft. Szombathely, Hungary 60

camLine Pte. Ltd. Singapore, Singapore 100

camLine Taiwan New Taipei City, Taiwan 100

camLine sdn. Bhd. Bayan Lepas, Malaysia 100

PT Elisa camLine Indonesia Surabaya, Indonesia 100

TenForce NV Leuven, Belgium 50

TenForce USA LLC Houston TX, USA 50

Process Data Control Corporation Arlington TX, USA 50

Elisa Deutschland GmbH Aachen, Germany 100

Elisa Finance Oü Tallinn, Estonia 100

Elisa France SAS Les Sorinieres, France 100

Elisa Hong Kong Limited Hong Kong, Hong Kong 100

Elisa Santa Monica Oy Helsinki, Finland 100

Elisa Eesti AS Tallinn, Estonia 100

Elisa Videra Oy Helsinki, Finland 100

2.4 Other operating income

FINANCIAL STATEMENTS 2022

Elisa Videra Inc. Los Angeles CA, USA 10 0

Elisa Videra Italy S.r.l San Genesio, Italia 100

Elisa Videra Norge As Oslo, Norway 100

Elisa Videra Singapore PTE Ltd. Singapore, Singapore 100

Elisa Videra Spain S.L Madrid, Spain 100

Elisa Videra UK Ltd. London, UK 100

Elistar AB Stockholm, Sweden 100

Cardinality Ltd Guildford, England 100

Cardinality SP. z.o.o. Lublin, Poland 100

Cardinality Inc. Delaware DE, USA 100

Frinx s.r.o. Bratislava, Slovakia 100

Frinx Corp New York NY, USA 100

Polystar Egypt LLC Cairo, Egypt 100

Polystar Instruments Canada Inc. Toronto, Kanada 100

Polystar Instruments Inc. Frisco,TX, USA 100

Polystar OSIX AB Stockholm, Sweden 100

Polystar Asia Private Ltd. Singapore, Singapore 100

Polystar Australia Pty Sydney, Australia 100

P-OSS Solutions S.L.U. Bilbao, Spain 100

Polystar Ryssland LLC Moscow, Russia 100

Enia Oy Helsinki, Finland 100

Epic TV SAS Sallanches, France 100

Fenix Solutions Oy Turku, Finland 100

Fonum Oy Helsinki, Finland 100

Karelsat Oy Joensuu, Finland 100

Kepit Systems Oy Vaasa, Finland 70

Kiinteistö Oy Raision Luolasto Espoo, Finland 100

Kiinteistö Oy Rinnetorppa Kuusamo, Finland 100

Kiinteistö Oy Tapiolan Luolasto Espoo, Finland 100

LE-Kuitu Oy Salo, Finland 100

LNS Kommunikation AB Stockholm, Sweden 100

Preminet Oy Helsinki, Finland 100

Sutaria Services Inc. Murphy TX, USA 57

Watson Nordic Oy Vaasa, Finland 100

Joint arrangements

Kiinteistö Oy Brahenkartano Turku, Finland 60

Significant changes in ownership of subsidiaries are presented in note 3. Other changes in group structure is described further.

On 25 October 2022 Elisa Eesti AS ja Santa Monica Networks AS have merged with Elisa Teleteenused AS. After the mergers the name of Elisa Teleteenused AS has changed to Elisa Eesti AS.

Subsidiaries Domicile

Group’s

ownership, %

FINANCIAL STATEMENTS 2022

Accounting principles – Consolidation principles, subsidiaries:

The consolidated financial statements include the parent company, Elisa Corporation, and those subsidiaries over which the Group has control. The group controls an entity when the group is

exposed to, or has rights to, variable returns from its involvement with the entity, and has the ability to affect those returns through its power over the entity.

Subsidiaries are consolidated from the date the Group obtains control and divested companies until the loss of control. Acquisition method is used in the accounting for the elimination of

internal ownership. All intra-group transactions, gains on the sale of inventories and fixed assets, intra-group receivables, payables and dividends are eliminated.

Profit for the period attributable to the equity holders of the parent and non-controlling interests is presented separately in the consolidated income statement. Non-controlling interests are

presented separately from the equity of the owners of the parent in the consolidated statement of financial position. Losses of subsidiaries are allocated to non-controlling interests even if they

exceed their share of ownership.

Accounting principles – Consolidation principles, joint arrangements:

Joint arrangements are arrangements over which the Group exercises joint control with one or more parties. A joint arrangement is either a joint venture or a joint operation. A joint venture is

a joint arrangement, where the Group has rights to the net assets of the arrangement. A joint operation is a joint arrangement where the Group has rights to the assets and obligations for the

liabilities relating to the arrangement.

The only joint arrangement owned by the Group, Kiinteistö Oy Brahenkartano, is a joint operation, which is consolidated using the proportional consolidation method. 60 per cent of the assets,

liabilities, income and expenses of the joint operation are consolidated to the Group’s financial statements. The company owns and manages a building and a site in Turku. Elisa is mainly

entitled to manage office and telecom facilities with the shares owned.

FINANCIAL STATEMENTS 2022

8.3.2 Investments in associated companies

Aggregated financial information of associates

EUR million 2022 2021

I/S

Group’s share of associated companies’ profit –0.7 –0.5

 B/S Group’s investments in associated companies 9.9 10.6

EUR million 2022 2021

Balance at the beginning of the period 10.6 1.4

Additions 0.0 9.8

Reclassifications 0.0 –0.1

Share of profits for the period –0.7 –0.5

Dividends received 0.0

 B/S Balance at the end of the period 9.9 10.6

During comparison period Elisa acquired 19 per sent of Italian industrial software provider specialised in innovative IT solutions for Digital Supply Chain and Smart Manufacturing, sedApta Group.

The companies are consolidated as associates on the basis of significant influence.

FINANCIAL STATEMENTS 2022

Associates Domicile ownership,%

FNE-Finland Oy Kontiolahti, Finland 45.9

Kiinteistö Oy Helsingin Sentnerikuja 6 Helsinki, Finland 50.0

Kiinteistö Oy Herrainmäen Luolasto Tampere, Finland 50.0

Kiinteistö Oy Lauttasaarentie 19 Helsinki, Finland 41.7

Kiinteistö Oy Pohjanplassi Lapua, Finland 39.0

Kiinteistö Oy Riihimäen Maisterinkatu 9 Riihimäki, Finland 37.0

Kiinteistö Oy Runeberginkatu 43 Helsinki, Finland 29.6

Kiinteistö Oy Stenbäckinkatu 5 Helsinki, Finland 40.0

sedApta Group Milan, Italy 19.0

Suomen Numerot NUMPAC Oy Helsinki, Finland 33.3

Tele Scope Oy Espoo, Finland 22.0

KE-Masto Oy Kajaani, Finland 49.5

Accounting principles – Consolidation principles, associated companies

Associated companies are entities over which the Group exercises significant influence. Significant influence is presumed to exist when the Group owns over 20 per cent of the voting rights

of the company or when the Group otherwise exercises significant influence, but does not exercise control. Associated companies are consolidated in accordance with equity method. If the

Group’s share of losses of an associated company exceeds its interest in the associated company, the investment is recognised on the balance sheet at zero value and the Group discontinues

recognising its share of further losses unless the Group has other obligations for the associated company. Associated companies are consolidated from the date the Group obtains significant

influence and divested associated companies are consolidated until the loss of significant influence.

FINANCIAL STATEMENTS 2022

8.4 Off-balance sheet leases and other commitments      

Leases

Group as a lessee

Lease payments related to off-balance sheet lease commitments:

EUR million 2022 2021

Lease payments associated with short-term leases 31.9 32.8

Lease payments associated with low-value assets 4.6 4.2

36.5 37.0

Future minimum lease payments under non-cancellable off-balance sheet leases:

EUR million 2022 2021

Within one year 13.2 12.5

Later than one year, but not later than five years 4.3 4.7

Later than five years 1.0 1.2

18.4 18.4

Lease payments are presented without value added tax.

Group as a lessor

Future minimum lease receivables under non-cancellable operating leases:

EUR million 2022 2021

Within one year 3.6 2.5

Later than one year, but not later than five years 0.7 0.9

4.3 3.3

2.5 Operating expenses

FINANCIAL STATEMENTS 2022

Accounting principles – Leases:

The group as a lessee

The Group recognises rental expenses for short-term leases and low-value assest in the income statements and presents such contracts as off-balance sheet liabilities.

The group as a lessor

The Group acts as a lessor in two different types of lease arrangements that are accounted for as operating leases: rental income from telecom premises and carrier services is recognised as

revenue over the lease period, and rental income from real estate is recognised as other operating income. The lease contract periods are mainly short with durations of 1–6 months.

Rental income is recognised over the lease period.

Collateral, commitments and other liabilities

EUR million

2022 2021

On behalf of own commitments

Mortgages 3.8

3.8

Guarantees 0.6

0.4

Deposits 0.6

0.4

On behalf of others

Guarantees 0.3

5.2

4.6

Other contractual obligations

Venture Capital investment obligation 0.5

0.8

Repurchase obligations

0.0

0.5 0.8

Real estate investments

VAT refund liability for real estate investments indicates the amount that may become completely non tax-deductible if the intended use of the property was to change.

On 31 December 2022, VAT refund liability for real estate investments was EUR 36.1 (33.2) million.

8.5 Events after the end of the reporting period

There were no significant events after the balance sheet date. .

2.6 Earnings per share

FINANCIAL STATEMENTS 2022

9.1 Key indicators describing the Group’s financial development

2022 2021 2020 2019 2018

INCOME STATEMENT

Revenue, EUR million 2,130 1,998 1,895 1,844 1,832

Change of revenue, % 6.6 5.5 2.8 0.7 2.5

EBITDA, EUR million 733 697 685 661 640

EBITDA as % of revenue 34.4 34.9 36.2 35.8 34.9

EBIT, EUR million 470 431 409 395 404

EBIT as % of revenue 22.1 21.6 21.6 21.4 22.0

Profit before tax, EUR million 456 418 398 372 381

Profit before tax as % of revenue 21.4 20.9 21.0 20.2 20.8

Return on equity (ROE), % 30.4 28.8 28.1 26.6 29.2

Return on investment (ROI), % 18.3 16.9 16.7 17.2 18.3

Research and development costs, EUR million 21 16 10 8 8

Research and development costs as % of revenue 1.0 0.8 0.5 0.4 0.5

BALANCE SHEET

Gearing ratio, % 101.9 101.2 101.9 103.0 94.8

Current ratio 1.0 1.4 1.3 1.2 1.0

Equity ratio, % 40.6 39.9 39.1 41.0 42.4

Non-interest bearing liabilities, EUR million 488 491 430 428 393

Interest bearing net debt 1,276 1,219 1,207 1,184 1,068

Balance sheet total, EUR million 3,101 3,028 3,041 2,814 2,669

INVESTMENTS

Investments in shares and business combinations, EUR million 25 28 70 83 14

CAPITAL EXPENDITURE

Gross investments, EUR million 290 265 266 256 254

Gross investments as % of revenue 13.6 13.3 14.1 13.9 13.9

PERSONNEL

Average number of employees during the period 5,523 5,391 5,097 4,882 4,814

Revenue/employee, EUR 1,000 386 371 372 378 380

The order book is not presented, as the information is not relevant due to the nature of the Group’s business.

3. Business acquisi-

tions and disposals

4. Personnel

9 Key Indicators

The key indicator tables are unaudited.

FINANCIAL STATEMENTS 2022

FORMULAE FOR FINANCIAL SUMMARY INDICATORS

EBITDA EBIT + depreciation, amortisation and impairment

EBIT

Profit for the period + income taxes + financial income and expenses + share of associated companies’ profit

Return on equity (ROE), %

Profit for the period

X 100

Total shareholders’ equity on average

Return on investment (ROI), %

Profit before taxes + interest and other financial expenses

X 100

Total equity + interest-bearing liabilities on average

Gearing ratio, %

Interest-bearing liabilities - cash and cash equivalents and financial assets at

fair value through profit or loss

X 100

Total shareholders’ equity

Current ratio

Current assets

Current liabilities - advance payments received

Equity ratio, %

Total shareholders’ equity

X 100

Balance sheet total - advance payments received

FINANCIAL STATEMENTS 2022

9.2 Alternative performance measures

2022 2021 2020 2019 2018

INCOME STATEMENT

Comparable EBITDA, EUR million 735 706 685 668 639

Comparable EBITDA as % of revenue 34.5 35.3 36.2 36.2 34.9

Comparable EBIT, EUR million 472 439 415 402 403

Comparable EBIT as % of revenue 22.2 22.0 21.9 21.8 22.0

Comparable profit before tax, EUR million 458 427 399 379 380

Comparable profit before tax as % of revenue 21.5 21.4 21.0 20.5 20.8

Comparable return on equity (ROE), % 30.5 29.3 28.1 27.1 28.8

Comparable return on investment (ROI), % 18.4 17.2 16.7 17.5 18.3

Comparable earnings per share (EPS) 2.34 2.19 2.05 1.93 1.95

 Other than the financial indicators defined by IFRS

4.1 Employee expenses

FINANCIAL STATEMENTS 2022

FORMULAE FOR ALTERNATIVE PERFORMANCE MEASURES

Comparable EBITDA EBIT + depreciation, amortisation and impairment +/- items affecting comparability

Comparable EBIT

Profit for the period + income taxes + financial income and expenses +

share of associated companies’ profit +/- items affecting comparability

Comparable profit for the period Profit for the period +/- items affecting comparability

Profit attributable to owners of the parent company

+/- items affecting comparability

Comparable EPS

Average number of shares during the period adjusted for share issues

Comparable return on equity (ROE), %

Profit for the period +/- items affecting comparability

X 100

Total shareholders' equity on average

Comparable return on investment (ROI), %

Profit before taxes + interest and other financial expenses

+/- items affecting comparability

X 100

Total equity + interest-bearing liabilities on average

Comparable cash flow after investments

Net cash flow from operating activities - net cash used in investing activities

+/- items affecting comparability

FINANCIAL STATEMENTS 2022

9.3. Per-share indicators

2022 2021 2020 2019 2018

Share capital, EUR 83,033,008 83,033,008 83,033,008 83,033,008 83,033,008

Number of shares at year-end 160,259,695 160,187,301 160,082,908 159,897,796 159,723,252

Average number of shares 160,253,348 160,174,453 160,065,712 159,880,581 159,736,826

Number of shares at year-end, diluted 160,416,729 160,187,301 160,082,908 159,897,796 159,723,252

Average number of shares, diluted 160,410,382 160,174,453 160,065,712 159,880,581 159,736,826

Market capitalisation, EUR million

8,276 9,056 7,508 8,241 6,037

Earnings per share (EPS), EUR 2.33 2.15 2.05 1.90 1.98

Dividend per share, EUR 2.15

2.05 1.95 1.85 1.75

Payout ratio, % 92.1 95.6 95.1 97.6 88.5

Equity per share, EUR 7.78 7.48 7.39 7.19 7.05

P/E ratio 21.2 25.2 21.9 26.0 18.2

Effective dividend yield, %

4.3 3.8 4.3 3.8 4.9

Share performance on Nasdaq Helsinki

Mean price, EUR 51.99 51.00 51.08 42.26 36.34

Closing price at year-end, EUR 49.46 54.12 44.87 49.25 36.08

Lowest price, EUR 45.57 45.10 40.79 35.51 31.68

Highest price, EUR 56.90 56.18 58.88 49.91 41.95

Trading of shares on Nasdaq Helsinki

Total trading volume, 1,000 shares 71,229 81,557 122,497 96,662 104,879

Percentage of shares traded

43 49 73 58 63

The numbers of shares are presented without treasury shares held by Elisa Group.

Calculated on the basis of the closing price on the last trading day of the year and the total number of shares at the end of the period (167 335 073).

Calculated on the basis of the closing price on the last trading day of the year.

Elisa share is also traded in alternative marketplaces. According to Bloomberg and the Fidessa Fragmentation report, the trading volumes in these markets in 2022 were approximately 293 (205) per cent of

Nasdaq Helsinki’s volumes.

Calculated in proportion to the total number of shares at the end of the period.

The Board of Directors proposes a dividend payment of EUR 2.15 per share.

4.2 Share-based incentives

FINANCIAL STATEMENTS 2022

FORMULAE FOR PER-SHARE INDICATORS

Earnings per share (EPS)

Profit for the period attributable to the equity holders of the parent

Average number of shares during the period adjusted for share issues

Dividend per share

Dividend adjusted for share issues

Number of shares at the balance sheet date adjusted for share issues

Effective dividend yield, %

Dividend per share

X 100

Share price at the balance sheet date adjusted for share issues

Payout ratio, %

Dividend per share

X 100

Earnings per share

Equity per share

Equity attributable to equity holders of the parent

Number of shares at the balance sheet date adjusted for share issues

P/E ratio (price/earnings)

Share price on the balance sheet date

Earnings per share

The calculation formulae apply also to the capital repayment indicators.

FINANCIAL STATEMENTS 2022

EUR million Note 31 Dec. 2022 31 Dec. 2021

Revenue 1 1,731.1 1,657.8

Other operating income 2 7.9 8.8

Materials and services 3 –670.9 –642.8

Employee expenses 4 –253.9 –253.4

Depreciation, amortisation and impairment 5 –261.4 –265.8

Other operating expenses –165.5 –156.9

Operating profit 387.3 347.6

Financial income and expenses 7 –13.5 –15.2

Profit before tax and appropriations 373.8 332.3

Appropriations 8 –10.9 –5.2

Income taxes 9 –78.9 –73.9

Profit for the period 284.1 253.2

Income statement, parent company, FAS

Contents THE REPORT OF THE BOARD OF DIREC-

TORS

FINANCIAL STATE-

MENTS

FINANCIAL STATEMENTS 2022

EUR million Note 31 Dec. 2022 31 Dec. 2021

ASSETS

Non-current assets

Intangible assets 10 276.4 304.5

Property, plant and equipment 10 694.3 682.1

Investments 11 863.7 861.0

1,834.4 1,847.6

Current assets

Inventories 12 64.6 56.1

Non-current receivables 13 123.7 122.0

Current receivables 14 439.1 419.3

Cash and bank receivables 53.0 72.7

680.4 670.3

TOTAL ASSETS 2,514.8 2,517.9

EQUITY AND LIABILITIES

Equity 15

Share capital 83.0 83.0

Treasury shares –124.4 –125.9

Reserve for invested non-restricted equity 77.8 77.8

Contingency reserve 3.4 3.4

Retained earnings 257.5 334.2

Profit for the period 284.1 253.2

581.5 625.7

Accumulated appropriations 83.3 77.8

Provisions 16 5.0 6.9

Liabilities

Non-current liabilities 17 1,007.3 1,163.8

Current liabilities 18 837.7 643.7

1,845.0 1,807.5

TOTAL EQUITY AND LIABILITIES 2,514.8 2,517.9

Balance sheet, parent company, FAS

Consolidated Financial State-

ments

FINANCIAL STATEMENTS 2022

EUR million

2022 2021

Cash flow from operating activities

Profit before appropriations and taxes

373.8

332.3

Adjustments:

Depreciation and amortisation

261.4

265.8

Other income and expenses with no payment relation

0.3

1.9

Other financial income (-) and expenses (+)

13.5

15.3

Gains (-) and losses (+) on the disposal of fixed assets –1.7

Gains (-) and losses (+) on the disposal of investments

0.0

–0.1

Change in provisions in the income statement

–2.0

2.8

Cash flow before changes in working capital

647.1

616.5

Change in working capital

Increase (-) / decrease (+) in current non-interest-bearing trade receivables

–12.8

–29.0

Increase (-) / decrease (+) in inventories

–8.8

–10.0

Increase (+) / decrease (-) in trade and other payables

0.9

38.0

Cash flow before financial items and taxes

626.3

615.5

Dividends received

6.1

0.9

Interests received

1.6

1.9

Interests paid

–15.9

–19.8

Income taxes paid

–81.7

–72.4

Net cash flow from operating activities

536.4

526.1

Cash flow statement, parent company, FAS

Consolidated income statement and statement of

comprehensive income

FINANCIAL STATEMENTS 2022

EUR million

2022 2021

Cash flow from investing activities

Capital expenditure

–252.1

–248.3

Proceeds from disposal of property, plant and equipment and intangible assets 2.4

Investments in shares and other investments

–4.9

–0.5

Proceeds from disposal of shares and other investments

0.0

0.1

Loans granted

–17.5

–38.4

Repayment of loan receivables

10.9

3.1

Net cash flow used in investing activities

–263.7

–281.7

Cash flow after investing activities

272.7

244.4

Cash flow from financing activities

Increase in long-term borrowings (+) 100.0

Decrease in long-term borrowings (-)

–100.0

–174.0

Increase (+) / decrease (-) in short-term borrowings

138.2

31.2

Group contributions received (+) / paid (-)

–2.7

0.0

Dividends paid

–327.9

–310.8

Net cash flow used in financing activities

–292.4

–353.6

Change in cash and cash equivalents

–19.8

–109.2

Cash and cash equivalents at the beginning of the period

72.7

181.9

Cash and cash equivalents at the end of the period

53.0

72.7

Cash flow statement, parent company, FAS

FINANCIAL STATEMENTS 2022

100

Accounting principles

Elisa Corporation’s financial statements have been prepared

in accordance with the accounting principles based on

Finnish accounting legislation.

Foreign currency items

Transactions denominated in foreign currencies are

recorded at the exchange rates prevailing on the dates of

transactions. At the end of the reporting period, assets and

liabilities denominated in foreign currencies are valued at

the exchange rates quoted by the European Central Bank

on the closing date.

Fixed assets

The carrying value of intangible and tangible assets is stated

at cost less accumulated depreciation, amortisation and

impairment. Internally generated fixed assets are measured

at variable costs.

The difference between depreciation according to plan and

total depreciation is presented under appropriations of the

parent company’s income statement and the accumulated

depreciation difference is presented under accumulated

appropriations in shareholders’ equity and liabilities on the

balance sheet. Depreciation according to plan is recognised

on a straight-line basis over the useful life from the original

acquisition cost.

The useful life according to plan for the different asset

groups:

Intangible rights 3–5 years

Goodwill 5–20 years

Other expenditure with long-term effects 5–10 years

Buildings and structures 25–40 years

Machinery and equipment in buildings 10–25 years

Telephone exchanges 6–10 years

Cable network 8–15 years

Telecommunication terminals 2–4 years

Other machines and equipment 3–5 years

Inventories

Inventories are stated at the lowest of variable cost,

acquisition price or the likely disposal or repurchase price.

Cost is determined using a weighted average price.

Marketable securities

Investments in money market funds are recognised at the

repurchase price. Investments in certificates of deposit and

commercial paper are recognised at the acquisition cost,

as the difference between the repurchase price and cost of

acquisition is not significant.

Revenue recognition principles

Revenue from deliverables is recognised at the time of

ownership transfer and revenue from services is recognised

when the services have been performed.

Interconnection fees that are invoiced from the customers

and paid as such to other telecommunication companies are

presented as an adjustment to revenue (Finnish Accounting

Standards Board 1995/1325).

The profit from the sale of business operations and fixed

assets, subsidies received and rental income from premises

are presented under other operating income. The loss from

the sale of fixed assets is presented under other operating

expenses. The profit or loss from the sale of shares is

presented in financial income and expenses.

Research and development

Research costs are expensed as they incur, with the exception

of development costs, which are capitalised. The capitalisation

criteria are met when the product is technically and

commercially feasible, and it is expected to generate future

economic benefit. Development costs initially recognised as

expenses cannot be capitalised subsequently.

Public grants associated with development projects are

recognised as other operating income when the related costs

are recognised as expenses. Public grants, associated with

capitalised development costs, are recorded as a reduction of

cost.

Future expenses and losses

Probable future expenses and losses related to the reported

or a prior financial period without corresponding income

are recognised on the income statement. Such items are

recognised on the balance sheet under provisions, if a reliable

estimate of the amount or timing of the obligation cannot be

made. Otherwise the obligation is recognised as accrual.

Income taxes

Income taxes for the financial year are recognised on the

income statement. No deferred tax liabilities or receivables

have been recognised in the financial statements.

Notes to the financial statements of the parent company



position

Consolidated cash



FINANCIAL STATEMENTS 2022

101

1. Revenue

EUR million 2022 2021

Revenue 1,794.3 1,721.0

Interconnection fees and other adjustments –63.2 –63.2

1,731.1 1,657.8

Geographical distribution

Finland 1,704.1 1,640.7

Rest of Europe 25.2 16.1

Other countries 1.8 1.0

1,731.1 1,657.8

2. Other operating income

EUR million 2022 2021

Gain on disposals of fixed assets 1.7

Other income

7.9 7.1

7.9 8.8

Other income include rental income from the real estate, management fee income charged from subsidiaries and other income not associated with ordinary operating activities.

3. Materials and services

EUR million 2022 2021

Materials, supplies and goods

Purchases during reporting period 370.1 340.2

Change in inventories –8.5 –8.1

361.6 332.2

External services 309.3 310.7

670.9 642.8

Notes

1. General accounting principles 1.1 Basic information about the

Group

Consolidated statement of changes

in equity

FINANCIAL STATEMENTS 2022

102

4. Employee expenses

EUR million 2022 2021

Salaries and wages 211.8 213.7

Pension costs 36.3 33.8

Other social security costs 5.8 5.9

253.9 253.4

Personnel on average 3,295 3,280

CEO remuneration, EUR 2022 2021

Fixed salaries 674,640.00 661,180.00

Performance-based bonus 365,376.72 251,030.79

Fringe benefits 20,077.03 23,363.00

Share-based payments

715,958.19 865,204.04

1,776,051.94 1,800,777.83

1) 1

The maximum award allocated to the CEO under the share-based compensation plans equals the value of 134,430 shares. See Note 4.1 of the consolidated

 

In 2020, the Board of Directors agreed with the CEO of Elisa Corporation Veli-Matti Mattila that he will continue as CEO until further notice. Under previous executive agreement, the Group CEO

would have retired at the age of 60. The defined benefit pension plan includes vested rights. See Note 4.1 of the consolidated financial statements.

The remuneration of the Board members, EUR 2022 2021

Clarisse Berggårdh 95,400.00 95,050.00

Maher Chebbo 87,600.00 81,800.00

Kim Ignatius 97,000.00 81,650.00

Katariina Kravi 78,000.00

Pia Kåll 78,800.00

Topi Manner 79,600.00 80,850.00

Eva-Lotta Sjöstedt 85,200.00 82,450.00

Seija Turunen 2,400.00 96,650.00

Anssi Vanjoki 138,000.00 133,900.00

Antti Vasara 82,000.00 80,050.00

824,000.00 732,400.00

For year 2022, following compensations were decided by the Annual General Meeting to the Members of the Board: remuneration fee for the Chair EUR 130,000, for Deputy Chair and the Chairs

of the Committees EUR 85,000, and other Board members EUR 70,000; and additionally EUR 800 per meeting of the Board and of a Commetee. However, if a Board member lives permanently

outside Finland and is physically present in the Board or Committee meeting, which is held in a country other than his/her permanent home country, the meeting fee is EUR 1,600. According to

the decision of the Board on 6 April 2022, the annual remuneration was paid in Company shares on 27 April 2022. The outstanding remuneration amounts were paid net of tax, 60 per cent.

-

nancial statements

FINANCIAL STATEMENTS 2022

103

6. Auditor fees

EUR million 2022 2021

Auditing 0.2 0.1

Tax advisory services 0.0 0.0

Other services 0.0 0.1

0.2 0.2

7. Financial income and expenses

EUR million 2022 2021

Interest income and other financial income

Dividends received

From the Group companies 5.5 0.3

From others 0.4 0.6

5.9 0.9

Other interest and financial income

From the Group companies 0.4 0.2

Capital gains from investments 0.0 0.1

From others 1.7 1.6

2.1 1.9

8.0 2.8

Interest costs and other financial expenses

To the Group companies –6.1 –5.5

Impairment of investments in subsidiaries –2.1

To others –13.3 –12.6

–21.5 –18.1

–13.5 –15.2

5. Depreciation, amortisation and impairment

EUR million

2022 2021

Intangible assets 87.6 91.2

Property, plant and equipment 173.7 174.7

261.4 265.8

Specification of depreciation, amortisation and impairment by balance sheet items is included in note 10.

-

dards

2. Operational result

2.1 Operating segments and geo-

graphical areas

FINANCIAL STATEMENTS 2022

104

9. Income taxes

EUR million 2022 2021

Income taxes for the reporting period –78.9 –73.9

Taxes for previous periods 0.0

–78.9 –73.9

10. Intangible assets and property, plant and equipment

Intangible assets

2022

EUR million

Development

costs

Intangible

assets Goodwill

Other

intangible

assets

Intangible

assets under

construction Total

Acquisition cost at 1 Jan. 59.6 157.2 886.3 569.7 13.3 1,686.1

Additions 7.4 5.5 27.9 12.3 53.1

Reclassifications 7.0 0.4 5.7 –6.8 6.4

Acquisition cost at 31 Dec. 74.0 163.2 886.3 603.3 18.8 1,745.6

Accumulated depreciation and amortisation at 1 Jan. 50.5 86.5 758.6 485.9 1,381.5

Accumulated depreciation on disposals and reclassifications 0.0 0.0 0.0

Amortisation and depreciation for the period 7.7 8.6 38.9 32.5 87.6

Accumulated depreciation and amortisation at 31 Dec. 58.2 95.1 797.5 518.4 1,469.2

Book value at 31 Dec. 15.9 68.1 88.7 84.9 18.8 276.4

8. Appropriations

EUR million 2022 2021

Change in appropriations –5.5 –2.5

Group contributions received 8.1 4.2

Group contributions paid –13.5 –6.8

–10.9 –5.2



2.3 Revenue

2.4 Other operating in-

come

2.5 Operating expenses

FINANCIAL STATEMENTS 2022

105

Property, plant and equipment

2022

EUR million

Land and

water areas

Buildings and

constructions

Machinery and

equipment

Other

assets

Assets under

construction Total

Acquisition cost at 1 Jan. 10.0 227.7 3,943.8 35.1 31.8 4,248.4

Additions 0.0 15.6 155.3 21.4 192.3

Reclassifications –0.6 0.5 15.7 –21.9 –6.4

Acquisition cost at 31 Dec. 9.4 243.8 4,114.8 35.1 31.3 4,434.3

Accumulated depreciation at 1 Jan. 143.2 3,388.6 34.5 3,566.3

Accumulated depreciation on disposals and reclassifications 0.0 0.0 0.0

Depreciation for the period 8.0 165.7 0.0 173.7

Accumulated depreciation at 31 Dec. 151.2 3,554.3 34.6 3,740.0

Book value at 31 Dec. 9.4 92.6 560.5 0.6 31.3 694.3

FINANCIAL STATEMENTS 2022

106

Intangible Assets

2021

EUR million

Development

costs

Intangible

rights Goodwill

Other

intangible

assets

Intangible

assets under

construction Total

Acquisition cost at 1 Jan. 53.5 154.0 886.3 540.4 10.2 1,644.4

Additions 3.9 3.0 24.4 10.8 42.0

Reclassifications 2.1 0.2 4.9 –7.7 –0.4

Acquisition cost at 31 Dec. 59.6 157.2 886.3 569.7 13.3 1,686.1

Accumulated depreciation and amortisation at 1 Jan. 44.0 78.3 716.0 452.2 1,290.4

Amortisation and depreciation for the period 6.6 8.3 42.7 33.7 91.2

Accumulated depreciation and amortisation at 31 Dec. 50.5 86.5 758.6 485.9 1,381.5

Book value at 31 Dec. 9.1 70.7 127.7 83.8 13.3 304.5

Property, plant and equipment

2021

EUR million

Land and

water areas

Buildings and

constructions

Machinery and

equipment

Other

assets

Assets under

construction Total

Acquisition cost at 1 Jan. 9.9 216.6 3,766.6 35.1 25.1 4,053.3

Additions 0.0 11.3 163.2 20.7 195.2

Disposals 0.0 –0.5 0.0 –0.5

Reclassifications 0.0 0.3 14.1 –14.0 0.4

Acquisition cost at 31 Dec. 10.0 227.7 3,943.8 35.1 31.8 4,248.4

Accumulated depreciation at 1 Jan. 135.0 3,222.4 34.5 3,392.0

Accumulated depreciation on disposals and reclassifications –0.3 0.0 –0.3

Depreciation for the period 8.5 166.1 0.0 174.7

Accumulated depreciation at 31 Dec. 143.2 3,388.6 34.5 3,566.3

Book value at 31 Dec. 10.0 84.5 555.3 0.6 31.8 682.1

FINANCIAL STATEMENTS 2022

107

11. Investments

Investments in Receivables from

2022

EUR million Subsidiaries Associates

Other

companies

Group

companies

Other

Other companies Total

Acquisition cost at 1 Jan. 837.7 6.2 22.9 1.6 0.1 868.5

Additions 4.5 0.0 0.3 4.9

Disposals 0.0 0.0 –0.1 –0.1

Acquisition cost at 31 Dec. 842.2 6.3 23.3 1.5 0.0 873.3

Impairment at 1 Jan. –3.3 –0.1 –4.1 –7.5

Additions –1.8 –0.2 –2.1

Impairment at 31 Dec. –5.1 –0.1 –4.3 –9.6

Book value at 31 Dec. 837.1 6.2 18.9 1.5 0.0 863.7

A list of the Group and associated companies is available under Note 8.3 of the consolidated financial statements.

Investments in Receivables from

2021

EUR million Subsidiaries Associates

Other

companies

Group

companies

Other

Other companies Total

Acquisition cost at 1 Jan. 837.5 6.2 22.5 1.6 0.1 867.9

Additions 0.2 0.4 0.6

Disposals 0.0 0.0 0.0

Acquisition cost at 31 Dec. 837.7 6.2 22.9 1.6 0.1 868.5

Impairment at 1 Jan. –3.3 –0.1 –4.1 –7.5

Impairment at 31 Dec. –3.3 –0.1 –4.1 –7.5

Book value at 31 Dec. 834.4 6.1 18.8 1.6 0.1 861.0

2.6 Earnings per share

FINANCIAL STATEMENTS 2022

108

12. Inventories

EUR million 2022 2021

Materials and supplies 21.3 13.9

Finished goods 43.4 42.2

64.6 56.1

13. Non-current receivables

EUR million 2022 2021

Receivables from the Group companies

Loan receivables

26.2

24.6

Receivables from others

Trade receivables

84.9

81.8

Prepayments and accrued income

12.6

15.7

97.5

97.4

123.7

122.0

Breakdown of prepayments and accrued income

Rent advances

8.7

Transaction costs and losses related to loan issuance

3.9

6.9

12.6

15.7

3. Business acquisitions and disposals

4. Personnel

FINANCIAL STATEMENTS 2022

109

14. Current receivables

EUR million 2022 2021

Receivables from the Group companies

Loan receivables

32.8

28.1

Trade receivables

3.3

2.3

Prepayments and accrued income

1.4

1.3

Other receivables

8.1

4.2

45.7

35.8

Receivables from the associated companies

Loan receivables

0.0

Trade receivables

0.1

Receivables from others

Trade receivables

326.0

309.9

Loan receivables

0.0

Prepayments and accrued income

55.5

60.7

Other receivables

11.8

12.9

393.3

383.5

439.1

419.3

Breakdown of prepayments and accrued income

Interests

0.2

Rent advances

1.4

Transaction costs and losses related to loan issuance

3.0

3.1

Income taxes

0.9

Other business expense advances paid 50.0 56.2

55.5

60.7

4.1 Employee expenses

FINANCIAL STATEMENTS 2022

110

15. Equity

EUR million 2022 2021

Share capital at 1 Jan. 83.0 83.0

Share capital at 31 Dec. 83.0 83.0

Treasury shares at 1 Jan. –125.9 –128.2

Disposal of treasury shares 1.6 2.3

Treasury shares at 31 Dec. –124.4 –125.9

Reserve for invested non-restricted equity at 1 Jan. 77.8 77.8

Reserve for invested non-restricted equity at 31 Dec. 77.8 77.8

Contingency reserve at 1 Jan. 3.4 3.4

Contingency reserve at 31 Dec. 3.4 3.4

Retained earnings at 1 Jan. 587.4 648.5

Dividend distribution –328.5 –312.3

Withdrawal of dividend liabilities 0.2 0.3

Disposal of treasury shares –1.6 –2.3

Retained earnings at 31 Dec. 257.5 334.2

Profit for the period 284.1 253.2

Total equity 581.5 625.7

Distributable earnings

Retained earnings 257.5 334.2

Treasury shares –124.4 –125.9

Reserve for invested non-restricted equity 77.8 77.8

Development costs –20.5 –12.3

Profit for the period 284.1 253.2

474.6 526.9

4.2 Share-based incentives

FINANCIAL STATEMENTS 2022

111

16. Provisions

EUR million 2022 2021

Provision for unemployment pensions 4.2 4.3

Other provisions

0.8 2.6

5.0 6.9

Other provisions consist of salaries, including related statutory employee costs for employees not required to work during their severance period and a provision for other operating expenses.

Provisions of EUR 3,0 (3,5) million were used and EUR 1,1 (1,6) million were reversed as unused in 2022.

17. Non-current liabilities

EUR million 2022 2021

Interest-bearing

Liabilities to others

Bonds 900.0 900.0

Loans from the financial institutions 100.0 250.0

1,000.0 1,150.0

Non-interest bearing

Liabilities to others

Trade payables 1.4 8.1

Accruals and deferred income

5.9 5.7

7.3 13.8

1,007.3 1,163.8

Liabilities maturing after five years

Bonds 300.0

300.0

Breakdown of accruals and deferred income

Rent advances 5.9 5.7

4.3 Pension obligations

5. Tangible and Intangible assets

FINANCIAL STATEMENTS 2022

112

18. Current liabilities

EUR million 2022 2021

Interest-bearing

Liabilities to the Group companies

Cash Pool account 232.8 219.6

232.8 219.6

Liabilities to others

Loans from the financial institutions 150.0 100.0

Commercial paper 125.0

275.0 100.0

507.8 319.6

Non-interest bearing

Liabilities to the Group companies

Trade payables 6.8 7.2

Other liabilities 13.7 7.0

20.5 14.2

Liabilities to the associates

Trade payables 0.0 0.0

0.0 0.0

Liabilities to others

Advances received 5.2 4.9

Trade payables 173.3 174.8

Accrued liabilities

56.0 54.7

Other liabilities 75.0 75.4

309.4 309.9

329.9 324.1

837.7 643.7

Breakdown of accrued liabilities

Salaries, wages and social security costs 48.2 45.5

Interests 5.5 5.5

Direct taxes 1.9

Rent advances 1.0 0.9

Income received in advance 0.9 0.5

Others 0.4 0.4

56.0 54.7

5.1 Depreciation, amortisation and

impairment

FINANCIAL STATEMENTS 2022

113

19. Lease commitments and other liabilities

Collateral

EUR million

2022 2021

On behalf of own commitments

Bank deposits

0.3

Guarantees

0.2

0.5

0.3

Lease commitments

EUR million

2022 2021

Real estate leases

Within one year

28.7

27.7

Later that one year, but not later that five years

40.1

47.6

Later than five years 62.6 63.6

131.4

138.9

Other lease commitments

Within one year

3.4

3.8

Later that one year, but not later that five years

3.7

3.8

7.1

7.5

Total leases

138.6

146.4

Other commitments

EUR million

2022 2021

Venture Capital investment obligation

0.5

0.8

Repurchase obligations 0.0

0.5 0.8

 

Lease liabilities consist mainly of car and IT equipment leases.

Real estate leases are presented at nominal values.

Rental liabilities are exclusive of value added tax, except for vehicle lease liabilities.

5.2 Property, plant and equipment

FINANCIAL STATEMENTS 2022

114

Derivative instruments

EUR million 2022 2021

Currency derivatives

Nominal value 3.3 3.5

Fair value 0.0 0.0

Electricity derivatives

Nominal value 5.8 1.9

Fair value 1.2 1.6

Elisa hedges electricity purchases through physical purchase agreements and derivatives. The electricity price risk is assessed at a five-year period. Electricity derivatives are subject to hedge

accounting.

The hedging rate for purchases during following years,% 2022 2021

0–1 years 86.6 93.1

1–2 years 60.1 30.6

2–3 years 38.9

3–4 years 37.8

4–5 years 36.7

Real-estate investments

On 31 December 2022, the VAT refund liability of real-estate investments was EUR 36.1 (33.2) million.

FINANCIAL STATEMENTS 2022

115

OSAKKEET JA

OSAKKEENOMISTAJAT

1. Share capital and shares

The company’s paid-up share capital registered in the Trade

year.

At the end of the financial year, the number of Elisa

Corporation shares was 167,335,073, all within one share

series.

2. Authorisations of the

Board of Directors

On 8 April 2022, the Annual General Meeting authorised

the Board of Directors to decide on a new share issue,

transfer of treasury shares owned by the company and/or

granting of special rights referred to in Chapter 10, Section

1 of the Finnish Companies Act subject to the following:

The authorisation allows the Board of Directors to issue a

maximum of 15,000,000 shares in one or several issues. The

share issue and shares granted by virtue of special rights

are included in the aforementioned maximum number. The

maximum number is approximately 9 per cent of the entire

stock. The share issue can be free or for consideration and

can also be directed to the Company itself. The authorisation

entitles the Board to make a directed issue. The authorisation

may be used for making acquisitions or implementing other

arrangements related to the Company’s business, to finance

investments, to improve the Company’s financial structure,

or for other purposes decided by the Board of Directors. The

Board of Directors shall have the right to decide on all other

matters related to the share issue. The authorisation is valid

for 18 months, and it annuls the authorisation given by the

Annual General Meeting to the Board of Directors on 8 April

2021.

On 8 April 2022, the Annual General Meeting also

authorised the Board of Directors to decide on the

acquisition of treasury shares subject to the following: The

Board of Directors may decide to acquire or pledge on non-

restricted equity a maximum of 5,000,000 treasury shares.

The acquisition may take place as one or several blocks of

shares. The consideration payable for the shares shall not

be more than the ultimate market price. In purchasing the

Company’s own shares derivative, share lending and other

contracts customary in the capital market may be concluded

pursuant to law and the applicable legal provisions. The

authorisation entitles the Board of Directors to pass a

resolution to purchase the shares by making an exception

to the purchase of shares relative to the current holdings

of the shareholders. The treasury shares may be used for

making acquisitions or implementing other arrangements

related to the Company’s business, to finance investments,

to improve the Company’s financial structure, to be used as

part of the incentive compensation plan, or for the purpose

of otherwise assigning or cancelling the shares. The Board of

Directors shall have the right to decide on all other matters

related to the acquisition of the Company’s own shares.

The authorisation is valid for 18 months, and it annuls the

respective authorisation given by the Annual General Meeting

to the Board of Directors on 8 April 2021.

3. Treasury shares, share

issues and cancellations

At the beginning of the financial period, Elisa held 7,147,772

treasury shares.

The Annual General Meeting held on 8 April 2022

authorised the Board of Directors to acquire and assign

treasury shares. The authorisation applies to a maximum of

5,000,000 treasury shares. On the basis of the authorisation,

Elisa has not acquired any treasury shares.

A total of 72,394 treasury shares were disposed during the

financial year.

At the end of the financial period, Elisa held 7,075,378

treasury shares.

The treasury shares held by Elisa Corporation do not have

any substantial impact on the distribution of holdings and votes

in the Company. They represent 4.23 per cent of all shares and

votes.

4. Management interests

The aggregate number of shares held by Elisa’s Board of

Directors and the CEO on 31 December 2022 was 124,417

shares and votes, which represented 0.07 per cent of all shares

and votes.

5. Share performance

The Elisa share closed at EUR 49.46 on 31 December 2022. The

highest quotation of the year was EUR 56.90 and the lowest

EUR 45.57. The average price was EUR 51.99. Information is

based on the share trades made on Nasdaq Helsinki stock

exchange.

At the end of the financial year, the market capitalisation of

Elisa’s total number of shares was EUR 8,276.4 million.

Shares and shareholders

5.3 Right-of-use assets

FINANCIAL STATEMENTS 2022

116

OSAKKEET JA

OSAKKEENOMISTAJAT

6. Quotation and trading

The Elisa share is quoted on the Main List of the Nasdaq Helsinki with the ticker ELISA. The aggregate volume of trading on the Nasdaq Helsinki between 1 January and 31 December 2022 was

71,229,057 shares for an aggregate price of EUR 3,703.2 million. The trading volume represented 42.6 per cent of the total number of shares at the end of the financial year.

7. Distribution of holding by shareholder groups at 31 December 2022

Number of shares

Proportion of all

shares, %

1 Private companies 3,272,026 1.96

2 Financial and insurance institutions 4,393,230 2.63

3 Public corporations 29,617,730 17.70

4 Non-profit organisations 5,198,591 3.11

5 Households 36,944,882 22.08

6 Foreign 357,449 0.21

7 Nominee registered 80,475,787 48.09

Elisa Group, treasury shares 7,075,378 4.23

167,335,073 100.00

8. Distribution of holding by amount at 31 December 2022

Size of holding

Number of

shareholders %

Number of

shares %

1–100 49,581 27.74 2,161,685 1.29

101–1 000 124,804 69.82 27,614,086 16.50

1 001–10 000 4,127 2.31 9,743,808 5.82

10 001–100 000 200 0.11 5,063,431 3.03

100 001–1 000 000 27 0.02 6,807,391 4.07

1 000 001– 7 0.00 28,255,787 16.89,

Nominee registered 80,475,787 48.09

178,746 100.00

Elisa Common Clearing account

137,720 0.08

Elisa Corporation, treasury shares 7,075,378 4.23

Issued amount 167,335,073 100.00

Shares on the Common Clearing account include shares that had not been transferred to the share owners’ book-entry accounts at the time of, or after, entering the shares into the Finnish book-entry

system.

FINANCIAL STATEMENTS 2022

117

OSAKKEET JA

OSAKKEENOMISTAJAT

9. Largest shareholders at 31 December 2022

Name

Number of

shares %

1 Solidium Oy 16,802,800 10.04

2 Keskinäinen Eläkevakuutusyhtiö Ilmarinen 4,090,118 2.44

3 Keskinäinen Työeläkevakuutusyhtiö Varma 3,096,976 1.85

4 Keskinäinen Työeläkevakuutusyhtiö Elo 2,238,000 1.34

5 Helsingin kaupunki 1,124,690 0.67

6 Valtion Eläkerahasto 1,100,000 0.66

7 OP Finland Fund 769,906 0.46

8 Nordea Pro Finland Fund 502,619 0.30

9 Föreningen Konstsamfundet rf 500,000 0.30

10 Stiftelsen För Åbo Akademi Sr 403,223 0.24

11 Keva 398,479 0.24

12 Sijoitusrahasto Seligson & Co 371,954 0.22

13 Juselius Sigrid Stiftelse 348,800 0.21

14 Nordea Finnish Stars Fund 321,610 0.19

15 Samfundet Folkhälsan i Svenska Finland R F 315,263 0.19

16 Op-Henkivakuutus Oy 289,825 0.17

17 Sijoitusrahasto Evli Suomi Select 281,024 0.17

18 Vantaan Kaupunki 258,738 0.15

19 Suomen Kulttuurirahasto Sr 224,356 0.13

20 Fjarde Ap-Fonden 188,202 0.11

33,626,583 20.10

Elisa Corporation, treasury shares 7,075,378 4.23

Nominee registered

80,475,787 48.09

Shareholders not specified above 46,157,325 27.58

167,335,073 100.00

On 27 February 2017, BlackRock, Inc gave a notice in accordance with Chapter 9, Section 5 of the Finnish Securities Market Act, that the direct share ownership of Elisa Corporation shares owned by BlackRock,

Inc. was 8,533,440 and by its funds 1,232,577 shares, totaling 9,766,017 shares, which was 5.84 per cent of Elisa Corporation’s entire stock.

FINANCIAL STATEMENTS 2022

118

OSAKKEET JA

OSAKKEENOMISTAJAT

Share trading volumes are based on the trades made on Nasdaq Helsinki.

Elisa share is also traded in alternative marketplaces.

11. Trading volume

Shares per month (million)

10. Daily price development

Closing price in EUR

Rebalanced to Elisa share.

Elisa

OMX Helsinki 25 -indeksi

Kurssikehitys päivittäin

Päätöskurssi, euroa

1/2022

2/2022

3/2022

4/2022

5/2022

6/2022

7/2022

8/2022

9/2022

10/2022

11/2022

12/2022

Suhteutettuna Elisan osakekurssiin

Osakevaihto

milj. kpl/kk

1/2022

2/2022

3/2022

4/2022

5/2022

6/2022

7/2022

8/2022

9/2022

10/2022

11/2022

12/2022

6.0

5.1

8.6

6.8

6.5

6.4

5.4

5.1

6.0

5.2

5.6

4.4

FINANCIAL STATEMENTS 2022

119

SIGNATURES TO THE BOARD OF DIRECTORS’

REPORT AND FINANCIAL STATEMENTS

Helsinki, 26 January 2023

Anssi Vanjoki Clarisse Berggårdh Maher Chebbo

Chairman of the

Board of Directors

Kim Ignatius Katariina Kravi Pia Kåll

Topi Manner Eva-Lotta Sjöstedt Antti Vasara

Veli-Matti Mattila

President and CEO

According to the balance sheet of 31 December 2022, the

parent company’s equity is EUR 581,469,661.80, of which

distributable funds account for EUR 474,553,183.53.

The parent company’s profit for the period from 1 January

to 31 December 2022 was EUR 284,090,605.60.

Board’s proposal for profit distribution

The Board of Directors proposes to the General Meeting

of Shareholders that the distributable funds be used as

follows:

• a dividend of EUR 2.15 per share shall be paid for a total

of EUR 344,558,344.25

• no dividend shall be paid on shares in the parent

company’s possession

• EUR 129,994,839.28 shall be retained in shareholders’

equity.

5.4 Intangible assets

6. Inventories, trade and other receivables, trade and

other liabilities

FINANCIAL STATEMENTS 2022

120

To the Annual General Meeting

of Elisa Corporation

Report on the Audit of the

Financial Statements

Opinion

We have audited the financial statements of Elisa

Corporation (business identity code 0116510–6) for the

year ended 31 December 2022. The financial statements

comprise the consolidated balance sheet, income

statement, statement of comprehensive income, statement

of changes in equity, statement of cash flows and notes,

including a summary of significant accounting policies,

as well as the parent company’s balance sheet, income

statement, statement of cash flows and notes.

In our opinion

• the consolidated financial statements give a true and

fair view of the group’s financial position, financial

performance and cash flows in accordance with

International Financial Reporting Standards (IFRS) as

adopted by the EU

• the financial statements give a true and fair view of the

parent company’s financial performance and financial

position in accordance with the laws and regulations

governing the preparation of financial statements in

Finland and comply with statutory requirements.

Our opinion is consistent with the additional report

submitted to the Audit Committee.

Basis for Opinion

We conducted our audit in accordance with good auditing

practice in Finland. Our responsibilities under good auditing

practice are further described in the Auditor’s Responsibilities

for the Audit of the Financial Statements section of our report.

We are independent of the parent company and of

the group companies in accordance with the ethical

requirements that are applicable in Finland and are

relevant to our audit, and we have fulfilled our other ethical

responsibilities in accordance with these requirements.

In our best knowledge and understanding, the non-audit

services that we have provided to the parent company

and group companies are in compliance with laws and

regulations applicable in Finland regarding these services,

and we have not provided any prohibited non-audit services

referred to in Article 5(1) of regulation (EU) 537/2014.

The non-audit services that we have provided have

been disclosed in note 2.5 to the consolidated financial

statements.

We believe that the audit evidence we have obtained

is sufficient and appropriate to provide a basis for our

opinion.

Materiality

The scope of our audit was influenced by our application

of materiality. The materiality is determined based on

our professional judgement and is used to determine the

nature, timing and extent of our audit procedures and

to evaluate the effect of identified misstatements on the

financial statements as a whole. The level of materiality

we set is based on our assessment of the magnitude of

misstatements that, individually or in aggregate, could

reasonably be expected to have influence on the economic

decisions of the users of the financial statements. We

have also taken into account misstatements and/or

possible misstatements that in our opinion are material for

qualitative reasons for the users of the financial statements.

Auditor’s Report

6.1 Inventories

FINANCIAL STATEMENTS 2022

121

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in

the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The significant risks of material

misstatement referred to in the EU Regulation No 537/2014 point (c) of Article 10(2) are included in the description of key audit matters below.

We have also addressed the risk of management override of internal controls. This includes consideration of whether there was evidence of management bias that represented a risk of

material misstatement due to fraud.

THE KEY AUDIT MATTER HOW THE MATTER WAS ADDRESSED IN THE AUDIT

Valuation of goodwill, € 1 157.3 million

(Consolidated accounting principles 1.2 and note 5.4)

• The amount of goodwill in the consolidated statement of financial position is significant

due to the acquisitions carried out in the previous years. The amount of goodwill equals

approximately to the consolidated equity.

• Goodwill is tested for impairment annually and the group prepares impairment tests for

the financial statements or when needed on a discounted cash flow basis with sensitivity

analyses.

• Estimating future cash flows underlying the impairment tests involves a significant amount

of management judgment, particularly in respect of growth in net sales, profitability and

discount rates.

• Due to management judgments about the estimates used in the impairment tests, as well

as the significant carrying amount involved, impairment of goodwill is considered a key

audit matter.

• We assessed critically those management judgments and the assumptions made, which

were used to prepare the cash flow projections for the coming years. In addition, we

compared previous years’ estimates to the actual amounts to be able to evaluate the

reliability of the estimating methods applied.

• We used KPMG valuation specialists when considering the appropriateness of the discount

rate used and the technical correctness of the calculations, as well as comparing the

assumptions used to market and industry-specific information.

• In addition, we assessed the adequacy of the sensitivity analyses and the appropriate

presentation of the notes related to impairment tests in the consolidated financial

statements.

FINANCIAL STATEMENTS 2022

122

Revenue recognition, € 2 129.5 million

(Consolidated accounting principles 1.2 and note 2.3)

• Revenues are recognized once the service has been rendered to the customer or once the

significant risks and rewards related to the ownership of the goods have been transferred

to the buyer.

• The IT system environment related to billing transactions is complex and the volume of

billing data is large containing wide variety of different products.

• Due to large volumes of data, revenue recognition involves the risk of revenue being

recognized in an incorrect period as well as the risk that all transactions are not recorded as

complete.

• Revenue recognition accrual is partially based on estimates from the management’s past

experience.

• We evaluated the sales-related IT control environment and the key controls in the billing

process over the completeness and accuracy of revenue.

• The majority of the group’s billing data is processed in a single IT system. We evaluated

the reliability of the associated IT control environment by assessing, among others, the

processes related to the user authorization management and back-up and recoveries, as

well as by testing the key application controls over the billing process.

• We also evaluated the group’s internal control procedures over the control environment in

the billing process, as well as assessed the group’s monthly revenue monitoring procedures

at business unit level.

• In addition to control testing, we performed substantive procedures to sales accruals to

assess the completeness and the accuracy of the recognized revenues.

Capital expenditures

(Consolidated accounting principles 1.2 and note 5)

• The group invests heavily especially in its own telecommunication network and IT

environments as well as new technology to remain competitive.

• The group’s capital expenditures (investments) amount to € 289.7 million in 2022, and

therefore capital expenditures comprise a significant part of the consolidated statement of

financial position

• We observed the group’s investment budget for the year 2022 and followed up

developments quarterly.

• We evaluated the group’s internal control environment. We also tested the controls over

the approval of investment projects; over the authorization process when placing individual

orders under an investment project; over the associated approval process when approving

purchase invoices; and over recording transactions in the asset register (for property, plant

and equipment and intangible assets).

• Our substantive procedures focused on assessing the appropriateness of the accounting

treatment in respect of the most significant investment projects. In addition, we tested

whether the assets under construction met the capitalization requirements and assessed

whether they were disclosed appropriately in the financial statements.

FINANCIAL STATEMENTS 2022

123

Responsibilities of the Board of

Directors and the Managing Director

for the Financial Statements

The Board of Directors and the Managing Director are

responsible for the preparation of consolidated financial

statements that give a true and fair view in accordance

with International Financial Reporting Standards (IFRS)

as adopted by the EU, and of financial statements that

give a true and fair view in accordance with the laws

and regulations governing the preparation of financial

statements in Finland and comply with statutory

requirements. The Board of Directors and the Managing

Director are also responsible for such internal control as

they determine is necessary to enable the preparation

of financial statements that are free from material

misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of

Directors and the Managing Director are responsible for

assessing the parent company’s and the group’s ability to

continue as going concern, disclosing, as applicable, matters

relating to going concern and using the going concern basis

of accounting. The financial statements are prepared using

the going concern basis of accounting unless there is an

intention to liquidate the parent company or the group or

cease operations, or there is no realistic alternative but to

do so.

Auditor’s Responsibilities for the

Audit of Financial Statements

Our objectives are to obtain reasonable assurance on

whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error,

and to issue an auditor’s report that includes our opinion.

Reasonable assurance is a high level of assurance, but is

not a guarantee that an audit conducted in accordance

with good auditing practice will always detect a material

misstatement when it exists. Misstatements can arise from

fraud or error and are considered material if, individually

or in aggregate, they could reasonably be expected to

influence the economic decisions of users taken on the

basis of the financial statements.

As part of an audit in accordance with good auditing

practice, we exercise professional judgment and maintain

professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of

the financial statements, whether due to fraud or error,

design and perform audit procedures responsive to those

risks, and obtain audit evidence that is sufficient and

appropriate to provide a basis for our opinion. The risk

of not detecting a material misstatement resulting from

fraud is higher than for one resulting from error, as fraud

may involve collusion, forgery, intentional omissions,

misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to

the audit in order to design audit procedures that are

appropriate in the circumstances, but not for the purpose

of expressing an opinion on the effectiveness of the

parent company’s or the group’s internal control.

• Evaluate the appropriateness of accounting policies used

and the reasonableness of accounting estimates and

related disclosures made by management.

• Conclude on the appropriateness of the Board of

Directors’ and the Managing Director’s use of the going

concern basis of accounting and based on the audit

evidence obtained, whether a material uncertainty exists

related to events or conditions that may cast significant

doubt on the parent company’s or the group’s ability

to continue as a going concern. If we conclude that a

material uncertainty exists, we are required to draw

attention in our auditor’s report to the related disclosures

in the financial statements or, if such disclosures are

inadequate, to modify our opinion. Our conclusions are

based on the audit evidence obtained up to the date of

our auditor’s report. However, future events or conditions

may cause the parent company or the group to cease to

continue as a going concern.

• Evaluate the overall presentation, structure and content

of the financial statements, including the disclosures,

and whether the financial statements represent the

underlying transactions and events so that the financial

statements give a true and fair view.

• Obtain sufficient appropriate audit evidence regarding

the financial information of the entities or business

activities within the group to express an opinion on the

consolidated financial statements. We are responsible for

the direction, supervision and performance of the group

audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance

regarding, among other matters, the planned scope and

timing of the audit and significant audit findings, including

any significant deficiencies in internal control that we

identify during our audit.

We also provide those charged with governance with a

statement that we have complied with relevant ethical

requirements regarding independence, and communicate

with them all relationships and other matters that may

reasonably be thought to bear on our independence, and

where applicable, related safeguards.

From the matters communicated with those charged with

governance, we determine those matters that were of most

significance in the audit of the financial statements of the

current period and are therefore the key audit matters. We

describe these matters in our auditor’s report unless law or

regulation precludes public disclosure about the matter or

when, in extremely rare circumstances, we determine that a

matter should not be communicated in our report because

the adverse consequences of doing so would reasonably be

expected to outweigh the public interest benefits of such

communication.

FINANCIAL STATEMENTS 2022

124

Other Reporting Requirements

Information on our audit engagement

We were first appointed as auditors by the Annual

General Meeting on 31 March 2004, and our appointment

represents a total period of uninterrupted engagement

of 19 years. The current auditor in charge, Toni Aaltonen,

Authorised Public Accountant, KHT, was elected on 6 April

2017.

Other Information

The Board of Directors and the Managing Director

are responsible for the other information. The other

information comprises the report of the Board of Directors

and the information included in the Annual Report, but

does not include the financial statements and our auditor’s

report thereon. We have obtained the report of the Board

of Directors prior to the date of this auditor’s report, and

the Annual Report is expected to be made available to us

after that date. Our opinion on the financial statements

does not cover the other information.

In connection with our audit of the financial statements,

our responsibility is to read the other information identified

above and, in doing so, consider whether the other

information is materially inconsistent with the financial

statements or our knowledge obtained in the audit, or

otherwise appears to be materially misstated. With respect

to the report of the Board of Directors, our responsibility

also includes considering whether the report of the Board

of Directors has been prepared in accordance with the

applicable laws and regulations.

In our opinion, the information in the report of the Board of

Directors is consistent with the information in the financial

statements and the report of the Board of Directors has

been prepared in accordance with the applicable laws and

regulations.

If, based on the work we have performed on the other

information that we obtained prior to the date of this

auditor’s report, we conclude that there is a material

misstatement of this other information, we are required to

report that fact. We have nothing to report in this regard.

Helsinki, 26 January 2023

KPMG Oy Ab

Toni Aaltonen

Authorised Public Accountant, KHT

FINANCIAL STATEMENTS 2022

125

To the Board of Directors

of Elisa Corporation

We have undertaken a reasonable assurance

engagement in respect of whether the consolidated

financial statements for the year ended 31 December

2022 included in the digital financial statements

743700TU2S3DXWGU7H32-2022-12-31 -en.zip of Elisa

Corporation (Business ID 0116510-6) have been marked up

with iXBRL markups in accordance with the requirements

of Article 4 of EU Delegated Regulation 2018/815 (ESEF

RTS).

The Responsibility of the Board of

Directors and Managing Director

The Board of Directors and Managing Director are

responsible for preparing the report of the Board

of Directors and financial statements (ESEF financial

statements) that comply with the requirements of ESEF

RTS. This responsibility includes:

• preparation of ESEF financial statements in XHTML

format in accordance with Article 3 of the ESEF RTS

• marking up the primary statements and the notes to

the consolidated financial statements, and the company

identification data included in the ESEF financial

statements with iXBRL tags in accordance with Article 4

of the ESEF RTS; and

• ensuring consistency between ESEF financial statements

and audited financial statements.

The Board of Directors and the Managing Director are

also responsible for such internal control as they deem

necessary to prepare the ESEF financial statements in

accordance with the requirements of the ESEF RTS.

Auditor’s Independence and

Quality Management

We are independent of the company in accordance with the

ethical requirements applicable in Finland, which apply to

the engagement we have performed, and we have fulfilled

our other ethical responsibilities in accordance with these

requirements.

The auditor applies International Standard on Quality

Management ISQM 1, which requires the firm to design,

implement and operate a system of quality management

including policies or procedures regarding compliance with

ethical requirements, professional standards and applicable

legal and regulations requirements.

Auditor’s Responsibility

In accordance with the Engagement Letter our responsibility

is to express an opinion on whether the marking up of

the consolidated financial statements included in the ESEF

financial statements comply in all material respects with

the Article 4 of the ESEF RTS. We conducted our reasonable

assurance engagement in accordance with International

Standard on Assurance Engagements 3000.

The engagement involves procedures to obtain evidence

whether;

• the primary statements of the consolidated financial

statements included in the ESEF financial statements are,

in all material respects, marked up with iXBRL tags in

accordance with Article 4 of the ESEF RTS, and;

• whether the notes to the consolidated financial statements

and the company identification data included in the ESEF

financial statements data, have been marked up, in all

material respects, with iXBRL tags in accordance with Article

4 of the ESEF RTS; and

• whether the ESEF financial statements and the audited

financial statements are consistent with each other.

The nature, timing and the extent of procedures

selected depend on practitioner’s judgement. This includes

the assessment of the risks of material departures from the

requirements set out in the ESEF RTS, whether due to fraud

or error.

We believe that the evidence we have obtained is

sufficient and appropriate to provide a basis for our

opinion.

Opinion

In our opinion, the primary statements of the consolidated

financial statements, the notes to the consolidated financial

statements and the company identification data included

in the ESEF financial statements of Elisa Corporation

identified as 743700TU2S3DXWGU7H32-2022-12-31 -en.zip

for the year ended 31 December 2022 are, in all material

respects, marked up in compliance with the ESEF Regulatory

Technical Standard.

Our audit opinion on the audit of the consolidated

financial statements of Elisa Corporation for the year ended

31 December 2022 is set out in our Auditor’s Report dated

26 January 2023. In this report, we do not express any audit

opinion or other assurance conclusion on the consolidated

financial statements.

Helsinki 13 March 2023

KPMG OY AB

Toni Aaltonen

Authorised Public Accountant, KHT

Independent Auditor’s Reasonable Assurance Report

on Elisa Corporation’s ESEF Financial Statements

6.2 Trade and other receivables